sl75
Posts: 2,092 
Likes: 1,245
|
Post by sl75 on Apr 26, 2018 10:46:06 GMT
While we understand the frustrations for lenders, we have always taken the approach that protecting investors’ capital is our number one priority for loans that no longer perform. To do this, we will exhaust all reasonable recovery avenues to avoid any losses to investors. In most cases however, we are subject to a legal process and cannot expedite or accelerate matters any more than we are currently. Therefore, this may incur a longer term recovery process. Whereas, if we were to take short-term recovery options this may result in a fire sale price which may consequence a reduced amount recoverable to investors. Lendy Support For the loans which have already resulted in a loss to lenders (at least from our perspective - the asset has been sold, so we no longer have any security), Lendy could expedite these quite easily by using its discretion to pay out the full amount of the capital outstanding (from the provision fund, or from company profits) and transfer the right to receive an equivalent amount from the eventual claim to the provision fund (the accrued interest and bonus claims would still exist, but be subordinated to the PF's claim to recover the capital, so any further payment a welcome bonus rather than an expectation). The claims could proceed without as much of an ongoing risk of disgruntled investors picking over every detail and discussing in public details which (for the sake of the ongoing claims) should not be discussed in public. If in fact your prospects of success are as good as you claim that your lawyers have assured you, the monies recovered from those claims will allow the provision fund to be well financed for the next set of claims that may be made, so that Lendy could again use its discretion to pay these, etc. in a long-term virtuous cycle - it should become pretty much completely self-funding from the recoveries made from earlier claims and the fees from new loans. The biggest single problem as I see it is that "discretionary" has changed in tone within Lendy's company culture from effectively meaning "we'll normally use our discretion to make payments as soon as a shortfall is expected, but reserve the right not to if circumstances change" (a stance which attracts investors, especially when combined with seeing such discretionary payments being made in the few cases when they're needed) to "we owe you nothing; it says 'discretionary' so we're under no obligation" (a stance which, combined with the increasing levels of unmet claims is causing many previously enthusiastic investors to leave). If the original stance had remained, and Lendy had found the funds to promptly settle each shortfall (and maybe even pro-actively settled claims where a shortfall was merely expected rather than actually confirmed, allowing interest to accrue to the PF rather than to investors), I expect the main complaints wouldn't be about the lack of recoveries on the older loans (which would have been long forgotten), but about how there aren't any 12% loans any more... Right now, the total capital balance of loans with "claims underway" is around £5.2M, with further shortfalls expected soon. This would be a very significant investment for Lendy in the short term, but based on their 2016 accounts should be affordable, and in any case Lendy and/or the provision fund can get the money back when all the various claims succeed. However, the longer-term rewards (assuming Lendy can manage to find a viable business strategy going forwards with the renewed investor confidence), could be FAR greater than this. [snip remainder of post that had turned into a long essay on the subject]
|
|
hazellend
Member of DD Central
Posts: 2,363
Likes: 2,180
|
Post by hazellend on Apr 26, 2018 11:00:42 GMT
While we understand the frustrations for lenders, we have always taken the approach that protecting investors’ capital is our number one priority for loans that no longer perform. To do this, we will exhaust all reasonable recovery avenues to avoid any losses to investors. In most cases however, we are subject to a legal process and cannot expedite or accelerate matters any more than we are currently. Therefore, this may incur a longer term recovery process. Whereas, if we were to take short-term recovery options this may result in a fire sale price which may consequence a reduced amount recoverable to investors. Lendy Support For the loans which have already resulted in a loss to lenders (at least from our perspective - the asset has been sold, so we no longer have any security), Lendy could expedite these quite easily by using its discretion to pay out the full amount of the capital outstanding (from the provision fund, or from company profits) and transfer the right to receive an equivalent amount from the eventual claim to the provision fund (the accrued interest and bonus claims would still exist, but be subordinated to the PF's claim to recover the capital, so any further payment a welcome bonus rather than an expectation). The claims could proceed without as much of an ongoing risk of disgruntled investors picking over every detail and discussing in public details which (for the sake of the ongoing claims) should not be discussed in public. I would not be happy with Lendy paying capital outstanding out of company profits.
Company profits should be used to improve and grow the company and keep it financially healthy, not to bail out investors from investments that are high risk.
The provision fund was and is a stupid idea from the start. Perhaps it should be divided up amongst all 20,000 investors equally and dropped.
|
|
|
|
Post by loftankerman on Apr 26, 2018 11:31:01 GMT
For the loans which have already resulted in a loss to lenders (at least from our perspective - the asset has been sold, so we no longer have any security), Lendy could expedite these quite easily by using its discretion to pay out the full amount of the capital outstanding (from the provision fund, or from company profits) and transfer the right to receive an equivalent amount from the eventual claim to the provision fund (the accrued interest and bonus claims would still exist, but be subordinated to the PF's claim to recover the capital, so any further payment a welcome bonus rather than an expectation). The claims could proceed without as much of an ongoing risk of disgruntled investors picking over every detail and discussing in public details which (for the sake of the ongoing claims) should not be discussed in public. I would not be happy with Lendy paying capital outstanding out of company profits.
