While change is coming to the mortgage market, Freddie Mac says in its 2016 housing forecast that it’s too soon to tell whether marketplace lending is the next Uber or just another flash in the pan.
“The current generation of marketplace lenders all may fail in the next economic downturn,” says Sean Becketti, Freddie Mac’s chief economist. “Regulators may impose higher standards on marketplace lenders. The cost advantages of marketplace lending may not extend to mortgage lending.”
But Becketti says the new year will undoubtedly bring changes: “Innovation is difficult to stop. New startups will look for ways to improve upon current marketplace lending business models. Large bank lenders may incorporate the most successful of the marketplace lending innovations. It’s difficult to say where all this will lead, but one prediction is indisputable. Expect change.”
More information on their 2015 Insight & Outlook 2016 are at: Freddie Mac