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Household debt levels are now approaching pre-crisis levels; instead of housing debt, consumers have accumulated more student and auto debt; student debt totaled $1.3 trillion at the end of 2016, an increase of 170% over the last 10 years; contributing factors include more students taking out loans, increased loan amounts and slowing borrower repayments; Lend Academy discusses the mounting defaults in student loan debt and the platforms that are aiming to solve the problem through various products. Source
Lend Academy provides more details on defaults triggering a breach in a SoFi securitization portfolio; the portfolio reporting the defaults was SoFi's first securitization of unsecured consumer loans, the SoFi Consumer Loan Program 2015-1 LLC; given the terms of the deal and the overall characteristics, the breach does not seem to have broad market indications; the deal arrangers set the trigger level at 3% which is a relatively low rate and the cumulative net loss is only reported to be marginally above the trigger; a chart from PeerIQ also provides more details on the cumulative net loss rates for SoFi. Source
Lend Academy shares details about some of the emerging platforms in the real estate market; new platforms have been providing innovative services to help make real estate transactions easier and make homeownership more affordable; companies mentioned are offering lower down payments and some participate in purchasing equity of the home; new platforms are also significantly reducing the expected transaction time for buying and selling a home. Source
Peter Renton, Founder of Lend Academy and Co-Founder of LendIt shares his perspective on the likely fintech IPOs in 2018. Source
SoFi is becoming one of the US's largest and most comprehensive marketplace lenders. Since launching in 2011 they have originated over $15 billion in loans. They market themselves as a new kind of finance company and recently acquired Zenbanx, expanding their products to deposit accounts. SoFi also offers student loan refinancing, mortgage loans, personal loans, wealth management and life insurance.
In Lend Academy's recent podcast with SoFi, CEO Mike Cagney provides some insight on how the company might be valued on a per customer basis. Mike Cagney says larger banks are valued at approximately $10,000 to $100,000 per customer. SoFi currently expects to have 500,000 customers by the end of 2017 and 2 million customers in the next two to three years; at a value of $50,000 per SoFi customer, this would imply a $100 billion valuation. Source
Securitization has become increasingly utilized by marketplace lending platforms and in 2016 a record number of deals were done; Lend Academy provides details on securitization structuring, Lending Club's recent securitization and the importance of transparency in their article; in Lending Club's December securitization the total amount of loans in the portfolio was approximately $131.3 million and the portfolio was rated by Kroll Bond Rating Agency. Source
The Madden v. Midland case has been a closely followed case for over two years by the marketplace lending industry; bills are now being introduced to hopefully fix the ambiguity around the case; Lend Academy shares the history of the case and perspectives from Adam Levitin, professor of law at Georgetown University, Nat Hoopes, executive director of the Marketplace Lending Association, and Brian Korn, partner at the law firm Manatt, Phelps & Phillips. Source
At Lang Di Fintech (LendIt's Chinese event), Peter Renton, the founder of Lend Academy, conducted an interview with ZhongAn Insurance CEO Jeffrey Chen; they talked about how the biggest insurtech company uses big data and artificial intelligence to measure risk, the scale of ZhongAn's business, regulatory issues and the future of the company; the article provides five key takeaways from the interview. Source
Lend Academy's Peter Renton provides insight on his marketplace lending investment strategies for Lending Club and Prosper loans; outlines the options available for investing and highlights best performing loan grades; reports details of loan filters he is using across his eight accounts. Source