UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

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FORM 10-Q

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(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002 or

[  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number    000-25621



E-LOAN, INC.



|Delaware                                                       | 77-0460084                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number)

5875 Arnold Road, Suite 100Dublin, California   94568

(925) 241-2400







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [  ]

As of August 1, 2002, 59,013,365 shares of the Registrant's Common Stock,
$0.001 par value per share, were issued and outstanding.









E-LOAN, INC.
      QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2002
                                TABLE OF CONTENTS



|PART I.   FINANCIAL INFORMATION                                                                                       | Page No.
|--------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                      |         
|Item 1.   Interim Financial Statements
                  (unaudited):                                                 |         
|                                                                                                                      |         
|Balance Sheets as of December 31, 2001 and June 30, 2002                                                              | **      
|                                                                                                                      |         
|Statements of Operations for the
    three and six months ended June 30, 2001 and 2002                                | **      
|                                                                                                                      |         
|Statements of Cash Flows for the
    six months ended June 30, 2001 and 2002                                          | **      
|                                                                                                                      |         
|Notes to Unaudited Financial Statements                                                                               | **      
|                                                                                                                      |         
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations | **      
|                                                                                                                      |         
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                  | **      
|                                                                                                                      |         
|PART II.  OTHER INFORMATION                                                                                           |         
|                                                                                                                      |         
|Item 1.   Legal Proceedings                                                                                           | **      
|                                                                                                                      |         
|Item 2.   Changes in Securities and Use of Proceeds                                                                   | **      
|                                                                                                                      |         
|Item 3.   Defaults Upon Senior Securities                                                                             | **      
|                                                                                                                      |         
|Item 4.   Submission of Matters to a Vote of Security Holders                                                         | **      
|                                                                                                                      |         
|Item 5.   Other Information                                                                                           | **      
|                                                                                                                      |         
|Item 6.   Exhibits and Reports on Form 8-K                                                                            | **      
|                                                                                                                      |         
|Signature                                                                                                             | **      

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PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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E-LOAN, INC.
BALANCE SHEETS
($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

---

`December 31,  June 30,
                                                                                   2001         2002
                                                                                -----------  -----------
                                                                                             (unaudited)
ASSETS
Current assets:
    Cash and cash equivalents (includes $4,500 and $2,500 of restricted cash). $    32,538  $    29,735
    Loans held-for-sale.......................................................     162,246       88,368
    Accounts receivable, prepaids and other current assets....................       8,435       15,958
                                                                                -----------  -----------
          Total current assets................................................     203,219      134,061
Fixed assets, net.............................................................       6,215        5,983
Deposits and other assets.....................................................       1,192        2,022
                                                                                -----------  -----------
           Total assets....................................................... $   210,626  $   142,066
                                                                                ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Warehouse and other lines payable......................................... $   158,148  $    87,483
    Accounts payable, accrued expenses and other current liabilities..........       7,535        6,914
    Capital lease obligation, current portion.................................         175           30
                                                                                -----------  -----------
           Total current liabilities..........................................     165,858       94,427
Notes payable, long term......................................................       5,000          --
                                                                                -----------  -----------
           Total liabilities..................................................     170,858       94,427
                                                                                -----------  -----------
Commitments and contingencies (Note 10):
Stockholders' equity:
    Preferred stock, 5,000,000 $0.001 par value shares authorized at
      December 31, 2001 and June 30, 2002; 0 shares issued and
      outstanding at December 31, 2001 and June 30, 2002......................         --           --
    Common stock, 150,000,000 $0.001 par value shares authorized at
      December 31, 2001 and June 30, 2002; 54,010,151 and
      59,013,365 shares issued and outstanding at December 31, 2001
      and June 30, 2002.......................................................          54           59
Additional paid-in capital....................................................     256,578      261,896
Accumulated deficit...........................................................    (216,864)    (214,316)
                                                                                -----------  -----------
           Total stockholders' equity.........................................      39,768       47,639
                                                                                -----------  -----------
           Total liabilities and stockholders' equity......................... $   210,626  $   142,066
                                                                                ===========  ===========`

The accompanying notes are an integral part of these financial statements.

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E-LOAN, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

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`Three Months Ended         Six Months Ended
                                                                June 30,                   June 30,
                                                            2001         2002          2001         2002
                                                         -----------  -----------   -----------  -----------
Revenues (Note 8)...................................... $    15,207  $    20,986   $    31,573  $    41,752

Operating expenses:
    Operations.........................................      10,693       11,327        22,181       22,179
    Sales and marketing................................       3,978        6,138         8,809       11,275
    Technology.........................................       1,680        1,240         3,463        2,669
    General and administrative.........................       1,276        1,347         2,763        2,980
    Amortization of non-cash marketing costs...........       2,985          --          5,970          --
    Amortization of unearned compensation..............       1,020          --          1,278          --
    Amortization of goodwill and intangible assets.....       9,933          --         19,867          --
                                                         -----------  -----------   -----------  -----------
           Total operating expenses....................      31,565       20,052        64,331       39,103
                                                         -----------  -----------   -----------  -----------
Income (loss) from  operations.........................     (16,358)         934       (32,758)       2,649
Other income, net......................................         238           39           321          (18)
                                                         -----------  -----------   -----------  -----------
Income (loss) before taxes.............................     (16,120)         973       (32,437)       2,631
Income taxes...........................................         --           (29)          --           (83)
                                                         -----------  -----------   -----------  -----------
Net income (loss)...................................... $   (16,120) $       944   $   (32,437) $     2,548
                                                         ===========  ===========   ===========  ===========

Net income (loss) per share:
    Basic.............................................. $     (0.30) $      0.02   $     (0.60) $      0.05
                                                         ===========  ===========   ===========  ===========
    Diluted............................................ $     (0.30) $      0.02   $     (0.60) $      0.04
                                                         ===========  ===========   ===========  ===========

    Weighted-average shares - basic....................      53,781       58,084        53,703       56,057
                                                         ===========  ===========   ===========  ===========
    Weighted-average shares - diluted..................      53,781       59,903        53,703       60,165
                                                         ===========  ===========   ===========  ===========`

The accompanying notes are an integral part of these financial statements.

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E-LOAN, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

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`Six Months Ended
                                                                         June 30,
                                                                    2001         2002
                                                                 -----------  -----------
Cash flows from  operating activities:
   Net income (loss)........................................... $   (32,437) $     2,548
   Adjustments to reconcile net income (loss) to net cash
     (used in) provided by operating activities:
     Amortization of unearned compensation.....................       1,278          --
     Amortization of goodwill and intangible assets............      19,867          --
     Non-cash marketing costs..................................       5,970          --
     Depreciation and amortization of fixed assets.............       1,925        1,943
     Changes in operating assets and liabilities:
       Loans held-for-sale.....................................      (2,038)      73,878
       Accounts receivable, prepaids, deposits
         and other assets......................................         962       (8,066)
       Accounts payable, accrued expenses and
         other payables........................................      (3,034)        (621)
                                                                 -----------  -----------
         Net cash provided by (used in) operating activities...      (7,507)      69,682
                                                                 -----------  -----------
Cash flows from investing activities:
   Acquisition of fixed assets.................................      (1,127)      (1,711)
                                                                 -----------  -----------
         Net cash used in investing activities                       (1,127)      (1,711)
                                                                 -----------  -----------
Cash flows from financing activities:
   Proceeds from issuance of common stock, net.................         229           36
   Proceeds from notes payable.................................       7,000          --
   Repayments of notes payable.................................      (7,060)         --
   Proceeds from warehouse and other lines payable.............   1,285,387    2,047,234
   Repayments of warehouse and other lines payable.............  (1,281,471)  (2,117,899)
   Payments on obligations under capital leases, net...........        (161)        (145)
                                                                 -----------  -----------
         Net cash provided by (used in) financing activities...       3,924      (70,774)
                                                                 -----------  -----------
Net decrease in cash...........................................      (4,710)      (2,803)
Cash and cash equivalents, beginning of period.................      28,459       32,538
                                                                 -----------  -----------
Cash and cash equivalents, end of period....................... $    23,749  $    29,735
                                                                 ===========  ===========
Supplemental cash flow information:
   Cash paid for interest...................................... $     5,554  $     3,463
                                                                 ===========  ===========
Non-cash financing activities:
   Conversion of convertible debt into common stock............ $       --   $     5,000
                                                                 ===========  ===========`

The accompanying notes are an integral part of these financial statements.

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E-LOAN, INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.	THE COMPANY

E-LOAN, Inc. (the "Company") was incorporated on August
26, 1996 and began marketing its services in June 1997.  The Company is a direct
to consumer lender of first and second mortgage loans, home equity loans and
home equity lines of credit and auto loans.  The Company operates as a single
operating segment.

2.	BASIS OF PRESENTATION

Interim Financial Information (unaudited)

The accompanying financial statements as of June 30, 2001
and 2002 are unaudited. The unaudited interim financial statements have been
prepared on the same basis as the annual financial statements and, in the
opinion of management, reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the Company's financial
position, results of operations and cash flows as of June 30, 2001 and 2002.
These financial statements and notes thereto are unaudited and should be read in
conjunction with the Company's audited financial statements included in the
Company's 10-K for the year ended December 31, 2001. The results for the three
and six months ended June 30, 2002 are not necessarily indicative of the
expected results for the year ending December 31, 2002.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid monetary
instruments with an original maturity of three months or less from the date of
purchase and documentary drafts, to be cash equivalents. Both cash equivalents
and short term investments are considered available-for-sale securities and are
carried at amortized cost, which approximates fair value. As more fully
described in Note 7, the Company must maintain a minimum cash and cash
equivalents balance of the higher of $15 million (including Restricted Cash,
excluding Documentary Drafts) or the highest amount required by any other lender
or agreement. The following summarizes cash and cash equivalents at December 31,
2001 and June 30, 2002 (dollars in thousands):

`December 31,  June 30,
                                                    2001         2002
                                                 -----------  -----------
Cash........................................... $     9,911  $    27,217
Commercial paper...............................      15,501          --
Documentary drafts.............................       2,626           18
Restricted cash................................       4,500        2,500
                                                 -----------  -----------
                                                $    32,538  $    29,735
                                                 ===========  ===========`

Documentary Drafts

The Company originates auto loans directly to consumers
through the use of a documentary draft process. This process requires the
borrower and the auto dealer to provide a series of supporting documents in
order to complete the loan. Examples of required supporting documentation
include copies of the borrower's driver's license, bill of sale, proof of
insurance, and application for title registration.

Documentary drafts consist of cash allocated to satisfy
documentary drafts presented by borrowers before the required supporting
documents are received by the Company to complete the loan. If the required
documentation is not provided as agreed to by the borrower and auto dealer, then
the allocation of cash is reversed and the cash balance is restored. The
Company's documentary draft process allows for at least two business days to
process the required supporting documentation prior to determining whether to
reverse or honor the original presentment by the auto dealer.  All documentary
drafts are pledged as collateral for borrowings under the auto line of credit at
June 30, 2002 (see Note 7).  Effective May 2002, the Company no longer uses a
documentary draft process to fund its auto loans.  All of the $18,000 included
in cash and cash equivalents at June 30, 2002 converted to loans in July 2002.

Derivative instruments

On June 15, 1998, the FASB issued SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities.  SFAS No. 133, as amended
by SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities and SFAS No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities, requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives will be recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction.  The
Statements require entities that use derivative instruments to measure these
instruments at fair value and record them as assets and liabilities on the
balance sheet.  Entities must reflect gains or losses associated with changes in
the fair value of these derivatives, either in earnings or as a separate
component of comprehensive income, depending on the nature of the underlying
contract or transaction. The Company adopted SFAS No. 133, as amended by SFAS
No. 137 and 138, on January 1, 2001. Adoption of this pronouncement resulted in
a transition adjustment of a $0.2 million gain, which was recorded as a
component of mortgage revenue.  For the three and six months ended June 30,
2002, the Company recorded a $1.3 million and $1.0 million loss, respectively,
as a component of mortgage revenue related to recording changes in fair value of
SFAS No. 133 derivatives.  The Company has designated certain assets as FAS 133
fair value hedges, which are further described in Note 10 Commitments and
Contingencies.

