Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Feb 8, 2019 13:12:20 GMT
"I’m willing to defer judgment for a year or so which is not an excessive timeframe for things to improve."Jeez I hope Brookes doesn't read that! A year to Lendy is like cat years! You are charitable sir, just the type of investor Lendy thrives on and looks for. Written them off mentally already. Dosn't mean they should get away with bad practice or overcharging.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 12:39:55 GMT
Whilst I agree that a disconnect between loan term (e.g. 6 months) and a dev project timeplan (e.g. 18 months) does no-one any favours, simply writing longer term loans is not going to provide a universal solution without better loan covenants to tie the borrower into sticking (roughly) to the timeplan.
Lets take an example, Lea**** Road, Wallasey originally activated May 2017, renewed twice (the first renewal increased the loan so probably rolled up the interest) and is now 2.5 months overdue. The loan was requested for the development of a plot of land, however nothing has actually been done during the time of the loan. After walking the site myself last summer, it feels to be a land bank transaction, IMO developing this site makes no sense unless the neighbouring much larger site (in other ownership) is also redeveloped. There are similiar issues with the recently defaulted loans to another Wirral developer who claimed to be developing multiple sites which were actually just land bank transactions (D*ll etc). Do we give these borrowers 18 month loans, for them to do nothing and to not have to justify doing nothing for a period of 18 months ?
The FS model is the borrowers pay interest on the maturity of the loan NOT upfront, it is lenders that take the risk that as well as potential capital losses there will be no interest received to (partially) compensate. This is very different to the retained interest model of other platforms which whilst a nonsense in the sense that you are receiving your own funds back from escrow as interest, it does provide a fig leaf to platforms when capital losses occur.
I have some concerns about how 12 month loans will work in the SM. I raised yesterday the obvious issue of the discount bandings vs tax liability, but there is a subtler issue that is of equal concern. The (notional) return on SM purchases is of course calculated on the purchase price which includes the accrued interest. The more the accrued interest, the lower the (annual) return based on purchase price. This needs working through on paper/spreadsheet to really appreciate, but aside from the maths, it should be clear that SM purchases are purchasing capital (which may be subject to losses) and already accrued interest (that may never be paid).
I'm still open minded re 12 month FS loans, but my gut feel is the risk on such loans could in some cases be significantly higher than a 6 month loan to the same borrower.
My mistake was thinking of renewals. Attached is something I knocked up that may be of use for those that buy and sell on SM (feel free to fix bugs or improve)
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 12:04:33 GMT
Well, it does depend if you are a buyer and holder (B&H), the mindset is very different from a day trader and critically timing of buys and sells for a B&H are very different. For example, the view of the direction of movement of the FED interest rates is probably the most important element of this type of shareholding. Generally, B&H do very well in the market if, IF, they select the right assets. Some B&H buy regularly and rebalance based on asset types, that can also be a method of generating CG which the Op might like to consider.
FAANGS are generally very volatile assets and I'm not sure a B&H would naturally add those to their holdings, though they might add something like the Fidelity Technology Fund which is aligned with FAANGS for something like 15% of the total assets. Right now the two things that hit FAANGS are the war with China and FED rate. You can get almost perfect correlation by reading www.marketwatch.com news items daily. But that is not a B&H strategy that is a day trader strategy.
Journalists, I have two views on Journalists, if you want to know which assets to sell, read the Daily Mail and sell whatever they recommend as a buy. Then there is the Economist, which offers significant technical advice and information.
