Yesterday Figure Technologies announced the launch of the Loan Marketplace on the Provenance blockchain, which was developed by Figure. The company is a unicorn and has raised more than $233 million in equity funding.
To accelerate the adoption of the blockchain platform, Figure became a loan originator, initially focusing on home equity line of credit or HELOC. To date, it has originated more than $1 billion in HELOC and refinanced student loans.
Figure has also packaged up some of those loans and resold them as Asset Backed Securities (ABS) using the blockchain. This new “Provenance Loan Marketplace” is another way to leverage the Provenance blockchain. And it also gets more of the loans off the Figure balance sheet, lest the Coronavirus should start impacting debt servicing by consumers.
The company says it will periodically release pools of Figure HELOCs onto the platform for bidding and expects to add other originators and investors.
“It’s a huge step forward in transitioning the buying and selling of loans from the opaque and time consuming over-the-counter process to a low cost, real time settlement and highly efficient marketplace that delivers unparalleled transparency for loan originators, investors and regulators,” said Mike Cagney, CEO and Co-Founder of Figure and co-founder of SoFi.
With accurate information added to the blockchain, blockchain’s advantage is that due diligence should be easier.
“Building this marketplace on Provenance is going to transform the speed and efficiency of bringing liquidity to the loan sector,” said Chad Carrigan, VP of Whole Loan Acquisition at First National Bank of America.
Figure says the advantages include:
- Secondary market liquidity
- Real time remittance
- Real time bilateral settlement
- Comprehensive, electronic loan documentation
- Reduced custody and servicing expense
- Real-time asset performance information
- Ability to resell participation interests in loan pools