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Post by Deleted on Jun 24, 2019 17:01:38 GMT
Lendy funded it's operations through fees paid by the borrower to arrange the loan, and the equivalent of 1% of the interest per month on loans where lenders get the other 12%. On larger loans like HQ that equates to hundreds of thousands of pounds. Then when there are defaults Lendy take the legal fees and recovery fees out of the funds they recover, before handing what is left back to the lenders. It was in Lendy's interests for loans to go into default in order to attract more fees, more interest, etc. Massive conflict of interests. Many believe this to be unfair as Lendy moved themselves to the front of the recovery costs queue without notifying investors, they just tweaked their terms and quietly brushed it under the carpet. I am not arguing at all but I am amused at your clarity describing Lendy's operations. On two loans a number of us know about, my understanding is that Lendy's interest was about 2% on one and 3% on another, while lenders' 'received' interest rate was 11%. On top were arrangement fees. Furthermore, overdue interest was an additional 3%, to be distributed between Lendy and lenders in a manner I can't remember. And yes, then there would also to be legal fees and recovery fees if defaulted. Lendy offered various interest rates depending on the risk profile of the property and the time remaining on the loan. Bonus interest was added to essentially pass on their interest rate to investors in loans nearing maturity to encourage people to stay in or buy into loans nearing the end of the term, because people started to flip them on the secondarymarket. The percentage was largely dictated by the size of the loan. On a smaller loan the arrangement fees would be a proportionally larger share of the overall return through the life of the loan, so Lendy may well have made more on one loan than they did for the other, however borrowers always paid the same interest rate and bonus rate where loans exited without any issues. You must remember that all of these fees, including our interest, were taken upfront before the loan was drawn down and then kept in the client account and drip fed back to investors over the life of the loan. They weren't taken from the borrower in monthly repayments like normal loans. By allowing a loan to go into default Lendy had an opportunity to extract more fees at that point while investors received nothing other than virtual interest to be paid when the default was settled. As we know most of them did not settle, and instead achieved a very poor recovery via auction. Lendy then took their full fees from that auction before passing on the rest. They even managed to get their fees paid from the provision fund by deducting amounts from the PF to top up capital losses due to the fact that they had used capital to take their fees. So in the end the provision fund wasn't really just for lost investor capital, it was a pot to cover literally unlimited Lendy fees too.
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Post by Deleted on Jun 24, 2019 17:06:41 GMT
Ok, I really try to avoid getting into arguements online so I'm not going to debate this point by point (funding is different to fee income, "estate" is the term for the assets of a "dead" company - what you've called "company assets" - it's the same as the "estate" of a deceased person, and I could go on).
You think the law is black and white, I think it is rarely black and white and this may take time and throw up some surprises, nothing we say here will answer that difference of opinion so let's leave it at that.
I hope you (and the rest of us!) get back your investments.
All the best, woofs and licks to the gang at Planet Express.....
You've just said there's a case to argue against and now you don't want to argue it? I've attempted to educate you on areas you clearly have no understanding of. Not knowing how Lendy make money from loans is a shocking admission to make if you have been pouring money into their platform.
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thedog
Member of DD Central
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Post by thedog on Jun 24, 2019 17:42:36 GMT
Ok, I really try to avoid getting into arguements online so I'm not going to debate this point by point (funding is different to fee income, "estate" is the term for the assets of a "dead" company - what you've called "company assets" - it's the same as the "estate" of a deceased person, and I could go on).
You think the law is black and white, I think it is rarely black and white and this may take time and throw up some surprises, nothing we say here will answer that difference of opinion so let's leave it at that.
I hope you (and the rest of us!) get back your investments.
All the best, woofs and licks to the gang at Planet Express.....
You've just said there's a case to argue against and now you don't want to argue it? I've attempted to educate you on areas you clearly have no understanding of. Not knowing how Lendy make money from loans is a shocking admission to make if you have been pouring money into their platform. Sigh.... It's not going to change anything - you have a view, I disagree. So bluntly what does it matter if we argue it out? It will land where it lands. I, and I'd have thought you, have better things to do with my time.
I'm not going to respond to comments like "you clearly have no understanding". You will think I cannot defend my views, I will tell you I can but refuse to waste my time. You can tell yourself you've "won" if you like, I don't mind..... The point of BBs is to share experience and views not argue about things we cannot change.
Of course Lendy made income from fee income and interest margin, I never said otherwise or that I didn't know that. Income and funding are different concepts. I specifically said I've only a very small exposure so not "pouring money".