Sale of auto loans to qualified special purpose entity

On June 17, 2002, the Company entered into an arrangement
to sell auto loan receivables to a qualified special purpose entity (QSPE), E-Loan Auto Fund
One, LLC ("E-Loan Auto").  As of June 30, 2002, the
Company had not yet sold any auto loans to E-Loan Auto. The following provides
an overview of the intended transactions and related accounting. These
transactions involve the Company surrendering control over these assets to
assure that the sold assets have been isolated from the Company and its
creditors. As E-Loan Auto has met the appropriate tests to be considered a QSPE
the assets and liabilities of E-Loan Auto are appropriately not consolidated in
financial statements of the Company. E-Loan Auto has obtained a secured
borrowing facility from Merrill Lynch Bank USA to finance all purchases of loans
from the Company. The Company will recognize a gain on the sale of auto loan
receivables to E-Loan Auto in the period in which the sale occurs, which
represents the difference between the sale proceeds to the Company and the
Company's net carrying value of the receivables. Included in the proceeds
received by the Company from the sale of loans is a beneficial interest related
to loans owned by the QSPE, which will be reflected on the Company's balance
sheet as a retained interest asset. These retained interest assets will be
recorded on the balance sheet at fair value. In order to determine the fair
value management will estimate future excess cash flows to be received by the
Company over the life of the loan. The Company will make various assumptions in
order to determine the fair value of the estimated future excess cash flows to
be generated by the auto loans sold to the QSPE. The most significant
assumptions to be made are the cumulative credit losses to be incurred on the
pool of auto loan receivables sold, prepayment rates of the auto loans and the
rate at which the estimated future excess cash flows are discounted. The
assumptions to be used represent the Company's best estimates, and the use of
different assumptions could produce different financial results.

Net Income (Loss) Per Share

The Company computes net income (loss) per share in
accordance with SFAS No. 128, Earnings per Share. Under the provisions of
SFAS No. 128 basic net income (loss) per share is computed by dividing the net
income (loss) available to common stockholders for the period by the weighted
average number of common shares outstanding during the period. Diluted net
income (loss) per share is computed by dividing the net income (loss) available
to common stockholders for the period by the weighted average number of common
and potential dilutive shares outstanding during the period, to the extent such
potential dilutive shares are dilutive. Potential dilutive shares are composed
of incremental common shares issuable upon the exercise of stock options and
warrants, and the conversion of debt into common stock.

`Three Months Ended        Six Months Ended
                                                        June 30,                  June 30,
                                                    2001         2002         2001         2002
                                                 -----------  -----------  -----------  -----------
                                                    (In Thousands)            (In Thousands)
  Numerator:
    Net income (loss).......................... $   (16,120) $       944  $   (32,437) $     2,548
    Interest expense from convertible note.....         --             3          --           152
                                                 -----------  -----------  -----------  -----------
    Net income (loss) assuming dilution........ $   (16,120) $       947  $   (32,437) $     2,700
                                                 ===========  ===========  ===========  ===========
  Denominator:
    Weighted average shares, basic.............      53,781       58,084       53,703       56,057
    Effect of potentially dilutive securities:
      Convertible note.........................         --           839          --         2,778
      Warrants.................................         --            37          --            60
      Employee Stock Option Plan...............         --           943          --         1,270
                                                 -----------  -----------  -----------  -----------
    Weighted average number of shares
      assuming dilution........................      53,781       59,903       53,703       60,165
                                                 ===========  ===========  ===========  ===========

  Diluted net income (loss) per share.......... $     (0.30) $      0.02  $     (0.60) $      0.04
                                                 ===========  ===========  ===========  ===========`

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board
("FASB") issued SFAS No. 141, Business Combinations and SFAS
No. 142, Goodwill and Other Intangible Assets.  SFAS No. 141, among other
things, eliminates the use of the pooling of interests method of accounting for
business combinations.  Under the provisions of SFAS No. 142, goodwill will no
longer be amortized, but will be subject to a periodic test for impairment based
upon fair values.  SFAS No. 141 is effective for all business combinations
initiated after June 30, 2001.  SFAS No. 142 is effective beginning January 1,
2002.  The adoption of these statements had no effect on the Company's financial
statements.

In May 2002, the FASB issued SFAS No. 145, "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections".  SFAS 145 rescinds the automatic treatment of gains
or losses from extinguishment of debt as extraordinary unless they meet the
criteria for extraordinary items as outlined in APB Opinion No. 30,
"Reporting the Results of Operations, Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions".  In addition, SFAS 145 also requires sale-leaseback accounting
for certain lease modifications that have economic effects
that are similar to sale-leaseback transactions and makes various technical
corrections to existing pronouncements.  The provisions of this statement
related to the rescission of FASB Statement 4 shall be applied in fiscal years
beginning after May 15, 2002.  The provisions in paragraphs 8 and 9(c) of this
Statement related to FASB Statement 13 shall be effective for transactions
occurring after May 15, 2002, with early application encouraged. All other
provisions of this Statement shall be effective for financial statements issued
on or after May 15, 2002.  The Company believes that the adoption of SFAS No.
145 will not have a material effect on its financial position or results of
operations.

In July 2002, the FASB issued SFAS No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities"(SFAS 146). SFAS No.
146 addresses financial accounting and reporting for costs associated with exit
or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)."  This Statement requires that a liability for costs
associated with an exit or disposal activity be recognized and measured
initially at fair value only when the liability is incurred.  The provisions of
this Statement are effective for exit or disposal activities that are initiated
after December 31, 2002. The Company believes that the adoption of SFAS No. 146
will not have a material effect on its financial position or results of
operations.

4. 	ACCOUNTS RECEIVABLE, PREPAIDS AND OTHER CURRENT ASSETS

Accounts Receivable, Prepaids and Other Current Assets as
of December 31, 2001 and June 30, 2002, was $8.4 million and $16.0 million,
respectively. This balance includes the receivable due to the Company from sales
of mortgage loans on its sale agreement with Greenwich Capital Financial
Products, Inc. ("Greenwich Capital") in the amounts of $3.1 million
and $10.3 million at December 31, 2001 and June 30, 2002, respectively (see Note
7).

5.	LOANS HELD-FOR-SALE

The inventory of mortgage loans consists primarily of
first and second trust deed mortgages on residential properties located
throughout the United States. As of December 31, 2001 and June 30, 2002, the
Company had net mortgage loans held-for-sale of $159.7 million and $82.2
million, all of which are on accrual basis. All mortgage loans held-for-sale are
pledged as collateral for borrowings at December 31, 2001 and June 30, 2002 (see
Note 7).

The inventory of auto loans consists primarily of loans
against new and used automobiles located throughout the United States. As of
December 31, 2001 and June 30, 2002, the Company had loans held-for-sale of $2.5
and $6.2 million, all of which are on accrual basis. All of the auto loans held-for-sale were
pledged as collateral for borrowings at December 31, 2001 and June
30, 2002 (see Note 7).

6.	NOTES PAYABLE

On July 12, 2001, the Company sold a $5 million
convertible note to The Charles Schwab Corporation, which was convertible into
shares of its common stock at a conversion price of $1.06 per share and which
was scheduled to mature on January 19, 2003 (see Note 11). The convertible note
bore interest at a rate of 8% per annum and was payable quarterly. On March 14,
2002, the Company elected to redeem the note prior to its maturity date. On
April 12, 2002, The Charles Schwab Corporation exercised its option to convert
the amount due to 4,716,981 shares of common stock, in lieu of repayment.  The
convertible note was converted and no amounts are owing thereunder.

7.	WAREHOUSE AND OTHER LINES PAYABLE

As of June 30, 2002, the Company had a warehouse line of
credit for borrowings of up to $70 million for the interim financing of mortgage
loans with GMAC Bank. The interest rate charged on borrowings against these
funds is variable based on LIBOR plus various percentage rates. Borrowings are
collateralized by the related mortgage loans held-for-sale. At December 31, 2001
and June 30, 2002 approximately $47.8 million and $29.7 million was outstanding
under this line, respectively. This line of credit agreement generally requires
the Company to comply with various financial and non-financial covenants.  In
particular, the Company must maintain a minimum unrestricted cash balance of
$12.5 million (excluding Documentary Drafts). The Company was in compliance with
these covenants during the three and six months ended and at June 30, 2002. The
committed line of credit  expires on March 31, 2003.

As of June 30, 2002, the
Company had an agreement to finance up to $300 million of mortgage loan
inventory pending sale of these loans to the ultimate mortgage loan investors
with Greenwich Capital. Of this amount, $150 million is available in committed
funds. This loan inventory financing is secured by the related mortgage loans.
The interest rate charged on borrowings against these funds is based on LIBOR
plus various percentage points. At December 31, 2001 and June 30, 2002 there was
$104.9 million and $49.2 million outstanding under this financial commitment.
This agreement includes various financial and non-financial covenants. In
particular, the Company must maintain a minimum cash and cash equivalents
balance of $15 million (including Restricted cash, excluding Documentary drafts)
and the highest amount required by any other lender or agreement. The Company
was in compliance with these covenants during the three and six months ended and
at June 30, 2002. The line expires on March 21, 2003.

In addition, the Company
has an uncommitted mortgage loan purchase and sale agreement with Greenwich
Capital. Under the terms of this agreement, mortgage loans which are subject to
a "take-out" commitment between the Company and an investor, but have
not yet been purchased, may be sold to Greenwich Capital with the accompanying
trade assignment.  This allows the Company to accelerate turnover and provide
additional liquidity to fund additional mortgage loans.  Revenue derived from
sales under this agreement are included as a receivable on the balance sheet
(see Note 4). The balance of loans sold related to these receivables was $126.9
million and $241.4 million as of December 31, 2001 and June 30, 2002,
respectively.

On April 1, 2001, the Company entered into an agreement for a
$25 million line of credit for the interim financing of auto loans with Bank
One, NA. The interest rate charged on this line was based on LIBOR plus 2.5%.
This committed line was reduced to $10 million on April 1, 2002 and was
scheduled to expire on July 31, 2002.  Prior to the expiration of this committed
line, the Company paid off the line on June 19, 2002, and terminated the
agreement.

On June 14, 2002, the Company secured a $10 million line of
credit facility with Merrill Lynch Mortgage Capital, Inc. to support the interim
funding of auto loans prior to their sale to the ultimate auto loan purchaser.
The interest rate charged on this line is based on LIBOR plus various percentage
points.  This facility expires on June 14, 2003. At June 30, 2002, $8.6 million
was outstanding under this line. This line includes various financial and non-
financial covenants.  At June 30, 2002, the Company was in compliance with these
covenants.

