Consumer direct lender E-Loan today reported a net loss of $1.1 million, or 2 cents a share in the first quarter, due to the shrinking refinance loan volume.

The company’s first-quarter revenue was $32 million, down from $36 million a year ago. Home equity revenue was a record $10.7 million, up 146 percent from the first quarter 2003. Diversified mortgage revenue, comprised of purchase and non-prime mortgage, was $8.2 million, up 5 percent from the same quarter last year.

Refinance mortgages accounted for 25 percent of revenue at $7.9 million, up from $6.7 million the previous quarter and down from $18 million a year ago. Home equity loans accounted for 29 percent of revenue at $9.3 million, up from $6.6 million the previous quarter and $3.9 million a year ago.

E-Loan provides mortgage, auto, credit card, home equity and business loans exclusively over the Internet. Revenues are primarily from the gain on sale of first mortgage, home equity and auto loans, as well as interest earned.

E-Loan launched a new loan closing service through its new subsidiary, Escrow Closing Services. The company said about 22 percent of its home equity loans used the service in the first quarter.

During the first quarter, the lender started giving its customers a choice of whether they wanted their home equity loans closed via outsourcing services in India. Loans processed in India offer cost savings to the lender and speed closing time by two days.

E-Loan replaced former president and COO Joe Kennedy during the first quarter, and recorded one-time costs of $1 million associated with Kennedy’s resignation. The new COO is Mark Lefanowicz.

E-Loan (Nasdaq: EELN) shares traded at $2.48 this morning, up slightly from the previous day’s close of $2.38.

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Send tips, feedback or a letter to the editor to Jessica@inman.com or call (510) 658-9252, ext. 133.

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