I suspect you meant "wary" but "weary" might also be the case. :-)
My own position on equity has changed during 2018 and I have moved from a very successful weekly trader position to a B&H position in some very specific markets. This seems to have kept me safe from Octobers 15% fall and most of my tradable assets are up about 10% from the summer. I'd like to claim some highly skilled reasoning for this action, but it was just a feeling (as they say the hardest part of investing is keeping control of the monkey in front of the screen)
Do you suggest this as required reading link
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 11:09:38 GMT
I agree it is ok for us investors but the attraction for the borrower is that this is basically an interest only loan similar to a old style bridging loan traditional lenders no longer offer. The total amount to be lent is agreed at the onset and is then drip fed by drawdown so as to keep interest to a minimum. In some projects the sale of completed flats etc allow for repayment of early traunches. This doesn’t affect the line of credit offered. If there is extra the borrower can do what they like with it. If sufficient progress or sales have not been achieved then the loan repayments will be delayed. Forcing the issue of payment could force the borrower into administration where the first part of the loan would probably just become part of the total owing to all secured lenders. Never a good idea Prepare yourself for all 6 month property loans to overrun for up to 2 years . The point where >90% are resolved. This timeframe should be shorter with FS’s new more robust recovery and defaulting strategy. ( we hope) I do agree with much of what you say and I don't think that borrowers are entirely to blame. Fact is FS have never previously given them a choice - it's a six-month loan period, however inappropriate that may be for the borrower's purpose. Perhaps the new 12-month loans will provide a partial solution, though the one currently being offered looks to be very unpopular with investors apparently preferring the Tranche 1 renewal at 6 months. I wonder how today's 12-month offering will go? I don't think investors generally mind lending money for 2 years - I quite happily lend for as long as five years on Assetz Capital and on Zopa (boo hiss!) but I know at the outset what the situation is. It's the failed promise of a specific repayment date that rankles - especially if you bought the loan at 30-odd days to go hoping to exploit a high effective rate (in my early FS days I did that with D*rwent Road, The D*ll, Lytham St Annes, W*lton Br*ck Road and several others, all still unpaid). There's also the stigma (perhaps unfairly) attached to the notion that a borrower who fails to pay on the nail is an irresponsible and untrustworthy borrower. Yip FS Should change the 6 months to the full timescale of the projected development this would require the borrower to find conciderably more cash to pay the interest upfront . I do consider every loan a 2 year loan on FS so as not to get too hungup when loans go over. Reduce the LTV% to 90% of a valuation suggested by a property Auction valuer.
The big advantage of FS is the ability to avoid Tax and that can only be achieved on the intrest only model and should remain.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 2:22:55 GMT
Baffling me.
Today (as in since midnight) Ive had investments on one of my investments which were new money added yesterday & reinvestments, and reinvestments on another, but two others havent invested for a couple of days and the the new investment form last week has stalled completely.
I think you are certainly not alone in your bafflement
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 2:14:51 GMT
Godanubis Since you’re in such a charitable mood, perhaps you’d like to make a donation. I’m sure all donations will be welcome. The way it’s looking, I hope Liam has his banjo and collection hat ready to make up the deficit. Rather than try to decide who deserves my money I use it to make my life more comfortable. I do give to lendwithcare much like P2P without the platform taking a cut. You invest in the person directly who then benefits their community. When they pay back you then pass the money on in an never ending cycle of support. We all All know things were bad. The are trying to correct the errors which they did admit. I’m willing to defer judgment for a year or so which is not an excessive timeframe for things to improve.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 0:43:15 GMT
They are not finished yet. This is just the start of the recovery process. Would you rather they just not bother ? If they’re going to sell assets off at a 26% loss and then distribute 58% of the proceeds in fees, yes I’d rather they didn’t bother. That is of course your view and you have every right to hold that view. I think others for whom any repayment after years would be welcome. With the chance of more to follow.
Perhaps you could just ask that your stalled loans be donated to their provision fund. Which would benefit all.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 0:37:11 GMT
It is a refreshing change having people investing in P2P complaining they can't get their money IN . Usually it's their money can't be taken out.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 0:28:45 GMT
31% recovery. Wow. Nice to see the enhanced recovery team living up to the hype and delivering as promised. With such excellent recovery rates, I can fully understand the worry of Lendy entering administration. Would hate for the professionals to come in and wind the loan book down. They are not finished yet. This is just the start of the recovery process. Would you rather they just not bother ?
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 0:16:23 GMT
F***ing big hitters ! Saying that though the algorithm is suppose to prioritise repayments over new investments, so it's still not right. You are probably right but does that include repayments from PF or repayments from the borrowers or both ? I have queued funds that came from PF take over still waiting.
