How does J.G. Wentworth make money?


Quick Answer

J.G. Wentworth makes money by purchasing the cash flow rights to investment contracts then turning around and selling the rights as securities on Wall Street. Most of J.G. Wentworth's business focuses on contracts from reliable third parties with a Moody rating of "A3" or better.

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Full Answer

J.G. Wentworth typically purchases structured settlement payments, annuity payments, lottery winnings and other future payment streams from its customers. It also provides pre-settlement funding. It spends a large amount of money on direct marketing and commercials, as it generally targets individuals. The company is known for its commercials, which typically feature "Mr. Wentworth" and the tagline "It's my money, and I need it now!" The company has even won several awards for its commercials and advertising, including a silver Davey award.

Even though J.G. Wentworth's business model of mainly targeting reliable contracts from safe counter parties ensures it has low default risk, it still is not guaranteed. The main issue with the business model is that it relies on securitization. In 2009, the company filed for Chapter 11 bankruptcy as the securities market imploded. However, it reorganized less than six months later when parent company JLL Partners of New York invested $100 million in the company.

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