Company profits should be used to improve and grow the company and keep it financially healthy, not to bail out investors from investments that are high risk.
The provision fund was and is a stupid idea from the start. Perhaps it should be divided up amongst all 20,000 investors equally and dropped.
But do we all have a pressing need for the funds to buy a 2nd class postage stamp?
|
|
sl75
Posts: 2,092
Likes: 1,245
|
Post by sl75 on Apr 26, 2018 11:52:27 GMT
Company profits should be used to improve and grow the company and keep it financially healthy, not to bail out investors from investments that are high risk.
The provision fund was and is a stupid idea from the start. Perhaps it should be divided up amongst all 20,000 investors equally and dropped. The main thing preventing the company from growing at the moment seems to me a lack of confidence amongst investors who perceive they are losing money (even though Lendy assures us that no money has been lost!). Restoring investor confidence so that new loans get funded right away (like Lendy used to be able to take for granted) seems to me a pre-requisite for growing the business, and thus a good one-off use of even quite a significant part of the company profits (following the initial intervention, it should be self-funding as funds are received from the ongoing claims the PF is already managing as well as the various claims that they currently expect investors to wait indefinitely for, together with the relevant contributions from new loans). I disagree that it was and is a stupid idea. However, unless it is used effectively (as similar funds on other platforms already are), it becomes useless. With a well-managed provision fund and loan book, Lendy should easily be able to get loans funded at 8% and 9% (and maybe even lower rates...), but instead they're currently struggling to persuade investors to fund loans even at 12%. If it does close, however, dividing by 20,000 investors "equally" would be approximately the most stupid idea (second only to Lendy pocketing it themselves!). At the very least it should be in proportion to the eventual losses from the loans that were live before it closed.
|
|
|
|
Post by captainconfident on Apr 26, 2018 12:04:29 GMT
I couldn't agree more with the line being advanced here by sl75 . This is exactly what has gone wrong and altered the mood of investors to a point that current and future project funding is jeapardised. Lendy, you should read and re-read the above posts and consider our future relationship carefully. |
|
hazellend
Member of DD Central
Posts: 2,363
Likes: 2,180
|
Post by hazellend on Apr 26, 2018 12:23:00 GMT
To be fair, judging from some comments from the more anti Lendy posters they will not keep investing with Lendy even if they paid out lost capital.
Lendy might as well just focus on the happy customers
|
|
p2p2p
Member of DD Central
Posts: 123
Likes: 114
|
Post by p2p2p on Apr 26, 2018 12:34:59 GMT
Losses are inevitable in p2p, I wish both Lendy and its investors accepted that. A provision fund is only practical if it is well funded, which means the rates on offer would drop to 10% or less, which I'm sure would not be popular.
The only merit of ex-gratia payments from Lendy is when they feel their investors have lost out because of something Lendy has done itself. Now you could argue poor valuations or bringing dodgy loans to market is that, but I can see why Lendy don't want the reputational damage of admitting that with payments.
I expect there are FCA rules about Lendy taking on loans internally. They would need a separate legal entity or backer to do that, as some other p2p companies seem to have with their lender of last resort.
|
|
|
|
Post by p2plender on Apr 26, 2018 12:49:38 GMT
To be fair, judging from some comments from the more anti Lendy posters they will not keep investing with Lendy even if they paid out lost capital. Lendy might as well just focus on the happy customersIt is doing, hence the half dozen positive trustpilot reviews of late. Just hope they are very, very HNWIs....
|
|
hector
Member of DD Central
Posts: 122
Likes: 162
|
Post by hector on Apr 26, 2018 13:20:13 GMT
For the loans which have already resulted in a loss to lenders (at least from our perspective - the asset has been sold, so we no longer have any security), Lendy could expedite these quite easily by using its discretion to pay out the full amount of the capital outstanding (from the provision fund, or from company profits) and transfer the right to receive an equivalent amount from the eventual claim to the provision fund (the accrued interest and bonus claims would still exist, but be subordinated to the PF's claim to recover the capital, so any further payment a welcome bonus rather than an expectation). The claims could proceed without as much of an ongoing risk of disgruntled investors picking over every detail and discussing in public details which (for the sake of the ongoing claims) should not be discussed in public. I would not be happy with Lendy paying capital outstanding out of company profits.
Company profits should be used to improve and grow the company and keep it financially healthy, not to bail out investors from investments that are high risk.