8.	REVENUES AND OTHER INCOME, NET

The following table provides the components of revenues
(in thousands):

`Three Months Ended     Six Months Ended
                                                      June 30,               June 30,
                                                 2001       2002        2001       2002
                                               ---------  ---------   ---------  ---------
Revenues:
   Mortgage.................................. $   8,772  $  11,738   $  15,986  $  24,553
   Interest income on mortgage loans.........     2,893      2,985       5,836      5,975
   Interest income on home equity loans......       115        519         199        757
   Home equity...............................       970      3,267       1,592      5,551
   Auto......................................     2,095      2,250       7,376      4,548
   Other.....................................       362        227         584        368
                                               ---------  ---------   ---------  ---------
         Total revenues...................... $  15,207  $  20,986   $  31,573  $  41,752
                                               =========  =========   =========  =========`

The following table provides the components of other income,
net (in thousands):

`Three Months Ended     Six Months Ended
                                                      June 30,               June 30,
                                                 2001       2002        2001       2002
                                               ---------  ---------   ---------  ---------
Interest on short-term  investments.......... $     244  $      55   $     401  $     140
Interest expense on non-warehouse
   facility borrowings.......................        (9)       (16)        (83)      (158)
Equity investment gain/(loss)................         2        --            6        --
Other........................................         1        --           (3)       --
                                               ---------  ---------   ---------  ---------
                                              $     238  $      39   $     321  $     (18)
                                               =========  =========   =========  =========`

9.	OPERATING EXPENSES

The following table provides the components of operating
expenses (in thousands):

`Three Months Ended     Six Months Ended
                                                      June 30,               June 30,
                                                 2001       2002        2001       2002
                                               ---------  ---------   ---------  ---------
Compensation and benefits.................... $   7,093  $   9,457   $  14,125  $  18,680
Processing costs.............................     1,663        910       3,304      1,445
Advertising and marketing....................     3,249      4,938       7,605      9,154
Professional services........................       633        648       1,773      1,383
Occupancy costs..............................       860      1,006       1,763      1,919
Computer and internet........................       248        220         552        507
General and administrative...................     1,291      1,274       2,623      2,706
Interest expense on warehouse borrowings.....     2,590      1,599       5,471      3,309
Amortization of unearned compensation........     1,020        --        1,278        --
Amortization of goodwill and intangible
   assets....................................     9,933        --       19,867        --
Non-cash marketing costs.....................     2,985        --        5,970        --
                                               ---------  ---------   ---------  ---------
         Total operating expenses............ $  31,565  $  20,052   $  64,331  $  39,103
                                               =========  =========   =========  =========`



The following table provides detail of the operations component of total
operating expenses classified by the following revenue-related categories (in
thousands):

`Three Months Ended      Six Months Ended
                                                 June 30,                June 30,
                                              2001        2002        2001        2002
                                           ----------  ----------  ----------  ----------
Mortgage ................................ $    5,190  $    5,967  $   10,266  $   11,817
Interest expense on mortgage loans.......      2,273       1,301       4,988       2,813
Interest expense on home equity loans....        208         241         374         351
Home equity..............................        771       1,844       1,156       3,175
Auto.....................................      2,204       1,940       5,318       3,952
Other....................................         47          34          79          71
                                           ----------  ----------  ----------  ----------
Total operations......................... $   10,693  $   11,327  $   22,181  $   22,179
                                           ==========  ==========  ==========  ==========`

10.	COMMITMENTS AND CONTINGENCIES

FINANCIAL INSTRUMENT CONTINGENCIES

E-LOAN originates mortgage and home equity loans and
manages the market risk related to these loans through various hedging
programs.

Loan commitments and hedging activities

At June 30, 2002, the Company was a party to rate lock
commitments to fund loans at interest rates previously agreed (locked) by both
the Company and the borrower for specified periods of time. Rate locks with the
borrowers are on a best effort basis, borrowers are not obligated to enter into
the loan agreement. A rate lock, which does not result in a funded loan, is
referred to as fallout. As the Company is exposed to movements in interest rates
after entering into rate locks, the Company must estimate fallout if interest
rate risk is to be economically hedged with a mandatory sell forward agreement.
At June 30, 2002, the Company had provided locks to originate loans amounting to
approximately $373.9 million (the "locked pipeline").

The Company originates mortgage loans and sells them
primarily through whole loan sales. The market values of mortgage loans are
sensitive to changes in market interest rates. If interest rates rise between
the time the Company enters into a rate lock with the borrower, the subsequent
funding of the loan and the time the mortgage loans are committed for sale,
there may be a decline in the market value of the mortgage loans. To protect
against such possible declines, the Company has adopted an economic hedging
strategy.

The Company retains the services of Tuttle Risk Management
Services, Inc. ("TRMS"), an unaffiliated advisory firm specializing in
mortgage loan pipeline management to assist the Company in minimizing the
interest rate risk associated with the time lag between when loans are rate-
locked and when they are committed for sale or exchanged in the secondary
market. Individual mortgage loan risks are aggregated by note rate, mortgage
loan type and stage in the pipeline, and are then matched, based on duration,
with the appropriate hedging instrument, thus mitigating
basis risk until closing and delivery. The Company currently hedges its mortgage
pipeline through mandatory forward sales of Fannie Mae mortgage-backed
securities and non-mandatory forward sale agreements with the ultimate investor.
The Company determines which alternative provides the best execution in the
secondary market. As a managed account of TRMS, the Company is able to take
advantage of TRMS' reporting services, including pipeline,
mark-to-market, commitment and position reporting.

The Company believes that it has implemented a cost-effective
economic hedging program to provide a high level of protection against changes
in the market value of rate-lock commitments. However, an effective strategy is
complex and no hedging strategy can completely insulate the Company against such
changes.

At June 30, 2002, the Company had entered into mandatory sell
forward commitments amounting to approximately $106.5 million. The Company
adjusts the amount of mandatory sell forward commitments held to offset changes
in the locked pipeline and changes in the market value of unsold loans.  During
the three months ended June 30, 2002, the Company did not designate mandatory
sell forward commitments as FAS 133 hedges. At June 30, 2002, the Company had
entered into $34.6 million of commitments with third party investors to deliver
loans related to funded loans held for sale. The Company designates as a fair
value FAS 133 hedge at commitment date loans held for sale, where the Company
intends to deliver the underlying loan into the commitment ("delivery
commitment").

At June 30, 2002, the Company had entered into non-mandatory
forward loan sale agreements amounting to approximately $230.2 million. These
forward loan sale agreements do not subject the Company to mandatory delivery
and there is no penalty if the Company does not deliver into the commitment. The
Company is exposed to the risk that these counterparties may be unable to meet
the terms of these sale agreements. The investors are well-established U.S.
financial institutions; the Company does not require collateral to support these
commitments, and there has been no failure on the part of the counterparties to
meet the terms of these agreements to date.  The Company designates all non-
mandatory forward sale agreements as fair value FAS 133 hedges for underlying
loans at funding. The Company did not have a material gain or loss representing
the amount of hedge ineffectiveness related to non-mandatory forward sale
agreements or delivery commitments during the three months ended June 30,
2002.

11.	RELATED PARTY TRANSACTIONS

Agreements With The Charles Schwab Corporation

Common Stock Purchase

On April 25, 2000, the Company sold 2,666,666 shares of
its common stock to The Charles Schwab Corporation (Schwab) at a purchase price
of $3.75 per share.  The sale was part of a $40 million private placement sale
of the Company's common stock.  Following the purchase of shares, Schwab
beneficially owned approximately 5% of the Company's outstanding shares of
common stock.

Marketing Agreement

On April 25, 2000, the Company entered into a four-year
Marketing Agreement with Schwab to become the exclusive provider of mortgage
loans to the Schwab customer base through a co-branded website at
http://schwab.eloan.com. In consideration, the
Company agreed to pay Schwab cash marketing fee payments and to issue to Schwab
warrants to purchase shares of its common stock.  As part of the Marketing
Agreement, Daniel O. Leemon, a member of Schwab's management committee, was
nominated to the Company's board of directors.

The Company recorded revenue earned from the sale of loans
attributable to the marketing agreement of $373,000, $5,435,000 and $3,445,000
for the twelve months ended December 31, 2000 and 2001 and the six months ended
June 30, 2002, respectively. The volume of loans sold associated with the above
revenue was $40.9 million, $305.3 million and $180.2 million for the twelve
months ended December 31, 2000 and 2001 and the six months ended June 30, 2002,
respectively.

Cash Marketing Costs

The original agreement stipulated that Schwab would
receive cash marketing fees in the amount of $929,000, $3,566,049, $11,159,611
and $13,355,340 for each of the four years of the agreement, respectively. The
escalating payments correlated to the anticipated future benefit from the
marketing agreement as of April 2000.  Through an amendment to the agreement,
the Company obtained a unilateral right to cancel the agreement on or before
June 30, 2001, which if exercised, no marketing fees would be owed for years 2
through 4 of the agreement. Also as an amendment to the agreement, the first
year payment of $929,000 was reduced to $799,000. Based on the Company's ability
to cancel, the first year's cash marketing fee payment of $799,000 was amortized
ratably over the first year of the agreement.

Through a series of subsequent amendments, the marketing fees
payable to Schwab were reduced to better match the then anticipated future
benefit from the marketing agreement. The Company recorded cash marketing costs
of $465,000, $1,100,000 and $785,000 for the twelve months ended December 31,
2000 and 2001 and the six months ended June 30, 2002, respectively. On May 30,
2002 the Company and Schwab mutually amended the agreement to change the total
cash marketing costs owing for the third and fourth years of the agreement to an
aggregate of $1,061,160 payable in equal monthly installments of $44,215.  In
addition, the amendment allows either party to cancel the agreement at any time
with thirty days notice.  To this date, the Company has elected not to terminate
the marketing agreement with Schwab because it believes that revenues to be
generated during the remaining term of the agreement will exceed the marketing
fees, co-op marketing costs and related operational costs to be incurred during
the remaining term.

In addition to marketing fees paid to Schwab, the Company
incurs other advertising expense directed toward the Schwab customer base known
as co-op marketing costs.  The co-op marketing costs cover such items as direct
mail pieces sent to Schwab customers.  There is no minimum co-op marketing
expense required under the agreement.  The co-op marketing costs are a pass
through of expenses and do not represent revenue for Schwab. The Company
recorded co-op marketing costs of $195,000, $475,000 and $89,000 for the twelve
months ended December 31, 2000 and 2001 and the six months ended June 30, 2002,
respectively.

Non-cash Marketing Costs

In addition to the cash compensation under the Marketing Agreement, the
Company issued two warrants to purchase 13.1 million shares of common stock to Schwab.  The first
warrant to purchase 6,500,000 shares of common stock at an exercise price of $3.75, has a three year
term and expires on April 25, 2003.  Half of the 6,500,000 shares under the warrant are exercisable
following the one year anniversary of the date of grant, and all of the shares are exercisable
following the two year anniversary, if immediately prior to exercise the Company's stock has traded
at $5.75 for five consecutive days.  Once exercised, the shares are subject to a one-year holding
period before they are saleable.  The second warrant to purchase 6,600,000 shares of common stock at
an exercise price of $15.00, had a three and a quarter year term and an expiration date of July 25,
2003.  The second warrant does not contain the same restrictions included in the first warrant, and
may be exercised by Schwab at any time.  The warrants, like those issued by the Company previously
to other parties, contain a net exercise provision which allows Schwab to pay for the warrant shares
without delivering any cash to the Company.  Instead, Schwab would pay for the shares by
relinquishing some of the shares that Schwab would have acquired had Schwab paid cash for the
shares.  Both warrants may only be transferred to a third party by Schwab, following delivery of
notice to the Company, and only in accordance with an exemption from registration under the
Securities Act of 1933, as amended.  The warrants are not subject to cancellation in the event that
the Marketing Agreement is terminated.  The average of the high and low price of the Company's
common stock as reported by the Nasdaq National Market on April 24, 2000 (prior to date of
issuance), and April 25, 2000 (the date of issuance of the warrants and the public announcement of
the agreement) was $4.16 and $7.60 per share, respectively.  Following the issuance of the warrants
on April 25, 2000 (and shares acquired in the private placement), Schwab beneficially owned
approximately 16% of the Company's outstanding shares of common stock.  Beneficial ownership
includes shares directly held and those issuable under warrants that are exercisable within sixty
days of April 25, 2000, regardless of whether the warrants exercise price is less than the market
price.

