Thursday October 17 2019, Weekly News Digest

LendingClub

News Comments Today’s main news: Zopa launches tool to compete with credit bureaus. KBRA assigns preliminary ratings to Marlette Funding Trust 2019-4. OnDeck Capital financial results. ID Finance raises 1.7M euro on Crowdcube in minutes. Canada’s fintech adoption rate has doubled since 2017. Today’s main analysis: LendingClub account performance (A MUST-READ). LendingTree’s Personal Loan Offers Report […]

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

LendingClub

News Comments

United States

United Kingdom

European Union

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News Summary

United States

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2019-4 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Marlette Funding Trust 2019-4 (MFT 2019-4). This is a $326.27 million consumer loan ABS transaction.

Preliminary Ratings Assigned: Marlette Funding Trust 2019-4

Class

Preliminary Rating

Initial Class Principal

A

AA (sf)

$260,298,000

B

A (sf)

$30,117,000

C

BBB- (sf)

$35,854,000

On Deck Capital Inc. Financial Results Comparing With Consumer Portfolio Services Inc. (Mesa Weekly), Rated: AAA

On Deck Capital Inc.’s volatility measures that it’s 85.00% more volatile than S&P 500 due to its 1.85 beta. Consumer Portfolio Services Inc. on the other hand, has 1.53 beta which makes it 53.00% more volatile compared to S&P 500.

Earnings & Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
On Deck Capital Inc. 3 0.12 45.93M 0.45 7.99
Consumer Portfolio Services Inc. 4 0.55 13.97M 0.50 7.37

Profitability

Net Margins Return on Equity Return on Assets
On Deck Capital Inc. 1,349,850,114.62% 12.2% 3.1%
Consumer Portfolio Services Inc. 396,042,410.84% 7.6% 0.6%

Global cooling; Upgrade Card (PeerIQ), Rated: AAA

In industry news, Upgrade led by CEO Renaud Laplanche released the “Upgrade Card”. The product is a cross between credit card and an installment loan. How does it work? Every month any new charges on the card transition into an installment loan of 12, 24, or 36 months. Customers can select the default payback period when applying for the card and they have the option to change the term for new charges at any time. Upgrade Card offers true risk-based pricing with a range of 6.49% to 29.99%. LendIt Co-Founder Peter Renton has a nice summary here.

In macro news, the Fed is expected to cut rates for a third time later this month to a range of 1.5% to 1.75%.

Source: OECD Interim Outlook Projections, Blackstone, PeerIQ
Source: WSJ, Cantor Fitzgerald, PeerIQ

New LendingClub Account Performance (Lend Academy), Rated: AAA

In April 2018, LendingClub provided us with $5,000 to open a brand new account. Since then we have been chronicling the status of the account on a quarterly basis. Below are links to the full series of blog posts in chronological order:

Source: Lend Academy
Source: Lend Academy

Personal Loan Offers Report – September 2019 (LendingTree), Rated: AAA

At 1,270 basis points, the spread between the highest and lowest offered APRs offered to the same consumers were especially stark for high-score borrowers.

  • The average spread for those with scores of 760 or higher was 1,270 basis points, amounting to a difference of 58.5% on the average loan amount offered for a three-year personal loan.
  • Consumers with scores between 720 and 759 saw an average offer spread of 1,145 basis points, representing a 49.9% difference in interest paid.
  • For those with scores between 680 and 719, the average spread was 971 basis points, representing a 37.3% difference in interest paid.
  • Borrowers with scores between 640 and 679 had an average spread of 860 basis points, representing a 28.2% difference in interest paid over the three years of the loan.
Source: LendingTree

Kiva Lending Team: Lendio Gives (Kiva), Rated: A

Lendio has provided over 10,000 Kiva microloans through its

Source: Kiva

There’s Never Been a Better Time to Consolidate Credit Card Debt (Credible), Rated: AAA

According to data collected by the Federal Reserve, borrowers who were assessed interest on their credit card accounts paid 16.97% on average during the three-month period ending Sept. 31. But the average rate on personal loans was only 10.07%.

That’s a spread of 6.9 percentage points — an all-time high in Federal Reserve records dating back to 1998.

Apple and Goldman Sachs aren’t reporting Apple Card information to credit bureaus (MarketWatch), Rated: A

Apple and Goldman Sachs have yet to start reporting consumers’ payment information for the Apple Card to the major credit bureaus, a source close to Goldman Sachs confirmed to MarketWatch on Monday. The source later said that the companies will begin reporting to the credit bureaus later this quarter.

