criston
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Post by criston on Apr 19, 2019 11:43:45 GMT
According to FS statistics their default rate to date, after recoveries, is 0.62%.
That appears pretty good on face value, but reading some threads here, defaults sound horrendous.
What is the general feeling?
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neal
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Post by neal on Apr 19, 2019 12:36:44 GMT
These are loans that fall behind the repayment schedule and there are loans marked as unredeemed I doubt these are included in the default figures.
I can tell you for fact that 81% of the loans I have invested in should have paid or refinanced by now but have not...
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criston
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Post by criston on Apr 19, 2019 14:17:30 GMT
81% !!!!!. Sorry to here that.
I am intrigued.
FS. 'All active & past loans 2631 no.' Of which 68 no. defaulted & unredeemed, 65 no. defaults, 100 no. fully recovered.
That equates to 2651/113 = 4.2% problem loans.
Is there a reason yours are 20 times worse.
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Mousey
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Post by Mousey on Apr 19, 2019 14:48:20 GMT
Well take for instance the 9 art loans made to a common borrower for circa £2.3 million all due for repayment over a year ago. All purported to be secured against artwork that fundingsecure left in the possession of the borrower. All artworks were sold and monies disappeared. The borrower has no assets left and was declared bankrupt in February. All 9 loans still ‘active’ and not part of the default statistics. Go figure |
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criston
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Post by criston on Apr 19, 2019 15:06:30 GMT
See what you mean. Properties as well showing active when in default. I wonder what the % of active are actually defaults.
Don't fancy going through them all, but surely regulators should get involved.
That is misleading.
There are about 140 so called active loans over a year old.
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arby
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Post by arby on Apr 19, 2019 15:07:02 GMT
81% !!!!!. Sorry to here that. I am intrigued. FS. 'All active & past loans 2631 no.' Of which 68 no. defaulted & unredeemed, 65 no. defaults, 100 no. fully recovered. That equates to 2651/113 = 4.2% problem loans. Is there a reason yours are 20 times worse. It's true that the method of reporting can underrepresent the number of late loans, but equally, any investor who hasn't put any money into FS loans for 6 months is guaranteed to have 100% of loans late, i.e. All loans are either repaid or late, hence 100% of active loans are late.
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r00lish67
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Post by r00lish67 on Apr 19, 2019 15:51:58 GMT
According to FS statistics their default rate to date, after recoveries, is 0.62%. That appears pretty good on face value, but reading some threads here, defaults sound horrendous. What is the general feeling? Firstly, the 0.62% is actually a capital loss percentage rather than a default rate. Their default rate as stated is 7.3%. The discrepancy in what you see on this forum and the stats is twofold, because: 1) FS have a highly questionable definition of loan defaults. 2) It takes a huge amount of time to bring loans that have gone badly wrong, whatever you want to call them, to completion and therefore crystallise any losses to 'big up' that 0.62%. For instance, I have a set of loans (Londonderry) that are approx. 1050 days old, nearly 2.5 years overdue. These are not deemed to be defaulted, so do not feature in the default rate. Even if they were, they've also yet to complete, so there's no lost capital. In reality, these loans should have been defaulted long ago, and are highly likely to incur significant losses when they eventually are finished. Some of the delay in crystallising losses is just a fact of life for P2P. The best outcomes need time. Arguably however, some borrowers are afforded far too much time to all outward appearances. In contrast, I don't see any valid excuse for the lack of calling a spade a spade in terms of categorising defaults though, it's just misleading. IMV.
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criston
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Post by criston on Apr 19, 2019 16:27:00 GMT
I did read it to mean 7.3% capital default, but 0.62% capital loss after recoveries, which I know takes a long time to accrue.
That's around 90% recovery.
Even Funding Circle with just Director Guarantees (which are over rated) reckon they eventually get 40% recoveries.
And yes, threaten the borrower quickly with auction. Saves a lot of legal, receiver & other ongoing expenses.
That of course assumes valuations are correct with plenty of leeway as far as LTV is concerned.
Reading through some of the defaulted loans, some valuations leave a lot to be desired
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adrian77
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Post by adrian77 on Apr 19, 2019 17:24:03 GMT
I would agree - I find the use of the word "defaulted" curious as to me (and I may be wrong) it can mean late and not yet settled e.g. Wimbledon which has the default status classed as "unredeemed" with status "loan defaulted" of which we all think there is exactly 0% chance of getting any money back. but there are also finalised loans which have the default status as "defaulted" and the loan status as "loan completed" e.g Peter Howson Painting which was sold at auction at a hefty loss. Well how simple is that! To me a defaulted loan is simply one which has not repaid on the contracted date.
