Defaults

Scanned from newspaper as editable text. I have corrected some of the wrong words, but I may have missed something

Reckon they wrote most of this story by reading my previous posts !!!!!!!!!!!!!!!!!. Very similar to the points I made.

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Pressure mounts on peer-to-peer
investors as more loans turn sour
Users FundingSecure, P2P
platform, are battling against a
sharp rise in non-performing
loans, Adam Williams reports
Pressure on the peer-to-peer
loans industry continues to
intensify, with investors using
the FundingSecure platform
the latest to face widespread issues.
Analysis by Telegraph Money found
that most of FundingSecure's £88m
live loan book is failing to perform as
expected. Loans worth a total of £24m
are considered in default - when the
borrower has not repaid the sums due
to investors - or expected to default. A
further £33m is in forbearance, which
means the platform has extended the
standard six-month loan term as the
borrower could not repay on time.
In some cases, loan terms have been
extended repeatedly, with investors
complaining that this hides the true
scale of problems. Many loans are
described by FundingSecure as
"active", rather than in arrears. But
Telegraph Money has uncovered loans
that are more than two years overdue
yet are still considered active, as the
initial term has been extended.
FundingSecure admitted that the
current level oflate payments was
"unacceptable" and blamed poor
economic conditions for the increase
in defaults. The company argued that
extending loan terms was intended to
give borrowers additional time to
repay or refinance. This was preferable
to pursuing borrowers in court, it said.  
FundingSecure allows individuals to
lend against property and other items
such as art, cars and watches, making
it akin to a high-end pawnbroker. It
offers returns of more than I2pc on
some loans, but many have turned
sour. In one case, a piece of artwork,
which investors believed was being
held in a secure location, was moved
and sold. How this occurred is now
subject to a legal case.
Nigel Hackett, of FundingSecure,
acknowledged that many loans on the
platform "may not have performed in
line with our investors' expectations".
He said the firm would look to
improve its communication and now
offered I8-month loans, which was
intended to minimise the number of
six-month terms being extended.
Mr Hackett said the firm was now
performing increased due diligence on
all new loans. "The process of
recovering funds for our investors
from all overdue loans is our number
one priority;' he said.
FundingSecure is the latest peer-to-
peer company to battle with arrears.
This newspaper has repeatedly
reported on troubles at Lendy,
another peer-to-peer provider.

The message they gave to the newspaper is nothing that FS hasn't said to us in each monthly update stretching back to last year.

The DT (and this journalist in particular) and other 'establishment' media titles really do seem to have their knives out for P2P.

At least this one quotes some FS sound bites even if they did fail to mention the 100s of successfully repaid loans and millions returned in interest (which I doubt FS would have neglected to inform the journalist of at the point of replying to any enquiries made).

FS managed to recover 125 loans so far in the all time loan book. 6 of these recoveries are property related. Blings, cars and art recoveries are much quicker than properties.

Compared to the unredeemed loans, there are 72 so far.

Realistic expectation, recovery takes time. Even FS has successfully recovery record for 2nd charge renewal 3113339697.

I agree but we investors need to have some confidence in the business acumen of FS and I currently have exactly zero. I invested in 6 art loans which I researched and thought were reasonably valued and there was NO evidence whatsoever they were the same lender (as with other property loans).  And what happened with art loans : FS literally gave them away without any reliable security. If a fund manager in the City had done this he would probably have been sacked or promoted depending upon his school tie! If FS has a poorly performing loan book then the only thing diversification is going to do is ensure a loss which reflects the loan book performance! Granted FS may now disclose if loans are linked but horse and stable door comes to mind.

Surely if FS were doing there job properly then most loans would be a prudent investment just like the Park homes, Whitehaven, Wimbledon, NI turbine etc etc! 

You need to be careful with statistics. How you invest on FS is dependent on how much time and money you are willing to put in. The good loans go fast and often have an initial limit of £25/£50. If you have lots of time and only £25 to invest you should have no issues making over 100% interest per year. If you have 20K to invest then you should be happy with 7-10% and avoiding a capital loss. If you go by the statistics and assume 20K then you are assuming you could evenly spread your investment across all loans. This does not happen. The loans that have a good chance of pay back are hard to invest in. The loans that are much more risky will happily accept a great deal of your hard earned £££.
Those brave souls that buy on SM at -1, close to the 30day cut off and hope to get 20% are significantly increasing their risk of a loss. I think they double their potential return and triple their risk. Maths guru required.