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Post by emoney on Aug 13, 2014 9:47:54 GMT
Good morning P2P gurus, we have been speaking to one of the Daddy's of Peer to Peer in the USA who are passionate about the crowd and financial institutions working shoulder to shoulder. We have discussed on the forums the benefits of institutional capital and with our dramatic increased borrower demand, higher credit score, but lower yield secured and unsecured borrowers it makes sense to offer this Whole Loan option to the institutions and the retail crowd. As the following Poll shows, there's a declining apetite from retail investors for the lower yield loans, p2pindependentforum.com/thread/1084/nisa-unsecured-loans-secured-property Comments please, before we roll out. |
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Post by davee39 on Aug 13, 2014 11:06:26 GMT
The market for lending to individuals is well supplied by two large platforms with a solid trading history. The smaller platforms need a good USP (Unique selling point) to stand out. Secured loans on domestic property can be pretty much a cut throat market competing against banks and building societies flooded with cheap money, and this lending looks unattractive compared with the provision fund/personal lending model. There are also platforms offering 12% on Property Loans (although in a different risk bracket). By all means go for the institutional cash, it helps grow the business and may allow for future developments in the individual lending space.
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Post by webbski9 on Aug 14, 2014 10:02:00 GMT
The market for lending to individuals is indeed covered by 2 market leaders as per Davee comment but at low rates compared to eMoney.
Of course RS/Z and eM have different models and property backed loans are in a cut throat area but seem to be popular here on eM.
We savers who support eM are happy to take the higher risk loans in the full knowledge of that risk.But having ( on some loans) a personal guarantee and the
eProvision Fund helps sway us.
Getting involved in Whole Loans with institutions can only help eM grow its business but can ,i think , work side by side with smaller savers.
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Post by emoney on Aug 14, 2014 10:32:51 GMT
Great feedback thanks, we certainly won't be launching anything without lender consultation, I think our USP is that we have the widest lender options by a long way and I believe we are the only P2P consumer loan offering in the world that secures on residential property, the other secured propositions are commercial/business/bridging offerings or pawnbroking. I am also aware of certain High Net Worth individuals who wish to own whole loans in their pension/investment portfolios particularly 1st charge secured loans as a very flexible alternative to annuities, something of great interest to IFA's as well. I believe funding circle offer a whole loan offering and I would appreciate comments from any private individuals who has utilised this and their experiences.  |
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spyrogyra
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Post by spyrogyra on Sept 1, 2014 21:01:43 GMT
Institutions won't invest without requesting all legal documents. Why do you think there ain't no private lenders who can put £20-30k into a single first charge low LTV mortgage loan providing they have access to all particulars and then legal papers in their own name. North West, F3, for example is not enough, North West is Moss side as well as Hazel Grove ! I myself thought of putting 51% on a house on House Crowd thus having the selling vote in my pocket but the unknown deductible amount for maintenance,failed rental payments etc made me think twice.
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Post by emoney on Sept 2, 2014 12:28:19 GMT
Hi Spyrogra, interesting observation. We will certainly take on board what you say and additional information may well be included in the whole loan programme, however you must appreciate that as eMoneyUnion only make money if the borrowers repay, it's not in anyones interest to offer loans on the platform secured against a property that could be deemed unsellable.
Lenders who participate in the whole loan programme own 100% of the loan, the voting right of action and recovery would be within your control, we are just the trustees on behalf of the lenders. We do actually have individual lenders who want whole loans at these levels; hence why we are introducing the service.
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shimself
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Post by shimself on Sept 2, 2014 12:39:33 GMT
... eMoneyUnion only make money if the borrowers repay, .... Is that right? I know you charge an arrangement fee, and I think if a borrower defaults then it's the guarantee fund takes the hit.
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Post by emoney on Sept 2, 2014 13:51:30 GMT
Hi shimself - the initial arrangement fees barely cover the admin set up costs for the loans. Our margin, or "skin in the game" as many like to call it, is payable as a slice of the interest upon borrower monthly repayment, you can see the slice/split here www.emoneyunion.com/lend/yields-and-risk-rating/ and also the substantial slice paid to the eProvsion fund here www.emoneyunion.com/lend/eprovision-fund/ It also needs to be noted that the 1st and 2nd Charge secured loans are NOT covered by the eProvision fund, the security against recovery of interest payments and capital is the property itself. |
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shimself
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Post by shimself on Sept 3, 2014 16:42:55 GMT
Hi shimself - the initial arrangement fees barely cover the admin set up costs for the loans. Our margin, or "skin in the game" as many like to call it, is payable as a slice of the interest upon borrower monthly repayment, you can see the slice/split here www.emoneyunion.com/lend/yields-and-risk-rating/ and also the substantial slice paid to the eProvsion fund here www.emoneyunion.com/lend/eprovision-fund/ It also needs to be noted that the 1st and 2nd Charge secured loans are NOT covered by the eProvision fund, the security against recovery of interest payments and capital is the property itself. Thanks for the correction, sorry for my error I'm not sure what is your slice on that page If we look at the first example A1 unsecured, borrower pays 10%, you get 5.5% and I get 4.5% is that it? And in this example the provision fund gets 2.5% leaving you with 3%
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Post by emoney on Sept 4, 2014 9:50:32 GMT
You are 100% correct |
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shimself
Member of DD Central
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Post by shimself on Sept 4, 2014 12:44:25 GMT
You are 100% correct staggered - I'll go and lie down
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