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Post by mrclondon on Oct 22, 2019 17:24:04 GMT
I'm monitoring the underlying risk extremely carefully, but for now I'm comfortable continuing with the "instant" access account given the notional maturity dates on most of the loans are some way off. My final withdrawal from the premium account was completed today, at this point the 60 days is a risk too far for me. Clearly this limits my possible exposure to the platform to the £20k limit on the "instant" access account, but given my sellf-imposed limit of £2k per loan, the current lack of diversification means I can't even invest £20k here (currently restricted to c. £15k. ) I had hoped to invest several times that ...
As I said a a couple of weeks ago, LP is a good idea that is seemingly not able to scale without diverging from the sort of loans that they launched with.
I think its notable that some of the initial investors in LP are pulling out, whilst seemingly others are still piing in. This is partly inevitable as the initial 100 investors were able to balance risk perceptions against higher rates (that expired at the end of June). But, personaly, based on the info made available by LP and that in the public domain, I still feel the risk profile of the loanbook has increased since launch. I hear the message from LP in reply to me making the same point above, that I'm wrong, but without fresh inputs for my risk modelling its simply stalemate.
The recent discussions on here concerning partner losses on the loans is important in the context of loanbook risk profiling. Whilst spot checking of the perfection of the security has not revealed any concerns to me, I suspect that to a lesser or greater extent at the day to day level the interface between LP & partner is managed as a large pot of money ... e.g. loan X (LP slice £300,000 ) is repaid to the partner in its entirity by the borrower, so LP issue an extra tranche in loan Y for £250k and keeps the extra £50k in the cash float (hence no cash actually changes hands between partner & LP). Hypothetically (but I'm sure some lenders wonder at some of what has happened at FS & L in the background) such a structure could be abused.
Whilst accepting LP is primarily a black-box account, I think medium term, LP are going to have to think about proper per loan transparency. I hear what LP said in reply to me above, "don't continually judge LP against others", and would like to support them longterm. But, and it is a big but, it seems increasingly that HNW/Professional investors are turning their backs on p2p, mainly through issues of trust. I have continualy badgered platforms to improve transparency ... mostly to no avail it has to be said.
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Post by mrclondon on Oct 22, 2019 18:10:41 GMT
mrclondon [...] On the point made about auctioning a 45-apartment block that would not be a logical strategy that anyone would be adopting so is a moot point. If for any unforeseeable reason a fire sale was needed then auctioning/discounting just 6 of these ‘residential new-build apartments’ to end buyers would see our loan repaid. [...] Apologies, I had intended to add some backgound, but was only reminded this morning by recovery actions that are in progress elsewhere.
I have many thousands invested in loans against two apartment blocks not that far away from this one. My understanding from the p2p platform, was they were structurally complete, internal furninshings (for student let purposes ) were in progress, PC was imminent, and completion demands would then be issued to the offplan purchasers. Whilst the actual monthly (or so) IMS reports were not provided by the platform, extracts from said were, and gave a degree of confidence that works were progressing if somewhat slower than should have been expected. An earlier adjacent block by the same developer had been completed, and was in use.
At face value this should have represented a lowish risk loan, with only a proportion of sales of individual apartments needed to repay the debt. But instead the two blocks are being marketed as one parcel on behalf of administrators, with in all probability p2p lenders losing a huge part of their capital.
What has gone wrong ? At the simplest level, the buildings were designed and built without fire compartmentation, and aren't fit for purpose at present. PC impossible. Unit sales impossible. One of the weaknesses of IMS is they are not structural experts, so extent to which the lack of the full IMS reports has misled lenders is hard to assess. However, IMS monitoring should report on building control inspections, and possibly the lack of such may have been noted by the ims but not divulged by the p2p platform. (But the completed block is the same design, by the same developer, and that was initially given the OK ... since evacuated by order of the local fire brigade.)
Its too early to know whether there will be a buyer for these apartment blocks at some price ... depends on whether they can be redesigned within the shells economically. But worst case, and it is a real possibility, these blocks will have to be demolished, and its probable in such circumstances the cost of demolition will exceed the value of the land.
This is the risk of investing in any development project. It is, unfortunately, rather closer to gambling than investing. I, and many other lenders have lost, and stand to lose huge sums from our gambles that have gone wrong. The biggest losses are all associated with large scale development projects. It inevitably means we view large development projects with increasing suspicion, especially when we lack IMS reports, detailed progress reports etc, and where there is (as in the case of this LP loan) well documented evidence that the borrower has run into financial difficulties earlier in the life of this project (and indeed on another project that was once the subject of a p2p loan - another finance provider will take the hit on that one).
Personally I don't think retail investors should be exposed to the risks associated with large scale development projects.
