Post by charliebrown on Sept 5, 2018 12:45:50 GMT
I like the idea of being able to buy/ sell late loans for a mutually agreeable discount.
I recall a loan on Lendy that went significantly late but in the end it turned out the security was good and a full recovery was made along with accrued interest and default interest. If a shrewd investor had been able to buy that loan at a discount once it defaulted then he/she would have made a tidy profit. Having said that the vast majority of late LY loans look like a complete train wreck so it’s unclear to me who would be jumping in to buy them.
I might be wrong here but doesn’t the FCA forbid trading in default loans? I’m thinking of the cases where (using LY as an example again) there has been some kind of major change to a loan (usually caused by LY being asleep at the wheel) and LY suspend trading saying it’s due to a change in risk profile. They didn’t used to do that and the consensus on the LY forums when they introduced this was that it was to comply with FCA rules. I don’t know that for sure though.
I recall a loan on Lendy that went significantly late but in the end it turned out the security was good and a full recovery was made along with accrued interest and default interest. If a shrewd investor had been able to buy that loan at a discount once it defaulted then he/she would have made a tidy profit. Having said that the vast majority of late LY loans look like a complete train wreck so it’s unclear to me who would be jumping in to buy them.
I might be wrong here but doesn’t the FCA forbid trading in default loans? I’m thinking of the cases where (using LY as an example again) there has been some kind of major change to a loan (usually caused by LY being asleep at the wheel) and LY suspend trading saying it’s due to a change in risk profile. They didn’t used to do that and the consensus on the LY forums when they introduced this was that it was to comply with FCA rules. I don’t know that for sure though.
