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Post by WestonKevTMP on May 31, 2018 9:51:35 GMT
Comrades,
We are still working through the best way to report loan repayment performance, one that is accurate but neither gives an overly positive picture nor a overly prudent negative one.
One of the issues is that in the world of HCSTC, you can expect a significant percentage of customers to miss a payment. Many of these borrowers need support, and typically go onto repayment plans. Most are within 12-months, but some on debt management plans can be longer. In line with the platforms ethical and transparent approach, we always demonstrate forbearance and therefore no additional fees or interest is charged for customers on plans. Although this negative performance is reported to the credit reference agencies thus making it difficult for such borrowers to avoid negative consequences. The issue for our reporting is where the borrower is on a rearranged payment plan and has paid 80% of the monies owed, they are still classified as "late". Adding these lates up, without taking into account the monies repaid would give the wrong impression. It is because of these plans, that the percentage of defaults is not high (i.. they are still late, not defaulted).
The other issue, and is partly platform specific, is that these customers on arrangements and where monies is collected ad-hoc, is not an automated process. Money has to be allocated back to the lender, and this takes time. We are working through how to automate this, which would increase the speed of monies paid back to lenders.
Kevin.
P.S. I'm not that frequent on this forum anymore, so apologies for the reduced posts compared to my historic prolific alter-egos.
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Post by WestonKevTMP on Apr 19, 2018 19:54:15 GMT
WestonKevTMP Are loans in Collection deemed irrecoverable in HMRC terms. This was a question that was asked constantly on these forums to platforms without a provision fund, notably Zopa and Funding Circle. The official line is that you must seek your own advice, not least because HM guidance has never been overly specific. The text within The Money Platform reflects this: " The information provided assumes that you are a UK tax resident individual and wish to take advantage of the new bad debt relief available on loans defaulted since 6 April 2017. If you have previously been able to take advantage of capital loss relief under TCGA 1992 (which is only available if you do not claim bad debt relief and is not available in respect of loans that become irrecoverable on or after 6 April 2017) and wish to do so for this tax year, please speak to your tax advisor. " My personal view is that a loan missing a payment hasn't defaulted, as there is a strong possibility that an arrangement plan will be put in place and monies will be slowly collected My personal rule of thumb is that if no payments have been recieved for 6-months (or 12 to be prudent), then it can be fairly reasonably be written off. But again, you must seek your own tax advice.
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Post by WestonKevTMP on Apr 19, 2018 19:46:37 GMT
Firstly, the tax statements were emailed today.
However, we are aware that for a small number of users this included an error, that we are correcting and will send out as quickly as possible. Hopefully this will be tomorrow (Friday) when IT are on the case.
Kevin.
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Post by WestonKevTMP on Apr 5, 2018 20:00:26 GMT
WestonKevTMP can you include overdues on the stats page please? The page is being updated to try and be clearer, with some improved definitions. However.... The issue we have is that since late September 2017 we switched to amortising loans. Therefore the lates will include a mix of customers that have never paid anything and some that have only missed a single payment. But of more importance is payment arrangements. The Money Platform has a reasonable share of "late" customers on repayment plans. It's very common within the HCSTC sector to have lates, that forebearance is given and customers given time to repay. These customers will eventually repay, but it takes time and interest is usually frozen. Unfortunately many users of HCSTC almost expect this, as if it's a product feature. So the problem is that the percentage of lates Is not representative of expected final losses and net profit/ loss to lenders will only be known 12-months later. As a young platform we don't have the data to statistically forecast/estimate the translation of current late rates into final loss rates. For example a late rate of 25% could result in a 10% loss (and therefore profit with intereet). Thus is thr dilemma we are currently trying to solve, and show reporting that is useful. Kevin.
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Post by WestonKevTMP on Feb 21, 2018 9:13:54 GMT
6%+ was readily available pre-ISA from much of the latter half of 2017, so while you do not pay tax, if you are a 20% tax payer you will get less interest than if you'd gone into 1 year pre-ISA. I posted a while ago that I suspect ISA money inflow would depress rates to nullify the tax advantage..... There might be an influx of money due to ISA, and this might reduce rates. And RateSetter probably hope it does to make more profit, write more loans and offer lower APRs which attract better risk quality borrowers. However the benchmark to judge if this is true shouldn't be 6% AER. The latter half of 2017 was a testing time because RateSetter offered a no fee refund due to their participation in wholesale lending. Thus offer was July/ August 2017. This caused an outflow of lender cash whilst RateSetter still had to fund existing loans and new originations. This caused the rates to spike, and is quite clear on the charts Prior to this change, rates had steadily fallen. 5-year money was around 5% and rolling nearly always below 3% (sometimes close to 2%) Kevin. P.S. I left the RateSetter office in October 2016, so I have no inside knowledge.
