niceguy37
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Post by niceguy37 on Nov 2, 2017 14:21:56 GMT
Great update, MT. Very well done!
I just wish there was more progress on the IFISA.
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niceguy37
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Post by niceguy37 on Oct 23, 2017 15:06:23 GMT
I wish Mr Freedman had provided his opinions on the borrower earlier.
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niceguy37
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Post by niceguy37 on Oct 20, 2017 9:36:00 GMT
I would like to see a 60 or 90-day deadline imposed for repayment on this loan.
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niceguy37
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Post by niceguy37 on Oct 17, 2017 14:04:58 GMT
Too right; P2P is the ludicrously risky end of lending - to cover our losses on loans that have gone genuinely bad (not this one - still plenty of security - why are we even talking about making a charitable donation to the borrower?!), we need to make our profits where we can on the riskier loans that pay off (and at 14%, this loan was one of them!) Lenders were very lenient some months ago to reduce the interest rate and defer interest repayments. The quid-pro-quo is that the borrower now pays up - a small loan (even with AC - I'd not be averse to lending again) to refinance the remaining interest does not seem like it would be too much of a hardship.Taking £80k against the existing £400k+? asset charge with AC now would attract a very low rate (<5 - 6%) in current conditions & would not seem unreasonable. Personally I would be happy with anything upwards of 75% of what is owed to achieve full & final settlement but can completely understand those who feel that the flexibility & support shown by lenders over the troubled history of this loan deserves full settlement. My only reservation is the inflexibility & lack of dynamic & creative thought that dictates AC's role in this process; they have a track record of demonstrating a "tin ear" to lenders concerns & are notoriously slow in doing anything, even counting the votes, so I fully expect this to drag on for several months more with negligible progress. I would prefer a simple lender vote on a counter response (say <60%, 60-80%, 80%+, nothing less than 100%) that would give AC a firm, democratic lender mandate to negotiate a better deal & put it to a final lender vote in a relatively short timescale - yes I might be a dreamer but it just seems common sense to get a solid, lender backed mandate to speed things up so a final agreement can be reached but I don't expect it to happen anytime soon . IMHO the lenders have been very reasonable in lowering the rate and allowing capital to be repaid first, further lowering our effective interest rate. I'm sorry the lender has suffered a personal tragedy, but this is a business. As Butch Cassidy has stated it should be very easy to borrow the remaining funds, and this should have a negligible effect on whether the surviving borrower can continue in business or not. We have enough losses in P2P through unrecoverable issues. If we write off loans every time a borrower has bad luck we'll be lucky to break even.
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niceguy37
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Post by niceguy37 on Oct 16, 2017 10:00:15 GMT
As I see it the borrower needs to look at how much money is needed to pay off our loan, to fix up anything that is needed at the hotel, recruit extra staff if required, and create a pool of working capital, and then decide if there is a good business case from continuing to run the hotel with this level of debt, or whether they should sell the hotel and do something else.
Obviously it was a struggle with the previous loan at an initial 14%, but a much smaller loan at a lower rate would be much more serviceable. Or the hotel could be sold for, hopefully, something near the stated asset value, leaving the borrower a long way from the bread-line.
We shouldn't be seen as a soft touch just because we are P2P and some of us are trying to use our money to help make the world a better place.
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niceguy37
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Post by niceguy37 on Oct 11, 2017 15:19:24 GMT
If it were a case of forcing the surviving borrower to sell their residence I might be more inclined to be sympathetic, but there is still the main security of the hotel, so I voted "B". Also this loan was restructured, IIRC, to lower the interest rate and also to repay capital first. I then sold off my loan parts, and got my capital, leaving me with just interest outstanding. So when the capital was recently repaid I didn't see it, and my interest has not been compounding. So it was a definite "B" for me. Yes, capital and interest payments have been mixed up on this loan, so it's not really clear what is what. It isn't just interest that is owed, if matters had progressed normally then my interest that was due two years ago would have been paid by now and there would be capital left. So I don't see this as "well it's just money you never had, you can write it off". Sadly, if past votes are anything to go by, there will be a lot of people who vote A without thinking too much. When this loan was restructured it was decided to repay capital first rather than the normal arrangement of clearing the interest first, then the balance of the repayment reducing the capital. I presume this was to lighten the burden on the borrower as capital attracts interest but any interest outstanding has not been earning anything. But it does mean that our outstanding interest has not been earning anything for quite a while.
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niceguy37
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Post by niceguy37 on Oct 10, 2017 20:40:57 GMT
If it were a case of forcing the surviving borrower to sell their residence I might be more inclined to be sympathetic, but there is still the main security of the hotel, so I voted "B".
