Rob
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Post by Rob on Oct 21, 2016 16:43:27 GMT
So there appears to be a consensus that the loans involve more risk now (although Martins never answered my question which started this thread). Yet the interest rates being offered for Hipocredit loans are lower than ever now. The highest on the PM at the moment is 13% - you can get that on unsecured loans with Buyback elsewhere. The graph in the Statistics section which showed the interest rates evolving over time has been removed, presumably because Mintos doesn't want investors to realise that interest rates have gradually been decreased, to a point where I now find it hard to justify any further investment on the PM.
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Post by gmaxkenny on Oct 21, 2016 18:19:03 GMT
And what if Mintos Finance goes bust? If that happens at the moment you still have a claim on your repayments through Hipocredit secured on the property. Under the new system you only have a claim against Hipocredit and as you loaned the money to them not the borrower in my opinion are not secured loans. The event of Mintos or a loan originator going bust is covered in the FAQ section
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Maestro
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Post by Maestro on Oct 21, 2016 18:43:15 GMT
According to civil law under which we operate it is allowed to assign claims and there is no limitations. The new structure was implemented due to the limitation imposed by Consumer protection center on these loan originators to assign claims from consumer loans in Latvia, which according to their view cannot be done. Bespoke p2p lending regulation is currently being developed. With reference to Hippocredit I am not so much worried about some borrowers defaulting as the company going bankrupt. We are investing in long term mortgage loans at low rates because they are secured on property. It now seems that in fact we in future will be giving Hippocredit long term UNSECURED loans and if if Hippocredit goes bust either by bad luck or by design we would join the queue of their creditors. As the loan book would be a company asset and would more than likely sold off at a knock down price I would not have much hope of getting back any investment. I for one will not be investing in any new Hippocredit loans. Agreed. I am ok with this new structure for Banknote loans (as I was already relying on their balance sheet to payback and hence size my investment appropriately), but not for Hipocredit as these are no longer mortgage loans.
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Post by rahafoorum on Oct 22, 2016 17:34:22 GMT
And what if Mintos Finance goes bust? If that happens at the moment you still have a claim on your repayments through Hipocredit secured on the property. Under the new system you only have a claim against Hipocredit and as you loaned the money to them not the borrower in my opinion are not secured loans. The event of Mintos or a loan originator going bust is covered in the FAQ section How is Mintos Finance actually structured? Is it separate entity (SPV?) from Mintos Marketplace? So nothing there besides the loans so this structure is not affected if Mintos Marketplace goes bankrupt? But yes, it seems to increase risk a lot in case of insolvency of either originator. In previous case, if the originator goes bust, you're in similar case as Trustbuddy, where loanbook is separate from assets in bankruptcy of the originator (or is it in case of Mintos agreements?). In other words, loanbook may be sold or if like in Trustbuddy case investors come up with better options and reach an agreement with the bankruptcy lawyer, then they could manage the loanbook and/or find a third party to collect on their behalf. In short, you'd likely get something back because other claimants can't take your investments to cover their losses. Edit: Let me specify that previous comment. Last time there was some conversation about this topic on Facebook group, Mintos representative admitted that there is no process in place in regards to the bankruptcy process of a loan originator. In other words, who knows what would have happened in that instance as well. Most likely something pretty crappy, like the Trustbuddy case With new structure, if loan originator goes bust, then it doesn't matter that you "owned" that loan. It's part of total assets in bankruptcy and will be liquidated and shared with all the claimants of which Mintos Finance is only one. If they issue bonds or take financing from a bank, those funds could likely be used to cover those loans instead of your "investments", depending on how the agreements are structured I guess? In short, "your investment" is not really yours after all. Also, if one originator goes bust, what will happen with investors' claims against Mintos Finance? Anyone looked deeply into the contracts? Since in theory you have a claim against Mintos Finance, who then has a claim against the originators' specific loan, can't investors demand payment from Mintos Finance once the originator drops and the specific loan is "taken away from investor"? What's in the agreements about this situation? If investors file a claim against Mintos Finance, then sounds like a possible bankruptcy case for that entity as well, bringing the other originator loans with it? Too many questions for me and sounds like the legal work in there will be way too complex for me to understand thoroughly. So will stay away.
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ivom
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Post by ivom on Oct 23, 2016 17:50:01 GMT
Please correct me if I am wrong but this seems a lot like derivatives/securitisation. Only other company doing something similar to my knowledge is Crosslend, and they have the appropriate licence in place as it seems. Maybe someone familiar with Latvia laws can comment if there is a licence for securitisation needed? Was just about to add some mortgage loans to my Mintos portfolio but am not sure if there will not be problems down the road.
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fric
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Post by fric on Oct 24, 2016 6:35:59 GMT
I don't know much about derivatives/securitisation but here is my guess: Well, as I said before I think its an issue of missing p2p lending regulation. Therefore if you technically lend money to Mintos who than lends it to Hipo or other loan originator its fine. Current laws have a grey area when giving the rights to a loan through cession contract (not sure if its the correct term in english though) to investors. When mintos was launched the Consumer Rights Protection Centre warned that there is no regulation regarding p2p lending. Therefore my guess is that when renewing Hipo and Banknote licenses to provide loans to consumers (a license to provide loans by a non-bank organization is issued by the Consumer Rights Protection Centre) p2p lending was one of the things discussed and they made a temporary solution so that technically the investors lend money to Mintos and than Mintos lends money to loan originators. Why this is an issue? Well in the original press release (link below) they asked Mintos to stop p2p lending, but they didn't start any process afterwards though - the situation kinda died by itself and there was no further public communication or anything. So my guess some p2p regulation might be in the works, its not a quick process. www.ptac.gov.lv/lv/news/ptac-pieprasa-mintos-p-rtraukt-invest-ciju-pakalpojumu-pied-v-anu-pat-r-t-jiem
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Post by mvaltersmintos on Nov 17, 2016 12:22:25 GMT
FYI - we have just finalised registering commercial pledge on loans of Hipocredit, which are used as source of repayment of loans to Mintos Finance, that are assigned to Mintos investors in the new structure. This means that Mintos investors are in preferential state, in case Hipocredit goes under. You can read more here blog.mintos.com/security-measures-hipocredit-loan-investments/
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Rob
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Post by Rob on Jan 6, 2017 7:35:41 GMT
Why are there suddenly lots of Hipocredit loans available, all at 15% interest rate and mostly issued several months ago but only just being listed recently?
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Post by martins on Jan 6, 2017 8:35:37 GMT
Hipocredit decreased the interest rate spread they keep to themselves. Some of the recently issued loans where replaced on the marketplace at higher interest rate.
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