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Post by Deleted on Jun 24, 2019 18:24:29 GMT
You've just said there's a case to argue against and now you don't want to argue it? I've attempted to educate you on areas you clearly have no understanding of. Not knowing how Lendy make money from loans is a shocking admission to make if you have been pouring money into their platform. Sigh.... It's not going to change anything - you have a view, I disagree. So bluntly what does it matter if we argue it out? It will land where it lands. I, and I'd have thought you, have better things to do with my time.
I'm not going to respond to comments like "you clearly have no understanding". You will think I cannot defend my views, I will tell you I can but refuse to waste my time. You can tell yourself you've "won" if you like, I don't mind..... The point of BBs is to share experience and views not argue about things we cannot change.
Of course Lendy made income from fee income and interest margin, I never said otherwise or that I didn't know that. Income and funding are different concepts. I specifically said I've only a very small exposure so not "pouring money".
You may wish to conduct self research in order to separate fantasy from reality, and be particularly careful about making statements to the contrary of fact in a publicly visible discourse.
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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 Jun 24, 2019 19:36:26 GMT
Lendy charged interest/management fees of between 6% & 3% pa. Arrangement fees were 4% with a proportion of that going to the broker.
Lendy may well have taken additional fees in exchange for extending a loan but any fees, default interest etc would have accrued and only been paid on repayment of the loan.
Relatively few loans redeemed with Lendy fees ranking ahead of lenders.
Lendy's HO is owned by a company named after it since late 2017/early 2018. That company has been owned by another group company since June 18 and ownership of that company passed to Mrs Laim in November.
Lendy announced the change to their terms in an email to lenders in March 2018, alerts on the website & and linked article on support. The clause containing the repayment priority was specifically highlighted. The previous t&cs did not include a repayment priority. The only statement of that was made in the recoveries policy communicated in April 2018 which may not count as a legal document and contradicted the T&Cs until corrected 8 months later. However, Lendy didnt actually follow the priority for several months & were inconsitent in its application.
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Post by brightspark on Jun 24, 2019 20:18:59 GMT
You are correct to make the point. Investors in HQ want their part payment now. The deafening silence concerning the part repayment of this very large sum of money is indicative of the sort of shenanigans that may be about to happen. We will just have to wait and see but I am not holding my breath. It is the FCA, not the administrators who are preventing access to those funds. The admins have 8 weeks to balance the books and report to the FCA so they can begin to approve payments. Anything before those 8 weeks should be considered a bonus, and the administrators are under no obligation to report on anything until the conclusion of their investigation, otherwise they may give out incorrect information causing more harm than good. It seems odd that Administrators in this instance effectively are referring all decisions regarding distribution of monies to the FCA which is not set up to make judgements on Administration. would it not be more logical now that the dust has settled and their chosen Administrators are installed the FCA would fall back into the role of Regulator to avoid becoming first in the firing line in the event that serious disputes arise between the various parties.
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Post by Deleted on Jun 25, 2019 1:09:44 GMT
It is the FCA, not the administrators who are preventing access to those funds. The admins have 8 weeks to balance the books and report to the FCA so they can begin to approve payments. Anything before those 8 weeks should be considered a bonus, and the administrators are under no obligation to report on anything until the conclusion of their investigation, otherwise they may give out incorrect information causing more harm than good. It seems odd that Administrators in this instance effectively are referring all decisions regarding distribution of monies to the FCA which is not set up to make judgements on Administration. would it not be more logical now that the dust has settled and their chosen Administrators are installed the FCA would fall back into the role of Regulator to avoid becoming first in the firing line in the event that serious disputes arise between the various parties. The administrators are not referring anything to the FCA other than their report once they have run a full reconciliation on the accounts, and the advice legal professionals give regarding unfair contractual terms which may lead some or all investors to getting creditor status. They aren't just flipping a coin, it will have to be looked at in forensic detail where substantial sums of money are involved. The fact that the administrators are running the company at this point, instead of LB makes no difference to the FCA, the restriction is in place and the company insolvent, it didn't go away the moment it went into administration. You should treat the current reconciliation as if it were being conducted by LB on the requirements of the FCA. It's much better for obvious reasons that the admins are doing it and not LB, there will be no room for creative book keeping and will uncover any past instances, potentially leading to a clawback of assets under the insolvency act which may have been removed from the company, ie transferring Lendy towers to his Mrs for one, a million quid sent to an offshore tax avoidance scheme, etc. Only a few more weeks now and we'll be able to see what's what.