The total valuation of both of these warrants was determined to be $12,460,000.
The first warrant was valued using the Black-Scholes option pricing model with the following
assumptions: risk-free interest rate of 6.0%, term of three years and volatility of 80%.   The
second warrant was also valued using the Black-Scholes option pricing model with the following
assumptions: risk-free interest rate of 6.0%, term of three and 1/4 years and volatility of 70%.
The difference between the total valuation of the warrants and the Black-Scholes option pricing
model output is primarily attributable to discounts relating to both the dilution impact from the
potential issuance of the shares of common stock underlying the warrants and the restrictions upon
the exercise of the first warrant and the ability to sell the shares issuable upon exercise of that
warrant.  The total valuation was recorded as a contra-equity item called marketing services
receivable and was expensed over a one-year term, consistent with the treatment of the first year
cash payment due to the unilateral cancellation right.

The Company recorded $6.5 million and $6.0 million in non-cash marketing costs in
the years ended December 31, 2000 and 2001, respectively, related to the issuance of these warrants.
As of December 31, 2001, the warrants were fully amortized.

Convertible Debt

On July 12, 2001, the Company sold a $5 million convertible note to The
Charles Schwab Corporation, which was convertible into shares of its common stock at a conversion
price of $1.06 per share and which was scheduled to mature on January 19, 2003. The Company issued
the note for general corporate purposes and in order to obtain adequate excess cash reserves above
its minimum cash covenant requirements under its warehouse lines of credit. As the convertible
feature was issuable in the Company's stock, no value was ascribed to the convertible feature of the
note at the time it was issued (in accordance with APB 14 and FAS 133). The convertible note bore
interest at a rate of 8% per annum and was payable quarterly. Schwab beneficially owned
approximately 19% of the Company's outstanding shares at the time the note was issued on July 12,
2001(after giving effect to the warrant exchange described below).  Beneficial ownership includes
shares directly held and those issuable under warrants that are exercisable within sixty days of
July 12, 2001, regardless of whether the warrants exercise price is less than the market price.
Schwab received a total of $183,000 and $113,000 in interest payments on this note for the year
ended December 31, 2001 and the six months ended June 30, 2002, respectively.

On March 14, 2002, the Company elected to redeem the
convertible note prior to its maturity date. The Company elected to redeem the
note because the borrowings were no longer necessary to obtain adequate excess
cash reserves above its minimum cash covenant requirements under its warehouse
lines of credit.  Under the terms of the note, the Company notified Schwab of
its intent to redeem the note on April 15, 2002 by payment of $5,250,000 (105%
of the unpaid principal as of the date of redemption).  The average of the high
and low price of the Company's common stock as reported by the Nasdaq National
Market on April 15, 2002 was $1.92 per share. On April 12, 2002, The Charles
Schwab Corporation exercised its option to convert the amount due under the note
into 4,716,981 shares of the Company's common stock, in lieu of repayment, and
therefore the note was converted, rather than redeemed.

Warrant Exchange

On July 12, 2001, the Company issued a $5.0 million
convertible note to Schwab, convertible into shares of the Company's common
stock at a conversion price of $1.06 per share. In order to facilitate Schwab's
purchase of the convertible debt and to meet its requirement that its fully
diluted percent ownership in the Company be less than 25%, on July 12, 2001
Schwab surrendered its warrant to purchase 6,600,000 shares of common stock at
an exercise price of $15.00 ("surrendered warrant") and the Company issued
Schwab a new warrant to purchase 1,389,000 shares of common stock at an exercise
price of $5.00 and with an expiration date of July 25, 2003 ("exchange
warrant").  At the time of the exchange, the Company determined the value of the
surrendered warrant and the exchange warrant to each be approximately $240,000.
The surrendered warrant was valued using the Black-Scholes option pricing model
with the following assumptions: risk-free interest rate of 3.95%, remaining term
of 2 years and volatility of 98%.   The exchange warrant was also valued
using the Black-Scholes option pricing model with the following assumptions:
risk-free interest rate of 3.95%, remaining term of 2 years and volatility of
98%.   The difference between the valuation of each warrant and its
respective Black-Scholes option pricing model output is primarily attributable
to discounts which were applied to reflect liquidity and dilution.  A liquidity
discount was applied to both warrants to estimate the discount to market that
would be required for the holder to try and recognize the value through open
market sales.  A second discount was applied to the surrendered warrant to
reflect the dilution impact from the potential issuance of the shares of common
stock underlying the warrant.  This dilution discount was not applied to the
exchange warrant because of the smaller number of shares it represented. 
In valuing the surrendered warrant as part of the warrant exchange, we updated
assumptions that change over time (e.g. risk-free interest rate, volatility,
remaining term of set expiration date) from those used in its original valuation
in April 2000.  As each warrant was determined to be of approximate equal value,
no additional value was recorded at the time of exchange.  The Company will
incur additional costs related to legal, accounting and filing fees to register
the shares underlying the exchange warrant.  The Company derived a benefit in
the warrant exchange, since the exchange enabled Schwab to participate in the
convertible note issuance.  As a result of the exchange, Schwab reduced the
number of shares it was entitled to purchase, but increased the likelihood that
at some point in the future the exercise price would be less than the market
price of the Company's common stock.  The exchange warrant may be exercised by
Schwab at any time. The exchange warrant like the surrendered warrant contains a
net exercise provision.  The exchange warrant may only be transferred to a third
party by Schwab following delivery of notice to the Company, and only in
accordance with an exemption from registration under the Securities Act of 1933,
as amended. The average of the high and low price of the Company's common stock
as reported by the Nasdaq National Market on July 12, 2001 (the date of issuance
of the exchange warrant) was $1.02 per share.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion of the financial condition and
results of operations of the Company should be read in conjunction with the
Financial Statements and the related Notes thereto included elsewhere in this
Form 10-Q. This discussion contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below, as well as
those discussed below under "Factors Affecting Future Operating Results." The
Company disclaims any obligation to update information contained in any forward-looking
statement. See "Forward-Looking Statements."

OVERVIEW

The Company is an online lender whose revenues are
derived primarily from the commissions and fees earned from mortgage, home
equity and auto loans that it underwrites, funds and sells on the secondary
market.

Mortgage Revenues

The Company's mortgage revenues are derived from the
origination and sale of self-funded loans and, to a minor extent (less than one
percent), from the brokering of loans. Brokered loans are funded through lending
partners and the Company never takes title to the mortgage. Brokerage revenues
are comprised of the mark-up to the lending partner's loan price and processing
fees. These revenues are recognized at the time a loan is closed. In October
1998, the Company began funding its mortgage loans using warehouse lines of
credit. Self-funded loans are funded through the Company's own warehouse lines
of credit and sold to mortgage loan purchasers typically within thirty days.
Self-funded loan revenues consist of proceeds in excess of the carrying value of
the loan, origination fees less certain direct origination costs and other
processing fees. These revenues are recognized at the time the loan is sold. The
Company earns additional revenue from its self-funded loans as compared to
brokered loans because the sale of loans includes a service release premium.
Self-funded loans generated 99% of mortgage revenues in the three months ended
June 30, 2002.

Interest Income on Mortgage and Home Equity Loans

The Company generates revenues from interest income on
self-funded mortgage and home equity loans.  The revenues realized are based on
the loan amount multiplied by the contractual interest rate from the time of
funding by the Company through time of sale.  These revenues are recognized as
earned during the period from funding to sale.

Home Equity Revenues

In the fourth quarter of 2000, the Company began self-funding
home equity loans and selling them to home equity loan purchasers. The Company's
home equity revenues are derived from the origination and sale of self-funded
loans. Self-funded loans are funded through the Company's own warehouse lines of
credit and sold to home equity loan purchasers typically within thirty days.
Self-funded loan revenues consist of proceeds in excess of the carrying value of
the loan, origination fees less certain direct origination costs and other
processing fees. These revenues are recognized at the time the loan is sold.
Self-funded loans generated 97% of home equity revenues in the three months
ended June 30, 2002.

Auto Revenues

The Company's auto revenues are derived from the origination
and sale of self-funded loans and from the brokering of auto loans. Auto
brokerage revenues are primarily comprised of the mark-up to the lending
partner's loan price or a set origination fee. These revenues are recognized at
the time a loan is closed. Self-funded loans are funded through an auto line of
credit and sold to auto loan purchasers typically within ten business days. In
April 2001, the Company began funding its auto loans prior to sale with
borrowings against an auto line of credit. Self-funded loan revenues consist of
the mark-up to the lending partner's loan price or a set origination fee. These
revenues are recognized at the time a loan is sold.  Self-funded loans generated
83% of auto revenues in the three months ended June 30, 2002.

Other Revenues

The Company generates revenues from referral fees paid by
various partners in exchange for consumer loan referrals generated by
advertising such partners' products on the Company's website.  The current
consumer loan referral programs offered include credit cards, unsecured personal
loans and education loans.  Other revenues generated approximately 1% of total
revenue in the three months ended June 30, 2002.

RESULTS OF OPERATIONS

The following table sets forth certain items from the
Company's statements of operations as a percentage of total revenues for the
periods indicated:

`Three Months Ended         Six Months Ended
                                                               June 30,                   June 30,
                                                            2001         2002          2001         2002
                                                         -----------  -----------   -----------  -----------
Revenues ..............................................         100%         100%          100%         100%

Operating expenses:
    Operations.........................................          70%          54%           70%          53%
    Sales and marketing................................          26%          29%           28%          27%
    Technology.........................................          11%           6%           11%           6%
    General and administrative.........................           8%           6%            9%           7%
    Amortization of non-cash marketing costs...........          20%         --             19%         --
    Amortization of unearned compensation..............           7%         --              4%         --
    Amortization of goodwill and intangible assets.....          65%         --             63%         --
                                                         -----------  -----------   -----------  -----------
           Total operating expenses....................         207%          95%          204%          94%
                                                         -----------  -----------   -----------  -----------
Income (loss) from  operations.........................        -107%           5%         -104%           6%
Other income, net......................................           2%         --              1%         --
                                                         -----------  -----------   -----------  -----------
Income (loss) before taxes.............................        -105%           5%         -103%           6%
Income taxes...........................................         --           --            --           --
                                                         -----------  -----------   -----------  -----------
Net income (loss)......................................        -105%           5%         -103%           6%
                                                         ===========  ===========   ===========  ===========`

Revenues

The following table provides the components of revenue shown as a
percentage of total revenues:

`Three Months Ended     Six Months Ended
                                                     June 30,               June 30,
                                                 2001       2002        2001       2002
                                               ---------  ---------   ---------  ---------
Revenues:
   Mortgage..................................        58 %       56 %        51 %       59 %
   Interest income on mortgage loans.........        19 %       14 %        18 %       14 %
   Interest income on home equity loans......         1 %        2 %         1 %        2 %
   Home equity...............................         6 %       16 %         5 %       13 %
   Auto......................................        14 %       11 %        23 %       11 %
   Other.....................................         2 %        1 %         2 %        1 %
                                               ---------  ---------   ---------  ---------
         Total revenues......................       100 %      100 %       100 %      100 %
                                               =========  =========   =========  =========`

Revenues increased $5.8 million to $21.0 million for the three months ended
June 30, 2002 from $15.2 million for the three months ended June 30, 2001.
Revenues increased $10.2 million to $41.8 million for the six months ended June
30, 2002 from $31.6 million for the six months ended June 30, 2001. A
significant portion of these increases resulted from growth in the dollar volume
of mortgage and home equity loans closed and sold. Mortgage revenues increased
from $8.8 million for the three months ended June 30, 2001 to $11.8 million for
the three months ended June 30, 2002 and increased from $16.0 million for the
six months ended June 30, 2001 to $24.6 million for the six months ended June
30, 2002.  Refinance mortgage accounted for 75% of mortgage closed loan volume
in the three months ended June 30, 2002 as compared to 85% in the three months
ended June 30, 2001. Refinance mortgage accounted for 80% of mortgage closed
loan volume in the six months ended June 30, 2002 as compared to 84% in the six
months ended June 30, 2001.  The Company expects mortgage revenues to increase
in the short term, partially as a result of the recent increase in refinance
activity, returning to second quarter 2002 levels by year end. Home equity
revenues increased from $1.0 million for the three months ended June 30, 2001 to
$3.3 million for the three months ended June 30, 2002 and increased from $1.6
million for the six months ended June 30, 2001 to $5.6 million for the six
months ended June 30, 2002.  The Company also expects that home equity revenues
will moderately grow in the near future as volumes increase. Auto revenues
increased from $2.1 million for the three months ended June 30, 2001 to $2.3
million for the three months ended June 30, 2002 and decreased from $7.4 million
for the six months ended June 30, 2001 to $4.5 million for the six months ended
June 30, 2002.  The decline over the six months is largely attributed to strong
competition from the auto manufacturers in the form of widely available
incentive financing rates, such as 0% interest rate specials.  The Company
lowered interest rates on auto loans starting in the second quarter of 2001, to
try and remain competitive as evidenced in the decline in average basis points
per loan from the six months ended June 30, 2001 to the six months ended June
30, 2002. However, since the Company cannot compete with 0% interest rate
specials, the Company experienced a significant decline in volume of auto loans
funded from the six months ended June 30, 2001 to the six months ended June 30,
2002. We expect auto revenues to increase when the use of manufacturer
incentives returns to normal levels.