Goldman Sachs CEO says Apple Card is the most successful credit card launch ever (CNBC), Rated: B

“In three short years, we have raised $55 billion in deposits on the Marcus platform, generated $5 billion in loans, and built a new credit-card platform and launched Apple Card,” Solomon said, adding “which we believe is the most successful credit card launch ever.”

Rise of fintech weakens law to prevent lending discrimination (Roll Call), Rated: AAA

As online banking threatens to make in-person banking at brick-and-mortar branches as archaic as video rental stores, it may do the same to a 1977 law created to counteract decades of underinvestment in minority neighborhoods.

Fewer branches, more online

While that includes some wholesale banks or limited purpose institutions, like credit card banks, online banking is driving the sector’s growth.

At the same time, the number of bank branches with an obligation under the CRA to provide loans and other services is falling. Branches have declined every year since a peak in 2010, at 99,550, according to data from the Federal Deposit Insurance Corporation. Banks closed 1,700 branches in 2018, dropping the total number to 86,375.

After steadily rising to a peak of $505 billion in 2016, the number of CRA-compliant loans that banks issued dropped in 2017 to $482 billion, according to the Office of the Comptroller of the Currency.

CNB Bank Moves to Revolutionize its Retail Lending with nCino (PR Newswire), Rated: A

nCino, the worldwide leader in cloud banking, today announced that Pennsylvania-based CNB Bank will utilize nCino’s Bank Operating System to digitize its retail lending process from end-to-end to enrich the customer experience.

California has reformed consumer loan interest rates. But will lenders find loopholes? (Cal Matters), Rated: A

Gov. Gavin Newsom has signed into law Assembly Bill 539 by Assemblywoman Monique Limón, Santa Barbara Democrat. The measure sets an annual interest rate cap of roughly 36% on consumer loans from $2,500 to $10,000 made by non-bank lenders.

For the prior 34 years, under state law, the sky was the limit on rates charged for such loans. Last year, 333,416 non-bank consumer loans in the $2,500 to $10,000 range had annual percentage rates of 100% or higher. That represented 40.7% of such loans. In the $2,500-$4,999 range, the triple-digit APR ratio was 55.5%.

DrawBridge Lending CEO Discusses Risk and Compliance for Lending Capital to Bitcoin Holders (Crowdfund Insider), Rated: A

Earlier this month, DrawBridge Lending (DBL Digital), a digital asset lending, borrowing and investment management firm, partnered with Kingdom Trust, a qualified custodian providing a self-directed IRA incorporating several digital assets with property and traditional asset investments.

To be eligible to invest, investors must be eligible contract participants (ECPs), which means they should have a minimum net worth of $1 million. The minimum investment in Drawbridge Lending’s series fund is $1 million, which can be met with the contributions of multiple investors.

There are more than 600,000 millennial millionaires in the US, according to report (CNBC), Rated: A

There are 618,000 millennial millionaires in the U.S. and their wealth is only expected to grow.

Currently, 93% of millennial millionaires have a net wealth between approximately $1 million and $2.5 million, according to the report. Nearly 60% live in either California or New York and they are investing more in real estate than their elder-millionaire counterparts.

The Pros and Cons of Using Peer-to-Peer Lending When Investing in Real Estate (The Motley Fool), Rated: A

Today’s real estate investors have many financing options at their disposal. There are traditional options like government-backed loans, home equity lines of credit (HELOCs), and investment property mortgages. But on top of those, you also have new-age choices like crowdfunding and peer-to-peer (P2P) lending platforms.

Real Estate Earnings: What To Watch For This Quarter (Seeking Alpha), Rated: A

The “REIT Rejuvenation” of 2019 has restored the coveted NAV premium for most sectors, giving these REITs the currency to re-open the acquisition pipeline. This valuation premium has allowed REITs to kick-start external growth, which has historically been responsible for more than half of FFO per share growth across the REIT sector. REITs were net buyers again in 2Q19, buying $12.5 billion in assets while disposing of $6.6 billion. The $5.9 billion in net acquisitions was the largest quarterly “buy” since 4Q17, and we expect this trend to continue into 2020 given the favorable valuation environment. We break down the acquisition activity for each of the REIT sectors later in this report.

Source: Seeking Alpha

AMERICAN FINANCIAL RESOURCES AND FINICITY PARTNER TO SIMPLIFY THE MORTGAGE EXPERIENCE (Finicity), Rated: B

American Financial Resources, Inc. (AFR) announced today it is working together with Finicity—a provider of real-time financial data access and insights, to provide its business partners and their borrowers with a faster, simpler and more secure way to verify assets and income while originating loans.

