Priceline.com To Take Equity Stake In PricelineMortgage Loan Business; Guaranteed Best Rates for Purchase & Refinance Mortgages

Business Wire, Oct 9, 2001

Business Editors

NORWALK, Conn.--(BUSINESS WIRE)--Oct. 9, 2001

Priceline.com(R) (Nasdaq: PCLN) today announced that it will exercise its option to take a 49 percent equity stake in PricelineMortgage, the profitable Name Your Own Price(sm) loan service founded by priceline.com and Alliance Capital Partners.

Also today, PricelineMortgage announced the launch of a guaranteed best-rate promotion, which will be available through November 30, 2001 and can be found at www.priceline.com. PricelineMortgage is guaranteeing that it will get borrowers the lowest cost loan on the market at the time or pay them $300. The limited-time offer is being used to demonstrate PricelineMortgage's commitment to priceline.com's core benefit - delivering the best deals on the Internet.

PricelineMortgage has been operating profitably since February 2001 and its results will be consolidated with priceline.com's financial results in the 4th quarter 2001. Priceline.com said it expects PricelineMortgage to be financially accretive to the business, but not material to priceline.com's results at this time. Priceline.com said it will not need to make any additional investment to change its equity stake in PricelineMortgage. In 2000, priceline.com provided funding to PricelineMortgage with the provision that the investment could be converted, at priceline.com's option, into a 49 percent equity stake.

"Priceline.com has established a reputation for delivering the best deals on the Internet," said priceline.com Chairman and CEO Richard S. Braddock. "PricelineMortgage has successfully leveraged that reputation to create a financial product that increasing numbers of consumers are viewing as best of breed among online financial services. In fact, consumer acceptance of the service has gained momentum in light of recent rate trends. PricelineMortgage has definitely proven itself in the market and we're pleased to strengthen our support of the business."

"PricelineMortgage has seen consumer adoption and transaction completion rates increase substantially, proving that consumer confidence in online borrowing is growing for well-designed business models," said Robert Clements, President and CEO of Alliance Capital Partners. "PricelineMortgage is just such a model. It utilizes the strong financial services expertise of Alliance to create an online borrowing experience that is convenient, efficient and highly valuable to consumers. And it leverages priceline.com's technology expertise, marketing infrastructure, and strong financial and customer bases, thereby giving the business low operating costs and the ability to succeed in the Internet financial services marketplace."

PricelineMortgage has been featured in The Wall Street Journal and was named to Forbes' Best Of The Web list. PricelineMortgage enables consumers to choose their own mortgage terms, get guaranteed closing costs, and lock in their personalized rate in as little as 30 minutes. PricelineMortgage can save borrowers up to $1,000 in guaranteed points and closing costs. On larger "jumbo" loans, borrowers can save even more. If borrowers lock in a rate and rates change before the loan closes, PricelineMortgage customers receive whichever is lower - the rate they requested or the rate available when closing documents are prepared, which is generally five days prior to closing.

PricelineMortgage offers several advantages to borrowers, including:

    -   Guaranteed best rates. For a limited time, borrowers will get
        the best rate available or PricelineMortgage will pay them
        $300.

    -   Online lock-in. At the time a borrower's offer is accepted,
        the desired rate is locked in. Few online loan originators
        allow consumers to complete the lock-in process electronically
        and virtually all place substantial restrictions on the rate
        lock.

    -   "Float-down" rate protection. If rates drop between the time
        the rate is locked in and closing documents are prepared,
        PricelineMortgage customers will get the lower rate.

    -   Guaranteed low closing costs. Unlike other mortgage sites,
        PricelineMortgage spells out and guarantees closing costs and
        may save borrowers up to $1,000 in points and closing costs
        compared to other online and offline lenders.

    -   Loan-level pricing. Each customer's loan request is evaluated
        based on its own unique loan and credit attributes. Decisions
        on whether to accept the customer's requested interest rate is
        determined based on the customer's credit history and loan
        attributes.

    -   Real-time loan request evaluation. By using direct links to
        automated underwriting tools, PricelineMortgage customers
        receive a complete credit decision in as little as 30 minutes.

    -   Online loan counselors. PricelineMortgage features live chat
        support from a staff of online loan counselors. To reach a
        counselor, customers select the PricelineMortgage chat option
        and then electronically talk with a counselor as they fill out
        their application.