The following table summarizes dollar volume of loans closed and sold and the
revenue in both dollars and average basis points ("BPS") (dollars in
thousands except BPS):

`Three Months Ended      Six Months Ended
                                June 30,                June 30,
                            2001        2002        2001        2002
                         ----------  ----------  ----------  ----------
Mortgage
$ Volume                $  697,246  $  766,494  $1,252,680  $1,683,296
Revenue                 $    8,772  $   11,738  $   15,986  $   24,553
BPS                            126         153         128         146

Home Equity
$ Volume                $   62,351  $  124,125  $   94,559  $  221,773
Revenue                 $      970  $    3,267  $    1,592  $    5,551
BPS                            156         263         168         250

Auto
$ Volume                $  130,951  $  150,733  $  434,400  $  291,196
Revenue                 $    2,095  $    2,250  $    7,376  $    4,548
BPS                            160         149         170         156`

The following table illustrates the percentages of the Company's mortgage
closed loan volume from purchase and refinance loans as compared to the total
market (according to Mortgage Bankers Association of America) through June 30,
2002. The Mortgage Bankers Association of America data for the first and second
quarters of 2002 below represent their estimates as of July 12, 2002:



|E-LOAN
   Purchase
   Refinance       | 1999
63%
37% | 2000
61%
39% | 2001
16%
84% | Q1 02
15%
85% | Q2 02
25%
75%
|------------------------------------- | ------------ | ------------ | ------------ | ------------- | -------------
|Total Market
   Purchase
   Refinance | 1999
66%
34% | 2000
81%
19% | 2001
43%
57% | Q1 02
45%
55% | Q2 02
55%
45%

Operating Expenses

Total Operating Expenses. Total operating expenses
decreased $11.5 million to $20.1 million for the three months ended June 30,
2002 from $31.6 million for the three months ended June 30, 2001. Total
operating expenses decreased $25.2 million to $39.1 million for the six months
ended June 30, 2002 from $64.3 million for the six months ended June 30, 2001.
The decrease for the six-month period was primarily due to decreases in
amortization of goodwill, amortization of non-cash marketing costs, amortization
of unearned compensation, and interest expense on warehouse borrowings partially
offset by increases in operations and marketing costs associated with higher
loan volumes.

Operations. Operations expense is
comprised of both fixed and variable expenses, including employee compensation
and expenses associated with the production and sale of loans and interest
expense under the warehouse and line of credit facilities used to fund mortgage,
home equity and auto loans held-for-sale.

The following table provides detail of the Company's
operations expenses classified by the following revenue-related categories
(dollars in thousands):

`Three Months Ended      Six Months Ended
                                                  June 30,                June 30,
                                              2001        2002        2001        2002
                                           ----------  ----------  ----------  ----------
Mortgage ................................ $    5,190  $    5,967  $   10,266  $   11,817
Interest expense on mortgage loans.......      2,273       1,301       4,988       2,813
Interest expense on home equity loans....        208         241         374         351
Home equity..............................        771       1,844       1,156       3,175
Auto.....................................      2,204       1,940       5,318       3,952
Other....................................         47          34          79          71
                                           ----------  ----------  ----------  ----------
Total operations......................... $   10,693  $   11,327  $   22,181  $   22,179
                                           ==========  ==========  ==========  ==========`

Operations expense increased $0.6 million to $11.3 million
for the three months ended June 30, 2002 from $10.7 million for the three months
ended June 30, 2001.  Operations expense decreased as a percentage of revenue
from 70% to 54% for the three months ended June 30, 2001 and 2002, respectively.
The increase in absolute dollars is primarily due to an increase in mortgage and
home equity operations expenses related to higher loan volumes, partially offset
by decreases in interest expense on mortgage loans. In the near term, operations
expenses as a percentage of revenues are expected to moderately increase as the
mix of revenue shifts to loan products with current lower operational cost
efficiency than mortgage loans.

Direct Margin. Direct margin is defined as
revenue minus operations expense, which includes variable and fixed
expenses.

The following table provides detail of the Company's direct
margin classified by the following revenue-related categories (dollars in
thousands):

`Three Months Ended      Six Months Ended
                                                  June 30,                June 30,
                                              2001        2002        2001        2002
                                           ----------  ----------  ----------  ----------
Mortgage................................. $    3,582  $    5,771  $    5,720  $   12,737
Mortgage interest margin.................        620       1,684         848       3,162
Home equity interest margin..............        (93)        278        (175)        406
Home equity..............................        199       1,423         436       2,376
Auto.....................................       (109)        310       2,058         588
Other....................................        315         193         505         304
                                           ----------  ----------  ----------  ----------
Total direct margin...................... $    4,514  $    9,659  $    9,392  $   19,573
                                           ==========  ==========  ==========  ==========`

Direct margin increased $5.1 million to $9.6 million for the
three months ended June 30, 2002 from $4.5 million for the three months ended
June 30, 2001.  The growth in direct margin is due largely to the contribution
from mortgage and home equity volume coupled with technology and process
improvements.  Additionally, the increase in direct margin is due to the
significant positive spread of interest income over interest expense.  For the
six months ended June 30, 2002, auto direct margin decreased compared to the six
months ended June 30, 2001, as loan volume declined due to the industry's broad
use of low interest rate financing incentives, which began in the second quarter
of 2001. The Company was unable to lower interest rates on auto loans to a
competitive level in the heavy interest rate incentive environment and therefore
sustained sharp decreases in overall volume and the resulting revenue from that
volume. The decline in auto loan volume and revenue was greater than the
Company's ability to lower related auto operations expenses and resulted in
negative direct margins in the second quarter of 2001. Auto direct margins
recently returned to positive levels, and we expect these margins to further
improve when the use of these incentives returns to normal levels.

Sales and Marketing. Sales and marketing
expense is primarily comprised of expenses (excluding non-cash marketing costs)
related to advertising, promotion and distribution partnerships and employee
compensation and other expenses related to personnel. Sales and marketing
expense increased $2.1 million to $6.1 million for the three months ended June
30, 2002 from $4.0 million for the three months ended June 30, 2001.  Sales and
marketing expense increased moderately as a percentage of revenue from 26% to
29% for the three months ended June 30, 2001 and 2002, respectively.  Sales and
marketing expenses are expected to be approximately 25% of total revenues in
upcoming quarters.

Technology. Technology expense includes
employee compensation, the introduction of new technologies and the support of
the Company's existing technological infrastructure. Technology expense
decreased $0.5 million to $1.2 million for the three months ended June 30, 2002
from $1.7 million for the three months ended June 30, 2001.  Technology expense
decreased as a percentage of revenue from 11% to 6% for the three months ended
June 30, 2001 and 2002, respectively. The Company expects technology expense in
absolute dollars to moderately grow in the upcoming quarters.

General and Administrative. General and
administrative expense is primarily comprised of employee compensation and
professional services. General and administrative expense increased $0.1 million
to $1.4 million for the three months ended June 30, 2002 from $1.3 million for
the three months ended June 30, 2001.  General and administrative expense
decreased as a percentage of revenue from 8% to 6% for the three months ended
June 30, 2001 and 2002, respectively.  General and administrative expenses are
expected to stay relatively constant as a percentage of revenues in the upcoming
quarters.

Amortization of Non-Cash Marketing Costs.  On April
25, 2000, the Company issued two warrants to purchase up to 13.1 million shares
of common stock to The Charles Schwab Corporation pursuant to a marketing
agreement with Schwab.  The total valuation of both of these warrants was
determined to be $12.5 million.  The assumptions used to value the warrants are
detailed in Note 11 to the Financial Statements.  The amount was recorded as a
contra-equity item called marketing services receivable and was expensed over a
one-year term based on the Company's unilateral cancellation right on or before
the end of the agreement's first year. The marketing receivable concluded
amortization on June 30, 2001 (see Note 11 to the financial statements).

Amortization of Unearned Compensation.  Certain
stock options granted in the years ended December 31, 1998 and 1999 were
considered to be compensatory. Additionally, an issuance of Series D preferred
stock to Harold "Pete" Bonnikson, Senior Vice President of Mortgage
Operations, in 1999 was considered to be compensatory.  Management accelerated
the vesting of compensatory options in the fourth quarter of 2001 resulting in
the full amortization of unearned compensation in 2001.

Amortization of Goodwill.  Amortization of
goodwill was a result of the acquisition of Electronic Vehicle Remarketing, Inc.
("CarFinance.com") in September of 1999.  Goodwill was fully amortized
in 2001.

Other Income, net.  Other income, net,
decreased $0.2 million to $0 million for the three months ended June 30, 2002
from income of  $0.2 million for the three months ended June 30, 2001.  The
decrease is primarily attributable to the decrease of interest income on
investments as well as an increase in interest expense on non-warehouse
facilities.

Critical Accounting Policies

The consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the U.S., which
require the Company to make estimates and assumptions (see Note 2 to the
financial statements). The Company believes that of its significant accounting
policies (see Note 3 to the financial statements), the following may involve a
higher degree of judgment and complexity.

Sale of auto loans to qualified special purpose
entity. On June 17, 2002, the Company entered into an arrangement to sell
auto loan receivables to a qualified special purpose entity (QSPE), E-Loan Auto
Fund One, LLC ("E-Loan Auto"). As of June 30, 2002, the Company had
not yet sold any auto loans to E-Loan Auto . The following provides an overview
of the intended transactions and related accounting . These transactions involve
the Company surrendering control over these assets to assure that the sold
assets have been isolated from the Company and its creditors. As E-Loan Auto has
met the appropriate tests to be considered a QSPE the assets and liabilities of
E-Loan Auto are appropriately not consolidated in financial statements of the
Company. E-Loan Auto has obtained a secured borrowing facility from Merrill
Lynch Bank USA to finance all purchases of loans from the Company. The Company
will recognize a gain on the sale of auto loan receivables to E-Loan Auto in the
period in which the sale occurs, which represents the difference between the
sale proceeds to the Company and the Company's net carrying value of the
receivables. Included in the proceeds received by the Company from the sale of
loans is a beneficial interest related to loans owned by the QSPE, which will be
reflected on the Company's balance sheet as a retained interest asset. These
retained interest assets will be recorded on the balance sheet at fair value. In
order to determine the fair value management will estimate future excess cash
flows to be received by the Company over the life of the loan. The Company will
make various assumptions in order to determine the fair value of the estimated
future excess cash flows to be generated by the auto loans sold to the QSPE. The
most significant assumptions to be made are the cumulative credit losses to be
incurred on the pool of auto loan receivables sold, prepayment rates of the auto
loans and the rate at which the estimated future excess cash flows are
discounted. The assumptions to be used represent the Company's best estimates,
and the use of different assumptions could produce different financial
results.