Roofstock Accelerates Innovation with New Chief Product Officer at the Helm (Yahoo! Finance), Rated: B

Roofstock, the marketplace for investing in real estate, announced the addition of Ketan Babaria to the fintech’s leadership team as Chief Product Officer. Formerly the Head of Product for LifeLock and Capital One’s D3 incubation unit, Babaria will enhance Roofstock’s current offerings and introduce new, creative ideas to accelerate the fintech’s growth and make real estate investing radically accessible.

Director of Operations Joins Fintech Startup LenderClose (DS News), Rated: B

Des Moines fintech startup company LenderClose has welcomed Andrew Deignan as Director of Operations. Deignan will manage the Operations and Vendor Relationships group, ensuring LenderClose delivers the highest level of service to its credit union and community bank lender users.

United Kingdom

Zopa launches tool to dispel “mystery” of credit worthiness (AltFi), Rated: AAA

Zopa, the first ever peer-to-peer lending platform, is launching the tool, called Borrowing Power, as it says that lending decisions and credit worthiness have been “shrouded in mystery” for too long.

The tool, which is free of charge, works by giving Zopa customers a borrowing score between one and ten. Customers are shown why they are given the score and how they can help improve the score.

In the Spotlight with Mario Lupori, RateSetter (Financial Reporter), Rated: AAA

We spoke to Mario Lupori, chief investments officer at RateSetter, about whether there is more consolidation to come in the peer-to-peer market and whether forthcoming regulatory changes will hinder the sector.

Samsung.com partners with Klarna to offer pay later payment plans (IBS Intelligence), Rated: A

Samsung.com has partnered with payment provider Klarna in the UK to provide customers service to make purchases from its website and pay later. The customers will get a convenient and hassle-free way to pay later at Samsung.com.

Klarna: too good to be true for students? (Mancunion), Rated: A

Klarna is perfect in those situations, giving you a ‘try before you buy option’. You can get as many items as you wish, in as many sizes, returning all the items you don’t need before a penny leaves your bank account. There’s no waiting around for refunds to reach your depleted bank account – you only pay for what you actually keep.

Octopus Choice’s P2P loans now available within a SIPP (AltFi), Rated: A

The firm has announced that its P2P investment platform is now accessible within a SIPP wrapper.

Could banks become redundant in the future? (Finextra), Rated: A

P2P lending as it right now stands absolutely no chance in competing with traditional banking, as it requires a bit too much time from the lender’s side.

However, should technology such as Artificial Intelligence be successfully implemented on these platforms, it’s likely that P2P lending will occupy a large percentage of the financial market share.

Starling launches TV ad campaign after reaching 900,000 customers (AltFi), Rated: A

Today Starling Bank will premiere its first TV ad on ITV and Channel 4 during England’s UEFA Euro 2020 qualifier against Bulgaria, and Jamie’s Meat Free Meals.

Celsius Now Offers up to 10% Return on TrueUSD Lending Service (Finance Magnates), Rated: A

Celsius Network, a cryptocurrency lending and borrowing platform, has partnered with TrustToken, the team behind dollar-pegged TrueUSD (TUSD), to offer up to 10 percent interest on four new stablecoins.

Casa Italia to expand its restaurant in Liverpool following £650k loan from OakNorth Bank (Fintech Finance), Rated: B

China

PayPal wants to help Chinese online shoppers buy from overseas (Business Telegraph), Rated: AAA

By the end of this year, Chinese online shoppers will have a new way to buy things from abroad: PayPal.

Despite the tensions between Beijing and Washington, China’s central bank has allowed the US company to take a toehold in the country’s valuable payments market by buying a majority stake of Chinese payments group Gopay.

European Union

Barcelona-based fintech ID Finance secures €1.7 million within minutes on Crowdcube (EU-Startups), Rated: AAA

Barcelona–based ID Finance, a fintech that operates in Europe and Latin America, has raised over €1.7 million in crowdfunding within minutes of its campaign going live on Crowdcube, amidst strong demand from investors. The data science, credit scoring and digital finance company has a target of €2.3 million.

The company has a well established global team and over 3 million users, with over 40,000 new users joining each week. It is on track to double revenues this year to €90 million – up from €13 million in 2017 – and is targeting over €267 million in revenue by 2021, with the goal of becoming the number one digital lending platform in Hispanic and Latino markets.

Fintech exits have raked in €83bn since 2013 amid European funding boom (sifted), Rated: AAA

The sale of European fintechs via initial public offerings or acquisitions has pulled in €83bn over the past six years, according to a new report by Dealroom.co and Finch Capital. This is twice as much as the next biggest category, enterprise software, and highlights the scale of opportunity for investors as well as the growing maturity of the fintech market.

