LendingTree founder Doug Lebda, a CPA, wanted to purchase a home during the real estate market boom. Like so many other home seekers, he researched interest rates and shopped among banks and lenders by himself. That’s when he came up with a novel idea that eventually grew into a strong online business concept: “When banks compete, you win.” That ten-year-old slogan is still used today.

With the Internet as the facilitating technology, Ledba created a new e-brand—LendingTree.com. He envisioned LendingTree as an online lending marketplace that could quickly and easily match borrowers and lenders. Consumers could complete one simple and secure online form that multiple lenders could see. Lenders would offer customers their most competitive deal, and consumers would choose the best offer from among many lenders. It was a win-win situation: lenders got access to many more potential borrowers, and borrowers could choose from a list of many more lenders than they would normally be able to find on their own.

“When we launched the site in 1998, we were able to empower consumers with choice, convenience and value,” Doug says on the LendingTree website. “And lenders could target consumers whose needs they were best prepared to meet.”

While its primary purpose was to provide home loans, LendingTree expanded to include refinance loans, home equity loans and lines of credit, auto loans, personal loans, and credit cards, as well as access to student loans and commercial lending products. LendingTree now operates websites such as GetSmart.com, which compares mortgage rates from US lenders, RealEstate.com, a site for home sellers and buyers, and HomeLoanCenter.com, a mortgage lender. Lending Tree has become the number-one online lending exchange.

LendingTree, from its founding to until just recently, was a financial star. In 2000, the company filed an IPO. In 2003 Barry Diller, owner of media conglomerate IAC (InterActiveCorp.), purchased LendingTree, adding it to a stable of properties that included Home Shopping Network, Ticketmaster, Ask.com and Match.com. By 2006 LendingTree had served 20 million customers and booked more than US$ 152 billion in closed loan transactions. Many of the nation’s largest lending institutions participate in the LendingTree marketplace, the company says.

But in 2008, with the real estate market continuing its downward spiral, LendingTree was spun off and is now owned by newly established Tree.com.

LendingTree isn’t the only online loan provider—companies such as E-LOAN, which began in 1997, and ditech, launched in 1995, offer competing services. But the LendingTree “when banks compete, you win” pitch remains a compelling one—so compelling, in fact, that the company just revived and is running a television ad it created years ago.

US television viewers may have seen the ad: A customer walks into a bank and is greeted by his banker. The customer tells the banker he is using LendingTree to get competitive bids on a mortgage. The banker appears hurt, but the customer assures him that the bank is included in the bidding process, because it participates in LendingTree. The customer pats the banker on the arm, smiles knowingly, and says, “And I want you to know, I’m pulling for you.” The ad is a wonderful role reversal, vaulting the consumer into the position of power normally reserved for the banker.

Another memorable ad shows bankers standing in line at a consumer’s home, waiting to be “interviewed” by the consumer.

This brand positioning is right on the money for today’s consumer-empowerment trend. Offering the consumer control over the lending process, especially when banks and lenders may be perceived as barriers to home ownership, is very attractive messaging.

The reality today, however, is that LendingTree’s distinctive messaging may be overshadowed by the slumping housing market/bad bank loan economic meltdown. That could be a primary reason that LendingTree’s parent company reported a US$ 22.6 million loss in the third quarter on revenue of US$ 50.3 million. Losses as of the end of October total over US$ 195 million (Charlotte Business Journal, Oct. 30, 2008).

It also doesn’t help matters that nine civil lawsuits have recently been brought against LendingTree in South Carolina, charging that the company violated state law by not telling borrowers about the fees it receives from lenders. Another lawsuit, filed in May 2008 in New York, alleges that LendingTree did not have adequate security to keep customers’ data confidential. This suit relates to former company employees who gained unauthorized access to private customer information.

While LendingTree has been battered by the economic downturn and legal challenges, it is nothing if not well known. The company claims it has achieved “total brand awareness of 84 percent nationwide.” Time will tell if that brand awareness is enough for LendingTree to weather the current financial storm and continue to compete effectively in a difficult business environment.

Barry Silverstein has been a frequent brandchannel contributor since 2007. He has thirty years of advertising and marketing experience and is currently a freelance writer and marketing consultant. He founded and ran his own direct marketing agency and held executive positions with Epsilon, a leading database marketing firm and Arnold, a major ad agency. Silverstein is the author of three marketing books, including the McGraw-Hill book, The Breakaway Brand, which he co-authored with Arnold CEO Fran Kelly.