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Post by Deleted on Aug 31, 2014 19:52:03 GMT
There's a lot of people who worked in the banking sector in property finance and look what happened to the banks owing to reckless property lending decisions by these so called experts. We're still paying the price. Property is an industry that a lot of people think they understand but most of these people aren't property professionals. Banking/finance and property are separate specialisms. There was this crazy assumption that property values would keep on rising when that was never going to happen - the boom was built on paper money and not real money. I fear the same mistakes are starting to be repeated all over again and I know one thing - the current property boom in London and SE will end in bust and crash. I don't know when , but it will happen. Anyone who thinks land and property values will keep on rising way above the general rate of inflation year on year is living in cloud cuckoo land. When something overheats (and 10+% property value inflation against a backdrop of 2% general inflation is overheating) it eventually goes pop and cools down in a very sudden and abrupt way.
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j
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Post by j on Aug 31, 2014 20:38:28 GMT
Maybe we're reaching the wrong conclusion here, putting 2 & 2 together & ending up with cynical conspiracy theories about why SS went into property bridging loans. I'm sure they started focusing on boats, saw what other platforms are doing, felt they have the personnel with experience for such offerings & decided to diversify. Which is fine.
The aspects that still need answering, and a reply still isn't forthcoming, is confirmation from SS/Lendy of procedure, insurance & what exactly is covered if things go wrong. Some have provided answers through their own interpretations but, nothing official as yet has come back
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Post by bracknellboy on Aug 31, 2014 21:40:12 GMT
With all that property experience its just a bit surprising then, that they went for the boatie business first! Or was this boat gambit just a sprat to catch a mackerel? The boats being the sprat and us the mackerel, perhaps? It all sounds a bit fishy to me. Perhaps a merger with FS would be in order - the merged company could be a big fish in the Prawn Broker market.
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mikes1531
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Post by mikes1531 on Sept 1, 2014 16:52:52 GMT
If a loan defaults (and any asset sale does not cover the loan) there is no reason to suppose that Lendy will need to go into administration, as the loss will be felt by the investors. It is clear from the T&C (clause 5.2.4) that the loss will be born only by those investors who bought into that particular loan. Therefore there is a case for diversifying one's SS investment across several/many loans. I expect we all can agree that the above interpretation is consistent with the SS Ts&Cs. However... SS have said here -- and I can't put my finger on the critical posting at this moment -- quite definitively that this is not the way they actually work, and that we SS investors actually are lending money to SS/Lendy rather than to the boat/property-owning borrowers. And, furthermore, SS have said that if a borrower were to default and the specific security for that loan could not be converted into enough cash to pay off the investors SS/Lendy would use their own funds to protect their investors from capital losses. This is why some investors think there is no point in 'diversification' at SS. In light of this, it has been suggested -- to no effect so far -- that SS amend their Ts&Cs to reflect their position as stated on the forum. If SS/Lendy had to be wound up tomorrow, it is not the least bit clear to me whether their administrator would be able to honour SS's commitments here or whether they would feel they are bound by the existing Ts&Cs. I suspect the latter, but I'm certainly no expert on matters such as this. I would welcome SS Ts&Cs that matched SS's stated policy. Perhaps savingstream would care to state whether they are intending to address this T&C inconsistency any time soon? Sorry for the double post I struggle to get more than one quote into a post for some unknown reason. It's not an unknown reason. It's because the forum software doesn't offer an easy option for quoting multiple messages. It is possible to achieve this with a bit of cutting and pasting -- but it's probably not worth the trouble!
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j
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Penguins are very misunderstood!
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Post by j on Sept 1, 2014 17:09:03 GMT
If a loan defaults (and any asset sale does not cover the loan) there is no reason to suppose that Lendy will need to go into administration, as the loss will be felt by the investors. It is clear from the T&C (clause 5.2.4) that the loss will be born only by those investors who bought into that particular loan. Therefore there is a case for diversifying one's SS investment across several/many loans. I expect we all can agree that the above interpretation is consistent with the SS Ts&Cs. However... SS have said here -- and I can't put my finger on the critical posting at this moment -- quite definitively that this is not the way they actually work, and that we SS investors actually are lending money to SS/Lendy rather than to the boat/property-owning borrowers. And, furthermore, SS have said that if a borrower were to default and the specific security for that loan could not be converted into enough cash to pay off the investors SS/Lendy would use their own funds to protect their investors from capital losses. This is why some investors think there is no point in 'diversification' at SS. In light of this, it has been suggested -- to no effect so far -- that SS amend their Ts&Cs to reflect their position as stated on the forum. If SS/Lendy had to be wound up tomorrow, it is not the least bit clear to me whether their administrator would be able to honour SS's commitments here or whether they would feel they are bound by the existing Ts&Cs. I suspect the latter, but I'm certainly no expert on matters such as this. I would welcome SS Ts&Cs that matched SS's stated policy. Perhaps savingstream would care to state whether they are intending to address this T&C inconsistency any time soon? Sorry for the double post I struggle to get more than one quote into a post for some unknown reason. It's not an unknown reason. It's because the forum software doesn't offer an easy option for quoting multiple messages. It is possible to achieve this with a bit of cutting and pasting -- but it's probably not worth the trouble! I have faith that SS are sincere when they say they will honour any defaults to lenders but, there is no legal binding that obliges them to do so as such, leaving us only verbally protected is such an issue arose. Despite a number of requests, SS have never been able to put this in writing, one way or the other, which can make lenders a bit sceptical
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mikes1531
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Post by mikes1531 on Sept 1, 2014 17:15:53 GMT
I have faith that SS are sincere when they say they will honour any defaults to lenders but, there is no legal binding that obliges them to do so as such, leaving us only verbally protected is such an issue arose. Despite a number of requests, SS have never been able to put this in writing, one way or the other, which can make lenders a bit sceptical Does a policy statement made here not qualify as 'in writing'?