Some of the biggest exits were the €7.1bn flotation of Dutch payments company Adyen and the sale of Swedish start-up iZettle to Paypal for $2.2bn last year.

The same report also estimates that the continent’s remaining private fintechs have an “unrealised” value of €43bn combined, including companies such as N26 and Starling Bank.

Source: sifted
Source: sifted

Which P2P Lending Marketplaces in Europe Accept American Investors? (P2P-Banking), Rated: A

European p2p lending services are growing. And yields of 10+% are achievable on some of the platforms. This attracts international investors.

Here is an overview of 5 services (sorted aplphabetically) that do allow US investors.

Assetz Capital is a marketplace for UK SME and property development loans. The liquid ‘access’ products offer 4.1% to 5.75% interest.

Bondora is an Estonian p2p lending marketplace for consumer loans. The highly liquid Go&Grow product offer yields 6.75%. With other products higher yields of 10+% are achievable.

Estateguru is an Estonian marketplace for property loans. Typical interest rates are 10-12%.

Flender is an Irish marketplace for SME loans. Typical interest rates are around 10%.

Mintos is a Latvian p2p lending market place. A wide range of loan types is offered. The fairly liquid ‘Invest&Access’ product currently promotes around 8% rate. Yields of 10+% are possible with manual and autoinvest.

Europe’s top tech startups to know (sifted), Rated: A

Europe’s startup scene is often overshadowed by Silicon Valley, but the continent is gaining ground with more than 160 tech firms valued at over €1bn.

Klarna
Founded 2005 — Stockholm, Sweden — Unicorn

In 2019 it launched a new $460m fundraising round, giving the company a post-money valuation of $5.5bn and making it the highest-valued private fintech company in Europe. That was a 250% increase on its last valuation at the beginning of the year.

Starling Bank
Founded 2014 – London, UK – Rising Star & Female Led

Led by Anne Boden, Starling has made a dent in the UK’s thriving fintech ecosystem. As of August 2019 the bank has just shy of 800,000 customers, including around 60,000 business accounts. The company says it’s on track to pass a million this year and already has £1bn in deposits.

These numbers are not quite as impressive as Monzo, which boasts 3m customers, or Germany’s N26 with 3.5m.

Greensill
Founded 2011 — London, UK — Unicorn

Former British Prime Minister David Cameron is an advisor to the firm, which is backed by Softbank’s vision fund. The most recent funding round of $800m valued the company at $3.5bn — firm unicorn territory.

Its working finance solution is funded through issuing its own bonds, making it one of the largest bond issuers of the world, with an average of 47 bonds a day.

Nigerian SME Digital Lender Lidya Expands to Europe (Forbes), Rated: A

In an increasing trend where African technology companies are finding a global audience, Nigerian digital SME lending platform Lidya has expanded to Poland and the Czech Republic.

International

London-based finance platform Divido inks deal with US payment company Splitit offering point-of-sale finance (AltFi), Rated: A

Divido, the London-based consumer finance platform which lets consumers take out credit at the point of purchase to help spread the cost of purchases, has signed a deal with US payment company Splitit to offer a monthly instalment option to customers.

4+ INTERNET BANKING OPTIONS FOR GAMING (One Vale Fan), Rated: B

Klarna has become famous among the players in many countries since its creation in 2005. This virtual bank is seductive for its fast transactions and its privacy. The gamblers will remain anonymous when they deposit or withdraw funds utilizing Klarna as a method. In fact, this Swedish company does not ask any personal details or private information. What’s more, Klarna is also an excellent service to the mobile casino allowing the users to move funds at their convenience.

India

How Can Neobanks Potentially Transform SME Lending? (Inc42), Rated: AAA

Neobanking is a relatively newer concept in India as compared to the West, and is still on a take-off mode. However, market experts observe the gradual and steady adoption of Neobanks and credit their fast growth to its lender and SME-friendly characteristics.

IN CONVERSATION WITH CRIF’S ATRIDEB BASU & HOW HE SCALED DATA & ANALYTICS PRACTICE IN INDIA (Analytics India Mag), Rated: A

CRIF is an Italian company, based out of Bologna and caters to more than 6K banks and financial institutions across 30+ countries globally. In India, CRIF has two broad arms – one is the 100% subsidiary (called CRIF Solutions India) – which focuses on consulting, analytics and products and the other is the credit bureau where it has major ownership (CRIF Highmark) – which focuses on multiple services on retail and commercial side.

Asia

Investors Pour Record $ 735 Million Into Singapore Fintech Deals (Bloomberg), Rated: AAA

Investors poured a record $735 million into financial-technology ventures in Singapore in the first nine months of this year, according to research from Accenture Plc, which analyzed data from CB Insights, Pitchbook and Tracxn.

