Marketplace loans are the most exciting securitization asset class to emerge since credit cards and student loans. Securitization provides marketplace loan investors with liquidity, diversified funding and interest rate arbitrage opportunities. Securitization also involves complex legal requirements and specialized expertise that investors need to be familiar with if they want to grow with this new market.
This article provides a basic overview of important issues that must be considered in a securitization, including structural issues, ratings, securities law reporting, and liability and credit risk retention requirements. It also addresses how the JOBS Act, the Volcker rule, Regulation AB and other regulations might affect marketplace loan securitizations.
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