Online Lending: 'Plenty of Room' to Grow. Where Do Banks Fit In?

By Brian Patrick Eha

Marketplace lenders' share of the consumer and small-business loan markets is small now, but is expected to grow substantially in the coming years. Banks looking to get in on the action have two choices: team up with these established players that have already perfected the technology or try to beat them at their own game

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Latest News

Subprime ABS Loan Losses Spike in August

– Securitized subprime auto loan losses surged 27% on an annualized basis August, putting the sector on a path to approach post-crisis record loss levels by year’s end.

Sallie Mae's 3rd Private Student Loan Deal of 2016 Sized at $674M

– Similar to Sallie Mae’s recent deals, the collateral consists entirely of what Sallie Mae categorizes as “traditional loans" - those to borrowers with an original FICO score of at least 640 if he or she attended a non-profit school.

Santander, Executer Boost Credit Metrics in New ABS Deals

– Santander Drive Auto Receivables Trust (SDART) 2016-3 consists of $1.178 billion in new and used vehicle loans originated or acquired by Santander Consumer USA, with a potential upsizing in the works. Exeter's third deal of the year is sized at $450 million in notes, backed by $471.2 million in subprime loans.

BMW Adds $1B of Lease ABS to Mix of Auto Deals

– BMW Vehicle Lease Trust 2016-2, is backed by leases to prime quality borrowers, according to Standard & Poor’s; it will issue four senior tranches that benefit from initial credit enhancement of 15.9%:.


Featured Articles

Fannie, Freddie Helping Older Apartment Buildings Go Green

– Both government sponsored enterprises discount the interest rates on loans for buildings with one of several “green” certifications; they also underwrite some of the projected savings from upgrades on buildings of a certain age, allowing owners to take out bigger loans.

The Silent Crisis in Housing Finance

– With the creation of the Consumer Financial Protection Bureau, the cost of servicing mortgage loans in the U.S. has dramatically risen. Adding to the mortgage market's predicament is the exit of banks from the single-family mortgage business in favor of multifamily and commercial assets that are not subject to the CFPB mortgage rules.

"Shut Up and Move On." Eisman to Securitization Pros

– Steve Eisman, who profited from the mortgage metldown, tells an industry crowd why he thinks the financial system is safer under Dodd-Frank, why Silicon Valley is "clueless" about lending and what the next "big short" will be.

Rush To Extend Maturity of CLOs Ahead of Risk Retention

– In October, roughly $40 billion collateralized loan obligations will become callable, giving managers with a required payment date only a month in which to refinance before the risk retention requirement kicks in.

Startup Buys Home Equity, Instead of Lending Against It

– A fintech startup called Point is allowing consumers sell a piece of their home equity to investors, rather than borrowing against the value of their houses.

Lending Club Seeks to Bolster Its Retail Investor Base

– Lending Club, which is seeking to rebound from a recent corporate governance scandal, plans to step up its efforts to sell loans to everyday investors, Chief Executive Scott Sanborn said.

Struggling Malls Pose Outsized Risk to CMBS

– In just a few years, a popular mall with high-end anchor stores and boutique retail tenants can fall into substandard property condition, leaving commercial mortgage bond investors with outsized losses on their exposure to these properties.

Why Subprime Mortgages Lend Themselves to Securitization

– Many lenders are still reluctant to give mortgages to borrowers with less-than-pristine credit, yet such loans are far more likely than prime jumbo loans to be bundled into collateral bonds. Sreeni Prabhu of Angel Oak Capital credits banks' behavior and higher interest rates for that reality.


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Verizon Selling Bonds Backed by Cell Phone Payments

The $1.17 billion deal follows a year’s worth of management deliberations over issuing asset-backeds, which Verizon expects to lower the cost of financing device payment-plan agreements.The deal will also ease pressure on the carrier's own corporate credit ratings.

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