That’s up 69% from the same period a year earlier and exceeds the $642 million raised in all of 2018, the study found. Investments in payments startups and those in lending made up the bulk of fintech fundraising, accounting for 34% and 20% of the total, respectively. Insurance technology deals comprised 17%.

MENA

Region’s P2P lending platform Beehive funds first SME in Bahrain (Statup MGZN), Rated: A

Beehive, the region’s first regulated peer-to-peer lending platform announces that it has funded its first SME in Bahrain.

The funding was granted to Bahrain-based Mira Packaging Factory, which manufactures disposable cups in addition to other food packaging solutions for the GCC, and the African F&B industry.

Canada

FinTech adoption in Canada has increased from 18% to 50% since 2017, according to the EY Global FinTech Adoption Index 2019. Among the reasons driving consumers to FinTech services are better rates and fees (42%), ease of setting up an account (19%) and more innovative products and services (10%).

Authors:

George Popescu
Allen Taylor

The post Thursday October 17 2019, Weekly News Digest appeared first on Lending Times.

Friday May 11 2018, Daily News Digest

Volume of homes flipped with loans

News Comments Today’s main news: Robinhood raises $363M. Americans on pace to amass $4T in consumer debt by end of year. Zopa to boost regulatory clout. Reserve Bank of India regulations create P2P lending road blocks. How China struggles to create a credit scoring system. Today’s main analysis: LendingClub earnings overreaction. LendingTree Personal Loan Offers Report for April 2018. Today’s […]

Volume of homes flipped with loans

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Robinhood Aims to Rival Coinbase in Crypto With $ 363 Million Funding Round (Fortune) Rated: AAA

Robinhood, the free stock trading app, has raised $363 million in a new investment round valuing the company at $5.6 billion.

The Series D round, announced Thursday, makes Robinhood the second most valuable private fintech startup in the U.S. after Stripe, the online payments company.

Inside SoFi’s (expensive) customer acquisition push (Tear Sheet) Rated: AAA

SoFi, which recently confirmed it had 500,000 members, is on a customer acquisition push.

The company, which initially offered student loan refinancing for high-earning top-tier graduates and has since expanded its offerings, differentiates with VIP-style “member” benefits.

It’s a customer-for-life strategy other digital banking upstarts are pursuing. Luvleen Sidhu, CEO of BankMobile, recently told Tearsheet that a “customer for life” strategy is underpinned by the reality that “every customer is a potential customer,” with product offerings tailored for different life stages. SoFi has been known to pay a high price to gain customers; last year, it reportedly acquired customers at $756 apiece. The non-financial member services are valued at $795 per customer, according to the company.

Hey Future SoFi Money Member (SoFo Money Email), Rated: A

Higher interest (1.09% for May—21x the national checking account average of 0.05%!)

  • Reimbursed ATM fees worldwide (up to 6 per month)
  • No foreign transaction fees
  • No overdraft fees or account fees whatsoever!
  • Easy-to-use mobile app
  • SoFi Money Visa Debit Card
  • Mobile check deposit
  • Free checks
  • Top notch customer support
  • Send money to friends and family with easy P2P at no cost
  • Bill pay
  • Direct deposit
  • PLUS access to SoFi membership including complimentary career coaching and member events when you set up direct deposit

Did we mention that if you sign up for an account and set up direct deposit you’ll get $200?

LendingClub: Earnings Overreaction (Seeking Alpha) Rated: AAA

Such a strong reaction to LendingClub hasn’t happened in years. The company is still down 20% year to date, and more than 40% in the last twelve months. LendingClub has struggled to find its footing ever since the ouster of its CEO, Renaud Laplanche, after controversy over the parking of LendingClub notes in a related third-party firm. More recently, in the wake of Wells Fargo’s (WFC) fake-account scandal, the FTC has also charged LendingClub with charging improper fees to borrowers, sending the stock to new all-time lows of $2.57.

Source: Seeking Alpha

But with this earnings quarter – the first time in a long time that LendingClub has rallied to earnings news (in Q4, LendingClub dropped 9% after missing revenue estimates; the quarter before that, it tanked 17% for doing the same). What’s interesting is that even in this quarter, LendingClub continued a three-quarter streak of missing analysts’ revenue expectations.

How Wall Street, Silicon Valley institutionalized home flipping (Curbed) Rated: AAA

As the housing market has gone from recovering to roaring over the last five years, home flipping has also increased.

