stokeloans
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Post by stokeloans on Nov 23, 2018 18:11:37 GMT
It's time the regulator forced Lendy into administration, and loan agreements transferred to investors, particularly with a potential property crash getting ever closer with several successive months of flat-lining and receding prices - Valuations aren't going to get much better than they currently are. I've submitted a 17 page fact file to BBC's Watchdog, anyone else of a similar mindset ought consider doing the same, it has a habit of making regulators and Ombudsman prick their ears up, and thousands of "investors" speak out, as well as condemnation by other successful platforms. Waiting for Lendy to work through £130m of ever increasing distressed loans is foolhardy, they have neither the skills, manpower or any sense of urgency, they can't even keep in regular communications anymore, and they can't fund any of the upcoming tranches either. As others have pointed out Lendy are still turning a profit while investors have been taken to the cleaners. This isn't a situation that will continue forever with no new investments, the pyramid will collapse and the time to act will have passed. Their recovery ability is limited to the one or two percent they make on loans, rather than the 12pc we're owed, to say nothing for capital itself. The regulator needs to be made aware that this situation is untenable in the long term, and is simply placing investor funds at even further risk by plodding along at a snail's pace while everyone is pointing the finger of blame but doing nothing about it other than complaining at each other. Sitting about on a little corner of the internet hoping Lendy will still be here next month and waiting for repayment emails which may never come isn't going to make this bad situation any less bad, it's inviting it to get worse. Action needs to be taken immediately, by all investors. FSA and Ombudsman complaints are the only way to get things moving before there's no Lendy left to move. I would urge every investor to follow Lendy's complaints procedure with detailed concerns in order to obtain a final response, and then immediately proceed to the Ombudsman. While you wait for a final response in the mean time I would suggest beginning to collate information detailing how and why you believe Lendy has arrived in it's current state, and why you might feel that their recovery action simply isn't producing results at a reasonable standard. The PR disaster means no new investors are coming on board, and that is no fault of investors. Lendy have absolutely no business launching a 2nd "Wealth" product with their current track record, it's trying to put out a fire with petrol. At the very least we may be able to walk away with new regulations to ensure this sub-prime lending debacle isn't allowed to trap innocent unsophisticated and retail investors in future. What a load of old tosh.
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beechside
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Post by beechside on Nov 23, 2018 19:40:47 GMT
Without wishing to fall foul of an ad hominem attack, what Mr_N suggests is naive and ill informed. Administrators are not known for their altruism and will certainly take an eye-wateringly large percentage of the proceeds of the sales. Nor is it in their interests to deliver a speedy fix, since the time it takes them dutifully to get to the bottom of all the issues means the market will certainly be worse by then. Finally, there is no-one likely to take on the business. Has the OP not seen the Collateral case and learnt from that? However, as has been said before it seems we have a new member with a lot of agenda, perhaps some of it hidden. Sometimes, the ill-informed blame others for their own stupidity... |
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Mr_N
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Post by Mr_N on Nov 23, 2018 21:16:31 GMT
The problem is Lendy's available funds to pursue recoveries, and that is dragging out to dangerous timescales. 700+ days in default is ludicrous and clearly just to avoid writing the debt off. Why would an administrator have any more funds to pursue recoveries? The administrator of Lendy would have the same funds (which would have to cover their costs) but then they wouldnt be pursuing the recovery, that would be the designated run down third party (assuming the FCA doesnt decide to change them) who would have to pay for it from funds provided by Lendy in a living will, any income from performing loans and the assets themselves. So additional cost pressure, likely to result in diminished realisations via firesale.
It should be pointed out that in most cases, it isnt Lendy pursuing the recoveries, it is an administrator/receiver and decisions/timescales are determined by them. If they recommend something, then Lendy are unlikely to go against it as the receiver/administrator would resign as they wouldnt be pursuing their remit. Only the loans where Lendy hasnt appointed are Lendy in control. Most of the 700+ are in receivers/administrators hands and as such you can write them off
Administrators would work with investors as creditors, and as such we would have much more control over how much of the debt we actually want to use to enforce it. 5% is 5x the ability Lendy currently have, which is why property perpetually sits in estate agents on a bare minimum commission, rather than a premium marketing campaign. Why do you think Lendy is cashing in business assets? The money has run out, there's nothing left to do anything other than sit in estate agent windows.
