stevio
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Post by stevio on Sept 3, 2015 18:49:32 GMT
Have read in various places that MoneyThing's partner C*** S*** brings some form of benefit to the MoneyThing loans, something along the lines that they will cover defaults maybe? Could someone please explain the interaction and any benefits?
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 3, 2015 19:37:54 GMT
Have read in various places that MoneyThing's partner C*** S*** brings some form of benefit to the MoneyThing loans, something along the lines that they will cover defaults maybe? Could someone please explain the interaction and any benefits? CS buys back all their loans at the end of the loan term, so it doesnt matter whether the original borrower repays or defaults we get repaid. In the event of a default CS will sell the item to recover their cash. Therefore there is no risk of borrower default to lenders. There is a risk of CS failing, in which case MT would manage the loan book/recover money as the security is assigned to them or if MT failed in which case the administrator would manage the loan book. Both scenarios are obviously complicated & therefore more risky. Any loans originated by MT themselves have a similar buyback guarantee The basic process is CS lends cash to the borrower secured against a pawned item - CS assigns the security to MT in exchange for working capital - MT assigns parts of loans to lenders- CS buys back the security from MT - MT pays back lenders. Mintos, Funding Empire run similar loan types with partners that originate the loans.
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stevio
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Post by stevio on Sept 6, 2015 20:16:05 GMT
Thanks
So that means there no risk of default and only risk of platform/partner failure?
Where did you get that information from as I can't see this on their website?
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 6, 2015 20:48:50 GMT
Thanks So that means there no risk of default and only risk of platform/partner failure? Where did you get that information from as I can't see this on their website? There are multiple posts on the forum from the horse's mouth, Mr Ed of Monything, so to speak. Here's the original one on the CS deal p2pindependentforum.com/post/37491/thread and another herethere are others on MT loans themselves, though not to hand Its on the website under lending, why lend? thats not all - www.moneything.com/lendingMore on lending structure here
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stevio
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Post by stevio on Sept 7, 2015 8:18:07 GMT
That's great ilmoro, thanks for your help!
Finally, does it state somewhere in the description of the loans which are via a partner?
Thanks
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SteveT
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Post by SteveT on Sept 7, 2015 8:20:11 GMT
That's great ilmoro, thanks for your help! Finally, does it state somewhere in the description of the loans which are via a partner? Thanks The ones that start with CS are C*** S***. The other start with MT
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Post by profunder on Sept 11, 2015 1:19:58 GMT
I think its important to remember what a buy back loan really means. As stated this type of loan happens on other sites too.
If person A borrows £10,000 from CS on a loan, the loan becomes an asset owned by CS. What is really happening then is CS are applying for a secured loan with MoneyThing using their loan asset as a security. Therefore every transaction can be seen as loan to CS and not the end user, in reality you only have the end users loan as security. In the event of CS going out of business they cant redeem your loan and MoneyThing will try and collect the money, however where is the asset held, if its with the CS the security could almost be worthless as collecting it could be a problem. It could even be difficult to contact the customer.
What is worst is as all loans are really loans to CS then your diversified portfolio isn't really diversified at all. Every loan has the same borrower.
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webwiz
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Post by webwiz on Sept 12, 2015 10:15:33 GMT
What is worst is as all loans are really loans to CS then your diversified portfolio isn't really diversified at all. Every loan has the same borrower. This is correct AIUI but why is it such a bad thing? A proportion of loans will certainly default, with no loss to us, whilst CS is unlikely to fold, although I agree it would be catastrophic if it did. This would be a risk if all one's money was with MT/CS but diversification can be achieved by spreading money across MT/not CS and other platforms.
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jimc99
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Post by jimc99 on Sept 12, 2015 12:37:22 GMT
Just pointing out that pawnbrokers do go bust like any other business. A few years ago I lost a packet when Abermarle and Bond, a much bigger outfit than CS, went bust. So the CS tie up with MT is not as safe as some think.
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jonno
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Post by jonno on Sept 12, 2015 13:47:45 GMT
Just pointing out that pawnbrokers do go bust like any other business. A few years ago I lost a packet when Abermarle and Bond, a much bigger outfit than CS, went bust. So the CS tie up with MT is not as safe as some think. Look guys, let's all be grown and adult about this. Of course there is risk involved. Why do you think there is a return of 12%?
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webwiz
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Post by webwiz on Sept 12, 2015 14:30:37 GMT
Just pointing out that pawnbrokers do go bust like any other business. A few years ago I lost a packet when Abermarle and Bond, a much bigger outfit than CS, went bust. So the CS tie up with MT is not as safe as some think. Look guys, let's all be grown and adult about this. Of course there is risk involved. Why do you think there is a return of 12%? That's right. If you have zero appetite for risk no p2p/p2b is for you. Personally I would rather take the risk of CS folding than try to do DD on a multitude of loans. This is the advantage of the CS tie-up, rather than extra security IMHO. If someone gets 12% for a year without significant losses (s)he can withstand a sizable loss and still be ahead of BS or other safer rates.
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oldgrumpy
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Post by oldgrumpy on Sept 12, 2015 14:40:45 GMT
Despite the return of 12%, the facts that MT has had nothing new for about a month, and that most of their loans are attached to one pawnbroker, are reasons why I have a fairly small amount in the platform. Diversification has to come from a wide spread elsewhere. Until MT can improve their business flow considerably, and show a much much wider source of new loan availability, that's how it will stay.
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Post by drstarter33 on Sept 12, 2015 15:40:19 GMT
Look guys, let's all be grown and adult about this. Of course there is risk involved. Why do you think there is a return of 12%? That's right. If you have zero appetite for risk no p2p/p2b is for you. Personally I would rather take the risk of CS folding than try to do DD on a multitude of loans. This is the advantage of the CS tie-up, rather than extra security IMHO. If someone gets 12% for a year without significant losses (s)he can withstand a sizable loss and still be ahead of BS or other safer rates. sorry for being so dumb, but what is BS?
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Post by Come_on_Grandad on Sept 12, 2015 16:01:42 GMT
That's right. If you have zero appetite for risk no p2p/p2b is for you. Personally I would rather take the risk of CS folding than try to do DD on a multitude of loans. This is the advantage of the CS tie-up, rather than extra security IMHO. If someone gets 12% for a year without significant losses (s)he can withstand a sizable loss and still be ahead of BS or other safer rates. sorry for being so dumb, but what is BS? In this context it's Building Society. Other contexts are available.
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Post by profunder on Sept 13, 2015 9:56:49 GMT
Just pointing out that pawnbrokers do go bust like any other business. A few years ago I lost a packet when Abermarle and Bond, a much bigger outfit than CS, went bust. So the CS tie up with MT is not as safe as some think. Of course, I would happily lend money on these loans, obviously the correct investment strategy in any market is to diversify. I personally diversify firstly my investments in Shares, Property and P2P. Inside P2P I diversify across loans. There is nothing wrong with most investment being P2P, my concern is someone who is less clued up seeing the diversify message and thinking they are doing so by investing in many of those cash shop loans seeing them as different. The vast majority of users here are not typical investors, typically investors here have investments on many platforms and put in a reasonable amount of due diligence. If I was advising someone on a portfolio (which of course im not and/or cant), I would probably not put more than 5% to 10% of loans into CS backed funding depending on risk appetite.
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