FirstAgain's 'Back to Basics' Underwriting Bolsters Recession-Resistant Business Model for Online Consumer Lender Focusing on 'Superprime' Borrowers

Online Unsecured Personal Loan Provider Relies on Human Underwriters and Traditional Underwriting Practices to Accurately Evaluate Creditworthiness and Keep Losses below Industry Averages

(PRWEB) November 19, 2008 -- When consumers with excellent credit come to FirstAgain (www.firstagain.com) for a loan, they can be assured their applications are reviewed in much the same way their local bankers did in "the good old days." Instead of relying on software-analyzed payment histories and FICO scores often blemished with inaccurate credit information, FirstAgain's expert underwriters review each person's complete credit history--not just their credit bureau report but income and assets as well--to determine whether they meet the company's strict guidelines for excellent credit. In doing so, FirstAgain gains a more accurate picture of an individual's ability to pay back a loan.

News Facts:

•    FirstAgain uses a proprietary, judgmental underwriting method that examines a multitude of factors to determine credit worthiness. The company believes that relying solely on FICO scores is an incomplete approach because FICO only looks at the debt side of an individual's balance sheet. FirstAgain reviews an applicant's income and assets as well to better understand the ability of an applicant to repay his or her debt obligations.

•    FirstAgain's business model is built around limited credit losses because the lender focuses solely on individuals with excellent credit and does not require collateral to secure their loans.

•    FirstAgain's 2008 credit losses are running substantially below one percent of assets. These losses are a fraction of the six-to-seven percent being experienced in the prime credit card market and are even substantially lower than the nearly two percent loss rates being experienced in the "secured" prime auto business.

•    FirstAgain's AnythingLoan is available in amounts between $10,000 and $100,000 and can be used for autos, home improvements, education, solar, timeshares or anything else.

Supporting Resources:

•    FirstAgain has identified a list of characteristics that individuals with excellent credit typically share (https://www.firstagain.com/Apply/ExcellentCredit.aspx).

•    Banks continue to tighten standards on loans of all kinds, according to the Federal Reserve Board's October 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices (http://www.federalreserve.gov/boarddocs/SnLoanSurvey/200811/).

•    As loan options become increasingly constrained even for individuals with excellent credit, FirstAgain's AnythingLoan is well positioned to become a preferred alternative to traditional financing for these consumers.

•    Debt-to-income ratios can be calculated (http://www.bankrate.com/brm/calc/ratio-debt-calculator.asp) to gain a more complete view of an individual's financial picture.

•    FirstAgain's current interest rates for unsecured loans: http://www.firstagain.com/Rates/

•    FirstAgain's judgmental underwriting was responsible for helping the founders' previous company, PeopleFirst, achieve the lowest level of credit losses in the auto-loan industry, with default rates of 10-to-15 basis points.

•    Fitch Ratings research reveals that U.S. prime auto loan ABS losses have reached a record high. (http://www.researchrecap.com/index.php/2008/10/01/us-prime-auto-loan-abs-losses-reach-record-high/)

•    Moody's reported an increase of nearly 50 percent in credit card default rates in August 2008. (http://biz.yahoo.com/ap/081017/credit_cards_moody_s.html)

Supporting Quotes:

Gary Miller, FirstAgain co-founder and CEO:

•    "Our unsecured personal loan portfolio is performing very well, especially considering the downturn in the economy. FirstAgain's 'back to basics' underwriting and passionate focus on our customer's experience are the keys to our successful business model. We assess whether prospective borrowers will be able to pay back a loan based on their total financial picture, not their collateral or FICO score. Our customers have stable jobs, a proven ability to save and aren't overextended. In relying on traditional underwriting to screen for those superprime customers, we are able to keep our credit risk at a minimum, which allows us to create the experience for our customers that their hard earned excellent credit deserves."

Alison and Pat Wilson of Dallas, FirstAgain customers:

•    "We really appreciated FirstAgain's holistic view of our financial situation and not only credit statistics. Compared to banks, FirstAgain made the entire loan process really easy. Everything was done online and the money was deposited in our account immediately without any liens. When it came time to buy a boat, we returned to FirstAgain without hesitation."

Elizabeth Rowe, principal analyst, Mercator Advisory Group (www.mercatoradvisorygroup.com)

•    "A lending competitor like FirstAgain is a must to monitor - its market is the bread-and-butter of the banking industry and every loan it originates is a loan not funded by a bank and represents another banking customer suddenly vulnerable to the superior offerings of other nontraditional financial services providers."

Relevant coverage:

•    Mercator Analyst Report: http://www.firstagain.com/Assets/pdfs/Mercator07012008.pdf

•    Barron's: http://online.barrons.com/article/SB122065357289805353.html

•    TheStreet.com: http://www.thestreet.com/story/10431355/1/how-to-use-online-loan-sites.html

•    NetBanker: http://www.netbanker.com/2008/07/firstagain_targets_online_users_with_excellent_credit.html

About FirstAgain:

FirstAgain LLC is redefining consumer lending for individuals with excellent credit. The San Diego-based company has developed a completely paperless, online experience for applying, approving, signing, funding and servicing unsecured personal loans. FirstAgain's AnythingLoan can be used for any purpose, including home improvements, vehicle purchases, educational and medical expenses, timeshares, vacation ownerships, marine products, loan refinancing and anything else. Most AnythingLoan finance amounts range from $10,000 to $100,000 with low rates, same-day funding and an unparalleled customer experience. Timeshare and fractional financing loan amounts start as low as $7,500. FirstAgain was founded by the pioneering veterans of PeopleFirst, a company which grew into the nation's largest online auto lender prior to its sale to Capital One in 2001. The company operates nationwide and has financial investments from Merrill Lynch and Arsenal Capital Partners.

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