Source: Curbed

According to data provided by ATTOM Data Solutions, a real estate data provider, some 138,410 flippers invested $56 billion in home flipping in 2017, 34.8 percent of which was financed as opposed to executed in all cash. Prior to the housing bust, the same type of easy credit that infected the traditional mortgage market was also present in home flipping. At the peak of the housing bubble in 2005, more than $100 billion worth of homes were flipped by 287,929 investors, and 66 percent of those home flips were financed with loans.

Source: Curbed

Turn the Post Office Into a Bank? First Check Japan (Bloomberg) Rated: AAA

Koizumi won his fight, his party crushing all opposition in a landslide, and his plan was set in motion, though the process has taken more than a decade. The company’s initial public offering in 2015 was the world’s biggest in that year. The government still owns most of Japan Post Holdings Co., and periodically sells off shares, with the goal of eventually reducing its stake to only a third from more than half now. But privatization hasn’t shrunk Japan’s postal bank itself, which remains one of the largest and most important in the world:

Source: Bloomberg

The problem was that Japan’s postal bank didn’t just take deposits — it also lent money, including to so-called zombie companies, or inefficient enterprises that survive due to below-market-rate loans.

Bond Fund Inflows, Dollar Rally and Buyback Surge (INTL FCStone Email), Rated: AAA

Source: INTL FCStone

U.S. equity ETFs have lost $35 billion since the Nasdaq index peaked in mid-March. This is the longest stretch of ETF outflows I can remember since the end of the great financial crisis. Inflows into bond funds accelerated to $16 billion over the same time. Jumping from stock to bond funds at the first sign of volatility was a logical reaction when bond yields were falling to record lows amidst the deflationary fears of the beginning of 2016.

It makes a lot less sense when corporate earnings are soaring, when deficit-related treasury issuance is exploding, and when the New York Fed underlying inflation gauge is clocking above 3%. Last but not least, the equity selloff was in large part driven by a bond market rout that pushed 10-year yields above the economically meaningless but psychologically symbolic 3% level.

Read the full report here.

The Real Estate Lending Merger That Shook Mt. Olympus (Digital Journal) Rated: A

Zeus CrowdFunding, Zeus Hard Money and Zeus Mortgage Bank—made the switch to monotheism. The three successful businesses are now united under a single brand: ZeusLending.com.

Zeus Founder and Chief Acceleration Officer Steven Kaufman claims to have consolidated all three financing businesses into a single organization to better serve the community of real estate buyers and investors who rely upon fast, no-hassle loans to conduct timely transactions.

Federal student loans are about to get more expensive. What you need to know (CNBC) Rated: A

Although the Department of Education hasn’t formally announced the new rates, this year’s bump is likely to be higher than expected, said Mark Kantrowitz, a student loan expert.

Americans On Pace to Amass a Collective $ 4 Trillion in Consumer Debt by the End of 2018 (Benzinga) Rated: AAA

LendingTree today released its first Consumer Debt Outlook for May 2018. Americans are on pace to amass a collective $4 trillion in consumer debt by the end of 2018. Collectively, Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010.

Incomes growing, but consumer borrowing growing faster
Overall, the percentage of total non-housing debt, at 26 percent of Disposable Personal Income, is now even higher than during the credit boom in the mid-2000s.

Source: Lending Tree

 

LendingTree Personal Loan Offers Report – April 2018 (Lending Tree) Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.35% in April.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.35%, a decrease of 7 basis points from the prior month and 2 basis points from the same period one year ago.
  • At $22,774, the average loan amounts offered with the best APRs to all borrowers with a score of 760, up 0.57% ($130) from last month, and over 17.86% ($4,067) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 4.87% on average, and loan amounts of $33,931. A borrower with this APR and loan amount would save $2,877 by consolidating debt with a 10% APR over a three-year term.
Source: Lending Tree

Real Estate Crowdfunding: MG Capital Migrates Investment Opportunity Online (Crowdfund Insider) Rated: A

Recently, CI had a chance to catch up with Eric Malley, founder & CEO of MG Capital Management during the Crypto Invest Summit in Los Angeles. While not quite there yet, Malley is interested in the potential of blockchain.  He is looking at the options of how crypto and property can make sense for both investor and issuer.

RealtyMogul’s MogulREIT I Closes $ 4.9 Million Investments in Two Retail Shopping Centers (Citizen Tribune) Rated: B

MogulREIT I, as part of its diversified income strategy, recently completed two preferred equity investments in community-based retail centers. Community-based retail centers are centrally located within their respective population centers and focus on durable tenancy that serves the needs of the working community, thereby being less susceptible to internet retailing. The transactions include a $3 million preferred equity investment in a retail center in Waterbury, CT, consisting of three multi-tenant strips with 17 suites across 50.5 acres and a $1.9 million preferred equity investment in a retail center comprised of two lots with over 27,000 square feet located in Orange County, CA. CoStar reports that within a one-mile radius of the property, average household income is over $116,000.