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Post by rooster on Jun 25, 2019 6:02:31 GMT
It seems odd that Administrators in this instance effectively are referring all decisions regarding distribution of monies to the FCA which is not set up to make judgements on Administration. would it not be more logical now that the dust has settled and their chosen Administrators are installed the FCA would fall back into the role of Regulator to avoid becoming first in the firing line in the event that serious disputes arise between the various parties. The administrators are not referring anything to the FCA other than their report once they have run a full reconciliation on the accounts, and the advice legal professionals give regarding unfair contractual terms which may lead some or all investors to getting creditor status. They aren't just flipping a coin, it will have to be looked at in forensic detail where substantial sums of money are involved. The fact that the administrators are running the company at this point, instead of LB makes no difference to the FCA, the restriction is in place and the company insolvent, it didn't go away the moment it went into administration. You should treat the current reconciliation as if it were being conducted by LB on the requirements of the FCA. It's much better for obvious reasons that the admins are doing it and not LB, there will be no room for creative book keeping and will uncover any past instances, potentially leading to a clawback of assets under the insolvency act which may have been removed from the company, ie transferring Lendy towers to his Mrs for one, a million quid sent to an offshore tax avoidance scheme, etc. Only a few more weeks now and we'll be able to see what's what. Are there any limits to the administrator's clawback option? For example, were the administrators to deem Lendy had broken stated terms of business or operated the company in a way that significantly harmed users (both lenders and borrowers) of the platform, could it clawback withdrawals/payments/proceeds removed from the company and paid to any of the senior management running the company since it's induction (as Saving Stream) please?
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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 Jun 25, 2019 8:15:44 GMT
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iRobot
Member of DD Central
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Post by iRobot on Jun 25, 2019 12:31:45 GMT
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Post by Deleted on Jun 25, 2019 13:15:23 GMT
The administrators are not referring anything to the FCA other than their report once they have run a full reconciliation on the accounts, and the advice legal professionals give regarding unfair contractual terms which may lead some or all investors to getting creditor status. They aren't just flipping a coin, it will have to be looked at in forensic detail where substantial sums of money are involved. The fact that the administrators are running the company at this point, instead of LB makes no difference to the FCA, the restriction is in place and the company insolvent, it didn't go away the moment it went into administration. You should treat the current reconciliation as if it were being conducted by LB on the requirements of the FCA. It's much better for obvious reasons that the admins are doing it and not LB, there will be no room for creative book keeping and will uncover any past instances, potentially leading to a clawback of assets under the insolvency act which may have been removed from the company, ie transferring Lendy towers to his Mrs for one, a million quid sent to an offshore tax avoidance scheme, etc. Only a few more weeks now and we'll be able to see what's what. Are there any limits to the administrator's clawback option? For example, were the administrators to deem Lendy had broken stated terms of business or operated the company in a way that significantly harmed users (both lenders and borrowers) of the platform, could it clawback withdrawals/payments/proceeds removed from the company and paid to any of the senior management running the company since it's induction (as Saving Stream) please? No, clawback of assets and shares are specifically if assets have been sold off or given away under value or to remove it from the reach of creditors. It forms part of the insolvency act.
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Post by Deleted on Jun 25, 2019 13:31:55 GMT
Not wanting to say anything about it other than that they are currently in enforcement doesn't sound positive. www.fca.org.uk/about/enforcement"Our Enforcement division supports our objectives by making it clear there are real and meaningful consequences for firms and individuals who don’t follow the rules. We can take action such as: withdrawing a firm's authorisation prohibiting individuals from carrying on regulated activities suspending firms and individuals from undertaking regulated activities issuing fines against firms and individuals who breach our rules or commit market abuse issuing fines against firms breaching competition laws making a public announcement when we begin disciplinary action and publishing details of warning, decision and final notices applying to the courts for injunctions, restitution orders, winding-up and other insolvency orders bringing criminal prosecutions to tackle financial crime, such as insider dealing, unauthorised business and false claims to be FCA authorisedissuing warnings and alerts about unauthorised firms and individuals and requesting that web hosts deactivate associated websites" If LB tried to pull the wool over the FCA's eyes when we knew things were already starting to go wrong last year in order to get authorisation we could be in for a box of popcorn.
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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 Jun 26, 2019 0:21:08 GMT
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adrianc
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Post by adrianc on Jun 26, 2019 8:32:41 GMT
www.fca.org.uk/about/enforcement"Our Enforcement division supports our objectives by making it clear there are real and meaningful consequences for firms and individuals who don’t follow the rules. We can take action such as: ... bringing criminal prosecutions to tackle financial crime, such as ... false claims to be FCA authorised Collateral, anybody?
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Post by Deleted on Jun 26, 2019 11:44:25 GMT
www.fca.org.uk/about/enforcement"Our Enforcement division supports our objectives by making it clear there are real and meaningful consequences for firms and individuals who don’t follow the rules. We can take action such as: ... bringing criminal prosecutions to tackle financial crime, such as ... false claims to be FCA authorised Collateral, anybody? Col weren't FCA authorised. I'm talking about potentially Ly lying to the FCA to get authorised, not lying to the public that they are already authorised.
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