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Post by patright on Oct 21, 2018 6:53:45 GMT
TO all, yes its kinda venting but I am sick and tired of this Lendy mess.
I am willing to take a shave on all my outstanding loans as long as I recover 80% of the capital..just to move on and forget this horrible experience
All of my loans are now defaulted, all the parts I have had for months in the secondary market for sale are also therefore suspended as of last week (while they generated zero interest while sitting there for months)
really it's time to move on and money sitting potentially for years will do no good anyway, might as well take a cut...after all time is money and there are real investments to get in..
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Post by charlata on Oct 21, 2018 7:57:35 GMT
I have every sympathy, but it's just a feature of P2P in the UK that people who want to sell loan parts are routinely prevented from selling them to people who want to buy them. Aside of the frustration this causes, it means that when it comes to votes on recovery, investors are set against each other, with those who want to hold in opposition to those who want out.
The FCA seem to reason that retail investors can assess the risks of buying into loans that have a 20% chance of losing money, but can't assess the risks of buying into loans with a 50% chance. So they wont allow trading in defaulted loans.
There's also a number of posters on here who would block all trading of loans on the grounds that it leads to incidences of buyers/sellers' regret. Many of the platforms seem keen to pander to investors who like to keep it simple. This creates a disjoint of platforms that are easy to use, selling loans which are anything but.
I've pondered whether it might be possible to set up a parallel market in loan parts, but the problem seems intractable. At some point someone's going to set up a vulture fund to refinance the 'good' defaulted loans at hefty haircuts, safe in the knowledge that investors who want to leave have no other way out.
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hazellend
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Post by hazellend on Oct 21, 2018 8:25:18 GMT
There is definitely a perverse incentive for Lendy to not allow discounting as they collect the interest for loan parts listed for sale.
These days any platform that doesn’t have a bid/offer secondary market might as well not bother.
ABLrate have set the gold standard and I can’t understand why others don’t follow.
Even ugly loans will sell at massive discount (30% or more)
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lofty
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Post by lofty on Oct 21, 2018 10:17:54 GMT
It would be interesting to see how discounts on loans would go. As pointed out above if you give 30% discounts people will buy - some would call it a speculative investment, others might say greed or stupidity. Take your choice.
Similarly some people will refuse to sell at anything less than par. "I paid x for it, so that's what its worth". I have sympathy for this viewpoint as I still own a large collection of VHS tapes - anyone wish to buy at £9.99 each?
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rocky1
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Post by rocky1 on Oct 21, 2018 10:34:07 GMT
well lendy can have my mid 5 figure diversified potfolio some still IOA for 30% discount. no cherry picking the good ones,the whole lot for 30% discount i will even sign one of your non disclosure clauses.you know its a good offer and i can be out of here for good.i will email offer tomorrow for your consideration.
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brianlom1
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Post by brianlom1 on Oct 21, 2018 11:51:03 GMT
It would be interesting to see how discounts on loans would go. As pointed out above if you give 30% discounts people will buy - some would call it a speculative investment, others might say greed or stupidity. Take your choice. Similarly some people will refuse to sell at anything less than par. "I paid x for it, so that's what its worth". I have sympathy for this viewpoint as I still own a large collection of VHS tapes - anyone wish to buy at £9.99 each? That's easy to arrange, just take a look at the Abl SM (with loan parts currently offering up to 30% return) - a good example to follow IMHO
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ilmoro
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Post by ilmoro on Oct 21, 2018 12:48:29 GMT
It would be interesting to see how discounts on loans would go. As pointed out above if you give 30% discounts people will buy - some would call it a speculative investment, others might say greed or stupidity. Take your choice. Similarly some people will refuse to sell at anything less than par. "I paid x for it, so that's what its worth". I have sympathy for this viewpoint as I still own a large collection of VHS tapes - anyone wish to buy at £9.99 each? That's easy to arrange, just take a look at the Abl SM (with loan parts currently offering up to 30% return) - a good example to follow IMHO Theose loans are in default but not in recovery. Loans in recovery, or likely to so imminently (fish), are suspended just like anywhere else.
I think there are number of issues with trading in distressed loans which is why no platform really does it (I dont mean those in default) - somewhat speculative this
I suspect that the FCA doesnt actually ban it but doesnt allow it to unsophisticated investors as its trading in a different type of risk.
