james
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Post by james on Feb 24, 2015 23:34:41 GMT
james: sorry to be a pain, but "...investment misselling...": I may be misinterpreting the intent of the statement, but on the face of it that is a 'strong' statement to be making if it is intended to be directed at Bondora themselves. Could you please clarify what was meant and consider whether the post may need editing in order to relay facts rather than what might be construed as accusations ? I edited my first post to add the word possible. ... later, I also swapped the word and for or to help clarify that the word possible applies to both parts of the relevant sentence. The second described steps that could be taken to identify whether there was investment mis-selling or not, so I don't think that particular post could be taken as an assertion of mis-selling. Later still, I made some tweaks to the second post also. If you haven't read it yet I recommend that you read the text of the Defamation Act 2013, the provisions of which entered force at the start of this year. In particular you may wish to consider whether what I have written is likely to cause any party serious - and actually provable, not speculated about - financial loss, which is the new minimum threshold for a business to start to bring a defamation claim. The writing about public interest, truth and honest opinion may also be relevant. However, for moderators here it's most likely to be section 5. Operators of websites that is of most interest. Most notably the clear statement that "It is a defence for the operator to show that it was not the operator who posted the statement on the website", though there are some related obligations placed on site operators. In connection with that it would be very useful to read Complaints about defamatory material posted on websites: Guidance on Section 5 of the Defamation Act 2013 and Regulations. You should find that these things make life considerably easier for those responsible for this site, greatly reducing the prospect of action against them. If after the edits you're uncomfortable with the post(s) please do let me know so I can consider further edits to address your concerns. One of the interesting aspects of online moderation is that it can be a cooperative activity when posters and moderators discuss their concerns and react to them.
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jay
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Post by jay on Feb 25, 2015 0:18:28 GMT
Ah well...thanks for answering but you got me even more worried. ... Now what can we do ? you might be able to sell some loans for less than the average loss you expect from them. Or not. If so, you might be able to stomach doing that. Or not. Its impossible to sell 60+ days defaulted loans on bondora so its already too late for that.
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james
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Post by james on Feb 25, 2015 0:30:37 GMT
jay, I edited my post a little after you posted your quote. Would you be kind enough to edit yours to include the new version of mine, which I changed a bit to help to ease concerns of a moderator? Or, perhaps better still, to drastically cut back how much you quote, particularly in the mis-sale part, in case the moderators would be more comfortable with additional edits?
Yes, it's not possible to sell loans that have defaulted while they are still in that 60+ day overdue status, though that can change. However, if you can demonstrate mis-selling, one of the standard remedies for that is:
1. to reverse the sales
2. to pay the complainant redress equal to what they would have made had they invested the money as they would otherwise have done
3. to add some payment for distress and inconvenience
This is one of the reasons why I mentioned investigating the possibility of mis-sale, since if you and other lenders were misled it won't matter whether the loan has defaulted or not.
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jay
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Post by jay on Feb 25, 2015 0:45:33 GMT
Done so, i dont want to have you deported and jailed in some dirty estonian prison ! Although according the delay to recover funds , i think you are not risking much from them.
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duck
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Post by duck on Feb 25, 2015 5:44:56 GMT
james wasn't it about a year ago that Bondora 'withdrew' a batch of loans that they had a second look at and decided all was not as it seemed? I know I have about a dozen or so of these loans highlighted on my spreadsheets.
Personally I'm not totally down on Bondora, I know I have posted previously that I view it as 'The Wild West' and certainly one of my most risky investments .... but until the last couple of months it was still giving me my second highest return (averaged over the previous 1.5 years). I appreciate your input westonkevRS, I had the same feelings (along the lines you mention) about the Finnish market when it started (I had large default rate like most other early investors) and now I'm running an 11.7% default rate on 776 current loans which I find totally acceptable (only Estonia betters this at 5.59% with 1020 loans).
I'm currently taking a 'holding' position, I have a couple of hundred loans under the new portfolio manager, the first ones have already made payments* but the major proportion are due within the next couple of weeks ..............
Never a dull day if you are a Bondora investor.
*One payment made at +70% something that I feel uncomfortable with as I have previously posted.
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james
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Post by james on Feb 25, 2015 20:13:42 GMT
james wasn't it about a year ago that Bondora 'withdrew' a batch of loans that they had a second look at and decided all was not as it seemed? I know I have about a dozen or so of these loans highlighted on my spreadsheets. Yes. These are the ones I mentioned where the money was never successfully drawn by the borrower but Bondora kept taking the repayments from the loan money that had already been transferred into the borrower's account, making it appear to lenders as though all was well and it was a real, successful, loan. Personally I'm not totally down on Bondora, I know I have posted previously that I view it as 'The Wild West' and certainly one of my most risky investments .... but until the last couple of months it was still giving me my second highest return (averaged over the previous 1.5 years). I'm not totally down on it, particularly for older loans. However both from my concerns about ethics and because now I think it's easy to beat their risk-adjusted returns I don't think it's worth using the place any more. As with Zopa, which I also write isn't worth using at current returns, this could always change in the future. If I was totally down on Bondora I would be selling all loans to get out of the firm as soon as practical and I'm not yet doing that.
