bugs4me
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Post by bugs4me on Jul 16, 2018 21:40:38 GMT
I've said previously I believe its inevitable that self select loans will have to be restricted to sophisticated/HNW investors as its predominately retail investors that take up the highest risk loans being offered by p2p platforms that really shouldn't be being filled at all (e.g. the COL lancs development plots).
I'm finding it hard to visualise what improvements could be forced on platforms. I would prefer more transparency before and during the loan, but the platforms argue that to do so would breach their duty of care to the borrower. I would prefer SM trading to be suspended if an update can not be made for legal reasons. I do not want to see a rigid timescale or processes for dafaulting loans as this will reduce the eventual recovery in many cases where the valuation was based on erroneous assumptions (e.g. FS Rishton).
Whilst I would prefer to see LTV's based on current estimated firesale values not residual values from a development scheme, to do so would simply make such loans unviable and quickly kill p2p as a concept. I agree that at some stage in the future P2P offerings will be the domain of sophisticated/HNW investors but I would not expect those investors to be willing to operate on the skimpy loan details that are currently being put on the table. Why would any HNW investor bother with DD when the information already exists with the platform. Maybe it's my imagination but during the past year or two the relevant information being disclosed by the majority of platforms has been on a 'crash diet' to such an extent that apart from the odd platform here and there my interest has all but gone. Doing DD is both time consuming and expensive.
If and it's probably a big if, the platforms do only attract HNW investors I do not believe platforms will be treated with the same leniency as is being currently experienced. The leniency that several platforms 'enjoy' is as a direct result that 'average' retail investors are simply not organised. This lack of organisation is well known to the platforms hence their contempt towards lenders re overdue loans - many of which have been overdue for months/years. Do you really feel that any HNW investor would tolerate the endless 'can-kicking' - I certainly don't.
You could be forgiven that more than a couple of platforms are 'can-kicking' to keep their balance sheet intact until they sell out and leave a new management team to sort out the mess.
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zlb
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Post by zlb on Jul 16, 2018 22:01:20 GMT
It's a lot to expect an MP to understand. It takes some time to have a mental picture of the framework that makes up each different platform and its risks. (Glazing over, comes to mind, at best.)
I wouldn't want this avenue closed off to me. Maybe it could be beneficial to have valuations alone prodded at. Eg 'p2p is great, but it relies upon valuations.
The government wants p2p and fintech to win, I thought. There are many factors involved, eg who ticks the boxes saying they know all risks and only invest 10% when that's not true?
I'm not saying nothing should be raised, but I think one needs to be very sophisticated about any points raised.
What happens if the MP gets investor opportunities closed off?
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 16, 2018 22:02:27 GMT
"...... a direct result that the 'average' retail investors are simply not organised."
Oh bugs4me, YES!  Investors are basically getting enjoying what they so richly deserve, from Borrowers, Introducers, RICS Valuers, Platforms, and The FCA.
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69m
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Post by 69m on Jul 16, 2018 22:14:52 GMT
Until there are Questions asked in Parliament and we get FAR wider coverage and visibility on the crookedness of P2P nothing will happen. You seem to be implying that the entire P2P sector is crooked, which is fair enough if that has been your experience. It hasn't been mine (although I will say that some loans have been handled incompetently).
Nevertheless, the FCA needs to introduce some standardised definitions and metrics for non-performing loans, bad debts and recoveries. This would certainly make assessing and comparing platforms both easier and more transparent. I suspect that too many naive lenders are currently seduced by snazzy web sites, high headline rates and 'not a penny of capital lost' claims.
For wider coverage and visibility, I'd suggest contacting newspaper journalists. They'd probably want specific examples to build a story around, though.
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ozboy
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Post by ozboy on Jul 16, 2018 22:49:46 GMT
As long as Investors DO something. And yes, contacting journos is a very good idea, which I have also suggested in the past.
But meekly sitting around just accepting "That's the way it is" is going to help a lot isn't it?! <- This is not directed at you 69m.
And no, I'm not implying the entire P2P industry, there's just limited space on here to list numerous caveats.
I'd wager that most on the Forum would easily agree who the main perpetrator/s are.
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zlb
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Post by zlb on Jul 17, 2018 6:31:12 GMT
There's currently a run on p2p in China, according to Bloomberg. do they have an FCA equivalent? it doesn't sound like it.
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bigfoot12
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Post by bigfoot12 on Jul 17, 2018 7:23:20 GMT
... who ticks the boxes saying they know all risks and only invest 10% when that's not true? I think that there is a limit on how far FCA protection can go. FCA is there to protect people who try to do the right thing but get scammed. Accepting that an investment is high risk and then investing too much in it is a personal decision and I don't think that the FCA can do much about that - if they do P2P will be similar to a savings account with similar rates, or at least a unit trust. As long as Investors DO something. ...But meekly sitting around just accepting "That's the way it is" is going to help a lot isn't it?! I don't think anyone should meekly accept anything. Just sell out, as quickly as is possible. Don't like the valuations - don't invest. Don't think the team is up to it - don't invest. I have exited (or am exiting) FS, L, FC, TC, LI & W because I no longer like what I see. (Also exiting RS and Z because the rate seemed too low for the risk.) Many other platforms I didn't enter in the first place. "That's the way it is" if you don't like it don't do it and if it changes get out ASAP. (PS. TC might now be better than it was when I decided to get out a few years ago before it changed owner - don't know.) (PPS. I am exiting LI because I don't really understand the structure rather than I think that they are doing a bad job - they seem pretty good at enforcement.)