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Mr_N
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Post by Mr_N on Nov 23, 2018 21:20:36 GMT
Anyone who has ever engaged with the English court system (whether civil or criminal) will know that things move at a glacial pace. Unfortunately, it is all too easy at every stage for either side in a dispute to introduce another delaying tactic. As a very simple example, look how long it took to finally evict the unscrupulous farmers from the tin shed in Somerset - he used every trick in the book to keep the wheels spinning for about a year.... Lendy got there in the end and have now marketed the property. I know lenders are looking at a considerable headline loss when the security is sold and the probability of recovering the shortfall via personal guarantees and the like is incredibly small but that's not my point here. To re-iterate, the courts move incredibly slowly and enforcement action / recovery can only be done by following due process. If Lendy itself went into administration, any 3rd party subsequently responsible for collection would have to work through the exact same process. The pace at which they are recovering and the lack of new investors means Lendy won't be around long enough to let everything else fall into 2 year periods. Just what exactly do you think will happen when the business folds? Have you prepared your solicitor to immediately take charge of recovering and enforcing your share of the loan agreements we're advised are confidential and denied access to? I don't think you understand the gravity of the situation if/when Lendy folds. We've no access to any documentation, it won't be turned over to us all when all the staff are told to clear their desks.
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Mr_N
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Post by Mr_N on Nov 23, 2018 21:25:28 GMT
Is would suggest that if Lendy gets put into administration the PF will disappear with the directors. Putting them into administration is daft. Take the emotion out of it and think clearly. Waiting until the business folds means you'll have no access to any documentation whatsoever. One day we will all just arrive on this forum with the Lendy website displaying a closed message and you'll have no evidence of anything. It will then be up to each and every one of us to pay and instruct legal advisers to recover documentation like loan agreements which won't be forthcoming. Believe me, once the lights go out our task will be much harder, more expensive, and most will probably just write it off and walk away.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 23, 2018 21:27:17 GMT
Why would an administrator have any more funds to pursue recoveries? The administrator of Lendy would have the same funds (which would have to cover their costs) but then they wouldnt be pursuing the recovery, that would be the designated run down third party (assuming the FCA doesnt decide to change them) who would have to pay for it from funds provided by Lendy in a living will, any income from performing loans and the assets themselves. So additional cost pressure, likely to result in diminished realisations via firesale.
It should be pointed out that in most cases, it isnt Lendy pursuing the recoveries, it is an administrator/receiver and decisions/timescales are determined by them. If they recommend something, then Lendy are unlikely to go against it as the receiver/administrator would resign as they wouldnt be pursuing their remit. Only the loans where Lendy hasnt appointed are Lendy in control. Most of the 700+ are in receivers/administrators hands and as such you can write them off
Administrators would work with investors as creditors, and as such we would have much more control over how much of the debt we actually want to use to enforce it. 5% is 5x the ability Lendy currently have, which is why property perpetually sits in estate agents on a bare minimum commission, rather than a premium marketing campaign. Why do you think Lendy is cashing in business assets? The money has run out, there's nothing left to do anything other than sit in estate agent windows. No, they wouldn't. We would not be creditors of Lendy, we would be creditors of the individual borrowers.(except in the few loans of type 1 direct lending) Don't get Lendy confused with Collateral who were unregulated. Creditors have limited control over administrators whose remit is very clearly defined. The only role creditors or a creditors committee has is to approve renumeration. They can assist the administrators but have no control. In the case of Lendy the administrators would potentially be responsible to Liam who is the sole charge holder. Don't understand what you mean by cashing in business assets
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Mr_N
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Post by Mr_N on Nov 23, 2018 21:28:01 GMT
700 days isn't yet 2 years, and hence can not possibly be ludicrous. These are complex highly geared development projects, and a resolution for most could take 5 or more years. Why should Lendy be expected to resolve loans in less than 2 years when the likes of AC, TC , FS, FC etc don't. (at AC I have loans that defaulted in 2014 not yet resolved, at FC a loan that defaulted in 2012 is going to take another few years to resolve, hopefully before the 10 year mark is hit)
Unfortunately p2p platforms have not spelt out adequately to retail lenders what the implications are for investing in bridging / development debt, leading to totally unreasonable expectations. Some loans will repay more or less on schedule, some will repay within a year of being overdue, but the rest will take years to resolve.
