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Reports indicate a persistent failure to pay employees, significant layoffs, and multiple lawsuits from creditors alleging debts exceeding $2 million. With a history of rapid growth fueled by around $100 million in seed funding from notable investors, LoanSnap's innovative "smart loans" aimed at optimizing mortgage options for homebuyers have hit a critical stumbling block.
Additional concerns include accusations of charging for non-closed loans, misleading consumers on mortgage approvals, and considerable regulatory scrutiny for unlicensed mortgage activities and violations of lending laws.
Notably, the firm has been hit with a cease-and-desist order for unlicensed mortgage origination activities in Connecticut, spotlighting serious compliance issues.
Our Opinion:
Transparency, compliance, and fairness are crucial in alternative finance. LoanSnap's actions undermine the industry's credibility. Regulators must hold them accountable, and investors should conduct thorough due diligence on fintech lenders. All stakeholders are responsible for upholding the sector's integrity and preventing future misconduct.
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