Loans held-for-sale. Loans held-for-sale are recorded
at the lower of cost or aggregate market value. Cost generally consists of loan
principal balance adjusted for net deferred fees and costs. No valuation
adjustment was required at December 31, 2001 or June 30, 2002.

Capitalized Software.  In 1999, the Company adopted
SOP 98-1,Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use, which requires that the Company expense computer software
costs as they are incurred in the preliminary project stage. Once the
capitalization criteria of the SOP have been met, external direct costs of
materials and services consumed in developing or obtaining internal-use computer
software and payroll and payroll related costs for employees who are directly
associated with and who devote time to the internal-use computer software are
capitalized. Capitalized costs are generally amortized over one to three years
on a straight-line basis. As of June 30, 2002, the Company had capitalized
approximately $3.7 million in internally developed software costs of which $1.6
million had been amortized.

Derivative Instruments. On June 15, 1998, the FASB
issued SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities.  SFAS No. 133, as amended by SFAS No. 137, Accounting for
Derivative Instruments and Hedging Activities and SFAS No. 138,
Accounting for Certain Derivative Instruments and Certain Hedging
Activities, requires that all derivative instruments be recorded on the
balance sheet at their fair value. Changes in the fair value of derivatives will
be recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction.  The Statements require entities
that use derivative instruments to measure these instruments at fair value and
record them as assets and liabilities on the balance sheet.  Entities must
reflect gains or losses associated with changes in the fair value of these
derivatives, either in earnings or as a separate component of comprehensive
income, depending on the nature of the underlying contract or transaction. The
Company adopted SFAS No. 133, as amended by SFAS No. 137 and 138, on January 1,
2001. Adoption of this pronouncement resulted in a transition adjustment of a
$0.2 million gain, which was recorded as a component of mortgage revenue.  For
the three and six months ended June 30, 2002, the Company recorded a $1.3
million and $1.0 million loss, respectively, as a component of mortgage revenue
related to recording changes in fair value of SFAS No. 133 derivatives.  The
Company has designated certain assets as FAS 133 fair value hedges, which are
further described in Note 10 of the Financial Statements.

Liquidity and Capital Resources

The Company's sources of cash flow include cash from the
sale of mortgage, home equity and auto loans, borrowings under warehouse lines
of credit and other credit facilities, brokerage fees, interest income, credit
card referrals and the sale of debt and equity securities in both private and
public transactions. The Company's uses of cash include the funding of mortgage,
home equity and auto loans, repayment of amounts borrowed under warehouse lines
of credit, operating expenses, payment of interest, and capital expenditures
primarily comprised of furniture, fixtures, computer equipment, software and
leasehold improvements.

Net cash (used in) provided by operating activities was
$(7.5) million and $69.7 million for the six months ended June 30, 2001 and
2002, respectively.  Net cash used in operating activities during the six months
ended June 30, 2001 was primarily due to the net loss, off-set by goodwill and
non-cash marketing costs, and cash used by an increase in loans held-for-sale.
Net cash provided by operating activities during the six months ended June 30,
2002, was primarily due to the cash provided from the decrease in loans held-
for-sale plus net income, off-set by cash used from the increase in other
assets.  The decrease in loans held-for-sale as of June 30, 2002 is due to the
amount of loan sales for the six-month period exceeding the amount of loans
funded.  A funded loan remains held-for-sale until it is sold. During the six
months ended June 30, 2002, the Company sold all of the loans included in the
loan held-for-sale balance at December 31, 2001, as well as substantially all of
the loans funded during the period.  This had a positive impact on revenue in
the six months ended June 30, 2002 as we recognize revenue on self-funded loans
at time of sale.

Net cash used in investing activities was $1.1 million and
$1.7 million for the six months ended June 30, 2001 and 2002, respectively.  Net
cash used in investing activities was primarily for the purchase of software,
furniture, equipment and leasehold improvements.

Net cash provided by (used in) financing activities
was $3.9 million and $(70.8) million for the six months ended June 30, 2001 and
2002, respectively.  Net cash provided by financing activities during the six
months ended June 30, 2001 was primarily from net proceeds from borrowings under
the Company's warehouse lines of credit and other credit facilities. Net cash
used by financing activities during the six months ended June 30, 2002 was
primarily from net repayments on the Company's warehouse lines of credit and
other credit facilities. This corresponds with the changes in loans held-for-sale described in
operating activities above.
The ongoing funding of loans is facilitated through the use of warehouse and
other lines of credit.  Each of these facilities requires significant cash
balances to satisfy debt covenants.  The convertible debt raised from The
Charles Schwab Corporation in July 2001 reflects the Company's cash management
position of maintaining cash reserves well in excess of those required by its
warehouse facilities.  From a long-term standpoint, access to committed
warehouse facilities is critical in maintaining funding liquidity in order to
operate the Company's business model.

The Company has a warehouse line of credit for
borrowings of up to $70 million for the interim financing of mortgage loans with
GMAC Bank. The interest rate charged on borrowings against these funds is
variable based on LIBOR plus various percentage rates. Borrowings are
collateralized by the related mortgage loans held-for-sale. The committed line
of credit expires on March 31, 2003. Upon expiration, management believes it
will either renew its existing line or obtain sufficient additional lines. This
line of credit agreement generally requires the Company to comply with various
financial and non-financial covenants. In particular, the Company must maintain
a minimum unrestricted cash balance of $12.5 million (excluding Documentary
Drafts) in addition to the requirement that the Company maintain at least one
other warehouse facility of no less than $100 million. Failure to comply with
these, or any other covenants, could result in the obligation to repay all
amounts then outstanding. The Company was in compliance with all covenants for
this agreement during the three and six months ended and at June 30, 2002.

The Company has an agreement to finance up to $300 million of
mortgage loan inventory pending sale of these loans to the ultimate mortgage
loan investors with Greenwich Capital. Of this amount, $150 million is available
in committed funds. This loan inventory financing is secured by the related
mortgage loans. The interest rate charged on borrowings against these funds is
based on LIBOR plus various percentage points.  The line requires the
restriction of $2.5 million in cash as additional collateral.  The line expires
March 21, 2003. Upon expiration, management believes it will either renew its
existing line or obtain sufficient additional lines. This agreement includes
various financial and non-financial covenants. In particular, the Company must
maintain a minimum cash and cash equivalents balance of the higher of $15
million (including Restricted Cash, excluding Documentary Drafts) or the highest
amount required by any other lender or agreement. Additionally, the Company is
required to maintain at least one other warehouse facility of no less than $50
million. Failure to comply with these, or any other covenants, could result in
the obligation to repay all amounts then outstanding.  The Company was in
compliance with all debt covenants for this agreement during the three and six
months ended and at June 30, 2002. In addition, the Company has an uncommitted
mortgage loan purchase and sale agreement with Greenwich Capital. Under the
terms of this agreement, mortgage loans which are subject to a "take-out" commitment
between the Company and an investor, but have not yet been
purchased, may be sold to Greenwich Capital with the accompanying trade
assignment.  This allows the Company to accelerate turnover and provide
additional liquidity to fund additional mortgage loans.  Revenues derived from
sales under this agreement are included as a receivable on the Company's balance
sheet.

On April 1, 2001, the Company entered into an agreement for a
$25 million line of credit with Bank One, NA for the interim financing of auto
loans. The interest rate charged on this line was based on LIBOR plus 2.5%. This
line includes various financial and non-financial covenants.  At March 31, 2002,
the Company was not in compliance with a debt to tangible net worth covenant
ratio and subsequently obtained a waiver from the lender. This committed line
was reduced to $10 million on April 1, 2002 and was scheduled to expire on July
31, 2002.  Prior to the expiration of this committed line, the Company paid off
the line on June 19, 2002 and terminated the agreement.

On July 12, 2001 the Company issued a $5.0 million
convertible note to The Charles Schwab Corporation, which was convertible into
shares of its common stock at a conversion price of $1.06 per share and which
was scheduled to mature on January 19, 2003. The convertible note bore interest
at a rate of 8% per annum and was payable quarterly.  On March 14, 2002, the
Company elected to redeem the note prior to its maturity date.  On April 12,
2002, The Charles Schwab Corporation exercised its option to convert the amount
due to 4,716,981 shares of common stock, in lieu of repayment.

On June 14, 2002, the Company secured a $10 million line of
credit facility with Merrill Lynch Mortgage Capital, Inc. to support the interim
funding of auto loans prior to the sale to the ultimate auto loan purchaser. The
interest rate charged on this line is based on LIBOR plus various percentage
points. This facility expires on June 14, 2003. Upon expiration, management
believes it will either renew its existing line or obtain sufficient additional
lines. At June 30, 2002, $8.6 million was outstanding under this line. This line
includes various financial and non-financial covenants. At June 30, 2002, the
Company was in compliance with these covenants.

The Company believes that its existing cash and cash
equivalents as of June 30, 2002 will be sufficient to fund its operating
activities, capital expenditures and other obligations for the next twelve
months.  However, if during that period or thereafter the Company is not
successful in generating sufficient cash flow from operations, or in raising
additional funds when required in sufficient amounts and on terms acceptable to
the Company, it could have a material adverse effect on the Company's business,
results of operations and financial condition. If additional funds are raised
through  the issuance of equity securities, the percentage ownership of its
then-current stockholders would be reduced.

FORWARD LOOKING STATEMENTS

The statements contained in this Report that are not
historical facts are "forward-looking statements" (as such term is defined in
Section 27A of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934), which can be identified by the use of forward-looking
terminology such as "estimated," "projects," "anticipated," "expects,"
"intends," "believes," or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. These forward-looking statements, such as the Company's plans to
increase its revenue diversification among its three primary products, the
relative importance of streamlining its operations processes and related costs
and growth in the consumer adoption of online lending, statements regarding
development of E-LOAN's business, future operating results, anticipated capital
expenditures, the expectations as to the use of the capital resource and the
availability of additional financing, and other statements contained in this
Report regarding matters that are not historical facts, are only estimates or
predictions and cannot be relied upon. No assurance can be given that future
results will be achieved; actual events or results may differ materially as a
result of risks facing the company or actual results differing from the
assumption underlying such statements. Such risks and assumptions include, but
are not limited to, E-LOAN's ability to access additional debt or equity
financing in the future, secure replacement lines of credit for mortgage and
auto loans, respond to increasing competition, secure additional loan
purchasers, manage growth of E-LOAN's operations, as well as regulatory,
legislative, and judicial developments that could cause actual results to vary
materially from the future results indicated, expressed or implied in such
forward-looking statements. All written and oral forward-looking statements made
in connection with this Report which are attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by the "Factors
Affecting Future Operating Results" and other cautionary statements included
herein. The Company disclaims any obligation to update information contained in
any forward-looking statement.

FACTORS AFFECTING FUTURE OPERATING RESULTS

The following important factors, among others, could
cause actual results to differ materially from those contained in forward-looking statements
made in this report or presented elsewhere by management from
time to time.

We Have a History of Losses,  While We Achieved Our Third Consecutive
Quarter of Profitability In the Second Quarter of 2002, We Incurred A
Substantial Net Loss for the Year Ended December 31, 2001, and We May Not Be
Able to Maintain Profitability

As of June 30, 2002, our accumulated deficit was $214.3
million.  While we achieved our third consecutive quarter of profitability in
the second quarter of 2002, we incurred a substantial net loss for the year
ended December 31, 2001.  Because we expect our operating costs will increase to
accommodate expected growth in loan applications, we will need to generate
significant revenues to maintain profitability. We may not sustain or increase
profitability on a quarterly or annual basis in the future.  If revenues grow
more slowly than we anticipate, or if operating expenses exceed our expectations
or cannot be adjusted accordingly, our business, results of operations and
financial condition will be adversely affected.