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Post by nooneere on Oct 22, 2019 18:27:27 GMT
mrclondon Gosh, really sorry to read your account. Your caution is understandable in this light. But regarding LP, I do think the longevity of the current lending partner (40 years) should be a major factor in considerations of risk. They would not be thriving today without a high degree of competence - think of the booms-and-busts they have endured. (But I agree with the discussion on the need for more lending partners.) I am also invested in this type of property lending via securitised debt investment trusts such as RECI (steady share price, 7% yield). With the right investment companies, there has to be a way for retail investors to make money from development capital.
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Post by mrclondon on Oct 22, 2019 19:18:02 GMT
But regarding LP, I do think the longevity of the current lending partner (40 years) should be a major factor in considerations of risk. They would not be thriving today without a high degree of competence - think of the booms-and-busts they have endured. (But I agree with the discussion on the need for more lending partners.) Largely, yes, I agree.
I think though where there is a need for caution is that the longstanding principals of the lending partner are in their mid 70's, and it is possible that the appointment of an additional director in 2015 is the start of a succession plan. Whilst the founding principals almost certainly retain a veto, it would unusual to overrule projects sourced and championed by a newer senior member of staff who may well have different perceptions of risk.
The specific LP project in this chain of posts is outside of the lending partners normal geographical zone, and the new (in 2015) director was involved in funding the earlier iteration of the project via another finance provider before the financial restructuring of the project that saw LP's lending partner take on the debt (and another p2p platform write off a significant chunk of debt).
Its all supposition on my part, but there seems a possibility that the new (in 2015) director is more comfortable with lending to large scale development projects than perhaps the founding directors have historically been comfortable with.
Bottom line - this is simply one of the many factors that contributes to my assessement of risk of the LP loanbook.
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Post by nooneere on Oct 22, 2019 20:14:32 GMT
I think though where there is a need for caution is that the longstanding principals of the lending partner are in their mid 70's, and it is possible that the appointment of an additional director in 2015 is the start of a succession plan. Whilst the founding principals almost certainly retain a veto, it would unusual to overrule projects sourced and championed by a newer senior member of staff who may well have different perceptions of risk.
The specific LP project in this chain of posts is outside of the lending partners normal geographical zone, and the new (in 2015) director was involved in funding the earlier iteration of the project via another finance provider before the financial restructuring of the project that saw LP's lending partner take on the debt (and another p2p platform write off a significant chunk of debt).
Its all supposition on my part, but there seems a possibility that the new (in 2015) director is more comfortable with lending to large scale development projects than perhaps the founding directors have historically been comfortable with. Interesting - I wonder if the post-2015 director is behind their new P2P affiliation (i.e. with LP).
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Post by Badly Drawn Stickman on Oct 22, 2019 21:14:58 GMT
I think though where there is a need for caution is that the longstanding principals of the lending partner are in their mid 70's, and it is possible that the appointment of an additional director in 2015 is the start of a succession plan. Whilst the founding principals almost certainly retain a veto, it would unusual to overrule projects sourced and championed by a newer senior member of staff who may well have different perceptions of risk.
The specific LP project in this chain of posts is outside of the lending partners normal geographical zone, and the new (in 2015) director was involved in funding the earlier iteration of the project via another finance provider before the financial restructuring of the project that saw LP's lending partner take on the debt (and another p2p platform write off a significant chunk of debt).
Its all supposition on my part, but there seems a possibility that the new (in 2015) director is more comfortable with lending to large scale development projects than perhaps the founding directors have historically been comfortable with. Interesting - I wonder if the post-2015 director is behind their new P2P affiliation (i.e. with LP). The Lending partners web site suggested that all their loans were financed purely by the Lending partner when LP launched (and may well still do so). Clearly this partnership with LP/ourselves was a move to allow more/bigger finances taking more risk for a higher return, we in return got a decent cushion against capital loss. This is clearly a change in how they have operated to date, so would suggest that their track record whilst not irrelevant is maybe a lesser factor than may initially appear to be the case. I still like the concept and expect to see other platforms using modified versions of it in the near future. Time will tell if other lending partners are coming on board, if they fail to appear the platform risk does become uncomfortably linked to the one lending partner - not a great position obviously.
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Ukmikk
Member of DD Central
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Loanpad
Oct 23, 2019 9:41:23 GMT
via mobile
Post by Ukmikk on Oct 23, 2019 9:41:23 GMT
Time will tell if other lending partners are coming on board, if they fail to appear the platform risk does become uncomfortably linked to the one lending partner - not a great position obviously. Agreed, I think it is now critical to bring additional lending partners on board pretty swiftly in order to maintain investor confidence, reduce risk and improve diversification. If this doesn't happen I would anticipate current investors may start to retreat from the platform.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Oct 23, 2019 10:08:13 GMT
I may be missing something but ISTM that any lending organisation would welcome a LP type partnership. If they can hive off part of their loan book at a lower rate of interest than they are getting this boosts their profit and does not increase their risk at all. I had assumed that LP's reason for not getting further partners was simply the flow of cash coming in.