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ramblin rose
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Post by ramblin rose on Sept 1, 2014 17:20:05 GMT
I have faith that SS are sincere when they say they will honour any defaults to lenders but, there is no legal binding that obliges them to do so as such, leaving us only verbally protected is such an issue arose. Despite a number of requests, SS have never been able to put this in writing, one way or the other, which can make lenders a bit sceptical They definitely need to update the Ts and Cs because as others have said, that is our only legal agreement, but they have put it in writing on this forum at least twice: in this post SS said this: "3) The third point (as mentioned in a previous post) is that if there is a default on the loan and the sale of the asset does not cover the the full repayment due to the saver/lender then Saving Stream will cover any shortfall. The saver/lender's return is a set arrangement with Saving Stream and is not dependant on whether the sale of the asset that a loan is secured against covers the loan + interest."although as many have mentioned it remains to be seen whether they could cover really large drops in property values. And much more recently they have said this: " 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."
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Post by robberbaron on Sept 1, 2014 17:27:52 GMT
With all that property experience its just a bit surprising then, that they went for the boatie business first! Or was this boat gambit just a sprat to catch a mackerel? The boats being the sprat and us the mackerel, perhaps? SS has said before that the boaty lending business is seasonal. It makes sense that owners are more likely to borrow against their boats in winter when they cannot use them than during the summer. So if SS hadn't gone into the real estate business this summer we would all be complaining about the lack of available loans.
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ramblin rose
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Post by ramblin rose on Sept 1, 2014 17:32:35 GMT
With all that property experience its just a bit surprising then, that they went for the boatie business first! Or was this boat gambit just a sprat to catch a mackerel? The boats being the sprat and us the mackerel, perhaps? .............. if SS hadn't gone into the real estate business this summer we would all be complaining about the lack of available loans. Indeed, quite a few people were.
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mikes1531
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Post by mikes1531 on Sept 1, 2014 18:01:28 GMT
I've concluded that the diversification of investment between different loans on the SS platform is to a large extent irrelevant. It has been explained that investors are not directly protected by the charges and guarantees provided by the borrowers. Our security comes directly from Lendy who have vowed to make good any losses on particular loans. Thats suggests the risk lies not in the individual loans but in the SS platform and Lendy itself. I have long been wondering why those who feel they are really only lending directly to Lendy Ltd and in reality have one 'loan' to Lendy are bothered about diversification. The only reason that comes to mind is that they want to make sure their funds are re-lent, perhaps if a loan is due to close soon and a new one is available now and might not be at the time, or to take advantage of cash-back? Another potential reason for 'diversification' could be cash flow management. Investors could prefer to have their capital returned in smaller, more frequent, lumps rather than in less occasional, larger lumps. It could help provide funds for ongoing expenses, or perhaps make re-investment easier. Having said that, though, my SS experience so far has shown how variable the capital repayments are -- sometimes quite early, and sometimes at the last possible moment, or later.
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star dust
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Post by star dust on Sept 1, 2014 19:35:58 GMT
It's also very easy to sell chunks if you want to at the moment too, although I guess if may not always be so. You're getting monthly interest from the Property Loans too. Do you really need more than that for cash-flow?
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mikes1531
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Post by mikes1531 on Sept 1, 2014 20:45:15 GMT
Do you really need more than that for cash-flow? I have some hefty bills that are due on an annual or semi-annual basis, so for me the answer is yes.
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star dust
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Post by star dust on Sept 1, 2014 21:20:10 GMT
Do you really need more than that for cash-flow? I have some hefty bills that are due on an annual or semi-annual basis, so for me the answer is yes. Well, I guess SS works really well for you then, even if you regard it as just a single (highly flexible) loan to Lendy Ltd.
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