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Post by charliebrown on Oct 3, 2017 14:38:50 GMT
These factless type of updates are so tiring
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Post by charliebrown on Oct 3, 2017 14:02:40 GMT
The current total of default loans on Lendy is £24million - and with more to come. The purported asset value total is £40 million. If valuations were even ball-park accurate then we’d have very little to worry about, apart from recovery delays and inconvenience. In circumstances where, without any significant negligence/ incompetence/ fraud, I lost some invested capital I’d take it on the chin, without holding grudges. My biggest concern at the moment is where some loans appear to be a catalogue of negligence/ incompetence/ fraud. Take a look at IoW, Exeter, H**** for example. These look disastrous. It’s hard to imagine the outcomes being anything short of a blood bath. One catastrophe can wipe out tens of loans that went well, not just in terms of financial impact to investors but in terms of bad sentiment which can then quickly snowball.
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Post by charliebrown on Oct 1, 2017 2:58:51 GMT
Excellent post by mikes1531. Very well rounded and looking at an overall platform perspective. I feel it’s unlikely that Lendy can reclaim 50% of “value” on defaults, not given the info we have seen that shows a lot of loans are well and truly stuffed. However, let’s assume by mike’s calculation investors don’t lose any capital but instead realise an average return of 1.75%pa. I would argue that an average 1.75% return renders the platform defunct. I’m not spreading doom and gloom, but I think the people who are saying it’s to be expected and it’s ok are only saying so because they didn’t get tied up in any troubled loans. That wasn’t my point, I was asking from an overall platform perspective.
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Post by charliebrown on Sept 30, 2017 8:33:09 GMT
CAVEAT EMPTOR and growing pains. I built up a large for me portfolio in the good old days and sold down to zero a couple of months ago taking sm liquidity opportunities when I could. Now have rebuilt with loans I am confident with to a sensible platform risk cap. Lendy has had a massive job on its hands to build a recovery team with the almost inevitable scale of defaults given their growth rate. Their underwriting and valuation standards are much improved. The information has been there for all to see. I was out of Somerset office within hours of the news about the country rogue surfacing. it is disappointing and frustrating if you are stuck in default loans but the earlier situation where it was an instant access 12% saving account was unhealthy and sucked in those who should not be investing here. Recoveries will take a while and dent returns but the basic premise of asset based lending remains sound.I may be wrong but I don't see any capital losses in prospect that seriously threaten the platform or a sensibly diversified portfolio.there is a lot of extend and pretend going on elsewhere. Pick the right loans by doing sensible due diligence, keep an eye on things every day and stop burying The secondary market in an avalanche of wailing because you didn't do this in the first place. I think the gloom and doom is being overdone a little as well. I just sold some loans this morning, gone within minutes and a couple more will be gone within hours. I'm stuck in a couple that I would rather not still be holding, but a couple of substantial repayments could well see those put right. I don't see the sky falling here either. I’m not trying to spread doom and gloom. I simply asked whether 25%+ bad debt is a problem for the platform. Is it indeed inevitable and acceptable and can be brushed off as growing pains or will it significantly affect the overall platform. It’s nice to hear a balanced view, some people are upset about it and think it’s too high, some say it’s ok.
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Post by charliebrown on Sept 30, 2017 8:15:00 GMT
Paul64 , why haven't DFL's 1 & 2 not been moved to the Defaults tab? Anyone else hazard a guess as to why these loans haven't been officially defaulted by Lendy? Doesn’t it need to reach minus 180 days before it’s officially recognised as defaulted and moved to the defaults tab?
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Post by charliebrown on Sept 30, 2017 7:39:54 GMT
Not too negative (yet) on this one. By all accounts the full loan amount should be close to recoverable if indeed past evidence relating to this property is to be believed and money has been spent on upgrades. I feel Lendy have been forced to withdraw from secondary market because the original valuation is clearly not a fair reflection of the likely sales figure and they would be in breach of regulation if they continued to trade it. I feel that the reasoning is weak, or perhaps Lendy's methodology of putting absolute faith in bits of paper. For instance, I could borrow £1m on a pair of my old trainers if there was a valuation certificate saying it was worth £1,300,000. And similarly that loan would be able to be traded even though everyone knew it was a sham until another bit of paper came along and confirmed the original valuation was wrong and that actually it was worth zero. If we went through the entire loan book and looked at valuations vs probable recoveries under default (which would almost always be a fire sale) then I guess many loans would be at very large LTVs, apart from on paper of course. At the same time I wonder why a sale hasn't gone through. The person behind it seems keen to get rid of it, and you'd have thought there would be enough minted people in the surrounding areas. Nice analogy with your old trainers You’ve hit the nail on the head there. I imagine even on the loans that were ok and paid us back with interest a lot of them had dodgy valuations and it was just lucky we didn’t need to “test” those valuations.
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Post by charliebrown on Sept 30, 2017 7:32:58 GMT
As has been discussed, Lendy is 25%+ bad debt and growing all the time. Can the platform survive this? Is it time to dig into the history books and read about what happened at Yes Secure? (I think that's the relevant platform.) I have just read up about what happened at Yes Secure. Their bad debt had reached 17.8% and they decided to close their platform. Depending on how you measure it, Lendy is above that bad debt ratio. In theory as long as sentiment stays strong the platform can survive bad debts, but in practice Lendy’s poor performance coupled with the poor attitude shown to investors then I’d expect repercussions. There’s already a lot of people on this forum who are winding down their Lendy investment. Worrying times.
