SoFi has been somewhat of a quiet achiever in the p2p lending industry. But they have been breaking a lot of new ground over the past few months. In this edition of the Lend Academy Podcast I talk with Mike Cagney, the co-founder and CEO of SoFi. I came away from this interview so impressed with what SoFi is doing. They are executing incredibly well and have many new tricks up their sleeve.
In this episode you will learn:
- Why Cagney decided to tackle the student loan problem.
- How the student loan business is almost like a Trojan horse for SoFi.
- An explanation of the HENRY market.
- Why SoFi decided to go down the securitization route with their loans.
- How DBRS, who rated the first SoFi securitization, got comfortable with SoFi’s loan book.
- Why the Standard & Poors rating of the second securitization was important for the entire industry.
- How SoFi has never had a default or even a 90-day delinquency in their history of lending to 10,000 borrowers.
- How retail accredited investors can invest in SoFi today.
- The unique way that SoFi is attacking the home mortgage space.
- Where SoFi is focusing with the real estate business.
- The game changer that SoFi is trying to put in place for home mortgages.
- How SoFi is entering the unsecured consumer loans space.
- When and how they are moving into a lending marketplace.
- Their amazing loan volume projections for 2015.
- The vision Cagney has for SoFi going forward.
Download the transcription of LAP22: Interview with Mike Cagney of SoFi.
You can subscribe to the Lend Academy Podcast via iTunes or Stitcher. To listen to this podcast episode there is an audio player directly below or you can download the MP3 file here.
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One of the many things I love about this business is its transparency. Anyone can download the entire loan history of Lending Club and Prosper and see how every single loan has performed. It is in this spirit of transparency that I bring you details of my own p2p investment returns each and every quarter.
This past quarter marked my five-year anniversary of investing in p2p lending. I started with just $500 and as I have become more comfortable with this investment I have added more money. Today, I have a very high level of comfort so I continue to add new money here. I have been slowly taking money out of the stock and bond markets and putting it to work in this industry.
Overall P2P Lending Return Now at 11.87%
Before I get into the details of my returns I want to give a quick overview for newcomers. I have had six accounts, four at Lending Club and two at Prosper for several years. These accounts have formed the core of my p2p lending portfolio and their results can be tracked back to the fourth quarter of 2011. Last quarter I introduced two new accounts into the mix. In February I opened a Prosper SMA account through Lend Academy Investments, my new wealth management firm, and last year I invested in the Direct Lending Income Fund, a fund that invests in small business loans.
Below is the quarterly table of all my p2p lending investments. I have continued to separate these two new accounts from the six established accounts – mainly so I can continue to track the overall returns of these core accounts. Speaking of which, last quarter was my first overall decline for my core accounts since I switched to a more aggressive investment approach three years ago. My overall return for my core accounts went down from 11.87% to 11.15%.
This was not unexpected although the magnitude of the drop did surprise me somewhat. Most of my core accounts had a larger than average number of defaults this past quarter, which led to lower returns across the board. You can see the details in the table below. You can see the table at full size and you can view the table with the extended return percentages here.
As you look at the above table you should take note of the following points: [click to continue…]