shimself
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Post by shimself on Aug 22, 2014 8:11:28 GMT
At the end of the day, it depends on the level of risk you can personally accept which will decide what % you'd be willing to invest in p2p. The returns are infinitely better than leaving funds in a bank at the moment, that's for sure on another thread SS just confirmed Investing in Saving Stream does contractually amount to investing in Lendy Ltd. There are no underlying contracts between lenders and borrowers. Contracts exist between Investors and Lendy Ltd and contracts exists between Borrowers and Lendy Ltd. Lendy Ltd make no secret of this. All legal charges on assets and property are held by Lendy Ltd. Investors may choose which loan their investment is tied to and these funds are assigned to this loan to be repaid when that loan is repaid. This is why Lendy publishes all valuation documents for each loan to allow investors to make educated investment decisions.I think this works out thus: If a particular loan fails then providing Lendy can cope we are ok BUT if Lendy can't cope, or fail for any other reason then we will suffer losses across all our dealings with SS. They do have a recovery insurance arrangement, so the borrowers will still have to pay up. It's not clear how the moneys would be distributed (My guess would be that we would rank after the taxman etc, but then we would get repaid proportionally to our investment, with no regard to which loans we had chosen. Perhaps other people know better??). I think this remains a point worth pursuing. Like everyone I like the 12%, but I still can't figure the worst case adequately ie assess the risk. For the moment I'm treating it as a single loan (same as a single decent loan on TC/Assetz), rather than a platform.
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j
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Penguins are very misunderstood!
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Post by j on Aug 22, 2014 8:53:01 GMT
At the end of the day, it depends on the level of risk you can personally accept which will decide what % you'd be willing to invest in p2p. The returns are infinitely better than leaving funds in a bank at the moment, that's for sure on another thread SS just confirmed Investing in Saving Stream does contractually amount to investing in Lendy Ltd. There are no underlying contracts between lenders and borrowers. Contracts exist between Investors and Lendy Ltd and contracts exists between Borrowers and Lendy Ltd. Lendy Ltd make no secret of this. All legal charges on assets and property are held by Lendy Ltd. Investors may choose which loan their investment is tied to and these funds are assigned to this loan to be repaid when that loan is repaid. This is why Lendy publishes all valuation documents for each loan to allow investors to make educated investment decisions.I think this works out thus: If a particular loan fails then providing Lendy can cope we are ok BUT if Lendy can't cope, or fail for any other reason then we will suffer losses across all our dealings with SS. They do have a recovery insurance arrangement, so the borrowers will still have to pay up. It's not clear how the moneys would be distributed (My guess would be that we would rank after the taxman etc, but then we would get repaid proportionally to our investment, with no regard to which loans we had chosen. Perhaps other people know better??). I think this remains a point worth pursuing. Like everyone I like the 12%, but I still can't figure the worst case adequately ie assess the risk. For the moment I'm treating it as a single loan (same as a single decent loan on TC/Assetz), rather than a platform. A very good point raised here by shimself. Maybe savingstream would care to clarify if loans will indeed be lumped together as one or treated separately. That will put lenders' minds to rest once & for all
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Post by marek63 on Aug 24, 2014 0:38:06 GMT
You have to play armchairworst case games here and for every platform, assume, for example, that one of Lendy employees goes mad and somehow redirects all your funds. How much exposure do you have? Try thinking through that Lendy (or any other platform) decides to offer all its loan book as security to a loan that goes in to default for twenty years. Then you have a model that allows you to assess exposure correctly to any P2P investment. I have lost and made lots of money on high yield, on foreign exchange, on business failures and been through a good three business cycles. Remember a world with 15% interest rates (anyone remember personal mortgages in 1992-4...). And diversify and work out where you will get liquidity should you need it. And it won't be P2P in a crisis...
I have a good sum >10k <50k in Lendy. But diversify, don't ever rely.
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Liz
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Post by Liz on Aug 25, 2014 18:22:50 GMT
When is interest on property loans paid? Is this the same for sold loan parts?
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Investor
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Post by Investor on Aug 25, 2014 18:28:16 GMT
When is interest on property loans paid? Is this the same for sold loan parts? Paid monthly. Most property loans also have an "upfront" interest payment option where all interest is paid in advance at drawdown. Sold loan part interest is paid at the end of the loan term.