The other problem is one of information. How do you determine the value of an asset in a distressed state? We've seen that assets in distressed loans are extremely volatile when it comes realisations, valuations are largely meaningless and Im not even sure valuers can provide valuations in such a situation. So how does the platform allow lenders to make an informed choice on the price that they are willing to pay for a distressed loan? (Any valaution would of course cost, so who pays ... borrower, administrator, platform)
Final point ... loans that are in recovery purchased post recovery are not eligible for loss relief under SAIM 12000
In most cases I think these questions are what prevents platforms from permitting trading in distressed loans as its not worth the complications but I havent done any in depth research so this could all be rubbish (apart from SAIM)
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spiral
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Post by spiral on Oct 21, 2018 17:17:22 GMT
I still own a large collection of VHS tapes - anyone wish to buy at £9.99 each? I'll buy at 70% discount. Everyone knows VHS is going to make a comeback, just look at vinyl records. 
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Post by samford71 on Oct 21, 2018 18:44:08 GMT
Theose loans are in default but not in recovery. Loans in recovery, or likely to so imminently (fish), are suspended just like anywhere else. I think there are number of issues with trading in distressed loans which is why no platform really does it (I dont mean those in default) - somewhat speculative this
I suspect that the FCA doesnt actually ban it but doesnt allow it to unsophisticated investors as its trading in a different type of risk. The other problem is one of information. How do you determine the value of an asset in a distressed state? We've seen that assets in distressed loans are extremely volatile when it comes realisations, valuations are largely meaningless and Im not even sure valuers can provide valuations in such a situation. So how does the platform allow lenders to make an informed choice on the price that they are willing to pay for a distressed loan? (Any valaution would of course cost, so who pays ... borrower, administrator, platform) Final point ... loans that are in recovery purchased post recovery are not eligible for loss relief under SAIM 12000 In most cases I think these questions are what prevents platforms from permitting trading in distressed loans as its not worth the complications but I havent done any in depth research so this could all be rubbish (apart from SAIM)
I agree that determining the value of a distressed asset is often complex. It's utterly illogical, however, that both the FCA and some P2P platforms take the position that you can be well-informed and experienced enough to buy loans on a P2P platform but somehow you are not experienced or informed enough to sell them when distressed state. The PV of any loan is the probability-weighted superposition of all possible forward values that loan could take, including values when it is distressed. So if you can't determine the value in a distressed state, you cannot determine it's value at any point prior to redemption. Logically, therefore, if the concern is that investors cannot evaluate a loan's value in a distressed state then they should not be allowed to buy any loan, period! Lenders are to some extent to blame here. Posters who dislike variable pricing remain under some sort of strange delusion that par value is somehow "correct". There is simply no reason to believe loans should even be issued at par, never mind trade during their lifetime at par. The only thing we can say is they should redeem at par, if they do not default. Platforms obviously love this since it maintains the illusion that you cannot lose your principal. The FCA should enforce a basic idea: either no SM at all or a variable pricing SM for any loan, in any state. Par-only SMs should be banned since they feed fundamentally incorrect ideas: that you can transform something intrinsically illiquid/risky into something liquid/non-risky with no change in price. Clearly there are risks around asymmetric information but that can be regulated for in the same way as it currently is in the securities industry.
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ilmoro
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Post by ilmoro on Oct 21, 2018 20:43:13 GMT
I assume one issue is that most valuations are based on comparatives. Valuer can present evidence that something similar down the road sold for X so on balance of probabilities security will sell for that ballpark in similar circumstances. Lenders can assess this & any caveats and make a evidence based judgement on whether the valuers case makes sense. Very hard to do something similar for a distressed asset.
I know AC has been considering distressed loan sales for a couple of years but as yet haven't gone with it. As one of the platforms that does tend to trust its investors with complicated things like IMS reports that they don't suggests it isn't straight forward.
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jjc
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Post by jjc on Oct 22, 2018 2:34:23 GMT
Thank you samford71 . Rarely wiser words here than those you've written, flagging to MoneyThing & sophie in case they miss them. I'd add (in case it wasn't obvious) that it will be difficult, if not impossible*, for any platforms (or p2p as a whole) to flourish unless they allow variable pricing. * the obvious exceptions to this would be platforms that are A able to originate a loan book with negligible (<5%?) default rates, B have an investor base that is almost uniformly & without exceptions (because a twitchy BH or 2 could by themselves upset the apple cart) supremely confident in these low default rates pretty much from the start of a loan's lifetime & right through to squeaky bum time term, & C have a recovery team (not to mention the bit of luck you'll likely need with borrowers, administrators, receivers, judges, auctioneers & who knows who else all falling into your lap & charging little for their services) that ensures that, when those oh so rare defaults happen, losses are contained to a degree that make them negligible in terms of dampening future confidence (5% again or so I'd guess?). And all this irrespective of what nasty or otherwise unnerving things may be going on in the big bad real world outside. As I believe that (much as I wish they weren't) A, B & C are each in themselves pie in the sky la la land, never mind all 3 together, if things still aren't clear it's perhaps worth reading Samford's post again (until they are) |
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invester
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Post by invester on Oct 22, 2018 7:12:11 GMT
I think a variable secondary market might be detrimental at the moment.
