DANVILLE, Calif. and LOS ANGELES — DebtMarket, formerly GDNAuto, relaunched as an automated marketplace that connects buyers and sellers of consumer loan portfolios. It also forged a partnership with Frazer Computing Inc., a provider of dealer management software, to incorporate certain features of the DebtMarket platform into its dealership offerings.
Frazer is based in Canton, N.Y. and one of the industry's largest DMS providers, with 4,700 active users, most of which are independent dealers. DebtMarket said it intends to pursue similar relationships across the broad consumer credit landscape.
DebtMarket enables an estimated 60,000 loan originators (primarily banks, credit unions and finance companies) and portfolio owners (primarily institutions, hedge funds and private equity investors) to list loans from the major consumer loan asset classes, including automobiles, mortgages and student loans. In the months ahead, the company also will support credit card portfolios and other asset classes. DebtMarket accepts loan portfolios of any size, credit quality and loan performance.
The company also announced it has tapped Intel's former research director as CTO and enlisted several top consumer finance leaders for its advisory board.
"DebtMarket transforms the existing secondary debt market - much as eBay transformed the auction marketplace - by making it easy for institutions and institutional investors of all types and sizes to participate," DebtMarket Founder and Chairman Scott Walchek said.
DebtMarket enables participants to establish and negotiate pricing, perform due diligence and complete all the paperwork needed to close the transaction. DebtMarket technology delivers transparency through a series of essential elements: an auction-style marketplace for competitive pricing; loan-level detail; direct contact between buyer and seller; a visible next-step process in the transaction; and a published fee structure.
"DebtMarket acts as a market stabilizer by providing access to buyers and sellers beyond companies' traditional reach. This helps address the 'price discovery' problem that historically has discouraged so many small- and medium-size institutions and new investors from participating," said Mike Sheridan, co-founder and president of DebtMarket.
Industry observers suggest that DebtMarket will initially attract buyers and sellers of distressed debt, but that demand for a full-spectrum, technology-enabled solution is likely to extend to the market as a whole.