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Liz
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Post by Liz on Aug 25, 2014 19:50:27 GMT
When is interest on property loans paid? Is this the same for sold loan parts? Paid monthly. Most property loans also have an "upfront" interest payment option where all interest is paid in advance at drawdown. Sold loan part interest is paid at the end of the loan term. Thanks. I Have a few upfront interest loans. What date is interest paid on monthly loans? 31st?
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Investor
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Post by Investor on Aug 25, 2014 20:53:41 GMT
Paid monthly. Most property loans also have an "upfront" interest payment option where all interest is paid in advance at drawdown. Sold loan part interest is paid at the end of the loan term. Thanks. I Have a few upfront interest loans. What date is interest paid on monthly loans? 31st? If memory serves it is the last day of the month
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Post by Deleted on Aug 25, 2014 22:36:10 GMT
Yes, monthly interest is available to withdraw to bank after the last day of the month.It will appear in your Available Funds and then you can withdraw it or reinvest it in the secondary market.
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shimself
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Post by shimself on Aug 26, 2014 15:17:06 GMT
You have to play armchairworst case games here and for every platform, assume, for example, that one of Lendy employees goes mad and somehow redirects all your funds. How much exposure do you have? Try thinking through that Lendy (or any other platform) decides to offer all its loan book as security to a loan that goes in to default for twenty years. Then you have a model that allows you to assess exposure correctly to any P2P investment. I have lost and made lots of money on high yield, on foreign exchange, on business failures and been through a good three business cycles. Remember a world with 15% interest rates (anyone remember personal mortgages in 1992-4...). And diversify and work out where you will get liquidity should you need it. And it won't be P2P in a crisis... I have a good sum >10k <50k in Lendy. But diversify, don't ever rely. In the day when I signed the cheques I heard two tales in the same week, from different companies, where the finance person, divorcing or some other nasty business, they both stuck their own accounts into the payables run and off they went to South America. I stuck to signing cheques after that. Stuff does happen.
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mikes1531
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Post by mikes1531 on Aug 26, 2014 17:44:57 GMT
When is interest on property loans paid? Is this the same for sold loan parts? Paid monthly. Sold loan part interest is paid at the end of the loan term. Are you sure, Investor? I would have expected that with a PBL that pays interest monthly the interest on a sold loan part would be paid at the end of the month during which the part was sold. Does anyone have experience with this? Do we need to ask for clarification from savingstream?
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Post by Deleted on Aug 26, 2014 17:58:53 GMT
That's interesting. It says on the SS site when you go to sell part of a PBL:
Once your designated loan part sells completely, the loan part value will be credited to your available balance less the interest earned. The interest earned will be credited to your available balance upon repayment of the loan. Interest will cease to accrue on your loan part at the point at which you confirm you wish to sell it.
When I've done this the interest on my dashboard goes down (To take out the interest accrued on the sold loan part) and the interest on the sold loan parts shows up under my Sold tab instead - and I assumed I wouldn't get that until the loan is repaid. I've only been using SS for 2 months though so I won't know for sure until the end of the month.
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star dust
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Post by star dust on Aug 26, 2014 18:18:14 GMT
I think that may be a hangover from when the majority of loans were boats. Perhaps savingstream need to review their t&c's to ensure they are up to date? Whilst they are at it perhaps they could add some info on their deposit and withdrawal mechanisms which seem to have been causing some recent difficulties. One thing I haven't noticed recently are any minus figures on loans where two people purchase the last bit simultaneously, so perhaps they've fixed that particular bug? |
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Post by mrclondon on Aug 26, 2014 19:29:49 GMT
One thing I haven't noticed recently are any minus figures on loans where two people purchase the last bit simultaneously, so perhaps they've fixed that particular bug? Nope, they've just been quicker at correcting them - one of my sales today created a negative but it was cleared within a couple of minutes.
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star dust
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Post by star dust on Aug 27, 2014 7:58:36 GMT
One thing I haven't noticed recently are any minus figures on loans where two people purchase the last bit simultaneously, so perhaps they've fixed that particular bug? Nope, they've just been quicker at correcting them - one of my sales today created a negative but it was cleared within a couple of minutes. Ah........we're still living in hope then  .
