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Post by valueinvestor123 on May 11, 2017 12:24:26 GMT
I noticed there have recently been a lot of launches, that the secondary market has been quite saturated for some time and that a number of loans have either defaulted or are not repaying/'stuck'. I am concerned (and I haven't studied it, perhaps someone is keeping track of it) that there seem to be more loans being launched (or repackaged and relaunched?) than repaid/unwound. With a healthy loan book, there shouldn't be such a mismatch. I know a healthy platform will experience some growth etc but for me one of the red flags is when this disconnect begins to emerge between letting loans mature/repay and new launches.
Anyone has more insight at what's going on or am I imagining it?
There is also a reluctancy from the platform for investors to take a hit (some view it as a good thing, I am not so sure as I the worry what else the platform may be doing to avoid this at all costs, behind the scenes). If the remedy is to keep launching/repackaging the same loans and use commission fees to subsidise losses or something similar, this is very unsettling as it becomes a game of musical chairs.
Am I being unfair? At the moment, it's just a gut feeling.
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Post by valueinvestor123 on May 11, 2017 13:00:18 GMT
Ok but platform growth can not continue indefinitely. At some point it will reach a saturation point. Will it be able to survive when the growth stops? (or when the market for bridging finance/property loans deflates).
We cannot count on this growth continuing. A platform should be able to be profitable without having to constantly increase its loan book size.
Are you thinking about the pyramids in Egypt? :-)
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Liz
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Post by Liz on May 11, 2017 13:05:24 GMT
Ok but platform growth can not continue indefinitely. At some point it will reach a saturation point. Will it be able to survive when the growth stops? (or when the market for bridging finance/property loans deflates). We cannot count on this growth continuing. A platform should be able to be profitable without having to constantly increase its loan book size. Are thinking about the pyramids in Egypt? :-)Platform growth should be the least of your worries. Defaults, platform failure, inability to fill loans, empty PF, losses, lack of FCA approval, etc are far more worrying.
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Post by valueinvestor123 on May 11, 2017 13:11:50 GMT
Sorry, maybe I wasn't clear: my worry is not platform growth. My worry is the reliance of a platform and its loan book on growth in loans/writing new loans, instead of relying on the security/valuations of the underlying collateral.
But I am assuming. All I noticed was a rapid increase in launches compared to the amount of loans getting repaid/unwound. This is not only specific to Lendy btw.
I noticed it much earlier with some of the Baltic sites. Some even stopped bothering recoveries because it was cheaper to just keep writing new loans. Potentially very toxic IMO. Just been through this, it seems, in 2008.
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GeorgeT
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Post by GeorgeT on May 11, 2017 15:15:05 GMT
Approximately £10.5 million has been repaid to investors in the last 17 days. And of course another month's interest on top. Another £2.5m approx is predicted by Lendy to be repaid in the next week.
I don't know how these numbers compare with the total £ of new loans launched and funded over this period but things appear to be roughly in equilibrium at present and the % of the total loanbook available on the SM would seem to support the current level of growth.
Just my view, and continuing lack of full FCA authorisation and number of defaults is a growing concern.
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Post by jackpease on May 11, 2017 15:19:01 GMT
I too feel that Lendy is now a mature platform and one should be seeing repayments/write offs marching out the door at the bottom and new loans coming in at the top (as we see with Assetz and dare I say it FC). Obviously capital losses make people really cross but we know where we are, people carry on with those platforms.
With so many defaults stacking up with no track record of how the platform/lenders will cope with the inevitable capital loss that must come, it is a limbo and allusions to pointy things are inevitable.
Jack P
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on May 11, 2017 15:47:00 GMT
I too feel that Lendy is now a mature platform and one should be seeing repayments/write offs marching out the door at the bottom and new loans coming in at the top (as we see with Assetz and dare I say it FC). Obviously capital losses make people really cross but we know where we are, people carry on with those platforms.
With so many defaults stacking up with no track record of how the platform/lenders will cope with the inevitable capital loss that must come, it is a limbo and allusions to pointy things are inevitable.
Jack P
I love you Poms, " cross" has to be the understatement of the year - how very British!!! Carry on.
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Post by jackpease on May 11, 2017 15:51:35 GMT
I too feel that Lendy is now a mature platform and one should be seeing repayments/write offs marching out the door at the bottom and new loans coming in at the top (as we see with Assetz and dare I say it FC). Obviously capital losses make people really cross but we know where we are, people carry on with those platforms.
With so many defaults stacking up with no track record of how the platform/lenders will cope with the inevitable capital loss that must come, it is a limbo and allusions to pointy things are inevitable.
