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Post by swfab on Feb 18, 2015 0:07:35 GMT
Based on my previous thread "Ratesetter giving loans of more than £25000??": p2pindependentforum.com/thread/2146/ratesetter-giving-loans-more-25000which I started after discovering that loans of more that 25K were possible with RS and for loans other than personal loans (not officially mentioned anywhere), I am starting this new thread to see if clear and official information can be provided by Ratesetter / westonkevRS as to who RS really offers loans to and what will be the future platform developments to cope with/support these?
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Post by westonkevRS on Feb 18, 2015 7:55:35 GMT
RateSetter neither has nor intends to have an "official" spokesman on the forums. I apologise if I appear as such, but you can be sure if there was one he wouldn't be called "westonkev", moan about functionality or be a big fan of some of the other sites such as Abundance and Funding Circle. Or be in awe of what Zopa created globally, perhaps the greatest change to banking in a generation So any communication and data will be on the RateSetter web site. The start of this journey is the blog: www.ratesetter.com/blog/article/gaining_depth_and_breadthIt certainly won't be published here first. As the blog says "We believe diversification of lenders and borrowers is important to the health of our ecosystem. Our role at RateSetter is to work to grow the marketplace and seek to deliver great returns for our lenders, great loans for our borrowers and great service for both of them". If this makes us seem more like a bank and less an interactive choose your peers to lend to offering, then so be it. I'll not be saying anymore on this forum on this matter. Besides I'm on holiday. Kevin (Head of Retail Lending).
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Post by goldservice on Feb 18, 2015 8:20:35 GMT
I've tried to read that blog, Kev, but it's another load of grey on white. If that was a good idea, wouldn't books be printed with grey ink? I guess your web developers concentrate on implementing the house style without actually reading the content.
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Steerpike
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Post by Steerpike on Feb 18, 2015 8:51:56 GMT
I've tried to read that blog, Kev, but it's another load of grey on white. If that was a good idea, wouldn't books be printed with grey ink? I guess your web developers concentrate on implementing the house style without actually reading the content. Firefox / View / Page Style / No Style - displays a page that looks more like a traditional book.
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Post by yorkshireman on Feb 18, 2015 10:59:47 GMT
"We believe diversification of lenders and borrowers is important to the health of our ecosystem." That can be interpreted 2 ways. Is that Ratesetter’s /the financial sector’s ecosystem or everyone’s?
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Post by swfab on Feb 18, 2015 11:31:40 GMT
RateSetter neither has nor intends to have an "official" spokesman on the forums. I apologise if I appear as such, but you can be sure if there was one he wouldn't be called "westonkev", moan about functionality or be a big fan of some of the other sites such as Abundance and Funding Circle. Or be in awe of what Zopa created globally, perhaps the greatest change to banking in a generation So any communication and data will be on the RateSjourneweb site. The start of this journey is the blog: www.ratesetter.com/blog/article/gaining_depth_and_breadthIt certainly won't be published here first. As the blog says "We believe diversification of lenders and borrowers is important to the health of our ecosystem. Our role at RateSetter is to work to grow the marketplace and seek to deliver great returns for our lenders, great loans for our borrowers and great service for both of them". If this makes us seem more like a bank and less an interactive choose your peers to lend to offering, then so be it. I'll not be saying anymore on this forum on this matter. Besides I'm on holiday. Kevin (Head of Retail Lending). Enjoy your break westonkevRS and thank you for taking the time to reply. I had become aware of that particular blog in the last few days only. Still there is nothing that reflects what RS is now doing on its website. As far as a newcomer is concerned, RS is seen as arranging personal loans for a maximum of £25K only, which is not true anymore and sounds like intentional mis-information. A blog is akin to a small print and in this case for that particular announcement, a very very small print. I as mentioned in the previous thread, I had no problem with RS targeting more market segments and becoming a or THE platform for all types of loans. Diversification would still be true in such case as lenders would be lending to a wider range and diverse type of borrowers. There has to be however a clear separation between those different types of loans and clear information and assessment about the different associated risks. All those loans just cannot be dumped into the same markets. * When offering loans to limited companies, what amount of information is provided to the lenders about the risks? Private/Public? Under what legal structure are the limited companies incorporated? All vital minimum information to the lenders. * When offering loans secured against properties, does RS guarantee a 1st legal charge against these (not 2nd but 1st)? This information is vital to the lenders.
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Post by swfab on Feb 19, 2015 9:01:34 GMT
Is this misleading or is this misleading???
From Ratesetter's own FAQ as of 19th Feb 2015:
=================================================== Who can borrow through RateSetter?
