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Post by solicitorious on Mar 3, 2015 22:16:11 GMT
What I mean is. What happens if by the time of the crystallized loss you have no other P2P holdings (interest) against which to utilize the loss?
That's why we need a carry-back and carry-forward clause.
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Post by solicitorious on Mar 3, 2015 21:50:29 GMT
We should lobby our MPs to include something similar in the proposed income tax loss relief.
What happens if you get out of P2P before the crystallized loss?
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Post by solicitorious on Mar 3, 2015 14:52:17 GMT
After incurring a potential serious loss on another platform, I have quickly got up to speed on the risks of lending. There are high risks in lending to entities which are not backed in full by hard assets. Hopefully that doesn't apply to SS, but I mention it anyhow. There are also risks in lending to entities which are not backed in full by 1st Charges on those hard assets. 2nd Charges are usually inferior security, and therefore riskier. Checking my SS loans I find most are backed by 1st Charges. With a couple of exceptions. Loans #22 and #23 just say "Legal Charge" in the Loan particulars pdf. We need that clarifying please. I would recommend SS to state in summary and with clarity on the loan tab page the type of charges applying to each loan. Which brings me to loan #6. This IS only backed by a 2nd Charge. Now, it is for every lender to evaluate their own risks but, to assist, the following numbers may be helpful. LTV0: 43.9% LTV50: 51.6% LTV90: 57.7% Edit: I should add that the PF will improve these figures, and will get round to calculating that sometime... I would recommend lenders checking all loans for any other unusual or unclear charges I may have missed.
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Post by solicitorious on Mar 3, 2015 1:07:58 GMT
As a relative beginner, I would really appreciate if someone would explain what is meant by LTV0, LTV50, LTV90. Pretty please ! Thanks LTV0: the amount the security would have to fall to, percentagewise, for you to recover nothing. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV50: the amount the security would have to fall to, percentagewise, for you to recover half your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV90: the amount the security would have to fall to, percentagewise, for you to recover 90% of your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. Remember when borrowers get into difficulty, such assets as they may have are usually sold quickly at a discount from the headline valuation given at the time of them taking out the loan. A knock-down to 70% of the initial valuation is not unusual. So, if you saw LTV0 of 70%, you are at high risk of losing EVERYTHING if things go bad... When evaluating a loan you could follow this bit of pseudocode. BEGIN REM: Only you can decide what is an acceptable value for low in this program IF LTV0 =0 OR is very low PROCEED WITH CAUTION ELSE EXIT IF LTV50 is low PROCEED WITH CAUTION ELSE EXIT IF LTV90 is low PROCEED WITH CAUTION ELSE EXIT PROCEED WITH CAUTION (again, just to make sure) END
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Post by solicitorious on Mar 2, 2015 23:32:14 GMT
Oh, I agree. That's why LTV50 and LTV90 are essential to understand. In the Plumber's case the answers are "not applicable", because the hard assets provided insufficient security to afford any protection against those levels of loss. The answers in the Plumber's case are "not applicable" only because results above 100% have been declared to be N/A. IMHO that's an artificial limitation, and I believe that results above 100% should be allowed -- and shown. Seeing that a loan's 'hard' security would have to be sold for 125%, 150%, or 200% of its value in order for lenders to achieve some specified level of recovery is a lot more informative than seeing 'N/A' as the result. I will look into it. I had to calculate it programmatically moving down in very small decrements from 100%, and it takes a while to run. If I had to start at a 1000% or higher it could take forever... It was simpler to define everything over 100% as "n/a", meaning safety margin "not applicable" or "none available" [else some improbably high increase in the value of the security (under fire sale conditions)]
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Post by solicitorious on Mar 2, 2015 22:40:09 GMT
As a relative beginner, I would really appreciate if someone would explain what is meant by LTV0, LTV50, LTV90. Pretty please ! Thanks LTV0: the amount the security would have to fall to, percentagewise, for you to recover nothing. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV50: the amount the security would have to fall to, percentagewise, for you to recover half your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV90: the amount the security would have to fall to, percentagewise, for you to recover 90% of your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. Remember when borrowers get into difficulty, such assets as they may have are usually sold quickly at a discount from the headline valuation given at the time of them taking out the loan. A knock-down to 70% of the initial valuation is not unusual. So, if you saw LTV0 of 70%, you are at high risk of losing EVERYTHING if things go bad...
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Post by solicitorious on Mar 2, 2015 21:43:32 GMT
At least SCP&M had an LTV0 of zero. The fact that the LTV0 is calculated as zero is very misleading. This is caused by the tiny amount (£4k) of unencumbered hard assets held as security. So LTV0% may be zero, but LTV1% is substantially greater than zero. I think it's about 63%. And I think LTV32% is over 100%. Which is to say that 'hard' security was severely lacking in this case. But we all know that -- now. Oh, I agree. That's why LTV50 and LTV90 are essential to understand. In the Plumber's case the answers are "not applicable", because the hard assets provided insufficient security to afford any protection against those levels of loss. You want all three LTVs to be as low as possible. The point I was making was, there but for the grace of God, LTV0 could have been "n/a" also....
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Post by solicitorious on Mar 2, 2015 18:18:40 GMT
How bad (or good) are those figures... Considerably better than SCP&M ever was! At least SCP&M had an LTV0 of zero. We should be thankful for small mercies, I suppose....
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Post by solicitorious on Mar 2, 2015 17:56:59 GMT
For those who are interested in these things [and Boy... you should be!] I calculate LTV0: 0% LTV50: 25.4% LTV90: 45.8% How bad (or good) are those figures (I have got the spreadsheet to look at) ... but we "amateurs" need a bit of help sometimes. I was an amateur too, until I lost ~£3k overnight. Then I decided I better become a professional... I can only say that 156 is in the top quartile (better) risk profile of the offerings, but that should not be taken as advice. DYOR.
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Post by solicitorious on Mar 2, 2015 17:47:26 GMT
Yep, we need LTVs rebased to Hard Security (if any), not based on promises or wishful thinking...
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Post by solicitorious on Mar 2, 2015 17:40:10 GMT
For those who are interested in these things [and Boy... you should be!]
I calculate
LTV0: 0%
LTV50: 25.4%
LTV90: 45.8%
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Post by solicitorious on Mar 2, 2015 17:28:12 GMT
126 and 45 go to Live again.
New loan 156 live.
AC really must do better to keep people in the loop.
Employ a contractor to integrate a proper messaging system to the platform ASAP, or confidence will evaporate.
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Post by solicitorious on Mar 2, 2015 13:42:03 GMT
22 Loans Paused.
Can we have an explanation?
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Post by solicitorious on Feb 26, 2015 16:50:27 GMT
I wonder if you need a few more options such as 1.25 x and 1.5 x initial investment. Mmm, don't think I can edit it now. I guess you'll have to go with either break even or 2x.
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Post by solicitorious on Feb 26, 2015 16:36:31 GMT
Please only answer if you have given it some considered thought. Don't just wildly guess, or give way to wishful thinking. And please ignore any EIS tax breaks.
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