Goldman Sachs, Apple Team Up on New Credit Card (Wall Street Journal) Rated: A

Apple Inc. and Goldman Sachs Group Inc. are preparing to launch a new joint credit card, a move that would deepen the technology giant’s push into its customers’ wallets and mark the Wall Street firm’s first foray into plastic.

The planned card would carry the Apple Pay brand and could launch early next year, people familiar with the matter said. Apple will replace its longstanding rewards-card partnership with Barclays PLC, the people said.

Guaranteed Rate Continues Record-Breaking Streak through April (Blobe Newswire) Rated: A

Guaranteed Rate, one of the nation’s largest retail mortgage lenders, reached $3 billion in total locked loan volume for the month of April and eclipsed records previously broken in March. In a highly-competitive housing market, the retail mortgage lender showed it’s the home purchase expert by achieving the following records: 9,387 in total locked units, $2.5 billion in locked purchase volume and 8,041 in locked purchase units.

 

Why Nationwide is ditching retail banking (Tear Sheet) Rated: A

Nationwide is shutting down its retail bank, returning to its historical core business lines including insurance and retirement; part of this plan is to invest more resources in reaching the fee-only adviser community.

The move to wind down banking operations was a strategic decision to focus on trust operations that support  retirement plans, a company spokesman said. Gaining scale and becoming competitive in retail banking would have required a “significant investment.”

Digital Lending 2.0 — A New Era (LinkedIn) Rated: A

We are now seeing an evolution of the online lending model: version 2.0. This version looks in many ways like a traditional bank, albeit a much lighter and digital one, with multi-product platforms and a variety of custom offerings for consumers. With non-traditional models like Barclays and Goldman Sachs entering the market, online lenders are either partnering up or learning from the players they sought to disrupt. In digital lending 2.0, it will be important to take an open collaborative approach, broaden offerings and deepen customer relationships through more customized solutions.

Marketplace Lending Update #3: Kabbage Heads to Court (The National Law Review) Rated: A

A recently filed California lawsuit raises the stakes in the ongoing challenge to the “bank origination model.” The lawsuit, Barnabas Clothing, Inc. v. Kabbage, Inc., was filed on March 22, 2018 in Superior Court in Los Angeles and recently removed to the federal court.1 Barnabas alleges violations of state usury, false advertising, and unfair competition laws, and asserts two federal Racketeer Influenced and Corrupt Organizations (“RICO”) Act claims. Barnabas seeks to certify a class on behalf of all California-based Kabbage borrowers and requests various relief, including that the court void the Kabbage loans.

You can do more than you think with bad credit (Inquirer Business) Rated: B

CreditCards.com, the average FICO credit score was 699 in 2016, which is just a step above fair credit. About 30 percent of Americans have poor credit, making it difficult for them to function in the financial world.

Get Creative with Loans

  • Peer to Peer LendingSince 2005, peer to peer (P2) lending has been a staple for those seeking funding with bad credit. Rather than going through an institution, you apply for and receive funds over a member-funded platform.

 

United Kingdom

Zopa to boost regulatory clout ahead of Brexit (Peer2Peer Finance) Rated: AAA

ZOPA is recruiting staff to bolster its regulatory expertise and influence ahead of industry changes and developments such as Brexit.

The peer-to-peer lender is advertising for a public and regulatory affairs officer who will be responsible for building relationships with key regulatory and political stakeholders and industry bodies.

 

Nearly Half of Aspiring Property Developers Say Economic Growth Will Have the Greatest Effect on House Prices in the Next Five Years (Crowdfund Insider) Rated: A

According to LendInvest, when asked what will have the biggest effect on house prices in the next five years, nearly half (40%) of those surveyed viewed national economic growth as having the greatest impact. Only a quarter of respondents (24%) reportedly believe political developments, such as further elections and impending Brexit, will affect house price growth the most. And a shortage in supply of housing is the biggest concern affecting house prices for only a fifth (20%) of those surveyed, while 16% of aspiring developers cited the construction of new infrastructure such as the new HS2 and Crossrail lines as the key influencing factor.

 

Goldman Sachs has invested in a UK startup that tells you when to switch mortgages (Business Insider) Rated: A

Goldman Sachs has led a £13.6 million funding round into UK startup Trussle, a company that helps people get mortgages online and tells them when to switch to better deals.