It was a test. It does seem to have had an effect. Will drip feed in the future
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 0:02:46 GMT
My uninvested funds is now standing at 9% of my balance, no new investments all repayments. 13 days with no new lending, this is the worse I've seen it in almost a year of lending with WLU. I suspected platform oversubscription towards the start of the year but within a day or two there was a Seedrs update calling for more lenders followed by an email saying the same. It just doesn't add up, the only thing I can think of and it's a cynical through at that, is they are intentionally saturating the platform to boost cash drag and reduce rates being paid against total funds they have to lend. This strategy would work from their point of view because as alluded to in a earlier post, you have to withdraw the entire instruction to withdraw idle funds and the door hits you on the way in the form of losing that months PF bonus on the entire instruction balance. I sincerely hope I'm being slightly cynical, otherwise the situation is getting a little bizarre. Afraid We added quite a large sum just over 13 days ago Sorry On the upside it has nearly all been allocated now just a few £k left
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 8, 2019 0:00:12 GMT
You don't have to say it twice to make a point/
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 7, 2019 23:43:49 GMT
Following Godanubis comment I have checked my credit history on Noddle and only LandlordInvest shows out of all the P2P accounts that I have. Maybe it’s like godanubis’ over 15% FS returns...the world works differently for him. It won't show accounts where nobody is required to be notified. HMRC do not get notified of any P2P unless you choose or have a FISA. It will show loans etc, That will have implications for Inheritance Tax. Any P2P that you have an equity stake will be recorded. There are a few places to check such as HMRC website which should allow executor access to get info. For a price you will find it is amazing what is held online. Try here for multiagency check. link
My world is the underworld... Dark and mysterious.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 7, 2019 17:20:18 GMT
On the serious side I started this last year on The imminent death of my mother. I will update today. linkFollowed the link expecting a recently updated list of your account details As I’m immortal it won’t be a problem and unlike you all I will actually live long enough to see FS ans Lendy loans payback.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Feb 7, 2019 17:14:06 GMT
Update on how my mother’s estate is progressing. Currently the will is being confirmed. (Scottish probate) .Lendy account was available to view but this has now ceased updates are available and staff are very helpful. Funding circle was unavailable as soon as they were informed. My brother the executor will contact them again on will confirmation. Funding secure we still have read only access As we (The beneficiaries) have all FC and FS accounts we hope they can just be equally split. Only 2 of the three of us have Lendy accounts this may be problematic I will update in due course. Hi Godanubis. I am sorry to hear of your loss. Inheritance is an interesting topic for me in three respects: - Valuation of loans for the estate which are overdue but not defaulted This is a very subjective one. Where there is not an open market for an asset the rules are pretty open to interpretation. Clearly as a beneficiary the lower the valuation the better if estate subject to IHT. Not sure if there are any rules for this but I would say if there are comments to suggest loan won't be recovered then you could argue that the valuation for IHT purposes should be either 50% of even 100% written down. - Transfer of loans which have not completed to beneficiary Do platforms allow you to transfer from a deceased users account to a beneficiaries? I have no idea, what has been your experience? I know there are some funny rules around ISA's, my understanding was that on death the ISA wrapper is removed so effectively on death a investment in an ISA just becomes a non-ISA account. This was for a cash account though (the estate of the deceased in theory should pay income tax on the interest between death and the payment of the estate). - Identification of all p2p/online only accounts by trustee This is a whole different ballgame. Online banking/p2p investments are a nightmare for trustees if the person dies unexpectedly. I had this when my brother passed away a few years ago unexpectedly. All i could do was try to get into his email account and ring around banks to ask if he had an account with them. Sure p2p companies will make a fair bit from users who die and their relatives never knew their had an account, and for that matter users who haven't died but just forget about ever having an account. Thanks for your kind words. From what we have been told there should be no problems they will distribute according to the will . The only FISA is FS the accrued interest there is only £16000 .The distribution should be after April when hopefully we could transfer the loans to our FISAs within this years allowance. As her whole estate is basically cash investment it’s just a matter of what happens with defaults. I am happy to take over the investment with associated risks . Her inheritance tax threshold was doubled due to my fathers not being used so no problems there. Some FC & FS losses should cover IT bill as with my own investments most her profits were non taxable. If interest paid after death I’m not sure it would be income tax as I don’t think the deceased has an allowance post mortem, I think it gets included in the total for inheritance tax we’re it due. Looking at my my credit account on Noddle and Clearscore it shows every account I ever had and all the details that should be the first port of call for anyone seeking to discovery deceased loved ones accounts.
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