We Have a Limited Operating History and Consequently Face
Significant Risks and Challenges in Building Our Business

We were incorporated in August 1996, initiated our online
mortgage operations in June 1997 and acquired our online auto operations in
September 1999. We cannot assure you that we will be able to operate
successfully if a downturn in the mortgage or auto business occurs. As a result
of our limited operating history, our recent growth and our reporting
responsibilities as a public company, we may need to expand operational,
financial and administrative systems and control procedures to enable us to
further train and manage our employees and coordinate the efforts of our
underwriting, accounting, finance, marketing, and operations departments.

Our Quarterly Financial Results Are Vulnerable to
Significant Fluctuations and Seasonality, Which Could Adversely Affect Our Stock
Price

Our revenues and operating results may vary significantly
from quarter to quarter due to a number of factors. Certain months or quarters
have historically experienced a greater volume of purchase money mortgage and
auto loan applications and funded loans. As a result, we believe that quarter-to-quarter
comparisons of our operating results are not a good indication of our
future performance. It is possible that in some future periods our operating
results may be below the expectations of public market analysts and investors.
In this event, the price of our common stock may fall.

Interest Rate Fluctuations Could Significantly Reduce
Customers' Incentive to Refinance Existing Mortgage Loans

A significant percentage of our mortgage customers use
our services to refinance existing mortgages and they are motivated to do so
primarily when interest rates fall below the rates of their existing mortgages.
In the event interest rates significantly increase, consumers' incentive to
refinance will be greatly reduced and the number of loans that we originate
could significantly decline.  We significantly benefited from the spread between
long-term and short-term interest rates during 2001 and to date in 2002.  Based
on historical trends, we would not expect the same level of benefit from
interest rate spreads in a normal market.

Our Ability to Engage in Profitable Secondary Sales of
Loans May Also Be Adversely Affected by Increases in Interest Rates

The mortgage loan purchase commitments we obtain are
contingent upon our delivery of the relevant loans to the purchasers within
specified periods. To the extent that we are unable to deliver the loans within
the specified periods and interest rates increase during those periods, we may
experience no gain or even a loss on the sale of these loans. In addition, any
increase in interest rates will increase the cost of maintaining our warehouse
and repurchase lines of credit on which we depend to fund the loans we
originate. We have implemented a hedging program to manage the risk of loss due
to fluctuations in interest rates, but our hedging efforts may not be
successful, and no hedging strategy can completely eliminate interest rate risk.
A sharp decrease in interest rates over a short period may cause customers who
have interest rates on mortgages committed through us to either delay closing
their loans or refinance with another lender. If this occurs in significant
numbers, it may have an adverse effect on our business or quarterly results of
operations.

Our Hedging Strategy May Not Succeed in Reducing Our
Exposure to Losses Caused by Fluctuations in Interest Rates

We attempt to manage our interest rate risk exposure
through hedging transactions using a combination of forward sales of mortgage-backed
securities and forward whole-loan sales to fix the sales price of loans
we expect to fund. An effective hedging strategy is complex, and we have limited
experience administering a hedging program. A successful hedging program depends
in part on our ability to properly estimate the number of loans that will
actually close and is subject to fluctuations in the prices of mortgage-backed
securities, which do not necessarily move in tandem with the prices of loans we
originate and close. To the extent that we implement a hedging strategy but are
unable to effectively match our purchases and sales of mortgage-backed
securities with the sale of the closed loans we have originated, our gains on
sales of mortgage loans will be reduced, or we will experience a net loss on
those sales.

Uncertainty With Respect to the Time It Takes to Close
Mortgage Loans Can Lead to Unpredictable Revenue and Profitability

The time between the date an application for a mortgage
loan is received from a customer on our website and the date the loan closes can
be lengthy and unpredictable. The loan application and approval process is often
delayed due to factors over which we have little or no control, including the
timing of the customer's decision to commit to an available interest rate, the
close of escrow date for purchase loans, the timeliness of appraisals and the
adequacy of the customer's own disclosure documentation. Purchase mortgage loans
generally take longer to close than refinance loans as they are tied to the
close of the property sale escrow date. This uncertain timetable can have a
direct impact on our revenue and profitability for any given period. We may
expend substantial funds and management resources supporting the loan completion
process and never generate revenue from closed loans. Therefore, our results of
operations for a particular period may be adversely affected if the mortgage
loans applied for during that period do not close in a timely manner or at
all.

We Have Recently Experienced Significant Growth in Our
Business, and If We Are Unable to Manage this Growth, Our Business Will Be
Adversely Affected

Over the past two years we have experienced significant
growth, which has placed a strain on our resources and will continue to do so in
the future. Our failure to manage this growth effectively could adversely affect
our business. We may not be successful in managing or expanding our operations
or maintaining adequate management, financial and operating systems and
controls. Our headcount has grown substantially. At June 30, 2001 and 2002, we
had 385 and 524 full-time employees, respectively.

Our Future Success is Dependent Upon Increased Acceptance
of the Internet by Consumers and Lenders as a Medium for Lending

Our success will depend in large part on widespread
consumer acceptance of obtaining mortgage and auto loans online. Increased
consumer use of the Internet to provide for their lending needs is subject to
uncertainty. The development of an online market for mortgage and auto loans has
only recently begun, is rapidly evolving and likely will be characterized by an
increasing number of market entrants. If consumer acceptance of the Internet as
a source for mortgage, auto, and home equity loans does not increase, our
business, results of operations and financial condition will be adversely
affected. A number of factors may inhibit Internet usage by consumers, including
privacy and security concerns regarding their personal information.  The
adoption of online lending requires the acceptance of a new way of conducting
business, exchanging information and applying for credit by consumers that have
historically relied upon traditional lending methods.  As a result, we cannot be
sure that we will be able to compete effectively with traditional borrowing and
lending methods.

The Loss of One or More of Our Significant Distribution
Partners Would Adversely Affect Our Business

We rely on Internet distribution partners to direct a
significant number of prospective customers to our website. If we lose any of
our significant distribution partners, we will likely fail to meet our growth
objectives, both in terms of additional borrowers and increased brand awareness.
In the aggregate, approximately 36% and 73% of our mortgage and auto loan
applications, respectively, were derived from the websites of our distribution
partners during the three months ended June 30, 2002. Our agreements with our
distribution partners are typically short-term, from one to four years in
length, and most can be terminated for any reason upon 30 to 60 days prior
written notice. We cannot assure you that any or all of these agreements will
not be terminated or will be renewed or extended past their current expiration
dates. If any of these agreements were to be terminated or were to lapse without
extension, we could lose a considerable number of loan applications and our
business would be adversely affected.

The Termination of One or More of Our Mortgage Funding
Sources Would Adversely Affect Our Business

We depend on GMAC Bank, formerly GE Capital Mortgage
Services, Inc. ("GE Capital"), to finance our self-funded mortgage loan
activities through the warehouse credit facility they provide. We also depend on
Greenwich Capital Financial Products, Inc. ("Greenwich Capital") to finance
portions of our mortgage loan inventory pending ultimate sale to mortgage loan
purchasers. If either of these warehouse credit facilities becomes unavailable,
our business would be adversely affected. Under our agreements with each of
these lenders, we make extensive representations, warranties and various
operating and financial covenants. A material breach of these representations,
warranties or covenants on either or both lines could result in the termination
of our agreements and an obligation to repay all amounts outstanding at the time
of termination. In the past, we have had to obtain waivers from Greenwich
Capital and GE Capital as a result of our failure to comply with covenants
regarding the issuance of capital stock, excess asset purchases and the breach
of financial ratios. Our agreements with Greenwich Capital and GMAC Bank expire
in March 2003. Upon expiration of these agreements management intends to renew
or extend the warehouse credit facilities. However, we cannot assure you that
these agreements will be renewed or extended past their current expiration
dates, and additional sources of funding for our mortgage loans may not be
available on favorable terms or at all.

The Termination of Our Auto Line of Credit Would Adversely Affect Our
Business

We have obtained a line of credit from Merrill Lynch
Mortgage Capital Inc. to finance the funding of our auto loans, and this is our
sole facility for auto loan fundings.  If this credit facility becomes
unavailable, our business would be adversely affected. Under our line of credit
agreement, we make extensive representations, warranties and various operating
and financial covenants. A material breach of these representations, warranties
or covenants could result in the termination of the facility and an obligation
to repay all amounts outstanding at the time of termination. In the past, we
have had to obtain waivers from our previous auto line of credit provider (Bank
One, N.A.) as a result of our failure to comply with a covenant regarding a debt
to tangible net worth ratio.  Our line of credit with Merrill Lynch Mortgage
Capital Inc. expires June 14, 2003.  Upon expiration, management believes it
will either renew its existing line or obtain sufficient additional lines.
However, we cannot assure you that these agreements will be renewed or extended
past their current expiration dates, and additional sources of funding for our
auto loans may not be available on favorable terms or at all.

We Are Primarily Dependent on One Lending Source for All
of Our Home Equity Business

Currently, the majority of our home equity loans are
purchased by Wells Fargo Bank pursuant to a Home Equity Loan/Line Purchase
Agreement. If Wells Fargo Bank is unable or unwilling to purchase our home
equity loans, we may experience delays in our ability to accept or process home
equity loan applications until we are able to secure new sources of loan
purchasers. Sufficient additional sources of loan purchasers for our home equity
loans may not be available on favorable terms or at all.

We Are Dependent on Primarily Three Auto Loan Purchasers
for the Majority of Our Auto Loan Business

Currently, the majority of our auto loans are sold to
three auto loan purchasers.  If any of them are unable or unwilling to purchase
our auto loans, we may experience delays in our ability to accept or process
auto loan applications until we are able to secure new auto loan purchasers.
Sufficient additional purchasers for our auto loans may not be available on
favorable terms or at all.

We Depend on the Timely and Competent Services of Various
Companies Involved in the Mortgage Process; If These Companies Fail to Timely
and Competently Deliver These Services, Our Business and Reputation Will be
Directly and Adversely Affected

We rely on other companies to perform services related to
the loan underwriting process, including appraisals, credit reporting and title
searches. Any interruptions or delays in the provision of these services may
cause delays in the processing and closing of loans for our customers. If we are
unsuccessful in managing the timely delivery of these services we will likely
experience increased customer dissatisfaction and our business and reputation
could be adversely affected.

The Loss of Our Relationship with Any of Our Significant
Providers of Automated Underwriting Would Have an Adverse Effect on Our
Business

We depend on automated underwriting and other services
offered by government sponsored and other mortgage investors, including Fannie
Mae and Freddie Mac ("Agencies"), to help ensure that our mortgage services can
be offered efficiently and on a timely basis. We currently have an agreement
with the Agencies that authorizes our use of their automated underwriting
services and enables us to sell qualified first mortgages to these Agencies. We
cannot assure you that we will remain in good standing with the Agencies or that
the Agencies will not terminate our relationship. We expect to continue to
process a significant portion of our conforming mortgage loans using the
Agencies' systems until we are able to obtain automated underwriting services
from other providers. Our agreement with the Agencies can be terminated by
either party. The termination of our agreements with the Agencies would
adversely affect our business by reducing our ability to streamline the mortgage
origination process.

Any Outages, Delays or Other Difficulties Experienced by
the Internet Service Providers, Online Service Providers or Other Website
Operators on Which Our Users Depend Could Adversely Affect Our Business

Our website has in the past and may in the future
experience slower response times or decreased traffic for a variety of reasons.
In addition, our users depend on Internet service providers, online service
providers and other website operators for access to our websites. Many Internet
users have experienced significant outages in the past, and could experience
outages, delays and other difficulties due to system failures unrelated to our
systems. Additionally, the Internet infrastructure may not be able to support
continued growth in its use. Any of these problems could adversely affect our
business.