As others have said its the clamour by retail lenders to bring Lendy down that is the real frightening aspect here. I have inreased my balance at Lendy by 30% this year (a 5 figure sum, I'm not a retail investor) but have stopped for now because of posts like yours and the mis-guided attacks in the media.
not entirely sure what constitutes a 'retail' investor versus non-retail unless it means you chuck more money at the platform but got to say I'm surprised firstly that there's been anything on the platform of quality to warrant a 30% increase in balance and that further investment is linked to posts by eejits on a forum. The underlying prospects of the platform thriving or otherwise I think is more dependent on their actions and the quality of loans than random moaning on t'internet still each to their own. retail vs institutional, fund managers etc. Lendy "wealth" is not retail.
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Mr_N
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Post by Mr_N on Nov 23, 2018 21:32:22 GMT
700 days isn't yet 2 years, and hence can not possibly be ludicrous. These are complex highly geared development projects, and a resolution for most could take 5 or more years. Why should Lendy be expected to resolve loans in less than 2 years when the likes of AC, TC , FS, FC etc don't. (at AC I have loans that defaulted in 2014 not yet resolved, at FC a loan that defaulted in 2012 is going to take another few years to resolve, hopefully before the 10 year mark is hit)
Unfortunately p2p platforms have not spelt out adequately to retail lenders what the implications are for investing in bridging / development debt, leading to totally unreasonable expectations. Some loans will repay more or less on schedule, some will repay within a year of being overdue, but the rest will take years to resolve.
As others have said its the clamour by retail lenders to bring Lendy down that is the real frightening aspect here. I have inreased my balance at Lendy by 30% this year (a 5 figure sum, I'm not a retail investor) but have stopped for now because of posts like yours and the mis-guided attacks in the media.
I agree with mrclondon fully, the professional investors amongst us understand the timescales involved in closing out loans. As long as they are paid back and with some sort of reasonable interest attached for the loan and extension period, most professional investors have less problem with the timescale. It boils down to the diversification of loans and diversification of product and diversification of platforms. For the record, I monitor and calculate timescales of selling loan parts on Lendy, and it appears there remains reasonable movement on the secondary market to generate further daily funds for Lendy. For those that wish Lendy to be placed into administration, the size of Lendy loan book could mean 4-5 years to unwind satisfactorily, or quicker if the tardy projects are sold off at a discount, resulting in a considerable capital loss for the current investors. Lendy is not a current account, it is an investment. Some you win, and some you lose. Well that's just the problem isn't it? Many of us started out on the site when it was effectively an instant access 12% savings account, aka "Saving Stream". The site (still visible on waybackmachine) implied that 75% security value meant a loss capped at 25%, and then a separate provision fund that had never needed to be used before to step in if and when such an issue occurred. It turned into quite something else, and by the time the business grew into what it is (or was) today it was too late to get any of our money out of it. It's not until the proverbial hit the fan that we started to look elsewhere for info and found out just how bad things were, and that they have been bad for quite some time and we were totally oblivious to it.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 23, 2018 21:34:22 GMT
not entirely sure what constitutes a 'retail' investor versus non-retail unless it means you chuck more money at the platform but got to say I'm surprised firstly that there's been anything on the platform of quality to warrant a 30% increase in balance and that further investment is linked to posts by eejits on a forum. The underlying prospects of the platform thriving or otherwise I think is more dependent on their actions and the quality of loans than random moaning on t'internet still each to their own. retail vs institutional, fund managers etc. Lendy "wealth" is not retail. It isn't institutional or professional, therefore it is retail. However it is probably restricted as defined by FCA, so hnw, sophisticated or max 10% of assets
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 23, 2018 21:39:11 GMT
I agree with mrclondon fully, the professional investors amongst us understand the timescales involved in closing out loans. As long as they are paid back and with some sort of reasonable interest attached for the loan and extension period, most professional investors have less problem with the timescale. It boils down to the diversification of loans and diversification of product and diversification of platforms. For the record, I monitor and calculate timescales of selling loan parts on Lendy, and it appears there remains reasonable movement on the secondary market to generate further daily funds for Lendy. For those that wish Lendy to be placed into administration, the size of Lendy loan book could mean 4-5 years to unwind satisfactorily, or quicker if the tardy projects are sold off at a discount, resulting in a considerable capital loss for the current investors. Lendy is not a current account, it is an investment. Some you win, and some you lose. Well that's just the problem isn't it? Many of us started out on the site when it was effectively an instant access 12% savings account, aka "Saving Stream". It turned into quite something else, and by the time the business grew into what it is (or was) today it was too late to get any of our money out of it. It's not until the proverbial hit the fan that we started to look elsewhere for info and found out just how bad things were, and that they have been bad for quite some time and we were totally oblivious to it. It was never an instant access savings account and never promoted itself as such. Anyone who invested as such clearly didn't read or understand the risk warnings. This is why MrC has made the points he has and the FCA is currently advocating restrictions in their consultation.
