US Consumer Online Lending Annual Returns

As we approach year end, marketplace lending investors may be interested in seeing how the US Consumer Online Lending Platforms fared in 2017 compared to previous years using the Orchard Index. Although December numbers are not in yet, it appears the full year of 2017 will be below 2016's annual return of 3.95% (the 2017 full year should be between 3.70%-3.85%). This may have been the reason why several institutions sold bulk whole loan portfolios earlier this year. Investors may be more hopeful in the future regarding new originations when reviewing the historical monthly returns. For the months of October and November, monthly returns increased to 0.41% and 0.44% respectively from a range

Addressing the World in New Ways

[This was originally posted on LinkedIn, October 2017] The purpose of addresses is to enable the conveyance of a specific location to others. Our current system is not adequate for the modern world. This has become apparent most recently as we have witnessed the natural disasters in Houston, Puerto Rico and Northern California. In Houston, rescue helicopter pilots that were given street addresses had difficulty finding the locations because floodwaters distorted the landscape. For outsiders, it was already difficult to find rural locations in Puerto Rico but with roads torn up and cell towers shutdown, the standard methods to identify locations were inoperable. This month, National Guard tro

HUD Reverses Policy on PACE - No Longer Insuring Mortgages with PACE Exposure

Last week, the US Department of Housing and Urban Development (HUD) announced that "Properties encumbered with PACE obligations will no longer be eligible for FHA-insured forward mortgages." This reversed a policy that was announced in 2016, allowing for mortgages encumbered with PACE obligations to be insurable. The FHA will still allow for refi mortgages that pay off PACE obligations. The Mortgage Bankers Association (MBA) was in favor of the policy change and put out a statement. "MBA applauds HUD's announcement and fully supports these reforms. PACE liens pose a real danger to secured lenders and to the MMI [Mutual Mortgage Insurance] fund because they erode the underlying collateral due

Size of the Fix and Flip Mortgage Market

According to Attom Data Solutions (, 53,638 single family homes and condos were flipped nationwide in the second quarter of 2017 with the trailing 12 month volume of house flipper purchases approaching $45 Billion. The percentage of these purchases was 35% up from 32.3% during Q2 2016. Assuming properties have approximately 25% equity, we could see a total invest-able mortgage market of $11.8 Billion (35% * 75% * $45B). Mortgage insiders typically quote the market as much larger because of private mortgages and funding that does not get recorded on industry databases. To see the geographic areas by ZIP code where house flips are a large percentage (at least 25%) of

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