2008 illustrates this well. After the housing market crashed — which was ultimately. The result of bad-loan practices and consumer enthusiasm for taking on more mortgage debt than was reasonable. When the bubble finally burst and the supply of credit to traditional banks contracted sharply, a new type of financial service emerged from the ashes – market lenders. Borrowers desperate for credit, and Wall Street as a whole, are lured by the idea of fast, unfettered, deregulated loan access (will we learn our lesson)? The valuations of these companies have soared, and some even had IPOs; in late 2014, stock soared more than 50% on its first day of public trading.
Mature and Able to Gain Traction When It Comes
Since then, however, the general boom in market lenders has cooled. Earlier this year, a series of scandals came to light, most notably . It turned out that the China Phone Number CEO and his family were actually buying up loans originated by as a means to shore up the company’s perceived market performance. It also came to light that had unethically tampered with documents to drive the sale of certain loans. Timid investors pulled out of market lenders, disappointing yields and significant reductions followed as investments dried up.
Through Their Ability to Offer Credit Products
Not only are the questions surrounding lender transparency in the marketplace emerging, but many are starting to ask deeper, more serious questions. With no other source of income other than loans, is the marketplace lending business model viable? How will these platforms sustain in a capital crunch such as a recession? As investment dried up, market lenders responded by lowering lending standards, and for many the real estate crash was too new for them. Are these “eBays” really a good thing — or a recipe for economic disaster.