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Post by elephantrosie on Jun 3, 2017 9:28:57 GMT
If after one month still not fully funded. Should I be concerned?
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elliotn
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Post by elliotn on Jun 3, 2017 10:00:22 GMT
Typically you earn interest (or the equivalent funded by the platform to support take up) from the moment you buy your loan parts.
Collateral have said that if a loan finally failed to fund the loan would be cancelled and lenders' returns paid from their own pocket.
Ly put any unfunded amounts on to their SM and the loan holders bear the risk of it selling (presumed to be no longer Ly directly as the regulator frown upon additional balance sheet risk).
Similarly, MT have admitted that an unfunded loan now drawn down is being sold by a 'private individual'.
In such cases there should be no loan specific risk to capital (platform risk aside while waiting) but there is liquidity risk as Col/MT do not allow you to sell although Ly handily allow you to immediately jump any underwritten amounts.
Future liquidity may be diminished if the loan proved unpopular although at the moment we see a lack of lenders' funds across platforms so this may not be the case for the current unfunded crop.
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Liz
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Post by Liz on Jun 3, 2017 12:41:24 GMT
Depending on the platform but generally, loans will either be underwritten or fall through and funds returned.
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star dust
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Post by star dust on Jun 3, 2017 18:05:16 GMT
In such cases there should be no loan specific risk to capital (platform risk aside while waiting) but there is liquidity risk as Col/MT do not allow you to sell although Ly handily allow you to immediately jump any underwritten amounts. To be a bit pedantic, although in effect that is the case, it's not quite correct, you cannot sell on MT until a loan is fully funded (including underwriters being bought out), so you would have to wait until it is fully funded or it is pulled to get your funds back although you would earn interest. On Collateral you can put loan parts up for sale before the loan is fully funded, but you go to the back of the queue (at least I presume so as there is no way of telling where you are in a sales queue - you definitely don't go to the front 'cause I tried it as an experiment once), so your loan parts wouldn't start selling until it is fully funded anyway, and you wouldn't earn any interest in that position either.
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