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0 pointsgodzillabrennus5y ago0 comments

If I’m reading this right then the “loan originator” is both the recipient of the Capital AND the guarantor of the buyback if it goes south.

That’ll end well.

Looks like a brother system team that worked in construction and moved into lending:

0 comments

That's always the problem with "guaranteed" loans. Who's the counterparty, how much money have they got, and how strong are your claims against them?

Trying to fund a guarantee with some clever trading strategy usually comes apart in the next downturn. See the history of "portfolio insurance".[1]

j / k navigate · click thread line to collapse

0 pointsgodzillabrennus5y ago0 comments

If I’m reading this right then the “loan originator” is both the recipient of the Capital AND the guarantor of the buyback if it goes south.

That’ll end well.

Looks like a brother system team that worked in construction and moved into lending:

That's always the problem with "guaranteed" loans. Who's the counterparty, how much money have they got, and how strong are your claims against them?

Trying to fund a guarantee with some clever trading strategy usually comes apart in the next downturn. See the history of "portfolio insurance".[1]

j / k navigate · click thread line to collapse