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james
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Post by james on Feb 25, 2015 20:41:48 GMT
Bad debt rates of 80% plus, with many never making a payment is not a credit risk. This is neither bad affordability nor poor ability to repay checks . This is either third party fraud (impersonation) or first party unwillingness to pay (theft)... If it's fraud I wonder if it is classified as such on your accounts, and if so then Bondora should 100% remove themselves from this market until they can close the fraud hole. There wont be a recovery, and anyone would be mad to lend in this country via Bondora. For context, in the case of Zopa the loan is simply classed as in "default" state, just like loans where the borrower went through bankruptcy. A few examples: Loan made 13/9/2008 to d* via Listings. First three payments made, then debtor moved and has been untraceable through repeated searches. This loan is now probably statute barred due to last payment being on 26/12/2008. Loan made 4/11/2008 to d* via man markets. Two on time paymeets, one later payment, court decision reached in favour of lenders but borrower is no longer traceable so bailiff hasn't been able to do anything useful. Loan made 14/1/2009 to f* via main market for young borrowers. Ten on time payments, a few partials then a debt relief order was obtained and nothing since. Loan made 11/10/2009 to c* via main markets. 15 payments made then borrower declared bankrupt in late 2010. No payments since. Yet with others classed as defaults there can be arrangements in place and regular payments being made, so it's a pretty mixed bag of loans, some no-hopers, some making progress. And of course none of this would be a surprise to anyone with experience of lending to consumers, it's just life as usual. I've been winding down my Zopa loan book for long enough that the amount now in loans in default is now about the same as those that are on time or merely classed as "late" in one place or "Arrangement" in another, which generally means people who became unemployed or are working at lower paid jobs or similar. Getting quite close to the long tail where a significant chunk of the interest I'll end up having made overall depends on how well long term collection work goes. A batch of five year loans from mid 2012, two remaining from April and May 2010 are the remaining on time ones, all five year loans with a mean interest rate of around 9.7%.
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Post by westonkevRS on Feb 25, 2015 20:50:51 GMT
Bad debt rates of 80% plus, with many never making a payment is not a credit risk. This is neither bad affordability nor poor ability to repay checks . This is either third party fraud (impersonation) or first party unwillingness to pay (theft)... If it's fraud I wonder if it is classified as such on your accounts, and if so then Bondora should 100% remove themselves from this market until they can close the fraud hole. There wont be a recovery, and anyone would be mad to lend in this country via Bondora. For context, in the case of Zopa the loan is simply classed as in "default" state, just like loans where the borrower went through bankruptcy. A few examples: Loan made 13/9/2008 to d* via Listings. First three payments made, then debtor moved and has been untraceable through repeated searches. This loan is now probably statute barred due to last payment being on 26/12/2008. Loan made 4/11/2008 to d* via man markets. Two on time paymeets, one later payment, court decision reached in favour of lenders but borrower is no longer traceable so bailiff hasn't been able to do anything useful. Loan made 14/1/2009 to f* via main market for young borrowers. Ten on time payments, a few partials then a debt relief order was obtained and nothing since. Loan made 11/10/2009 to c* via main markets. 15 payments made then borrower declared bankrupt in late 2010. No payments since. Yet with others classed as defaults there can be arrangements in place and regular payments being made, so it's a pretty mixed bag of loans, some no-hopers, some making progress. And of course none of this would be a surprise to anyone with experience of lending to consumers, it's just life as usual. I've been winding down my Zopa loan book for long enough that the amount now in loans in default is now about the same as those that are on time or merely classed as "late" in one place or "Arrangement" in another, which generally means people who became unemployed or are working at lower paid jobs or similar. Getting quite close to the long tail where a significant chunk of the interest I'll end up having made overall depends on how well long term collection work goes. A batch of five year loans from mid 2012, two remaining from April and May 2010 are the remaining on time ones, all five year loans with a mean interest rate of around 9.7%. At RateSetter there are also anomalous defaults that occur. Over the years there have been a small handful of impersonation frauds (anyone lending money will be subject to attacks of this type continuously. it's part of the job), but also a few unique cases where the police have been involved. In all cases the Provision Fund covers the losses and the customer is blissfully unaware and receives an early redemption payment. However 80% plus defaults ( edit -as reported by lenders on this post, not confirmed to my knowledge) from one location is a different story. I suppose its is fair to say Bondora don't need to tell the lenders (i.e. neither do RateSetter nor Zopa), however it is fair to assume that with such a large percentage early defaults something is stray. I'm loathe to say anymore about Bondora due to my employment status with a competitor. So I'll not post here anymore, but please be careful my fellow lenders. Kevin.
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duck
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Post by duck on Feb 26, 2015 6:35:32 GMT
james, I think your and my experiences and thinking are running on very similar lines.
I too have similar misgivings with the new Bondora system which is why I dipped my toes in (so I could test it) but now find myself in a 'holding' position. I also have similar Zopa defaults and whilst I have been withdrawing from that platform for a couple of years I hold Zopa in fond memory since it was really that platform that got me 'started' in this field. It was the lending/interest rates that caused me to move away. I have absolutely no problem with the number of defaults I have/will have on Zopa, in reality I expected more.
I agree with westonkevRS that something is not right when default rates hit +80% (I appreciated your input westonkev and understand why you won't post on this thread any more) but IMHO these P2P P2B investments have to be a matter of personal risk assessment. It is for this reason that I have a limited exposure to Bondora and a much higher one at RS. There will always be defaults (for what ever reason) and setting your own personal acceptance level has again IMHO to be a high priority when investing with any platform.
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james
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Post by james on Mar 1, 2015 10:15:35 GMT
Yes, we do seem to have similar thoughts in many ways. I'm perhaps more fortunate because all of my lending was to people Bondora said were in Estonia. Maybe also because I'm more willing to express just how unhappy I am with some things.
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