Like stock markets we see participants go from exuberant to despair. Some of the current loans I believe would end up going for exceptionally cheap rates, like some of the ones we saw at Bondora.
Difference is Lendy Wealth would also be a participant. We have most likely seen them buy in some markets, but not all. I don't think it is a push to say that while two loans might be tradable, their chances of repayment may vary tremendously. And only Lendy would really know what that is because they control sentiment via the updates and there is no real other way to assess otherwise. How many times have we seen that they claim things are fine, only for them to be not. In some cases I do believe they would have seen the suspension coming a long way off - they must be experts at recognising the warning signs now.
So Lendy Wealth would be the main beneficiaries of variable pricing, and using that they could definitely deliver the returns stated for their Wealth customers, having access to superior information. But I have my doubts it would be legal, and if so totally unethical.
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jo
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Post by jo on Oct 22, 2018 7:47:37 GMT
I think a variable secondary market might be detrimental at the moment. Like stock markets we see participants go from exuberant to despair. Some of the current loans I believe would end up going for exceptionally cheap rates, like some of the ones we saw at Bondora. Difference is Lendy Wealth would also be a participant. We have most likely seen them buy in some markets, but not all. I don't think it is a push to say that while two loans might be tradable, their chances of repayment may vary tremendously. And only Lendy would really know what that is because they control sentiment via the updates and there is no real other way to assess otherwise. How many times have we seen that they claim things are fine, only for them to be not. In some cases I do believe they would have seen the suspension coming a long way off - they must be experts at recognising the warning signs now. So Lendy Wealth would be the main beneficiaries of variable pricing, and using that they could definitely deliver the returns stated for their Wealth customers, having access to superior information. But I have my doubts it would be legal, and if so totally unethical. If I'm a seller because I'm buying a house/retiring/need an operation/dying/dead etc etc, I don't care who the 'beneficiaries' (entirely subjective btw) are. I do care if I, or my heirs, are stuck in an investment until the twelfth of never because platforms wont recognise reality.
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Post by Ace on Oct 22, 2018 7:53:38 GMT
I think a variable secondary market might be detrimental at the moment. Like stock markets we see participants go from exuberant to despair. Some of the current loans I believe would end up going for exceptionally cheap rates, like some of the ones we saw at Bondora. Difference is Lendy Wealth would also be a participant. We have most likely seen them buy in some markets, but not all. I don't think it is a push to say that while two loans might be tradable, their chances of repayment may vary tremendously. And only Lendy would really know what that is because they control sentiment via the updates and there is no real other way to assess otherwise. How many times have we seen that they claim things are fine, only for them to be not. In some cases I do believe they would have seen the suspension coming a long way off - they must be experts at recognising the warning signs now. So Lendy Wealth would be the main beneficiaries of variable pricing, and using that they could definitely deliver the returns stated for their Wealth customers, having access to superior information. But I have my doubts it would be legal, and if so totally unethical. Lendy couldn't spot the world's biggest iceberg from 3 inches away in a tiny fishing boat. They're way too busy dangling a worm over the other end of the boat hoping for a big fish to bite!
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GeorgeT
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Post by GeorgeT on Oct 22, 2018 11:00:34 GMT
I would sell my 2 remaining loans for 25% of their face value just so I could get shot of LY and break my mental connection with them. And bear in mind my 2 are old terms loans and I remain of the strong belief that I am entitled to a 100% capital return because I lent to LY. However, how long they remain solvent is another matter because watching what is going on at the momentwith LY is like watching a wounded animal die slowly.
It looks to me like they have pretty much given up on it themselves and that is why Brookes and Kelly who seem to be a perfect match to me (in my opinion a couple of wideboys), are already working on their next project rather than working full-time in trying to rescue this one and get investors money back. I think they are the type of people who will just set up one company after another to make a quick buck and then on to the next thing.
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