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Post by WestonKevTMP on Apr 27, 2017 6:14:54 GMT
Personally I never liked making BACs payments, always felt like sending money off into the unknown hoping you got the right bank account details and reference. I appreciate you have to transfer £1,000 to avoid fees, but I always used debit card payments on the RateSetter site. It felt safer and I could lend instantly; The debit card functionality was always a bonus to me, for a variety of interpretations around regulatory restrictions on client cash (and who funds until the payment truly clears, which can be days for failures) and the need for a strong balance sheet - RateSetter is one of the only platforms to offer debit card functionality. Kevin.
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Post by WestonKevTMP on Apr 24, 2017 7:52:00 GMT
I probably shouldn't say it, but I've had more matches recently although all at £500 which makes me somewhat nervous. I'd prefer £250 matches, or even better, £20 partial loan parts! Still, I have Ratesetter for boring, this (and my shiny new FS IFISA) is for the nail biting rollercoaster! " I have RateSetter for boring, this (TMP) is for the nail biting rollercoaster!" Can we use this is marketing?
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Post by WestonKevTMP on Apr 23, 2017 16:30:54 GMT
Unfortunately I have not been able to re-invest in new loans at the frequency I was acheiving in November, so I am reluctantly withdrawing the repaid loans. This will have been my fault, as I joined in Jan 2017, and being a risk man over-hauled the policies and some processes. This takes time, and we are still optimising. But it did mean pulling back the risk appetite to be prudent, and we are now in a position to lend a little more quickly now. Hopefully the speed of lending experience from April 2017 onwards is better than Q1 2017... Kevin.
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Post by WestonKevTMP on Apr 18, 2017 20:10:38 GMT
If I was a staff member at Lendy, I would be worried and not comment about this case on a public forum. There will be legal action continuing, and it would be interesting to know if the FCA were involved. It is possible that the valuation on which the loan was based, was inflated by the " fake lease" between connected parties. This financial structure by the borrower supported Lendy into substantially overvaluing the property. To such an extend that it was valued at 3* the last known sale price (£2,870,000 vs £800,000). And to be fair, Lendy have relied on a third party to perform this valuation. As jfm rightly pointed out right at the start of this thread " Is anyone concerned that a majority of the rent on the building is paid by a newly formed company connected to the borrower?" Perhaps Lendy were inexperienced and this just reflects poor risk governance. Alternatively it is a case of 'Financial Crime' (as defined by the FCA - www.fca.org.uk/firms/financial-crime ) through manipulation by an individual whose moral characterer has been question in the national press and financially is an ex-bankrupt (although that in itself can be quite innocent, although unfortunate). The FCA role in Financial Crime avoidance is " to ensure the integrity of the UK financial markets we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime". If I'd lost money on this loan, I'd want to know if my loss was simply inexperience and poor risk management, or fraud through the manipulation of fake lease contracts to inflate a property price at the expense of lenders. Kevin.
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Post by WestonKevTMP on Apr 15, 2017 13:21:58 GMT
Traditional risk management would never lend only on "the deal" (i.e. security), you always asses the borrower.A somewhat unfortunate typo Westonkev, or a different approach to underwriting? Perhaps in this instance I'd make an exception.....
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Post by WestonKevTMP on Apr 15, 2017 12:23:32 GMT
I personally find this loan debacle very distasteful.
Traditional risk management would never lend only on "the deal" (i.e. security), you always assess the borrower. And if the property does sell for something like £1m then it'll turn out that "the deal" wasn't even a good one. Which should have been obvious from previous sale prices of the property.
This loan has allowed an ex-bankrupt, that several media outlets have called "a crook" to probably walk away with £2m cash and shot of a property he didn't want anymore. If this is what happens, then shame on all involved.
Kevin.
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Post by WestonKevTMP on Apr 14, 2017 20:04:59 GMT
Previous comment from Lendy in August 2016:
"The Times article states, in reference to PBL064, “One of the loans, worth £2 million, is secured against a tenanted office block that Saving Stream said was worth £2.9 million. The building had been purchased for £900,000 in 2014.”
The valuation of this property was undertaken by a large commercial property valuation agency with specialist expertise in this area. All property valuations in relation to Saving Stream loans are undertaken by independent valuers. Should the valuation of any property be negligent, Saving Stream would have recourse to the valuer’s professional indemnity insurance."
So it seems The Times was quite accurate with the criticism of price. And it'll be interesting to see if Lendy do follow up against the valuer's professional indemnity insurance....
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Post by WestonKevTMP on Apr 14, 2017 19:52:49 GMT
WestonKevTMP Over 10,000 users; congrats! How many are lenders, how many are actual borrowers and how many are declined borrowers? Ha ha, now I'm all for transparency but some details we'd rather keep private as we grow. Especially as the first 6-months is very unlikely to look like the next 6-months.... But the vast majority will be borrower registrations, with a very high percentage of declines as we tweek Credit Policy, product and underwriting processes. The key point for me was simply that the platform can handle user applications with all the appropriate APIs into third parties (such as credit reference agencies), and that there is a clear demand for what we offer. Kevin.
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Post by WestonKevTMP on Apr 12, 2017 19:40:06 GMT
Re post of Kev.... Thought I read somewhere that RS should no longer be lending money to "other lending" companies. Also according to the provision fund page the amount of current loans outstanding today is £636M not £690. Total under management is £712,104,843, which can be seen on the public data area; www.ratesetter.com/aboutus/statisticsThe Provision Fund page only includes the balances protected by the Provision Fund, so excludes some lending by institutions through the platform.