Jack P
I love you Poms, " cross" has to be the understatement of the year - how very British!!! Carry on.
Some tolerance of losses and mistakes should be included in our quest for risky returns - without getting cross.
Jack p
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ozboy
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Post by ozboy on May 11, 2017 15:55:16 GMT
What happened there jackpease, did you get censored??  EDIT - Your comment seemed to post "latently"??!!! DOUBLE EDIT - OK, understood!  |
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Post by valueinvestor123 on May 11, 2017 16:47:36 GMT
Approximately £10.5 million has been repaid to investors in the last 17 days. And of course another month's interest on top. Another £2.5m approx is predicted by Lendy to be repaid in the next week. I don't know how these numbers compare with the total £ of new loans launched and funded over this period but things appear to be roughly in equilibrium at present and the % of the total loanbook available on the SM would seem to support the current level of growth. Just my view, and continuing lack of full FCA authorisation and number of defaults is a growing concern. Thanks, that's the kind of response I was looking for. I do plead ignorance...I was going by my portfolio: basically it is set for autoinvest and I keep having to transfer in always much more than I get in interest each month (not to mention capital repayments). Meaning that a lot more loans are being launched than being repaid since I keep having to transfer more money in (I am talking about many months not just the last few months which could have been an aberration).
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Post by valueinvestor123 on May 11, 2017 16:49:41 GMT
Approximately £10.5 million has been repaid to investors in the last 17 days. And of course another month's interest on top. Another £2.5m approx is predicted by Lendy to be repaid in the next week. I don't know how these numbers compare with the total £ of new loans launched and funded over this period but things appear to be roughly in equilibrium at present and the % of the total loanbook available on the SM would seem to support the current level of growth. Just my view, and continuing lack of full FCA authorisation and number of defaults is a growing concern. Thanks, that's the kind of response I was looking for. I do plead ignorance...I was going by my portfolio: basically it is set for autoinvest and I keep having to transfer in always much more than I get in interest each month (not to mention capital repayments). Meaning that a lot more loans are being launched than being repaid since I keep having to transfer more money in (I am talking about many months not just the last few months which could have been an aberration). And recently it's quite a lot more.If there was an equilibrium, there would always be a positive sum (or close to) in my balance at end of month (in theory).
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Post by valueinvestor123 on May 11, 2017 17:22:36 GMT
Approximately £10.5 million has been repaid to investors in the last 17 days. And of course another month's interest on top. Another £2.5m approx is predicted by Lendy to be repaid in the next week. I don't know how these numbers compare with the total £ of new loans launched and funded over this period but things appear to be roughly in equilibrium at present and the % of the total loanbook available on the SM would seem to support the current level of growth. Just my view, and continuing lack of full FCA authorisation and number of defaults is a growing concern. Btw how many of the newly launched loans are completely new (and not the repackaged, old loans?). Does anybody know? Do Lendy have information on this or is someone keeping a spreadsheet?
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vmail
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Post by vmail on May 11, 2017 17:41:33 GMT
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sl75
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Post by sl75 on May 12, 2017 7:17:59 GMT
Thanks, that's the kind of response I was looking for. I do plead ignorance...I was going by my portfolio: basically it is set for autoinvest and I keep having to transfer in always much more than I get in interest each month (not to mention capital repayments). Meaning that a lot more loans are being launched than being repaid since I keep having to transfer more money in (I am talking about many months not just the last few months which could have been an aberration). One thing to be aware of with autoinvest (default pre-funding without regular manual review) on Lendy is that it invests multiple times in the same loan if it is drawn down in multiple tranches, as their system initially treats the extra tranche as though it's an entirely new loan, merging it into the original loan when it goes live. If you haven't already, you might want to quickly review your current holdings and sell off any duplicates in excess of what you're willing to continue to hold (and schedule further reviews at least every few weeks). You could go further and define investment criteria for what you want to continue to hold at all (e.g. based on interest rate, LTV, number of days remaining, or even deeper analysis of the loan and/or borrower's credentials), but any criteria that aren't obvious at a cursory glance might defeat the point of having a "hands-off" approach.
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Post by Deleted on May 12, 2017 7:36:54 GMT
The total live loan book size (including defaults) has been bouncing around the £175m-£185m range for a few months now.
Its roughly in the middle of that range now, and at the top end is when the SM starts to get very saturated.
We have seen a lot of small tranches and small 7-9%ers appear recently, offset by a few large loans repaying.
I guess anyone using auto-invest/pre-funding will be getting a lot of matches on these small tranches and loans.
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