Collections in 1st 2mths

Ok so not too sure on your distinction so am assuming you mean Old Classic in Old Investment i.e. still safeguarded so you can forget this one for all its worth. If you mean core then it might still not be that important yet.

In my ISA plus I can say that I have 5 in collections as follows. 

30/08/2017  B-60 Zopa Core (No payments, but can be up to 2 months out so 1st payment may be a manual one )
29/06/2017  B-60 Zopa Core (2 Man Payments, seems to have DD issues and is paying manually - no indication will miss this month, has been notified
26/06/2017  E-48 Zopa Plus ( 1st miss in Sept 26 after 2 payments)
27/06/2017 C1-60 Zopa Plus ( 1st miss in Aug 28 after 2 payments) 
27/06/2017  D-36  Zopa Plus ( 1st miss 30/8, paid by Debit card - missed again 28/9 still waiting!)

Whilst its not great I tend not to worry too much about collections more the issue is them going default after 4 months or so in arrears. Things tend to get a little out of sync for some people for the DD's. Even if they go default I still tend to not worry a great deal. I have lent out 5 figure sums to the ISA recently over the last few months and I've tried to keep the lending to <1999 at a time to give me £10 loans to mitigate the default hits. It takes longer but I think it will be worth it later down the line.

I've also made sue that I am never more than 20% in Plus over Core in ISA and 10% in invest Plus over Classic.

I'm still undecided where to put my Invest Classic returns in December when I can no longer invest in Classic. In reality though in ISA core 25% or my core lend is still in SG protection as well.

So for me its too early to tell on the conversion from collections to defaults. Of course I may live to regret that in 12/18 months time when defaults ramp up if brexit is not very favourable. 

We have seen a poor performance in ZPlus acknowledged by Zopa who have amended their loan algorythms, so too early to tell whether the changes have worked. Generally loans are only defaulted when borrower is made bankrupt/ accepted for an IVA / or is 4 months in arrears. The latter is most defaults and so from a June loan, would occur no earlier than this month, so you were unlikely to see any defaults before now. Remains to be seen whether defaults are more common towards the beginning, but that may be the case for the higher risk loans (if it isn't I will be losing money!). While some loans go back on time after being 2 or 3 payments in arrears, there is a good chance that they will ultimately default when they do so, but many go 1 payment behind and recover. If they do default you may well get some of your money back, but it is likely to be very delayed.

HTH

- PM

Whilst we had Safeguard (SD) I was quite happy to lend without too much thinking, but as SD is now just about to go; can I ask what other Lenders will do to counteract this, if anything, so as to keep themselves safer.

I've been trying to reduce the impact of defaults non SG (ISA Core) - I'm still relending in Classic on the invest side of house - by trying to keep the diversification to <=1%. To do this over the last few months in ISA I attempted to keep the lending amounts in the queues to < £1999. Lending is slower but it means that my overall diversification in ISA core is <1% its actually nearer <0.5%. This is much lower than recommended but does hopefully mean that defaults will have a minimised impact. 

Having said all that my actual loans did not all go out at £10 as I made a slight misjudgement of lending rates etc (you win some you lose some) still my max lend was £20 in core for about 12 loans in just under 1500 loans. 

All this is still theoretical of course and more by luck that judgment - especially if my £20 mistakes are the ones to default the most over the coming months especially as they will not have SG cover from the invest side!.


After lending a 5 figure sum in ISA core. I seem to have acquired a 43% cover with SG loans. This means that the average lend rate is £7.34 rather than the £10 I was aiming for so this also pulls things down a little.

My main lending levels over Plus and Core are 13% to 87% respectively. Thats slightly higher skew towards Plus than my 10% to 90% in the invest side. 

What I am planning to do with Classic relend is still undecided but this is my current plan.

* Move enough into ISA up to the £20,000 limit ( probably similar splits) keeping lend rates down to £10 loans.
  (Most likely the movements will be quite busy so lending may be slow)

* Move Classic returned money into Plus and Core at 10% rates of existing.

I will get Mrs Aju to perform similar things except that she does not pay tax so I might actually think about moving more over to her as well.

I'm hoping the impact will be limited but time will tell.

All i'm really trying to do is get a return that is better than inflation tax will remove it. To be honest its getting harder and harder without committing more risk on other investment platforms that I'm less than comfortable with. I'm personally paying tax so I need to cover that as well. Mrs Aju is not paying tax so I've got most of the money with her - lets hope she doesn't want a divorce ;-).

My real reason for funding in this way was the amount of defaults I could see in SG that would be my defaults in core and plus. Assuming that my defaults in Classic were mine then I'd be looking at considerably more of an issue. Perhaps the levels I'll be subject to will be as bad who knows. Its not like the old days in the previous bad time of 2007-2010 when at least I had a modicum of control over who I lent to. Mind you the amounts I am lending these days would mean I'd be spending all my time doing so much donkey work that I'd need to be lending at much higher levels so we'll see I guess. 

Hello - have had 2 specific responses from regular contributors : albeit that there have now been a reasonable no.of Views.
Lets be +'ive & Assume this means that investors have NOT noticed an increase in early Defaults  - since Zopa announced
a reduction in projected returns because more borrowers in financial difficulties since early 2017.

writing x2 to zopa & then joining this forum - was in the context of zopa stating that it had more sophisticated risk assess.
tools using more recent info.on borrowers.  My concern is C1 as an active feature of Core - as they are already on the 
boarder of loan affordability, but need them to offset the high % of low interest A* loans.

ps: had Hoped as still TRY to invest in Classic : A*s would go no lower then 1.94% interest - only to find on 17/10 had 8
assigned at 1.74%!!                                                Z2. 

    

I certainly got a shock when Zopa introduced the "Default Date" field as it enables one to see all the defaults in Classic that have been covered by the SG as well. It was quite a revelation to see that in my Classic lending of just over 5 figures I have had nearly £1000 worth of defaults. All were covered by SG so its hard to see what they may have been and when they failed what they failed at.  

My experience of real defaults so far, mostly PreSafeguard, is that in fact almost 50% has been recovered above the initial outlay registered in statements. It takes a long time to recover though and some are probably going take a lot of years at current rates some will fall by the wayside I guess.

I think the Americans would call the defaults rates per lender a "C-r-a-p shoot" - some you win many you lose. I'd like to think I'll win but one cannot know as its been reported it can take roughly 8-18 months in the danger zone for any given loan on zopa.

some stats on the 72 classic defaults so far are.

2014 = 2
2015 = 8
2016 = 20
2017 = 42

A* = 6
A1 = 6
A2 = 10
B   = 23
C1 = 27

Of £822 lent in total to the defaulted loan I received £66 interest. As I say they were all recovered on the SG but not sure what I would have thought if they were not Sg ones and I took the hit.