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Mr_N
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Post by Mr_N on Nov 23, 2018 21:51:28 GMT
I’m not suggesting Lendy should be forced into administration, but perhaps the FCA or Ombudsman could be sent in to provide guidance and assistance. I share the original poster’s frustration. From the outside looking in, Lendy’s so called world-class recoveries team are just not performing (at least not on my defaults). It can be argued that they’re working within a 3rd world legal system and that’s clearly true, but.... there are examples of incompetence everywhere you look. Examples from the top of my head are Hastings (where borrower excuses have been accepted for 531 days without any action), Wolves (where the investor vote was ignored), Sheds (where it’s suggested our first charge will be dropped to a second charge)... the list goes on. Do we honestly feel that LY is acting in our best interests? Rather than mudslinging what I would say is LY are out of their depth, they are lacking the skills and experience to execute recovery strategies. I do NOT want to force them into administration but I do want to send in help as they’ve totally lost control. What would you suggest? A request to the regulators co-signed by those who would want to?
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Mr_N
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Post by Mr_N on Nov 23, 2018 22:05:24 GMT
Administrators would work with investors as creditors, and as such we would have much more control over how much of the debt we actually want to use to enforce it. 5% is 5x the ability Lendy currently have, which is why property perpetually sits in estate agents on a bare minimum commission, rather than a premium marketing campaign. Why do you think Lendy is cashing in business assets? The money has run out, there's nothing left to do anything other than sit in estate agent windows. No, they wouldn't. We would not be creditors of Lendy, we would be creditors of the individual borrowers.(except in the few loans of type 1 direct lending) Don't get Lendy confused with Collateral who were unregulated. Creditors have limited control over administrators whose remit is very clearly defined. The only role creditors or a creditors committee has is to approve renumeration. They can assist the administrators but have no control. In the case of Lendy the administrators would potentially be responsible to Liam who is the sole charge holder. Don't understand what you mean by cashing in business assets And when they turn the lights off where will you start exactly? What regulator will oversee the winding down? How do you propose obtaining loan agreements and terms of which you're a creditor? And what of us who have no funds with which to instruct a solicitor? By cashing in business assets I'm referring to Director's loans against business assets. For many of us here we had no prior experience with investing, and none since. As I've said elsewhere we were essentially told via the site branding that there was a risk to using saving stream, but that our money was secured against 75% of the property value, and there was a fund we could access where there's a shortfall. The whole site should never have been made available to the general public. Their banner adverts were in a crypto currency forum of all places.