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Post by WestonKevTMP on Feb 13, 2018 21:36:22 GMT
One thing I learned from Zopa Listings was that I am useless at picking honest borrowers. Fortunately I didn't put too much money into them, they were a disaster, but rather addictive at the time. The wonderful anecdote (from Inside Zopa), was that the worst borrowers and fraudsters used photos of pretty girls to attract lenders. So if your losses are high from those days, you've only yourself to blame... 😍
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Post by WestonKevTMP on Feb 6, 2018 12:26:28 GMT
The above message is going to be shared with our existing portfolio of lenders, and on some social media. It follows from the article in the P2P News; www.p2pfinancenews.co.uk/2018/01/25/the-money-platform-open-banking/Due to the risk of this being interpreted as any type of financial promotion, I can't answer any questions on this thread. All requests for investor decks, equity valuations, etc. must go through the email above which will be passed to the legal representative. But from my personal perspective, I've pushed this as it was a common request from lenders during my days at RateSetter (which was always denied). It's a chance to give lenders the chance of equity, without having to list a formal raise on a crowdfunding site or suchlike (as we've raised privately already, as per the link). Kevin.
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Post by WestonKevTMP on Feb 6, 2018 12:20:49 GMT
We are currently considering an equity fundraise to fund our next stage of growth.
Some of our lender community have previously enquired as to whether they could invest in the company.
If you would like to know more about our proposed fundraising, you will need to; (a) confirm your status as either (i) self-certified ‘high net worth investor’, (ii) self-certified as a ‘sophisticated investor’, or (b) otherwise satisfy us that you our entitled to receive information about our proposed fundraising.
Please email us directly on helpdesk@themoneyplatform.com with the subject “Investment Enquiry” if you would like to receive further information and if you fit with the above criteria.
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Post by WestonKevTMP on Feb 6, 2018 12:18:51 GMT
With Zopa ages ago you did have some idea. Property well you know tons about ability to repay and often a certain amount about the borrower up to their name Nowadays with Zopa RS etc it's P 2 aTinyFractionOfLotsOfPeople. with TMC it's a fair lump (250 up) to one particular individual about whom you knwo that they have passed a credit scoring system about which you know not much Property and SME lending is less regulated, and information can be shared. Hence the insights you can see on sites such as Funding Circle. Consumer lending is highly regulated, not least in terms of the Consumer Credit Act but also around the sharing of private sensitive data. And this is getting worse/stronger with the introduction of GDPR (https://www.eugdpr.org/). Those days of Zopa individual listings are literally a decade old, and the likes of which will never return. We couldn't share details of borrowers if we wanted to (perhaps it's possible with a P2P environment, but very difficult and regulatory-wise very dangerous). I doubt there will ever again be a consumer lending platform that shares any level of individual borrower data with the lender. And platforms for obvious reasons will not share specific of credit policy and risk management processes. So it all comes down to the classic question of trust. You either trust a platform or you don't. I recall literally hundreds of posts on the RateSetter thread asking about the minutiae of platform operations. And eventually the default answer had to be trust, and not to evaluate the effectiveness of the platforms operations.