To borrow with RateSetter you need to be at least 21 years old, have a good credit history and a regular income. Unfortunately, we are unable to accept applications from residents of the Channel Islands or from those living abroad. Currently, we are not able to offer business loans, we are only able to offer personal loans. ===================================================
So any new customer wishing to lend money via RS is not aware of how his money is actually being used. RS got ahead of itself and engaged into new activities without properly advertising and announcing its intentions first. Customers/new customers who joined RS expecting their money to be used for personal loans only, as advertised, are not aware that their money is also being used for business loans and asset-backed loans as well, activities which have been going for a while it seems.
Again, now that RS as decided to target new borrowers, all those loans just cannot be dumped into the same markets.
* When offering loans to limited companies, what amount of information is provided to the lenders about the risks? Private/Public? Under what legal structure are the limited companies incorporated? All vital minimum information to the lenders. * When offering loans secured against properties, does RS guarantee a 1st legal charge against these (not 2nd but 1st)? This information is vital to the lenders.
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Post by davee39 on Feb 19, 2015 11:43:25 GMT
Is this misleading or is this misleading??? From Ratesetter's own FAQ as of 19th Feb 2015: =================================================== Who can borrow through RateSetter? To borrow with RateSetter you need to be at least 21 years old, have a good credit history and a regular income. Unfortunately, we are unable to accept applications from residents of the Channel Islands or from those living abroad. Currently, we are not able to offer business loans, we are only able to offer personal loans.=================================================== So any new customer wishing to lend money via RS is not aware of how his money is actually being used. RS got ahead of itself and engaged into new activities without properly advertising and announcing its intentions first. Customers/new customers who joined RS expecting their money to be used for personal loans only, as advertised, are not aware that their money is also being used for business loans and asset-backed loans as well, activities which have been going for a while it seems. Again, now that RS as decided to target new borrowers, all those loans just cannot be dumped into the same markets. * When offering loans to limited companies, what amount of information is provided to the lenders about the risks? Private/Public? Under what legal structure are the limited companies incorporated? All vital minimum information to the lenders. * When offering loans secured against properties, does RS guarantee a 1st legal charge against these (not 2nd but 1st)? This information is vital to the lenders. You have raised some interesting points and I have found this discussion helpful in evaluating my current savings. Unfortunately RS are not officially engaged with this forum and will not be coming forward to answer your questions. Have you raised this with RS directly? It needs to be noted that RS do not lend to Giffgaff customers through their own website, but there is no secret that these loans are made from the RS lender pool. My take on this is that lenders can only be matched through the RS website. Borrowers can be matched through the website according to the rules outlined in the FAQ, they can also be matched via giffgaff or third party introducers. Furthermore about 10% of lending is secured on property (We have not been told if this is residential or commercial - I had assumed that this was second charge security on domestic property). So how much risk is involved compared with other P2P providers? The provision fund appears to be healthy, losses so far appear to be low and RS is growing its own profitability. Without the new classes of borrower 5yr rates would be around 5%, lending would be at a lower rate and RS might not be profitable. I am happy to have the largest part of my P2P funds with RS, although I will be reducing this slightly as I look to add some diversification. I will also ignore the dross which is starting to churn up the bottom end of the market where I think there is more cause for concern. My criticism of the RS management team lies with their lack of transparency. I would expect to see a published breakdown of who the borrowers are, and clearer explanations as to how the markets work.
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c88dnf
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Post by c88dnf on Feb 19, 2015 13:07:06 GMT
I'm starting to think that instead of "conspiracy theory" we should consider "cock-up theory" on Ratesetter's FAQs etc. Put another way, I wonder if RS is expanding so quickly and in so many directions that the website maintainers have simply forgotten/ not had time to get all relevant information updated in the most appropriate places. The requisite information appears to be on the website, but not in the most obvious places. It should be, as swfab has correctly pointed out. Following previous posts I checked Ratesetter's FAQs, starting right back at the home page. If you follow a link from "general/ how is RS funded" in lenders' FAQs there is an option to "find out more". That takes you to the "about us" section which contains the following data under "What customers use us for". Apologies that I've quoted a lengthy list in full and the formatting doesn't quite transfer. Note in particular the last paragraph and the almost throwaway remark about "sums that can be secured against a business asset". BorrowersRateSetter lends to both Personal and Commercial borrowers. Our borrowers use our loans for a huge variety of purposes. Everything from the more obvious cars, expanding businesses, home improvements and paying off credit cards through to the more unusual, including a bassoon, a hang glider and even a wind turbine! Individuals and businesses borrow all sorts of amounts, from larger sums that can be secured against a business asset through to much smaller sums for things like a mobile phone or a season travel card through our partners giffgaff and Commuter Club. We also have a fair number of individuals using loans to fund the growth of their small business. These are mainly sole traders. Being evaluated as individuals can allow them to get cost-effective access to funds within a couple of days rather than a few weeks. We are always looking for new ways to help fund the ambitions, passions and dreams of our borrowers. For example loans to partnerships and businesses, where we believe our innovative and efficient approach can make a real difference. So, whether loans are for conservatories or hang gliders, secured or unsecured, large or small, personal or commercial, every proposal goes through the same credit and affordability checks that keep our default rates as one of the lowest in the industry.
