What did he say at the beginning? "I deducted it, but it wasn't worth it." lol there's that Tax Lawyer background coming to the service. You rock lloyd.
3,500 - 35,000 USD loans by Marcus. Let's say average loan will be 10,000 USD and 2 million people will take out the loan, that is 20 billion in consumer loans. 10%-20% will default, let' say 15% and they will have to sell those loans to debt buyers at 90% discount. So they will lose 2,7 billion annually and they will spend a billion a year on admin and marketing. Total costs are around 3,7-4 billion. OK Profit? Interests have to be above 20% for them to see some profits. I don't think they will be able to see profits in billions, few hundred millions yes. Consumer loans are not interesting if done by Goldman. Sorry.
People don't default on day one after they sign the loan. Most people will pay into their mortgages for years which is mostly interest before they default. You also forget the fees that are involved in mortgages and in late fees. Lastly, I doubt 10%-20% of borrowers default. Most banks that I have researched have loan loss provisions of less than 1%. Please show me which banks have up to 20% default rates.