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Mr_N
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Post by Mr_N on Nov 23, 2018 22:09:09 GMT
Well that's just the problem isn't it? Many of us started out on the site when it was effectively an instant access 12% savings account, aka "Saving Stream". It turned into quite something else, and by the time the business grew into what it is (or was) today it was too late to get any of our money out of it. It's not until the proverbial hit the fan that we started to look elsewhere for info and found out just how bad things were, and that they have been bad for quite some time and we were totally oblivious to it. It was never an instant access savings account and never promoted itself as such. Anyone who invested as such clearly didn't read or understand the risk warnings. This is why MrC has made the points he has and the FCA is currently advocating restrictions in their consultation. Risk warnings? Maybe you should journey back and have a good old look at the risk warnings: web.archive.org/web/20150315000758/https://www.savingstream.co.uk/Risk warnings were just an opportunity to promote the platform and explain how they had us covered. Most secondary market sales in 24 hours but not guaranteed, securities they enforce as soon as the loan defaults, indemnified valuations, 6 month terms, option to receive interest upfront. It bares no resemblance to the situation we all now find ourselves in, absolutely misleading wouldn't you agree?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 23, 2018 22:22:19 GMT
No, they wouldn't. We would not be creditors of Lendy, we would be creditors of the individual borrowers.(except in the few loans of type 1 direct lending) Don't get Lendy confused with Collateral who were unregulated. Creditors have limited control over administrators whose remit is very clearly defined. The only role creditors or a creditors committee has is to approve renumeration. They can assist the administrators but have no control. In the case of Lendy the administrators would potentially be responsible to Liam who is the sole charge holder. Don't understand what you mean by cashing in business assets And when they turn the lights off where will you start exactly? What regulator will oversee the winding down? How do you propose obtaining loan agreements and terms of which you're a creditor? And what of us who have no funds with which to instruct a solicitor? By cashing in business assets I'm referring to Director's loans against business assets. For many of us here we had no prior experience with investing, and none since. As I've said elsewhere we were essentially told via the site branding that there was a risk to using saving stream, but that our money was secured against 75% of the property value, and there was a fund we could access where there's a shortfall. The whole site should never have been made available to the general public. Their banner adverts were in a crypto currency forum of all places. With the FCA sanctioned agreed third party winddown company ... a major insolvency practioner. FCA. I don't need to as it will be managed by the former mentioned party as required by FCA regulation. (But they may be supplied if required - I've got the London one) -70% mazx actually but heavily caveated and not a distressed sale. If they were on crypto then that is far more risky than P2P, so noone could claim naivity, at risk of huge fluctuations and criminal prosecution in some cases. A more valid point would be they were on FB which they were. Yep, there was a discretionary fund so no guarentee. Valuations cue ozboy. Have been directors loans since day one just unsecured, SS had charges in favour of a borrower against it.
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Mucho P2P
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Post by Mucho P2P on Nov 23, 2018 22:28:01 GMT
No, they wouldn't. We would not be creditors of Lendy, we would be creditors of the individual borrowers.(except in the few loans of type 1 direct lending) Don't get Lendy confused with Collateral who were unregulated. Creditors have limited control over administrators whose remit is very clearly defined. The only role creditors or a creditors committee has is to approve renumeration. They can assist the administrators but have no control. In the case of Lendy the administrators would potentially be responsible to Liam who is the sole charge holder. Don't understand what you mean by cashing in business assets And when they turn the lights off where will you start exactly? What regulator will oversee the winding down? How do you propose obtaining loan agreements and terms of which you're a creditor? And what of us who have no funds with which to instruct a solicitor? By cashing in business assets I'm referring to Director's loans against business assets. For many of us here we had no prior experience with investing, and none since. As I've said elsewhere we were essentially told via the site branding that there was a risk to using saving stream, but that our money was secured against 75% of the property value, and there was a fund we could access where there's a shortfall. The whole site should never have been made available to the general public. Their banner adverts were in a crypto currency forum of all places. Unfortunately, in UK law, ignorance is no excuse, otherwise everyone would be citing they were unaware and hoping to get away with judgments in their favour. All investors start out with a solitary investment, some go on to add to their portfolio, some don't. It's life. That is why diversification is so important, aka, not putting all eggs in one basket. P2P is relatively a new investment in the electronic format, and the manual investing P2P sites like Lendy are probably best left to the professional investors who have learned to manage risk. Whilst I have no idea about the FCA views on Lendy, I would hazard a guess that it will only strengthen their [FCA] intention to limit P2P to non-retail investors in the future.
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