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Post by swfab on Feb 19, 2015 22:53:41 GMT
Thank you davee39 and c88dnf for your feedback. I have not, davee39, contacted RS directly, but one of us (our small group of friends) has, 3 days ago and hasn't received any feedback to date. I was also hoping that since there is a representative and employee of RS active on this forum, that he would pick up on this (after his holiday ends of course) and feed these concerns back to RS. The provision fund won't be any useful even with a second charge on property for huge loans of many £100K (a first charge being unlikely of course unless RS arranges mortgages themselves) when things go south. By the time an order of sale goes through, repayment problems with just a few of those borrowers will have massive impacts on the PF, which will deplete faster than anyone of us can realise (even to those monitoring it continuously and I know there are ;-) ).` A new strategy will be required to deal with those asset-backed loans and limited company loans should anything go wrong. I am just afraid that, on top of not informing clearly its customers, RS is moving too fast by dumping those loans in the same markets without any segmentation. Don't get me wrong, I admire greatly what all those platforms that lead the pack and the individuals behind them have achieved in the last decade. A true revolution on par with and even beyond that of Apple. But growing too fast can lead to arrogance, like Apple who takes its customers for granted ;-) or go from a revolution to a downright mess, like the Eurozone ;-) (which was a revolution...in theory anyway).
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mike
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Post by mike on Feb 20, 2015 8:39:31 GMT
swfab maybe you should raise your concerns with the FCA?
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Post by swfab on Feb 21, 2015 21:33:50 GMT
mike, seriously ;-) ? That same shower that could nor foresee nor prevent or even caused the banking crash ;-) ? The concerns I've raised were major enough, to me, to vote with my feet. For as long as their website is not fixed/clear, so as to inform their customers what kind of loans are arranged and for how much (not just personal loans of £25K max), and more importantly for as long as they remain secretive about their exposure to commercial and property loans (apart from some limited info provided in a blog) and advertise no basic information such as at least the LTV of any secured property, a few others and I will stay away.
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pip
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Post by pip on Feb 21, 2015 22:07:09 GMT
mike, seriously ;-) ? That same shower that could nor foresee nor prevent or even caused the banking crash ;-) ? The concerns I've raised were major enough, to me, to vote with my feet. For as long as their website is not fixed/clear, so as to inform their customers what kind of loans are arranged and for how much (not just personal loans of £25K max), and more importantly for as long as they remain secretive about their exposure to commercial and property loans (apart from some limited info provided in a blog) and advertise no basic information such as at least the LTV of any secured property, a few others and I will stay away. I agree and add to that their lack of clarity about why the loan rates for 1 months and 1 year are so much lower than they lend money at. I assume ratesetter are pocketing the difference, however it is clear that if the loan can't be rolled over the lender will be stuck on the lower rate for the duration of the loan and ultimately if the PF is empty will not get all their money back. So in effect people on the 1 month and 1 year are taking on all the risk of longer loans without the same return.
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Post by westonkevRS on Feb 22, 2015 7:07:02 GMT
swfab maybe you should raise your concerns with the FCA? Alternatively please direct message me your RateSetter login (your email) with any specific questions and I'll get them to email you directly. We don't post officially here, but will be happy to repost any answers. I'm presuming you are a RateSetter lender as your post focus on this forum has been exclusively RateSetter Kevin.
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jlend
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Post by jlend on Feb 22, 2015 17:39:35 GMT
mike, seriously ;-) ? That same shower that could nor foresee nor prevent or even caused the banking crash ;-) ? The concerns I've raised were major enough, to me, to vote with my feet. For as long as their website is not fixed/clear, so as to inform their customers what kind of loans are arranged and for how much (not just personal loans of £25K max), and more importantly for as long as they remain secretive about their exposure to commercial and property loans (apart from some limited info provided in a blog) and advertise no basic information such as at least the LTV of any secured property, a few others and I will stay away. I agree and add to that their lack of clarity about why the loan rates for 1 months and 1 year are so much lower than they lend money at. I assume ratesetter are pocketing the difference, however it is clear that if the loan can't be rolled over the lender will be stuck on the lower rate for the duration of the loan and ultimately if the PF is empty will not get all their money back. So in effect people on the 1 month and 1 year are taking on all the risk of longer loans without the same return. It's us - the lenders - me included - that set the rates we are happy to lend to on the 1 month and 1 year market. That is why the rates are lower.
Personally I am happy getting around 3% on the 1 month market - given the risk to my money.
Of course I'd like a higher rate - but the reality is there are 1000's of lenders like me who are willing to lend at these rates given the risk.
I think the provision fund is great - in fact much stronger than I ever imaged back in 2010 when I signed up to ratesetter so I am comfortable with the risk.
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