Goldman Sachs Principal Strategic Investments and Propel Venture Partners led the Series B investment into Trussle, which was announced on Wednesday.

Virgin Money offer highlights testing times for challenger banks (Financial Times) Rated: A

CYBG recently made a takeover approach of rival Virgin Money as challenger banks look for solutions in what has become a tough market; challenger banks are dealing with increased competition by digital entrants, not to mention the big four UK banks, rising funding costs and bigger rivals in the mortgage market; M&A activity among challengers is increasing as companies look to consolidate and digitize to compete.

 

 

Credit Kudos a bureau hero in open banking roll-out race (Fintech Futures) Rated: B

Credit Kudos has got connected with banks in the UK, becoming the “first credit bureau to offer open banking services to lenders and individuals”.

According to the credit bureau, borrowers can now use its services to verify income and demonstrate creditworthiness using their financial history data.

The company has now launched connections with Lloyds, Halifax, Bank of Scotland, Royal Bank of Scotland, NatWest, Ulster Bank, Allied Irish Bank, Danske Bank, and HSBC.

Mortgages shine in Castlight Financial’s open banking pilot (Fintech Futures) Rated: B

Glasgow-based Castlight Financial is partnering with Paradigm Mortgage Services and Foundation Home Loans to launch a pilot of its affordability tool powered by open banking technology.

Called Affordability Passport, Castlight says it allows brokers to process mortgages in under ten minutes.

China

China Struggles to Establish Credit Scoring System (Lend Academy) Rated: AAA

China’s government has tried for many years to establish a credit system that rivals the U.S. and Europe, but has found it a struggle to get there.

In 2015 China’s Central Bank contracted eight companies, including affiliates of TencentPing Anand Alibaba, to help build a credit system that could rival what other developed economies use. The experiment up until today has not fared well as lenders and e-commerce firms continue to use their own proprietary systems to determine risk of the borrower.

One of the main drivers behind the failure is companies were reluctant to share the data they collected. Also, conflicts of interest arose as users could be rewarded by using certain companies to drive their score up.

International

Splitit is financing purchases for debit cardholders (Tear Sheet) Rated: AAA

Splitit, a competitor to lending companies like Affirm and Klarna, is bringing its point-of-sale financing product to debit card users in the U.S. and Europe, targeting fashion and jewelry websites in particular, like Vestiaire Collective and Philip Stein.

Unlike its competitors, however, the company is focused on making the retail industry better for everyone involved — banks, processors, consumers and merchants — rather than displacing credit cards, said Gil Don, CEO of Splitit.

It might be decades before credit cards disappear, but different industries are already seeking ways to sidestep the fees that come with today’s credit card payments.

Getline ICO (GET Token): Blockchain Credit Scoring & Lending? (Bitcoin Exchange Guide) Rated: A

The GetLine network is a peer-to-peer lending platform that is built on the Ethereum blockchain. By leveraging distributed ledger technology, the objective of this project is to disrupt the lending sector, which is currently valued at a whopping $1 trillion. Therefore, transactions will be processed instantly thanks to the direct connection between lenders and borrowers. Moreover, the platform will rely on an advanced credit risk prediction mechanism, making the entire lending process safer and accessible to lenders and borrowers respectively.

 

India

RBI regulations create roadblocks for peer-to-peer lending companies (Business Standard) Rated: AAA

Is non-bank lending a form of access to credit for those in need or an investment asset class for the well-to-do? That is the question that India’s central bank perhaps grappled with while framing the regulations for the nascent peer-to-peer (P2P) lending companies.

While the regulations were put up only in November last year, a handful of companies have exited business and many others have changed tack after looking at the guidelines.

Asia

DBS Bank rolls out Singapore’s first in-app digital financial advisor that’s called ‘Your Financial GPS’ – (Business Insider) Rated: A

DBS Bank recently announced a new in-app holistic digital financial advisor which it called “Your Financial GPS”  – said to be the first of its kind in Singapore.

If you’re a DBS/POSB Bank member and have recently used your iBanking or digibank app, you might have noticed the new feature already available on the app’s main page.

Indonesia: Skystar-backed P2P lender Julo raises $ 5m Series A round (Deal Street Asia) Rated: A

Indonesian peer-to-peer (P2P) lending startup Julo has raised $5 million in a Series A funding round led by Skystar Capital and East Ventures.

Other investors that joined the round include Gobi Partners, Convergence Ventures, Provident Capital, Central Capital Ventura, Heyokha Brothers and other strategic investors, Julo announced on Thursday.

The new round of funding comes only a year after Julo raised an undisclosed amount in a seed round, also led by Skystar Capital.

Authors:

George Popescu
Allen Taylor