The provision fund was and is a stupid idea from the start. Perhaps it should be divided up amongst all 20,000 investors equally and dropped.
hazzelhend I completely agree regarding your suggested use of Company profits, & that is exactly what any sound business with a solid 5 year business plan would be aiming to create. Sadly the directors of Lendy do not fall into that category as can be seen from the obscene distribution of profits from their last published accounts, leaving a weak balance sheet, bloated directors dividends & flash “laddish” marketing spend.
|
|
sl75
Posts: 2,092
Likes: 1,245
|
Post by sl75 on Apr 26, 2018 14:05:30 GMT
To be fair, judging from some comments from the more anti Lendy posters they will not keep investing with Lendy even if they paid out lost capital. Lendy might as well just focus on the happy customers Lendy don't need the unhappy customers' funds back directly. Simply diluting or stopping the negativity they spread (and thus reducing or stopping the effect they have on dissuading potential new customers from signing up) would seem plenty enough to replace their funds on the platform. Considering my own actions just over a couple of years ago... I wanted to add another UK-based P2P platform to my portfolio (2 others were no longer willing to allow me to continue to invest due to a change in personal circumstances). This forum was one of my main sources of information about which platforms exist, and of people's opinions on each. I created accounts on at least 3 platforms, and took an almost immediate dislike to one (ReBS), and intended to get back to the other later when I'd finished building a portfolio here. If the general tone of discussions then had been as it is now, would Lendy (or Saving Stream as it was then) have been the one I added funds to? If I imagine the general tone of discussion after a scenario in which Lendy have settled in full the capital amount of all the loans with "claims underway", I anticipate that fewer potential investors will run a mile. This in itself could translate to more funds being added to Lendy's client account from those towards the bolder end of the spectrum. It'd only be a first step towards rebuilding a good reputation, but it would seem to me an important one.
|
|
webwizard
Member of DD Central
Posts: 157
Likes: 145
|
Post by webwizard on Apr 26, 2018 14:14:15 GMT
The provision fund was a nice idea in the beginning when everything was moving along nicely. Whilst it has been used for a few properties there is insufficient to cover current mismatch between what has been repaid and what is owed. I do not think dividing it up among investors would work. A better use would be get rid of it and use the funds to pursue all outstanding debt (pursuit fund??). Knowing that there is such a fund and desire, might make the borrowers think before they default (although perhaps not...  ) |
|
xpubman1
Member of DD Central
Posts: 62
Likes: 40
|
Post by xpubman1 on Apr 26, 2018 15:35:45 GMT
Lendy will do as they wish with their profits, I would take no notice of peoples ideas on a forum such as this.... Why should Lendy?
|
|
bfish
Member of DD Central
Posts: 106
Likes: 131
|
Post by bfish on Apr 26, 2018 15:57:23 GMT
hazzelhend I completely agree regarding your suggested use of Company profits, & that is exactly what any sound business with a solid 5 year business plan would be aiming to create. Sadly the directors of Lendy do not fall into that category as can be seen from the obscene distribution of profits from their last published accounts, leaving a weak balance sheet, bloated directors dividends & flash “laddish” marketing spend. Hector - I wonder what accounts you have access to. Have accounts for 2017 been published anywhere? The 2016 accounts appear really quite modest (not that I can claim ANY expertise)... apart from £600,000 being transferred to their 'WPIRT' (whatever that is?) - aah, is that what you are referring to perhaps ??
|
|
|
|
Post by justplayin on Apr 28, 2018 16:54:21 GMT
For my 21st birthday my grandmother, then a 64 year old widow bought me a premium bond. She said it was all she could afford, but that she hoped one day it would come up and make me rich. The years ticked by and she lived to be 100, dying just before her 101st birthday. I'll be 75 this year and it looks like the risk is that even if I live to hit 100 myself, I still won't have won. Ah but you'll get your capital back. 100% recovery. Contrast that to some so-called investments that we could speak about... Did you miss the bit about "your capital is at risk" when you signed up ? Just saying Attachments:
|
|
mouse
Posts: 55
Likes: 29
|
Post by mouse on Apr 29, 2018 16:49:02 GMT
Back on topic, I could be wrong, but my own view on the future of lendy unfortunately is not good, for all the reasons that have been said before.
I easily sold of my last few chunks of some quality loans with 260 days to run. But i was just fed up with the complete shambles that now presents itself, and didn't want to take any more risks with them. Earlier on i had a 5 fig sum with LY/SS restricted to 11% plus, but became more and more concerned as the defaults grew. At times i was in what turned out to be dodgy stuff - the superyacht (remember that), J**, leatherhd, exeter, marylbone rd, IOW, Hull, a certain welsh castle. However i was fortunate and sold these out early, and so dodged the bullets. On occasion i had to be patient sitting in long ques, waiting to sell, with on some of them recently no interest. But thankfully no capital losses.
I will watch LY from a distance now and not return unless the situation improves. Issues to deal with, like many of us over at MT and COL
|
|
)
