Prosper, another such venture, operates competitive auctions in which lenders bid to offer borrowers the lowest interest rates.
The borrowers send the payment to Somolend, which then remits the corresponding payments to each of the borrowers.
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Give student loan borrowers the help they need to understand their repayment rights.
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Of an expected 3 to4 million troubled borrowers the program was supposed to help only about 500, 000 loans have been worked out.
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Lending Club and Prosper vet thousands of loan applications, whittling down the pool to only those borrowers the company deems least likely to default.
For excessive fees, they offered underwater borrowers the false hope they could somehow keep their homes without paying for them, either by challenging the foreclosure paperwork or convincing a judge that the national registry system known as MERS was not the legitimate party to foreclose.
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Among those underwater, delinquency (measured as a borrower who is 90 days or more past due on a mortgage payment) is most common in the oldest and middle age brackets with 10.6% of underwater borrowers over the age of 85 delinquent on their mortgage payments and similar percentages of borrowers in both the 40 to 44 and 45 to 49 age brackets delinquent on their mortgages.
These investors buy the securities expecting certain performance characteristics, including payment flows from the borrowers of the underlying loans.
Although many are victims of circumstances beyond their control, almost all of the borrowers in the stories he tells showed bad judgment, inadequate effort or both.
To get judgments against the borrowers, the judge said, a single Mel Harris employee named Todd Fabacher signed 40, 000 affidavits attesting to the accuracy of debt claims.
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What once seemed a canny convergence play now looks like a barmy risk, for both the borrowers and the banks, chiefly Italian and Austrian, that lent to them.
So this fund is going to help out-of-work homeowners avoid preventable foreclosures, and it will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both the borrowers and the lenders alike, and will help folks who've taken out a second mortgage modify their loans.
While the rate of negative equity is comparable between the two sets of borrowers, the delinquency rate and loan-to-value ratios are substantially lower for borrowers who purchased homes in 2010 (see Figure 2).
In Andhra Pradesh (AP), the Indian state with the most microfinance borrowers and the base for the biggest for-profit MFIs, local politicians have bullied the business to a virtual halt.
Considering the banks that made foolish loans to dishonest borrowers, the prudent were victimized by both sides for their tax dollars paying for the bailout of banks made insolvent by those same borrowers.
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Question Two: If all the lenders go broke, will the borrowers get off the hook?
And indeed, many of the borrowers featured in the film become emotional when they finally reveal on-camera the true extent of their debt.
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The reality is that the most enthusiastic yuan borrowers in the market right now aren't borrowing in yuan, they are borrowing in old-fashioned dollars.
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If acceptable documentation cannot be provided by the borrowers to support the information used to secure the original electronic approval, the whole thing collapses.
Renaud Laplanche, cofounder and CEO of Lending Club. says his firm declines about 90% of all borrower applications, focusing on the 10% of borrowers with the best credit.
In the two years or so since the consent orders that started the whole thing were originally signed in April of 2011, the banks rarely included any disclosures in Qs or Ks of the potential liabilities to borrowers for the reviews.
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Hence the lower interest rates for other borrowers in the economy.
Others allegedly were steered into costly subprime loans, even though they could have qualified for a prime mortgage, the type of loan offered to borrowers with the best credit histories.
Lenders pass the loan-guarantee fees on to borrowers in the form of higher rates.
The pay-day industry stands accused of preying on the poor while making extortionate profits and misleading borrowers about the true cost of their loans.
In the Sun Belt, a surge in population in recent years drove up housing prices, which fell dramatically when the housing market slowed--leaving subprime borrowers in the lurch when they try to refinance before the "teaser rates" expire on their adjustable-rate mortgages.
The borrowers who need money the most, of course, are not the ones banks want to lend to.
This indicates that they beat local banks in winning fee income and were able to cherry-pick the safest borrowers, leaving the locals with a riskier lot.
Since the real problem lay partly in the mortgages, rather than the borrowers, this suggests the subprime crisis was a financial-market mess, as well as a housing one.
The borrowers were told that the product would provide an "insurance" or "hedge" against the risk of interest rates rising, but rates then fell and they faced heavy losses.
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