Our Business Will be Adversely Affected if We Are Unable
to Safeguard the Security and Privacy of Our Customers' Financial Data

Internet usage could decline if any well-publicized
compromise of security occurred. We may incur significant costs to protect
against the threat of security breaches or to alleviate problems caused by any
breaches that occur. We also retain on our premises personal financial documents
that we receive from prospective borrowers in connection with their loan
applications. These documents are highly sensitive and if a third party were to
misappropriate our customers' personal information, customers could possibly
bring legal claims against us. We cannot assure you that our privacy policy will
be deemed sufficient by our prospective customers or compliant with any federal
or state laws governing privacy, which may be adopted in the future.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate movements significantly impact E-LOAN's
volume of closed loans and represent the primary component of market risk to E-LOAN. In a
higher interest rate environment, consumer demand for mortgage loans,
particularly refinancing of existing mortgages, declines. Interest rate
movements affect the interest income earned on loans held for sale, interest
expense on the warehouse lines payable, the value of mortgage loans held-for-sale and
ultimately the gain on sale of mortgage loans.

E-LOAN attempts to minimize the interest rate risk associated
with the time lag between when loans are rate-locked and when they are committed
for sale or exchanged in the secondary market, through its hedging activities.
Individual mortgage loan risks are aggregated by note rate, mortgage loan type
and stage in the pipeline, and are then matched, based on duration, with the
appropriate hedging instrument, thus mitigating basis risk until closing and
delivery. E-LOAN currently hedges its mortgage pipeline through mandatory
forward sales of Fannie Mae mortgage-backed securities and non-mandatory forward
sale agreements with the ultimate investor. E-LOAN determines which alternative
provides the best execution in the secondary market.  In addition, E-LOAN does
not believe its net interest income would be materially affected as a result of
concurrent changes in long-term and short-term interest rates due to the short
duration of time loans are held on the balance sheet prior to being sold to
capital market loan purchasers (on average under thirty days).

E-LOAN believes that it has implemented a cost-effective hedging program to
provide a level of protection against changes in the market value of its fixed-rate mortgage
loans held for sale. However, an effective strategy is complex and
no hedging strategy can completely insulate the Company against such
changes.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to various legal proceedings
and claims, either asserted or unasserted, which arise in the ordinary course of
business. While the outcome of these claims cannot be predicted with certainty,
management does not believe that the outcome of any of these legal matters will
have a material adverse effect on the Company's results of operations, financial
position or liquidity.

Please refer to our Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2002, filed on May 15, 2002, which discloses claims which have
been filed against the Company. There have been no material developments with
respect to these claims since the previously filed Quarterly Report.

Item 2. Changes in Securities and Use of Proceeds

On April 12, 2002, The Charles Schwab Corporation
exercised its option to convert the amount due under the convertible note issued
to it on July 12, 2001 into 4,716,981 shares of common stock, in lieu of
repayment.  The total amount owing under the convertible note that was converted
into shares was $5 million, and the conversion price was $1.06 per share.  The
issuance of the shares was exempt from the registration requirements of the
Securities Act of 1933, as amended, pursuant to Section 4(2) thereof, since the
issuance constituted a sale not involving a public offering.

In connection with the $10 million line of credit with
Merrill Lynch Mortgage Capital, Inc. ("Merrill"), on June 14, 2002, the Company
issued to Merrill a warrant to purchase 800,000 shares of its common stock at an
exercise price of $1.218 per share.  The warrant expires on June 1, 2005.  The
issuance of the warrant was exempt from the registration requirements of the
Securities Act of 1933, as amended, pursuant to Section 4(2) thereof, since the
issuance constituted a sale not involving a public offering.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

At the Registrant's Annual Meeting of Stockholders held
on May 14, 2002 the following proposals were adopted by the margins
indicated:

|                                                                                                                                                                                     | Number of Shares
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------
|                                                                                                                                                                                     | Voted For       
|1.	To elect a two Class III Directors to hold office until
the Annual Meeting of Stockholders to be held in 2005 or until their respective
successors have been elected or appointed |                 
|Christian A. Larsen                                                                                                                                                                  | 44,464,520      
|Daniel O. Leemon                                                                                                                                                                     | 44,712,288      
|                                                                                                                                                                                     |                 
|                                                                                                                                                                                     |                 
|The following directors continued in office: Joseph J. Kennedy,
Robert C. Kagle, Claus H. Lund and Wade Randlett.                                                                   
|                                                                                                                                                                                     |                 
|                                                                                                                                                                                     | Number of Shares
|2. 	To ratify the appointment of the accounting firm of
PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending
December 31, 2002                              | Voted For       
|                                                                                                                                                                                     | 44,718,032      

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

1. Exhibits:

|3.1   | Restated Certificate of Incorporation of E-LOAN dated July 2,
1999 (1)                                                                                    
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2   | Corrected Certificate of Amendment of Restated Certificate of
Incorporation if E-LOAN, Inc. dated February 15, 2001 (2)                                   
|3.3   | Amended and Restated Bylaws of E-LOAN, Inc. dated March 16, 2001
(2)                                                                                      
|4.1   | Stock Purchase Warrant dated as of June 14, 2002 granting
Merrill Lynch Mortgage Capital Inc. the right to purchase 800,000 shares of
common stock        
|4.2   | Credit Agreement by and among E-LOAN Auto Fund One, LLC, E-LOAN,
Inc. and Merrill Lynch Bank USA dated as of June 1, 2002                                 
|4.3   | Loan Agreement between E-LOAN, Inc. and Merrill Lynch Mortgage
Capital, Inc. dated as of June 14, 2002                                                    
|10.9  | Flow Purchase and Sale Agreement (New Originations) with E*TRADE
Bank dated January 23, 2002*                                                             
|10.10 | Third Modification Agreement with GMAC Bank dated February 26,
2002                                                                                       
|10.11 | Advertising, Marketing and Linking Agreement with zipRealty,
Inc. dated April 15, 2002*                                                                   
|10.12 | Fifth Modification Agreement with GMAC Bank dated April 18,
2002                                                                                          
|10.13 | Fifth Amendment to Marketing Agreement with Charles Schwab &
Co., Inc. dated April 30, 2002                                                               
|10.14 | Originator Master Commitment for Enhanced AOT Offering with
Federal Home Loan Mortgage Corporation dated May 1, 2002*                                     
|10.15 | Auto Loan Purchase and Sale Agreement with Triad Financial
Corporation, d/b/a RoadLoans.com dated May 15, 2002*                                           
|10.16 | Sixth Amendment to Marketing Agreement with Charles Schwab &
Co., Inc. dated May 30, 2002                                                                 
|10.17 | Sixth Modification Agreement with GMAC Bank dated April 30,
2002                                                                                          
|10.18 | Seventh Modification Agreement with GMAC Bank dated May 29,
2002                                                                                          
|10.19 | Limited Liability Company Agreement of E-LOAN Auto Fund One,
LLC, a wholly-owned subsidiary of E-LOAN, Inc. dated May 21, 2002                            
|10.20 | Certificate of Formation of E-LOAN Auto Fund One, LLC, a wholly-
owned subsidiary of E-LOAN, Inc., dated May 21, 2002                                     
|10.21 | Administration Agreement between E-LOAN Auto Fund One, LLC and
E-LOAN, Inc. dated as of June 1, 2002                                                      
|10.22 | Security Agreement between E-LOAN Auto Fund One, LLC and Merrill
Lynch Bank USA dated as of June 1, 2002                                                  
|10.23 | Servicing and Custodian Agreement by and among Systems &
Servicing Technologies, Inc., E-LOAN Auto Fund One, LLC and E-LOAN, Inc. dated
as of June 1, 2002
|10.24 | Contribution and Sale Agreement between E-LOAN Auto Fund One,
LLC and E-LOAN, Inc. dated as of June 1, 2002                                               
|10.25 | Security Agreement between E-LOAN, Inc. and Merrill Lynch
Mortgage Capital, Inc. dated as of June 14, 2002                                                
|99.1  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.                                   
|99.2  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.                                   

__________

(1) Filed with Quarterly Report on Form 10-Q (FQE 6/30/00) on August 14,
2000.
(2) Filed with Annual Report on Form 10-K/A (FYE 12/31/00) on April 23,
2001.

*Confidential Treatment Requested

(b)    Reports on Form 8-K

The Company filed two reports on Form 8-K during the three
months ended June 30, 2002.  The first filed on April 19, 2002 for the purpose
of reporting the conversion of the Schwab convertible debt on April 17, 2002
under Item 5 thereof, and the second filed on April 26, 2002 for the purpose of
reporting under Item 5 thereof the results of its first quarter financial
results.

---

SIGNATURES

Pursuant to the requirement of the Security Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| |             
| | ------------
| | E-LOAN, INC.

Dated: August 14, 2002

| |                                                                          |                    
| | ------------------------------------------------------------------------ | -------------------
| | By:                                                                      | /s/ Matthew Roberts
| | Matthew Roberts                                                         
| | Chief Financial Officer                                                 
| | (Principal Financial and Accounting Officer and Duly
Authorized Officer)

---

EXHIBITS

|4.1   | Stock Purchase Warrant dated as of June 14, 2002 granting
Merrill Lynch Mortgage Capital Inc. the right to purchase 800,000 shares of
common stock        
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|4.2   | Credit Agreement by and among E-LOAN Auto Fund One, LLC, E-LOAN,
Inc. and Merrill Lynch Bank USA dated as of June 1, 2002                                 
|4.3   | Loan Agreement between E-LOAN, Inc. and Merrill Lynch Mortgage
Capital, Inc. dated as of June 14, 2002                                                    
|10.9  | Flow Purchase and Sale Agreement (New Originations) with E*TRADE
Bank dated January 23, 2002*                                                             
|10.10 | Third Modification Agreement with GMAC Bank dated February 26,
2002                                                                                       
|10.11 | Advertising, Marketing and Linking Agreement with zipRealty,
Inc. dated April 15, 2002*                                                                   
|10.12 | Fifth Modification Agreement with GMAC Bank dated April 18,
2002                                                                                          
|10.13 | Fifth Amendment to Marketing Agreement with Charles Schwab &
Co., Inc. dated April 30, 2002                                                               
|10.14 | Originator Master Commitment for Enhanced AOT Offering with
Federal Home Loan Mortgage Corporation dated May 1, 2002*                                     
|10.15 | Auto Loan Purchase and Sale Agreement with Triad Financial
Corporation, d/b/a RoadLoans.com dated May 15, 2002*                                           
|10.16 | Sixth Amendment to Marketing Agreement with Charles Schwab &
Co., Inc. dated May 30, 2002                                                                 
|10.17 | Sixth Modification Agreement with GMAC Bank dated April 30,
2002                                                                                          
|10.18 | Seventh Modification Agreement with GMAC Bank dated May 29,
2002                                                                                          
|10.19 | Limited Liability Company Agreement of E-LOAN Auto Fund One,
LLC, a wholly-owned subsidiary of E-LOAN, Inc. dated May 21, 2002                            
|10.20 | Certificate of Formation of E-LOAN Auto Fund One, LLC, a wholly-
owned subsidiary of E-LOAN, Inc., dated May 21, 2002                                     
|10.21 | Administration Agreement between E-LOAN Auto Fund One, LLC and
E-LOAN, Inc. dated as of June 1, 2002                                                      
|10.22 | Security Agreement between E-LOAN Auto Fund One, LLC and Merrill
Lynch Bank USA dated as of June 1, 2002                                                  
|10.23 | Servicing and Custodian Agreement by and among Systems &
Servicing Technologies, Inc., E-LOAN Auto Fund One, LLC and E-LOAN, Inc. dated
as of June 1, 2002
|10.24 | Contribution and Sale Agreement between E-LOAN Auto Fund One,
LLC and E-LOAN, Inc. dated as of June 1, 2002                                               
|10.25 | Security Agreement between E-LOAN, Inc. and Merrill Lynch
Mortgage Capital, Inc. dated as of June 14, 2002                                                
|99.1  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.                                   
|99.2  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.                                   



*Confidential Treatment Requested

---