Increased home prices combined with available capital are supporting renewed interest in house flipping; the number of investors buying and selling a house within a few months has increased to the highest level since 2007; current investors are reporting an average profit of approximately $61,000; big banks are now more interested in financing real estate lending for house flipping deals and more online lending platforms are facilitating these investments; real estate crowdfunding companies seeing increased activity from house flipping customers include 5 Arch Funding, LendingHome Corp., Asset Avenue, Groundfloor Finance and Anchor Loans. Source
BlueVine raised $49 million in a Series D funding round from existing investors including Lightspeed Venture Partners; BlueVine has so far provided $200 million in working capital and says they are on track to lend out $500 million in 2017; BlueVine credits partnerships for a lot of their success, in particular the deal with QuickBooks who says the BlueVine offer is very popular among users. Source
Funding Circle has announced a new $100 million multi-year investment agreement with Community Investment Management including provisions for additional investment; the $100 million investment will focus on small businesses in the US; the investment supports continued growth for Funding Circle which has reported monthly lending of over 100 million British pounds ($122.92 million) since November. Source
Customer acquisition cost is a central tenant to all lenders; in his keynote from LendIt USA 2016, Ken Lin of Credit Karma focused on trends in customer acquisition and ideas on how to improve innovation.
The three main themes he touched on were certainty, transparency and simplicity.
Certainty - 70% to 80% of loan applications are denied, this gives the consumer uncertainty when applying for a loan. Using underwriting to offer a unique loan to the customer can better help them to understand the right loan for them.
Transparency - There are over 6,500 lenders who offer tens of thousands of loan products, this can overload the customer and cloud their understanding. Giving borrowers more insight into their credit profile can help the consumer and force the lenders to differentiate themselves.
Simplicity - On average loan applications still consist of 25 to 50 questions, some can even go up to 100. By making the loan application simpler, consumers will spend less time applying for a loan and have more time to understand and explore the right loan for them.
A few trends and ideas he touched on were the move to mobile loan applications and new innovation in technology. 70% of Credit Karma traffic is driven through mobile and the younger generations use mobile almost 80% of the time. Making sure you give them the proper mobile experience is key.
Additionally, new innovations in technology are helping to drive down costs, including biometric technology such as a fingerprint to help identify who the borrower is and pre populating their information to cut down on loan times.
Check out the full video interview here:
Chinese regulators raided over 40 companies in China to investigate for illegal activities pertaining to the country's newly disseminated laws; investigators found property agents listing homes that owners had not agreed to sell and providing false information about properties; with a focus on real estate property investing, the investigators also found P2P lenders offering down payment loans after they were recently restricted by regulators. Source
Infinity Lending Systems offers a range of platform software services for online lenders; in their featured blog post J Washburn provides three tips for improving network security; suggests using clever passwords, regulating external devices and avoiding phishing attempts. Sponsored Blog Post
Forbes interviews Perry Rahbar, CEO of DV01 on his previous experience at Bear Stearns during the mortgage crisis and how that brought him to start his new firm; DV01 provides insight and transparency to portfolios of marketplace lending loans; DV01 has also been asked to participate in Lending Club's securitizations; according to Rahbar, "DV01 helps people get a transparent view of what's going on, what's causing problems and what's performing well. Historically, you couldn't do this in an easy fashion." Source
AltFi reports on recent developments affecting the marketplace lending industry; discusses challenges at RateSetter and platform changes at Zopa and Funding Circle; also notes that UK regulators may be seeking increased transparency through new regulations; argues against criticism that platforms are struggling for borrowers and shows origination volume growth since 2005. Source
RiverNorth's total portfolio consisted of 10,173 loans with an average loan size of $10,176 at the end of July; in the note to investors RiverNorth shared that investors are becoming more comfortable with online lending assets with more awareness likely to drive further growth; highlights two recent positive events in the industry including Prosper's recent securitization and Lending Club's Q2 2017 results. Source