Figure Technology Solutions has launched Figure Connect, its blockchain-based marketplace for private credit. Outside of the qualified mortgage sector, most loan purchase agreements (LPAs) are bespoke, making them illiquid. Figure’s is promoting the use of standardized sales terms and documentation to make the market more liquid.
Taking that a step further, the marketplace enables investors to commit to fund loan originators in advance of their lending.
Figure’s Chairman and founder Mike Cagney likes to use the term “replace trust with truth”. With conventional loans that don’t have government sponsors, typically loans would be subject to expensive third party reviews every time they are sold or pledged. Using blockchain for origination, there’s far greater transparency and immutability, ultimately leading to certainty about what the loan involves. That means there may be one off third party reviews, but they don’t need to be done repeatedly.
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