In the last decade, peer-to-peer lenders—online platforms that connect credit-seeking consumers directly to potential lenders—have helped customers borrow to refinance student loans, pay off credit card debt and build their small businesses.
Now, one lender wants to disrupt the market for mortgage originations, long dominated by big banks.
San Francisco-based lender SoFi (short for "Social Finance") has been quietly testing the waters to underwrite new mortgages for existing customers living in states like California, New Jersey, North Carolina and Texas. After beta testing more than 100 mortgages, SoFi is opening the platform more broadly.
"It's a multibillion-dollar opportunity," SoFi CEO Mike Cagney told CNBC.
The program boasts loans up to $3 million, with as little as 10 percent down, and a 21-day application turnaround—but is limited to six states.
When SoFi launched in 2011, it focused squarely on the burgeoning student loan market—a market that, unlike housing, had no viable option to refinance both federal and private student loans from higher interest-rate eras. Since then, SoFi has provided more than $1 billion in funding for students from select universities (read: schools with promising income capacity) to consolidate or refi college or grad school debt.