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macq
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Post by macq on Jul 17, 2018 7:36:41 GMT
It's not, and never has been, about " High Risk", "You don't get 12% for nothing" etc, etc, ad infnitum. We all know this, it's basic, schoolboy risk/reward stuff. It IS about making informed investment decisions based on the reasonably honest, presented facts, and when you are blatantly downright lied to, deceived, BS'd, conned, shafted and hung out to dry, it's pure appeasement to accept along the lines of "Oh well, that's the way it is, it's High Risk you know."Do you want this industry cleaned up or not Fellow Investors? I led the charge on The Valuations/LTV Scam and got castigated then. Until people started losing serious money and waking up. I'm getting Deja Vu and I'm feeling The Lone Ranger all over again on this one. This situation would not, and does not, happen in Australia and certainly wouldn't happen in the USA, Consumer Investors would be up in arms about it, wouldn't stand for it and it would be nipped in the bud. With the full support of a pro-active Government and Industry Body (Hello FCA? Wakey, wakey.) Not here in Blighty though, being polite & accepting, and even joking, about the daily "misleadings" taking place just beggars belief. Be a Churchill, don't be a Chamberlain. Not sure it would not happen in the USA - maybe things are better now but things like the Savings & loans crisis of the 80's & 90's and the sub prime mortgage problems of a few years back would not feel me with confidence.But getting back to p2p the thing that strikes me apart from LTV,recovery etc are Two issues which in the future could come up are provision funds and IFISA. 1.The wording on provision funds can be generic and a lot of if,buts and maybe's in most cases. 2.The IFISA should not have happened in my opinion.There should have been a new tax free product created with perhaps slightly different rules.As i would guess (and no i can't prove it) that many who have signed up over the last few months have seen the words ISA as part of IFISA and assumed its a lot safer then it is but good luck
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Nomad
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Post by Nomad on Jul 17, 2018 11:11:07 GMT
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aju
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Post by aju on Jul 17, 2018 11:14:23 GMT
Not sure my local MP would be much help, we've been banging on about mental health issues to him an ex military doctor, for years now but get little back except party line stuff, even letters to the top honcho doesn't cut much ice either. Beside aren't they all going on the hols imminently!
I'm sure none of you are targeting Zopa as a big issue here, but I've been with them since the start and I have defaults going pack a real long way. I've recently in the last year or so started poking them for updates on loans that have been languishing for a while. Not sure I got much back on either occasion so far.
My experience over the last 2/3 years is that defaults do seem to be escalating, recently they blamed things on Plus D/E loans take-up levels being too high and reduced that but to be honest my experience is not with those loans being an issue really. I've been lending in core ISA since last year and all seemed ok for a while the odd 1/2/3 defaults per month but last 2 months have got perilously close to completely wiping out all returns for the month. Still not that bad as the relend levels are high and I am lent out 20%/80% Plus/Core and with quite high sums of money so there is a little time to wait for stability to take effect.
I do have 30+ Pre-safeguard defaults that are still returning money and in a number of cases some are dead now (death/bankrupts/etc), but many are still not paying anything for a long time. Ok so I've written off those anyway and that's the approach I've take all along with defaults and I still think that this fin year will come through for me - I don't know this though so all my personal items are firmly crossed ;-) - I do wonder though if Zopa are actually even spending that much effort in trying to get back anything from defaults at all. I know the banks sell on debt at very low levels so not sure that zopa should do this, if they are not already, but the evidence I was given on those loans I queried with nothing returned in the last 2 years or more was very dismal and almost non existent to say the least almost appathetic.
All that said I'm pretty sure my local MP has many other things to worry about than my dabblings in these arena's, I'd be happy if he and his mates just focused more on things that might help some of the less fortunate people in our little part of this world we call Britain.
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aju
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Post by aju on Jul 17, 2018 11:19:32 GMT
Blimey over 4000 P2P platforms thats a huge number indeed ... Whoever heard of a run on the P2P's, batten down the hatches I feel a storm brewing. Let's hope the FCA is watching with eyes wide open.
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macq
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Post by macq on Jul 17, 2018 13:39:19 GMT
Blimey over 4000 P2P platforms thats a huge number indeed ... Whoever heard of a run on the P2P's, batten down the hatches I feel a storm brewing. Let's hope the FCA is watching with eyes wide open. But the good news is i bet you feel better about Zopa from your previous post after reading the story 
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aju
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Post by aju on Jul 17, 2018 13:52:58 GMT
Blimey over 4000 P2P platforms thats a huge number indeed ... Whoever heard of a run on the P2P's, batten down the hatches I feel a storm brewing. Let's hope the FCA is watching with eyes wide open. But the good news is i bet you feel better about Zopa from your previous post after reading the story very amusing
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Post by Deleted on Jul 17, 2018 13:54:56 GMT
I could talk to my MP about this issue and, given his socialist leanings and long service to home-care would get either a blank stare or just a mutter about "what do you expect under a  -bag government". Oz, go for it, I presently would be talking to a wall if I did. |
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archie
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Post by archie on Jul 17, 2018 14:01:29 GMT
I could talk to my MP about this issue and, given his socialist leanings and long service to home-care would get either a blank stare or just a mutter about "what do you expect under a -bag government". Oz, go for it, I presently would be talking to a wall if I did. You'd probably have to start by explaining what P2P is. 
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-bag government". Oz, go for it, I presently would be talking to a wall if I did.