A cynic would say this is PR spin nonsense designed to hide the true total of "defaulted" loans and there are going to be some mega losses here e.g. speedboat, park homes, Barnoldswick etc etc - as to whether this will change under the new management time will tell.
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Post by brightspark on Apr 19, 2019 18:27:15 GMT
According to FS statistics their default rate to date, after recoveries, is 0.62%. That appears pretty good on face value, but reading some threads here, defaults sound horrendous. What is the general feeling? Don't touch these investments with a bargepole unless you have a strong nerve and wide lending experience. Don't consider holding loans to term but instead churn them over leaving others less informed to take on the problems. Only chose first tranches of what sound like decent offerings. Don't rely on eulogistic twaddle given out by potential borrowers i.e. you must do your own proper due diligence - these are 12% i.e high risk loans! Be very wary of renewals - ask yourself why and is the reason crystal hard credible. Never ever lend more than you can afford to lose. Always diversify both in and between platforms rather than having everything stuck in a few large punts. Me - I gave up on FS platform about 18 months ago and none of the 5 investments have paid me so much as a penny owed for over at least a year. Fortunately I practiced what I preach so did not get my fingers more than a little singed.
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Post by dan1 on Apr 19, 2019 22:30:53 GMT
According to FS statistics their default rate to date, after recoveries, is 0.62%. That appears pretty good on face value, but reading some threads here, defaults sound horrendous. What is the general feeling? - have a scan through this thread... p2pindependentforum.com/thread/13234/fs-all-active-past-loans... if only to look at the charts. Most haven't been updated in a while but you get the picture.
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jonno
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Post by jonno on Apr 20, 2019 7:38:49 GMT
criston; three little words that will stand you in good stead for many years to come: DONT DO IT!!!!!
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criston
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Post by criston on Apr 20, 2019 15:44:23 GMT
dan1;
Thanks for that. Interesting. So I will add my four penneth.
Managed to interpret FC's statistics page.
March 2019 Loans to date £283,940,212 of which £235,290,742 completed.
The remaining £48,649,470 is overdue, £39,237,300 of which there is an agreed extension, pending refinance / sale
Not sure how to interpret the £9,412,170 between the two figures above. 'Overdue but without any agreement'
Now, of the £235,290,742 completed, £20,649,257 has defaulted.
Of the £20,649,257 defaulted £4,158,758 has been recovered, £15,155,759 is funds pending & £1,334,741 is lost.
The £1,334,741 is the 0.62% said to be lost due to defaults.
The big figure of £15,155,759 said to be 'f'unds pending' is where the remaining possible defaults could be hiding & equates to 6.7%.
FC really need to make this very much clearer.
It's the £9,412,170 'overdue' & the £15,155,759 'funds pending' that need explaining.
All in all it's quite easy to see how an earlier poster had 81% problem loans.
jonno;
I already have just 1.5% of my 'peer 2 peer pot' in FS, over 6 loans.
I picked ones with LTV of less than 60% which reduce to between 8.5% & 50% LTGDV.
Need to add 6% to these figures for rolled up interest.
I did have the Isle of Wight one, 20% LTV but that was paid back after a month.
I was aware of FS's record before investing, but not as much as covered on this thread, hence my cautious approach.
I will keep an eye on things though.
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technik
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Post by technik on Apr 22, 2019 9:59:35 GMT
A couple of things I thought might be helpful to point out. The thread dan1 mentioned is very useful and considers a lot of things to do with the stats and how they are open to interpretation (not just for those with cynical views of FS, but because how you define a non-performing loan for example impacts how the stats read when projecting forward). Completed loans may be misleading, as could be interpreted as a loan made and repaid in full. A large % of all completions are simply renewals, rolled over (and often with the owed interest built into a higher renewal amount). And with 6 month loan terms the cumulative completions look better than an arbitrary equivalent platform with 12 month loan terms. However, it is possible to cash out a loan after 6 months so a renewal could be a completion for an individual investor, but it's more debatable whether the loan itself is complete. Overdue seems more important than any differentiation between 'overdue with an agreed extension, pending refinance / sale' or 'overdue but without any agreement'. The former just means FS have decided the borrower can have more time, based on whatever reasoning or proof has been provided by the borrower that they aren't a lost cause. Lenders are not party to the criteria for that and based on what you read in consecutive updates over many years, or in the more disastrous default cases, a lot of people seem legitimately able to suggest the bar is quite low in terms of the evidence that needs providing. Nice to have someone coming at all of this afresh though and reading all the info available for the first time, as a complete package. |
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Greenwood2
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Post by Greenwood2 on Apr 27, 2019 12:55:47 GMT
Article in The Telegraph Money today about defaults on FS. I can't find an online link.
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