Joseph Cioffi offers the following quote to Structured Credit Investor, concerning the Madden v. Midland Funding case, “Not only are marketplace lenders at risk, but so will be the sponsors and other participants in the securitization of marketplace loans to the extent loans are held unenforceable or interest rates are reduced. Experience shows that when cashflows to investors are reduced, litigation follows.” Click here to view the full article.
Marketplace lending, sometimes referred to in various forms as peer-to-peer, P2P or online lending, has been marked by a meteoric rise and fall to earth in 2017. Lending platforms and ABS transactions continue to be shaped by advances in fintech, regulatory uncertainty and recent major legal decisions regarding “true lender,” “valid when made” and the application of usury laws. A technologically savvy consumer base creates the potential for marketplace lenders to outperform their traditional counterparts. The Credit Chronometer offers in-depth analysis and advice for avoiding the pitfalls that have historically led to shorter growth cycles and battles over loss distribution.
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