Also this loan was restructured, IIRC, to lower the interest rate and also to repay capital first. I then sold off my loan parts, and got my capital, leaving me with just interest outstanding. So when the capital was recently repaid I didn't see it, and my interest has not been compounding. So it was a definite "B" for me.
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niceguy37
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Post by niceguy37 on Aug 29, 2017 9:49:59 GMT
I think that every platform that allows discounts and premiums will have a small group of lenders that will prey upon and profit from, essentially, the ignorance of the hoard. This is point at which I generally leave. Typical or median returns will fall and the Platform or the FCA will change the platform to go automatic to ensure fair treatment for all. This is the point at which I consider returning. This is a pattern we have all seen elsewhere and if and when MT get big enough, they will surely follow. (With apologies to mrclondon ) I don't agree with this. I can't see how allowing discounting would allow a small group to prey on the ignorant hoards. AC allow discounting and I can't say that anyone is being preyed upon. Same with ABL etc etc. All it means is that it is always possible to sell and always possible to buy (if premiums are allowed) which reinforces confidence in the market. Historically an investment type/venue that has remained illiquid has typically died. I really don't buy into the 'fair treatment for all' or everyone should get the same returns idea. It is the opposite of capitalism (I guess this is fairly popular in this country at the moment). Those that deploy their capital well should be rewarded and those that do it badly should lose their money (and the same applies to the businesses themselves). That is how society progresses, leads to capital being allocated effectively and efficiently and prosperiety for the society as a whole. If all capital was allocated automatically then bad business ideas will always get their 'fair share' and resources (and money) will be wasted en masse. By this token a loan which looks dubious should be allowed to go unfilled on a platform instead of being by some sort of autobid. I don't have much sympathy for the ignorant when it comes to P2P lending. If they don't understand the basics/don't know what they are doing or the risks they are taking then they should stick to savings accounts. By the same token I am glad that we are allowed to buy shares in individual companies in the stock market instead of being forced to buy a FTSE-all share index tracker if we want to invest even if it means the igniorant may lose their money on a start up tech company. I'm happy with selling at discounts as it does improve liquidity. Sometimes a lender might just need his or her money, due to a change in circumstances perhaps, and wants to sell perfectly good loans. Or be prepared to offer a discount to reduce holdings in a loan that will take a while to be resolved. BUT as soon as there is selling at a premium, then as paul123 says, you have the traders trying to buy up the better looking loans to later sell at a premium for short-term profit, which just squeezes some of the value out of the system for the actual investors, who are funding the whole model. And MT don't get anything out of allowing selling at a premium, other than the cost of extra admin and volume of transactions, unless they add a trading fee on the secondary market. At the moment the SM is generally useful for reinvesting bits of interest as they come in, and one can be reasonably confident of the value on offer, but as soon as there is selling at a premium you know that there will only be poor-value loans left. For the P2P model to work well we need a system that offers: Quality borrowers reasonably speedy lending at fair rates Fair returns, with excellent security, for lenders without having to spend a huge amount of time (either doing due diligence or on the p2p website) P2P system that is easy and efficient to operate, to keep down overheads Introducing a opportunity for traders to sell at a profit will generally reduce the investors returns (as some of the true investors returns will be creamed off by the traders), which over time will cause them to leave for more profitable p2p platforms.
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niceguy37
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Post by niceguy37 on Aug 24, 2017 9:12:26 GMT
I must admit I think the requirement for a unanimous vote from many lenders, which is extremely unlikely in practice, makes it virtually impossible to handle credit problems with any flexibility.
I think FK would be wise to consider changing this to a majority vote in all future loans.