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Post by charliebrown on Sept 30, 2017 0:56:51 GMT
Since they're stubbornly resisting discounting, for obvious reasons, maybe they'll let lenders offer cashback the same way that they can? 8>. Despite Cowes (aka a load of old bull) it seems they are not managing to attract new lenders fast enough to keep up the the bottomless DFL demand-pit (and making it possible for existing lenders to bail out is well down the priority list). When I came to Lendy or Saving Stream as it was then called there were some decent looking loans and only one default, the Garden Centre. The SM was red hot and you could trade in and out of loans easily. It was paradise. Fast forward to Lendy’s current position and it looks like a total meltdown. It’s a disaster zone. Lendy must have the highest amount of bad debt of any platform. I just looked at BondMason stats page and their bad debt is 1.3% which in theory should represent an industry average. As has been discussed, Lendy is 25%+ bad debt and growing all the time. Can the platform survive this? Let’s say British Airways lost 1 of every 4 suitcases that were checked in, would people still fly with them.
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Post by charliebrown on Sept 29, 2017 12:12:39 GMT
Surely not another case of fraud and/ or gross negligence. How long can investors live with this? How long can the platform withstand all this bad PR? I’ve personally had enough. I got in to this platform knowing there was some risk, but I didn’t expect it to be this bad.
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Post by charliebrown on Sept 24, 2017 15:30:38 GMT
is it right that this has been put up for sale at under a million pounds? is that for part of the site? T Yes, I will pm you the link. This is truly awful. Up for sale at 20% of valuation. This is shocking, even in an environment where Lendy provide us with plenty of shocks. This type of valuation discrepancy is either gross negligence or it’s fraud. Right now, Lendy is looking like a sinking ship. That’s not a reference to Cowes weeks but a reference to the state of the loan book.
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Post by charliebrown on Sept 24, 2017 12:01:52 GMT
You have to wonder whether 12%, or even less in some cases, is really worth the risk. Poor due diligence, wildly inaccurate valuations, dodgy borrowers and withheld information are all common and are examples of the “avoidable” risks that can hit investors. When you add in the “unavoidable” risks such as economic downturn, property market crash and development complications then the risks become even more pronounced. Whether you see defaults at 14% (per Lendy) or 25% (per The Telegraph article) both seem unsustainably bad.
The only thing that’s keeping me invested at the moment is that, so far, there has been no capital losses. Once I hit a situation where I’ve lost a significant wedge of capital (looks likely as I’m in both Exeter loans) I’m going to look for a different place to invest with a better risk/ reward.
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Post by charliebrown on Sept 17, 2017 1:04:30 GMT
This strikes me as the worst LY default so far. Whilst some of the other defaults look bad, this looks like an unmitigated disaster. This is the first DFL default.
Depending on the borrower's attitude, wouldn't it be better to try to find a way to finish the build? That's what Lendy did with PBL081. I don't think taking a hard line and adding more penalties/ interest will help. Of course, if the borrower has already washed his hands of this then a hard line must be taken.
What options are the Receivers likely to consider in this scenario? Can anyone with experience, or a crystal ball, predict some likely outcomes?
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Post by charliebrown on Sept 3, 2017 1:34:50 GMT
Based on today's monthly interest payment it looks like I'm now earning 7.6%. A far cry from the advertised 12 per cent which was being realised eighteen months ago. And why I'm running my investment in Lendy down. I know that at some unspecified future date I MAY see some or all of my capital returned on the many default loans and who knows, possibly some interest too, but that's all 'jam tomorrow'. What a shame that Saving Stream grew too big for their corporate boots and took their eye off the ball. I'm about the same rate 8.1% last month but get the feeling when the defaults come through (assuming that the provision fund can't cover the capital losses) that i will have basically lost all the interest I've earned over the past few years so closer to the 0.5 % available in a current account.... Interesting to hear some people saying they are getting 12%. They've seemingly avoided any default loans and never had cash stuck in the SM. The way LY dynamics have changed, I don't think it's realistic to expect 12% is the norm. I'm currently wrapped up in a couple of loans that look to be a total disaster. Worst case scenario would pretty much wipe out any gains I've had over the past 18 months and put my returns at about 1%. When I factor in the capital losses I sustained at Funding Circle then I will have made 0% and have actually lost some capital over the 18 months. The only good news I have is it would have been far worse had I not heeded the advice I'd read on this forum. I managed to avoid quite a few default loans by listening to the senior members who said they were very high risk. My experience tells me, LY due diligence is not robust and shouldn't be trusted. Do your own DD and be very selective about which loans you invest in. If you don't know how to do thorough DD then read this forum and thank the guys that are doing it for us. Go for the 12% loans and the loans given a green light on this forum. The downside is by being ultra selective you might not be able to get as much money in as you'd like as you still shouldn't put too many eggs in too few baskets. I don't think it's realistic to expect 12% for life
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Post by charliebrown on Aug 26, 2017 2:43:49 GMT
I agree with those who say PF shouldn't be factored in to any risk calculation.
I'm not sure I agree with those who say PF should be abolished. Those who were invested in the Garden Centre wouldn't agree. What's the benefit to Lenders in calling for it to be abolished? Those calling for it to be abolished, can you explain why you want it abolished? Are you assuming that having it abolished would mean LY can offer Lenders higher interest rates, like the 13% FS offer?
The more worrying thing is, looking at the Defaults tab, PF or no PF, I think a lot of losses are going to be incurred and I'm wondering how that will affect Lender sentiment and the overall platform dynamics.
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Post by charliebrown on Aug 20, 2017 10:06:18 GMT
m*******1 just snapped up a £125,000 chunk of this. Strange considering there are some great loans on the SM atm This big hitter was probably reassured by the recent update advising that a sale has been agreed and the loan is expected to be repaid within the next couple of months. He or she probably relied upon that and decided it was a pretty low risk 12% for a few weeks. I have to say I am very pleased because it has bought me totally out of this loan and it also nails the lie that the secondary market is a dying animal. Anyone who commits 125k based on a LY update is very brave
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