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Post by Loanpad on Oct 23, 2019 12:21:55 GMT
I decided to get out of LP, partly because of the, 'sign people up and get a higher rate' thing. I thought we all got that message on Col and Ly do not put your friends and family in a problem if something you are into goes down. And the thread removed by request of loanpad bit didn't help! Hi Greenwood2 It is always disappointing to see any investor leave – we hope to welcome you back one day! As for the comparison we respectfully disagree. Any referrals to Loanpad would be investing in exactly the same portfolio of loans that their referrer would be invested in – which is a very different proposition to a self-select platform where outcomes can be totally different and uncontrollable. But we do understand your view nonetheless, which is also commendable, so fair enough.
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Loanpad
Oct 23, 2019 15:39:06 GMT
via mobile
Post by gravitykillz on Oct 23, 2019 15:39:06 GMT
I am out of lp as well. Have to admit though my experience with loanpad while I was with them went well apart from the report saga on this forum a few weeks back. However they are emailing me every week about not using my account. Did you find the withdrawal time fairly quick? I am hearing reports of several days being the current standard. If that is the case, it seems to have become quite a bit slower. Withdrawal was quick. Literally the same day. No issues their! Sorry about the late reply.
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zlb
Member of DD Central
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Loanpad
Oct 25, 2019 19:57:07 GMT
via mobile
Post by zlb on Oct 25, 2019 19:57:07 GMT
I decided to get out of LP, partly because of the, 'sign people up and get a higher rate' thing. I thought we all got that message on Col and Ly do not put your friends and family in a problem if something you are into goes down. And the thread removed by request of loanpad bit didn't help! Hi Greenwood2 It is always disappointing to see any investor leave – we hope to welcome you back one day! As for the comparison we respectfully disagree. Any referrals to Loanpad would be investing in exactly the same portfolio of loans that their referrer would be invested in – which is a very different proposition to a self-select platform where outcomes can be totally different and uncontrollable. But we do understand your view nonetheless, which is also commendable, so fair enough. the problem with referrals in order that the platform gets more investment is that it indicates the desire for growth which may be to high or too quick, in the interests of the platform and its owners and employees, rather than existing lenders. This is the issue previously experienced by people, I suspect.
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Post by nooneere on Oct 26, 2019 9:06:48 GMT
the problem with referrals in order that the platform gets more investment is that it indicates the desire for growth which may be to high or too quick, in the interests of the platform and its owners and employees, rather than existing lenders. This is the issue previously experienced by people, I suspect. Or just the need to reach profitability for a startup company, be fair.
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Greenwood2
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Post by Greenwood2 on Oct 26, 2019 10:28:12 GMT
I decided to get out of LP, partly because of the, 'sign people up and get a higher rate' thing. I thought we all got that message on Col and Ly do not put your friends and family in a problem if something you are into goes down. And the thread removed by request of loanpad bit didn't help! Hi Greenwood2 It is always disappointing to see any investor leave – we hope to welcome you back one day! As for the comparison we respectfully disagree. Any referrals to Loanpad would be investing in exactly the same portfolio of loans that their referrer would be invested in – which is a very different proposition to a self-select platform where outcomes can be totally different and uncontrollable. But we do understand your view nonetheless, which is also commendable, so fair enough. That doesn't really help if the platform goes down, like Col, Lendy and now FS. I'm sure quite a few lenders bitterly regret having encouraged friends and relatives, sometimes elderly parents, to put their money into these sort of inherently risky investments. Loanpad may be at the safer end of the spectrum but in principle I think this sort of promotion is tempting existing lenders to get other people to take more risk than they would normally consider, with money they can't afford to lose.
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puddleduck
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Post by puddleduck on Oct 26, 2019 11:09:12 GMT
Is anyone else having a problem connecting to Loanpad with BT fibre broadband?
'Network Error (tcp_error)
A communication error occurred: "Operation timed out"
The Web Server may be down, too busy, or experiencing other problems preventing it from responding to requests. You may wish to try again at a later time.
For assistance, contact your network support team.'
I can connect using my Vodafone SIM on my mobile just fine.
Been going on for several days for me.
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benaj
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Post by benaj on Oct 26, 2019 13:09:25 GMT
Is anyone else having a problem connecting to Loanpad with BT fibre broadband? 'Network Error (tcp_error) A communication error occurred: "Operation timed out" The Web Server may be down, too busy, or experiencing other problems preventing it from responding to requests. You may wish to try again at a later time. For assistance, contact your network support team.' I can connect using my Vodafone SIM on my mobile just fine. Been going on for several days for me. Have you tried restart your BT ROUTER?
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