rocky1
Member of DD Central
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Post by rocky1 on Mar 15, 2019 12:55:44 GMT
what is this all about,just lately the loans seem be getting a lot more riskier.75ltv,second charges and now three tier loans with higher rate for 2nd and 3rd tranches.i also am beginning to question these valuations.kuflinks rates are not good enough for these risks.tier 1pays back first in the event of default why risk tier 2and3 for a tiny fraction more.maybe it is just me after all the rubbish I have in LY,FS,MT etc etc.
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Post by Ace on Mar 15, 2019 15:21:45 GMT
They seem to be copying Proplend; same 3 tiers/tranches at exactly the same LTV break-points. Except that the second and third tiers on Proplend offer higher rates (and usually much higher) than Kuflink's self imposed maximum of 7.2%. Kuflink will probably say that their offerings are less risky for other reasons. Time will tell.
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Post by ajf1985x on Mar 16, 2019 9:33:43 GMT
I like the proplend proposition, I have twice as much invested with proplend than I do with kufflink.
So I was happy when I saw they have introduced securitisation however, the risk premium offered is simply not worth the increased risk, will be interesting to see what tier 3 looks like.
Hence why I have only invested in tier 1 for this loan.
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jcb208
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Post by jcb208 on Mar 16, 2019 11:26:37 GMT
Also only invested in tier 1,not worth the risk for another .5% on tier 2, looks like it is going to struggle to fill so unless tier3 is about 8% plus that will struggle as well along with the 2 second charge 75% LTV loans the rate is to low for the risk not that I invest in many second charge loans anyway
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Post by Ace on Mar 16, 2019 14:18:27 GMT
Also only invested in tier 1,not worth the risk for another .5% on tier 2, looks like it is going to struggle to fill so unless tier3 is about 8% plus that will struggle as well along with the 2 second charge 75% LTV loans the rate is to low for the risk not that I invest in many second charge loans anyway I totally agree, but I don't think they are planning on offering over 7.2%. All of their marketing still says "up to 7.2% pa". If they were planning to offer more they would probably displaying a higher headline rate in their adverts. It's worth noting that a third tier loan in the 65% to 75% LTV range is far more risky than a single tier loan at 75% LTV. E.g. If a loan were to default and recover 65% of its value, an investor in a single tier loan would recover 86.7% of their capital, whereas an investor in a third tier loan would be looking at a total loss.
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Post by ajf1985x on Mar 16, 2019 17:18:17 GMT
Also only invested in tier 1,not worth the risk for another .5% on tier 2, looks like it is going to struggle to fill so unless tier3 is about 8% plus that will struggle as well along with the 2 second charge 75% LTV loans the rate is to low for the risk not that I invest in many second charge loans anyway I totally agree, but I don't think they are planning on offering over 7.2%. All of their marketing still says "up to 7.2% pa". If they were planning to offer more they would probably displaying a higher headline rate in their adverts. It's worth noting that a third tier loan in the 65% to 75% LTV range is far more risky than a single tier loan at 75% LTV. E.g. If a loan were to default and recover 65% of its value, an investor in a single tier loan would recover 86.7% of their capital, whereas an investor in a third tier loan would be looking at a total loss. Exactly. This approach makes it more attractive to invest in tier 1 loans at a slightly lower interest rate, but the underlying asset needs to fall by 50% before you have to take a haircut. Whereas a 40% reduction in value on a 70% ltv Old model Single tier loan = loss of ~15% New model Tier 1 to 50%= zero loss Tier 2 51-65%= loss of ~33% Tier 3 66%+= loss of 100% The above is mental maths only, so could be totally out - so don’t make investment decisions off the back of this. Happy for someone else to do the calculation properly What it does demonstrate to me is that the risk/reward isn’t right to invest outside of tier 1. Tier 1 is now safer because the risk of losing the 15% in the above scenario has gone
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rocky1
Member of DD Central
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Post by rocky1 on Mar 28, 2019 18:14:23 GMT
where has the 2nd tier of this loan gone from the self select available loans?
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Post by spareapennyor2 on Mar 28, 2019 18:31:12 GMT
Filled
Now live
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rocky1
Member of DD Central
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Post by rocky1 on Jun 7, 2019 18:12:07 GMT
hi kuflink bit confused here with the latest tier offerings.2 separate developments with only a 2 bed leasehold flat in ealing as security on both.you state that there is more than 1 property as security but there are no detailsof this. and also in the event of default do these loans rank in order of tier 1 pays capital and interest over following tiers 2 and maybe even 3.could you clarify please as i have funds in my wallet waiting to go.also keep up the good work so far in dealing with overdue loans.as you know repayments are just as important as loan origination to keep investor confidence and the kuflink wheels turning.
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Post by gravitykillz on Jun 7, 2019 18:59:11 GMT
I just checked these out as well. They do look a little confusing. But from what I can tell these are 4 separate flats with different ltv. Kuflink is now closed so I doubt you will get an official reply b4 Monday.
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Post by gravitykillz on Jun 7, 2019 19:08:55 GMT
I personally have chucked a few quid into the tier 1 loans. They have a lower ltv.
Apparently he will repay the loans before new years day.
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Post by kuflink on Jun 10, 2019 8:54:06 GMT
Morning all, Hoping I can clear up any confusion around our new deals for you – Dickens Yard tiers 1 & 2 are secured against one flat, and Longfield Ave tiers 1 & 2 are secured against a different flat. So each loan has different security, but tiers of the same loan are secured against the same property. rocky1 thank you for your feedback – I’ll pass it over to the collections department 😊 |
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Post by kuflink on Jun 10, 2019 9:16:13 GMT
Just noticed your second question, sorry - yes you're correct, tier 1 ranks above tier 2 in terms of collections.
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sussexlender
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Cheat seeking missile
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Post by sussexlender on Jun 10, 2019 9:48:30 GMT
Good communications.
Well done Kuflink.
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jcb208
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Post by jcb208 on Jun 10, 2019 9:52:30 GMT
kuflink On your tier loans does tier 1 capital and interest rank before tire 2 or just capital Thanks
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