- At issue are consumer loans made by LoanDepot, and a one-year old securitization of them - MPLT 2015-LD1 - in which overdue payments have already breached a "trigger" which now directs cash from low-ranked tranches to protect those in higher classes.
- Cumulative losses rose to 4.97% in September vs. the 4.9% "trigger."
- This deal and at least two other struggling ones were underwritten by Jefferies (NYSE:LUK-OLD). Among LoanDepot's - which for years specialized in traditional mortgage banking until getting into Internet-based consumer loans - investors is Ellington Financial (NYSE:EFC), which contends the weakening in the sector is a buying opportunity.
- LoanDepot postponed an IPO late last year, instead turning to other sources to raise money.