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niceguy37
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Post by niceguy37 on Aug 3, 2017 9:58:29 GMT
The AC look-a-like thing with target amounts doesn't work terribly well with the multi-tranche loans that we see on MT. For instance there are currently 10 tranches of MH and all of them are due to repay on the same day and none of them are more desirable or less risky than any other. To make buy targets work, MT is going to need much more obvious linking between loans and the asset they're secured on so you can place your target against the asset rather than a specific loan identifier. Even this isn't enough if there are multiple charges against the asset and investors get paid a higher rate for the second charge loan. For assets with multiple charges you'd also have to select the target LTV you're prepared to lend against. If there are multiple tranches with different end dates, that adds a further complication because when adding a target amount for the asset you'd also need to add criteria for the minimum time to run on any purchase to ensure you didn't automatically buy some of a tranche that was due to repay next week. That's starting to look like a rather hefty and complicated redesign... If MT wanted target-setting I think it would be best to have a dedicated target-setting screen that showed a list of grouped loans (i.e. all the equal-ranking tranches of a loan totalled into a single row) in a table. The columns might be Loan Name, Total Loan Value, LTV eg "70% LTV" or "60% GDV", Rate, (Loan) End Date, (Amount) Available, Status (Pipeline/Bidding/Active/Suspended/Late/Default*), (Amount) Invested, Target (Amount). Then a user could come along to one screen, decide what loans he or she would like, load in their cash, and sit back and relax. A weekly or monthly update email will summarise how much of each loan they've bought, how much interest they've been paid, and the balance on their account, prompting them to log in to review progress and any new loans, and load in more cash as required. Obviously there'd be a bit of programming involved so that if a lender set or updated a target, added cash or received an interest payment then the system would need to check if there were any of the targetted loans available. The fun comes when an interest payment or loan repayment is processed to many lenders "simultaneously". Who gets what if there is more demand than supply? AssetzCapital developed some very complex sounding algorithms to attempt to handle this, which took them a while and a lot of effort to get right. I would suggest MT should, after an interest or loan repayment, simply select a list of lenders with active targets and cash on hand, and then process through this list in order of their lender number, allocating up to a maximum of, say, £50 per lender. (The system would need to remember who the last lucky lender was to get an allocation, and start again from the next numbered lender the next time.) It's not perfect (some people would try to game the system by opening multiple accounts, if a lender got a loan repayment of £1000 and wanted a new loan with plenty of availability he or she might end up with 20 lots of £50 each) but it's fairly simple to specify and program and for lenders to understand, and should enable lenders to greatly reduce the time required to run an MT account, speed up sales, and improve the platform efficiency.
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niceguy37
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Post by niceguy37 on Aug 2, 2017 11:19:42 GMT
SophieThing I admit to being one of those OCD people who make micro withdrawals. I already know logically that it makes no sense, but psychologically I feel uncomfortable having uninvested funds on the platform, even pennies. The solution for me would be to allow investments that aren't round £s so that I could invest interest amounts as and when they are received (as on ABL) instead of withdrawing them to save or invest elsewhere. I would be unhappy with a theoretical situation where MT prevented me from both withdrawing and investing part of my funds. What to do with small amounts of interest and uninvested funds is something several platforms struggle with. AssetzCapital have a good reinvestment option that allows tiny amounts to be reinvested in targetted loans, but the downside with their model can be a great many micro transactions that are not actually worth bothering with (my lowest hundred transactions do not add up to 1p). But I do find myself logging on to MT most days to reinvest any whole pounds received in interest. SophieThing I would love it if you there was an option you could turn on to automatically reinvest interest payments. This reinvestment could be in any loans you already have that still have availability, or in a single lender-selected loan. This would significantly reduce the lender effort required, which is a significant factor in competing with more automated p2p platforms such as RateSetter, and result in a better return for lenders, just by the software being a bit smarter. If MT are concerned about the volume of lender loans parts with lots of little loan parts from interest re-investment, then when interest is paid on a particular loan, the system could merge all a lender's loan parts for that loan. Ideally automatic interest reinvestment would sweep up the whole account balance, including pence, but that might be too much of a software / model change. (Any interest payments on these small investments should be rounded down to whole pence to avoid the complications of fractions.)
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niceguy37
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Post by niceguy37 on Jul 6, 2017 11:35:08 GMT
It looks as though this has gone live. Thanks chris I notice that looking at my account holdings in the GBBA, which is very nice, I select and view individual loans, but am surprised that I can create selling orders within the GBBA account for a particular loan. Are you sure you're not looking at the MLIA controls whilst viewing the loan? They don't disappear if you have no MLIA holdings. chris you are correct that the targets view from the GBBA are then set for the MLIA.
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niceguy37
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Post by niceguy37 on Jul 6, 2017 11:17:57 GMT
There's an update coming that will show your holdings in real time. All coded, holiday season got in the way of the release. It looks as though this has gone live. Thanks chrisI notice that looking at my account holdings in the GBBA, which is very nice, I select and view individual loans, but am surprised that I can create selling orders within the GBBA account for a particular loan.
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niceguy37
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MoneyThing (MT) in Administration
IFISA
May 31, 2017 15:43:37 GMT
Post by niceguy37 on May 31, 2017 15:43:37 GMT
Perhaps we need a multi site ifisa on a platform which I know a few companies are planning but I think it's currently against the rules? Anyone like to correct me. I believe "Up" www.investup.co/ offer a multi-site IFISA.
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niceguy37
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Post by niceguy37 on May 18, 2017 14:13:00 GMT
I think the FS / FC approach would be the best choice for AC. Although some forum posters have the time and knowledge to choose what to declare on a loan by loan basis, AC are clearing hoping to grow into the mass markets with their various account offerings, and I very much doubt that people in these markets want the hassle. I certainly don't.
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