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Post by WestonKevTMP on Feb 5, 2018 17:39:38 GMT
We've been asked via email and here on the forum how the queue works. This is important because the site doesn't currently tell you a queue position or expected time to lend, something I plan to change with IT priorities allow. It's also been a concern as lending was slow as we calibrated lending credit policy and switched to the amortising loan product to de-risk. The lending volumes are now increasing as we switch on borrower channel partners and queue times reduce with liquidity outflow. So today queue waiting time or less of an issue, however it's still important to know how the queues work. The market lending screens look like; This will be familiar to current lenders, where you opt to lend into markets depending on value and term buckets. This is my own lender screen, and you'll see I typically lend in the £250 and £500 market. This is my attempt at fractionalisation with small loans, obviously depending on total lend. However this is probably not the lowest risk approach on an individual loan basis, as the £750 and £1,000 lending criteria is far more strict and is restricted with tighter credit scores and policy. But lenders are free to make their own approach. The logic is based on FIFO (first in, first out) and works regardless of which markets a lender is in. Imagine all lenders are considered in a single queue, and when lenders make a loan they go to back of the queue. Of course lending is done in individual markets, so lenders in multiple markets increase their chances of lending.If you are lending across segments/buckets or have a multiple of your offer amount in your wallet; when you are matched to a loan then your remaining funds go to the back of the queue. So for example if you have £1,000 in your wallet and lend across the 8-week and 12-week £250 buckets, if you are matched to a loan in either market then remaining funds are sent to the back of the queue. Again if you lend in multiple markets it is more likely that you'll get to the front of the queue again. No priority is given for lenders who have been with the platform longer, or reinvested funds. We don't allow lenders to make offers lower than the minimum to lend faster, as the returns have been calculated based on expected defaults and income. Therefore we wouldn't want lenders to enter into rates that we know we would expect them to make a loss, if bad debt estimates are in line with forecasts. Additionally The Money Platform receives an equal share of income, from which significant costs have to be paid. Without this income the platform would not be sustainable. Kevin.
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Post by WestonKevTMP on Feb 5, 2018 17:27:10 GMT
It's worth adding that since September 2017, we switched all longer term loans to amortising products with 2 or 3 monthly payments. This reduces the risk, at least from complete capital loss, as smaller payments are made. It's also more affordable to the customer and therefore reduces the product risk.
Kevin.
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Post by WestonKevTMP on Feb 5, 2018 17:08:34 GMT
Of the 3 loans I had overdue mid-November 2 are now marked as defaulted and the third is late by over 30 days, with neither of the interim payments having been made. so looking like a total loss ( oh well not quite I've got a fiver to withdraw sometime) I still like the concept of the platform but hasn't worked out for me! romyI'm really sorry to hear that, and without making excuses this is the downside of a pure P2P platform without a provision fund and without fractionalisation. Where some are unlucky such as yourself, we've had others with nothing but repaid loans and a fantastic return. Especially now that we've increased the liquidity of lending, and returns are not diminished by excessive non-lent time. The Money Platform is at least very open about the risk of capital loss, and do not compare ourselves to the larger safer, and averaged expected return platforms. You could argue, probably correctly, that it is a design flaw to have neither fractionalisation nor a provision fund. This is something that we've considered, but would require significant IT changes and regulatory changes. We had hoped to develop a "pool lending" product, but similarities to collective funds. These have to date stopped us making these changes, but I would hope to revisit these in the future. In the meantime, as always I would urge lenders to only lend a small percentage of invest-able funds. And probably a marginal percentage of their lending within the P2P class itself. Kevin.
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The Money Platform (TMP)
Suggestions
Jan 30, 2018 9:04:26 GMT
Post by WestonKevTMP on Jan 30, 2018 9:04:26 GMT
Yes, thank you.
As you said, data does stay at the address for a number of years. And often having some accounts at an address can give the impression of residence, even if that isn't physically true.
And yes I'm sure that Equifax can provide international bureaux responses, they are a global company after all. And that might make sense for some platforms to use if the amounts involved are big enough, as the costs will certainly be higher. And based on average lender and borrower values at The Money Platform it wouldn't be economical.
As myself and other forumites have said, The Money Platform is a higher risk potential higher return P2P platform, and one in its purest state with neither fractionalisation nor a provision fund. The "rollercoaster of P2P", so it should always be considered a small alternative to primary investments. Money you can afford to lose, because unfortunately there is a distribution of returns, and luck will play a part in this.
Kevin.
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The Money Platform (TMP)
Suggestions
Jan 29, 2018 22:16:36 GMT
Post by WestonKevTMP on Jan 29, 2018 22:16:36 GMT
We accept non UK nationals, but they must be UK resident and have a UK based bank account. Kevin. Well I hear what you say, but it seems strange that most of your competitors (practically all) manage to do identity quite straightforwardly. I think, for example, that Equifax will vouch for my existence electronically. Oh well Equifax UK will not identify you unless you are on the electoral roll, have banking current account, utilities or have credit such as loans/cards in the UK. None of the UK based credit reference agencies can provide KYC or AML services if you only have overseas accounts and residency. Kevin.
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Post by WestonKevTMP on Jan 29, 2018 22:11:13 GMT
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