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nick
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Post by nick on Sept 25, 2014 9:34:42 GMT
Hello I am currently invested in FC and now intend to extend my P2B/P lending over several lending platforms in order to diversify risk. I intend to increase my P2B investment to about £100k in total. So say 5 platforms @ £20k each I would appreciate any feedback on SS's performance and likely future stability (e.g. level of defaults, liquidity of 2nd market, quality of service, etc., etc.) Also any guidance appreciated on other suitable P2B/P platforms. Thank you in advance. Hi I have recently invested in SS and initially spent a reasonable amount of time going through the terms and conditions and review the structure. I also have a financial background and have alot of risk and credit experience to allow me a reasonably informed view of the risks and pros of SS which I'm happy to share with others on an informal basis, ie this should not be construed in anyway as investment advice and is only my own view etc.... As others have pointed out, Savingstream isn't really a P2P platform. Instead, we as investors, are providing a loan to Lendy who use the funds to release thier own money that has been invested in loans to end borrowers. Our lending is notionally attached to the performance of a specific loan, but we do not in anyway have any direct relationship with the end borrower nor have direct access to the security on that loan. Peculiarly, this structure limits the recourse to investors (in the event of the underlying loan defaulting), to actual recovery of amounts from sold security or otherwise. The number one risk facing SS investors is Lendy's own credit risk - we are all unsecured creditors of Lendy (we do not have any charges on Lendy's assets). We are almost akin to bond holders of bank, abeit the risk is higher as our recourse is limited to amounts recovered by Lendy from the notionally attached loan. This gives rise to major risk #2, default of the borrower to which our lending is attached. Of course, if Lendy suffers a number of defaults across its portfolio and becomes insolvent, then all investors could lose out. Similarly, if Lendy were to fail for any other reason, eg. suffers a losses on any other operations, hits a liquidity issue, suffers a major fraud, we are exposed as unsecured creditors. IMO, this risk is not adequately highlighted by Lendy and may not be readily identified by any non-soposicated investor. Things aren't all negative, and there are number of positive things about the structure which I like. I have summarised the pros and cons (in my view) of SS given my experience to date: Pros:- Interest accrued from day one - interest accrues from the first day of investment. Lendy also honour interest accrued on funds commited to a specific loan in the event that loan falls over and never gets executed.
- Protection against fraud - Lendy state that they keep lenders whole in the event that the underlying borrower (notional) is fraudulent or if the valuation of security is subsequently found to be misstated. Won't help if Lendy themselves go bust, but failing this, they are taking on these risks on the chin
- Active secondary market - SS has an active secondary market which provides investors with liquidity should they need it. One small point, interest stops accruing from the time the loan is put up for sale and not when it is actually sold. Thus one will not earn interest during the time it takes to sell the relevant loan part - there are other treads on this.
- Lendy is regulated by FCA - Lendy is regulated by the FSA which provides a degree of comfort that they are required to maintain certain standards in respect of processes, treatment of clients, and financial prudence. However, it should be noted that thier regulated activities is minimal (only anti-money laundering) according to the FCA register (http://www.fsa.gov.uk/register/firmSearchForm.do)
- The underlying loans are all secured - on some sort of asset be it boat, property etc and are independently valued with loan advances not being particularly aggressive %s.
- Instant funding - account can be instantly funded and you are given one day to transfer the associated funds.
- They listen - They appear to be very reponsive to this forum which is a great positive
- Simple and responsive website
Cons:- Exposed to Lendy credit risk - we are all lending to Lendy on an unsecured basis. In the event of Lendy failing for whatever reason, our debt would equally rank as unsecured. However, this would not apply to cash (not loans) held at Lendy provided that they hold these funds in a client account (which they claim they do) as these will be considered our cash held on an agency basis by Lendy. Lendy could be alot more clearer about this risk and provide comfort by providing more information on i) a summary of all thier activities beyond the loan book we can see (if there are any other activities) so we can form a view of the risk of these, (ii) provide timely information regarding thier own financial standing (they are a very young company so no publically available accounts yet) and in particularly who is funding them during this start-up phase when I would be surprised if they are yet to breakeven.
- No interest accrued on loan parts whilst on sale in SM
- Lack of history - both in respect of the default rate of underlying loans, but also Lendy's performance which we are also ultimately exposed to from a credit perspective.
Happy for others to correct me or to add to the above.
Overall my limited experience of SS to date has been excellent. I am a high risk high return investor so intend more funds to them than I should, eg up to 10% of my 'liquid' portfolio. Given the concentration of credit risk to Lendy itself, I would advise not to allocate asmuch investment through them compared to other true P2P platforms where your credit risk can be more diversified and where your exposure to the operator is less direct, acknowledging that there is always going to be some degree of platform risk.
Hope that helps you form a view.
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