#Quicken loans horror stories full
#Quicken loans horror stories series

#Quicken loans horror stories series

This includes a $1 billion Series E completed in September of 2015, firmly planting SoFi in the unicorn club. According to CrunchBase, SoFi has raised $301 million in debt financing in addition to $1.37 billion in venture capital. SoFi needed access to cash to continue lending money.įrom there, demand outpaced their available capital, so they turned to venture and debt financing. Helping grads refinance their student loan debt was almost an act of school spirit. When SoFi started, they tapped a marketplace investor network that encouraged alumni to help recent grads from their alma mater. I understand their thinking in creating these funds: You need consistent access to money if you want to lend money to others that money has to come from somewhere. There is even talk of SoFi starting their own REIT, which they could use to buy the mortgages they write, as well. But consider the fact that SoFi recently created their own hedge fund to buy the loans they originate.

The “Don’t Bank” campaign alone isn’t overly troublesome. Newly established hedge fund tips their hand to the real customer

#Quicken loans horror stories full

No better way than #RocketMortgage for full transparency into mortgage options & info needed to make the right decision. When it comes to #mortgages, take your time, ask questions and #knowbeforeyouowe. You can be sure Quicken Loans’ disastrous super bowl ad caught the attention of the regulators, and I’m afraid the current SoFi campaign will do the same. The campaign opens the possibility for increased regulatory attention from groups like the CFPB (Consumer Financial Protection Bureau). They get away with it because they are a fresh, innovative disruptor - but this only buys them so much runway. In a way, SoFi’s “Don’t Bank” campaign feels like a small- scale version of redlining. Imagine what would happen if Wells Fargo or Bank of America came out and said “We can’t accept everyone, and we make no apology for that.” What if these other major institutions only targeted the top end of the market? The Internet would explode and stock prices would tumble. You need consistent access to money if you want to lend money to others. Starting as a student loan refinance lender, they focused on customers with degrees in specific fields or from certain schools. SoFi has a history of targeting the high-end customer. Marketing to a certain group is one thing - discouraging people before they apply is another. You don’t have to read the Equal Credit Opportunity Act to know that this probably isn’t a great stance to take as a company. “We hope that by getting a little education they can be great in the future.” I’m sure the spot was well-intentioned, but the underlying tone is, “We aren’t for everyone.” When you’re a financial services company that’s growing toward a $30-billion valuation, that’s a problem - especially if you offer mortgages. We want everyone to become a member, but not everyone will qualify. Watching one of their video ads, one line in particular struck me: “We can’t accept everyone, and we make no apology for that.” Sure, the company takes great care of its customers, who they call “members.” Members receive perks, like investor introductions for entrepreneurs or career planning services - which are totally awesome benefits, but only if they accept you into this exclusive club. More like the mean girls’ “you can’t sit with us” type of exclusive. Not the cool “the new iPhone just launched and the line is long” type of exclusive. However, their ad campaigns are borderline exclusive. Especially when you consider the fact that the millennial generation watched the housing collapse from the sidelines, it makes sense that SoFi would want to distance themselves from the old-money banks and mortgage lenders in the market. SoFi’s recent “Don’t Bank” campaigns are provocative.

But when considered together, I think SoFi is at a tipping point, and, if managed incorrectly, it could create a chain reaction that will seriously hurt the company and the fintech market at large. There are three things that, individually, seem innocent enough. However, some recent strategic choices at the company give me cause to worry. I think they have a great product, they’ve built an incredible business and their growth in a regulated and complex industry is impressive.Īnd I say this even though I’ve had my student loan refinance denied by them - they still provide a great experience. I’m going to start by saying I’m actually a huge fan of SoFi.