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Post by WestonKevTMP on Apr 11, 2017 20:17:07 GMT
Hi, WestonKevTMP is there any chance of getting a tax statement facility on the website? Admittedly, at the moment it's quite easy to work out manually but it's nice to have an official-looking statement to print off and send to the accountant. Yes, it's in the pipeline. I provided a number of examples from my personal lending (e.g. Zopa, RateSetter, Funding Circle), and I am hoping that The Money Platform tax statement will be based on the best of these example's features... Kevin.
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Post by WestonKevTMP on Apr 11, 2017 20:15:16 GMT
.... "The platform has lent a total of £310m to other lenders, of which £102m are currently outstanding." Do they mean outstanding as in, "yet to be paid back but all fine", or "could be in trouble"?! The " outstanding" is just jargon, usually " outstanding balances". It just means money still lent out, in total RateSetter has around £690m in "outstanding balances". With 100% certainty, there is NOT £102m in difficulty. I left RateSetter In October 2016, so I'm not really in a position to comment from the inside. But GeorgeBanco.com is a fantastic little business with a strong management team. Although it's a higher APR guarantor product (which not everyone approves of), it is a company run with strong ethics that genuinely tries to rehabilitate customers that have had financial difficulty in the past. Kevin. Kevin.
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Post by WestonKevTMP on Apr 7, 2017 6:17:33 GMT
....only problem is if they had bothered to check her account they might have noticed that she had more then that in her account. To paraphrase and steal a quote, " Banks are only willing to lend money to people that don't need it"
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Post by WestonKevTMP on Apr 4, 2017 21:34:44 GMT
If that is the case why are the rates so high? And why are the expected defaults so high? That question deserves a large answer, there are so many issues. Firstly the short term product means APRs are always high. Any fee based short term product, when annualised is magnified. It's not a bad deal for a single short term borrower, but great for a long term lender who can keep his monies rolling from one borrower to another across a whole year. Another issue is sourcing of borrowers. Most channels focus on " prime" or " sub prime", there isn't really a middle ground for the type of applicant I described. Then there's the issue of why/when borrowers default. My view is that there are three timings; 1) No intention, either fraud or borrower is taking the loan knowing they are not going to pay. Usually a first (non)payment default. 2) Poor lending decision, i.e. the loan was granted when the customer cannot afford the loan or their financial status wasn't stable enough. 3) longer term, life happens and the borrower can't pay. Perhaps they lose their job, debt spirals, get ill, The issue is that short term borrowers suffer from 2 out of 3, even if the loan is just for a few weeks. So the risk is not that less than a 12+ month loan, despite only charging interest for weeks, rather than years. These applicants do often have some form of historical impaired credit. So approval rates are low but the platform has to pay to assess everyone. It isn't a case of approving defaults of CCJs, but segmenting the applications to determine slices of the impaired portfolio that are acceptable within a risk appetite. This segmentation requires data analytics and a higher degree of risk sophisticated than simple low risk lending to homeowners with perfect credit histories. Finally a lot of the lending costs are the same. The cost of sourcing the borrower, broker or comparison fees, credit reference checks, operational costs. So it costs the same for a 4 week loan to be acquired as a 5-year loan. So to answer your question, there are many factors that come into play. But very often factors that make short term lending an expensive business to be in. These costs inevitably end up with the borrower, and default expectations are higher. Kevin.
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Post by WestonKevTMP on Apr 3, 2017 15:25:24 GMT
....How long could this platform survive at current loan volumes? The platform cannot survive on current loan volumes, and we will need to scale. But there is no short-term time pressure, and we want to " get it right, then do it on time".... They key is to get the foundations right (platform tech, credit policy, customer management, loan product, lender product), and then hopefully scale lending without having to scale costs.
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Post by WestonKevTMP on Apr 3, 2017 15:21:34 GMT
As of earlier today they had a total of £33,750 loans in place. Hardly a viable volume for lenders or for the platform. But that has doubled since I last checked on 17th November, which is encouraging. This amount of lending is of course not viable in the long-term. The point is that we've got to get the foundations right first and we are happy if this takes time, we are in no hurry. Getting the foundations right started with the platform web site and back office tech tech, building the payment processing infrastructure, FCA authorisation, income checks and API links in with the various credit reference agencies and fraud tools. This has all been live for around 6 months, a fantastic achievement. It has more recently been a case of getting some of the credit basics right including customer management (including Collections), credit references agency reporting and credit policy. Basically the risk stuff. The credit policy has purposely been initially strict, our approach is always to start prudent and slowly increase approval rates. Also when you first launch a product the quality of through the door traffic tends to be markedly worse than for a mature platform. In addition we don't want to attract too much volume from partners until we are in a place where we can more confidentially approve the right applicants. This we have started to do, and volumes of lending should now slowly start to increase. The Money Platform has recently passed the £100k mark; Not quite the millions I'm use to at RateSetter, but feels good to be building something here from the foundations. So I appreciate some of our lenders might have been frustrated with stagnant money, but hopefully borrower volumes will now start to escalate. I also appreciate the platform at this stage isn't for everyone. The platform today is for the more adventurous investor/lender. Returns are expected to be higher - but there is neither FSCS protection, loan fractionalisation nor a provision fund. The Money Platform is a pure P2P lending platform. But over time these things will change as we grow, mature and extend the offering. But that's for the future (no plans to become a bank!), and I thank the lenders that have registered on the platform so far, the adventurous early adopters. Kevin.
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