blender
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Post by blender on Jan 23, 2020 15:55:58 GMT
The issue is not whether the platform promised more lender funds to the borrower, but whether the borrowers can take legal action again any/all of the lenders, rather than the platform. See the LY London loan case for more background. That is where the 'loss more than amount lent' comes from.
There may be no merit in the borrower's case, but that doesn't help the lender(s) who got dragged into a court case miles away, and may never collect their costs.
Yes, this sort of problem can apply where a single development project is to be funded by a series of tranches. If the agent (platform) makes a commitment to the borrower to fund a complete project and subsequent if tranches fail to fill, then the borrower may have a claim against the lenders for breach of contract - presumably just the lenders who lent on the first tranche and have a contract with the borrower. Developers need to be assured that all the funds will be forthcoming. Good old FC, when they did property in small tranches, made an agreement to fund the whole project if the first tranche filled. If lender funds were not forthcoming they would lend the balance on the balance sheet of their subsidiary (they set aside £1M). So they at least sorted this problem. I believe that with ablrate, no loan commits to a subsequent loan.
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star dust
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Post by star dust on Jan 23, 2020 17:21:48 GMT
There have been two different cases one concerning alleged development funding (Lendy) and one concerning a number of loans secured on bling (Unbolted). Each case has different circumstances, but any claim doesn't need to have merit to be initiated, and the commonality is in my view the type of borrower. These cases have shown that there are some unpleasant vexatious litigious borrowers who are prepared to try it on, push at the boundaries or test the legal system in order to avoid their debts (I would contend not necessarily expecting to win), threatening lenders is an intimidation tactic, none has succeeded but the threat is worrying for lenders/investors until such time as it is legally ruled out. I am not a lawyer and have no legal knowledge, but personally, despite some platforms publicly claiming it couldn’t possibly happen to them, I don’t think any platform is immune.
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iren
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Post by iren on Jan 23, 2020 20:23:20 GMT
Ultimately, one of the problems with P2P as it stands is the lack of specific provision in law for P2P as an asset class. We need a Peer to Peer Investment and Borrowing Act 2020, in the same way we have, for example, banking acts and insurance acts.
The Act would clarify matters such as liabilities in the event of platform maladministration or unfulfillable promises, and the status of P2P assets in the event that a platform enters administration.
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Post by ablrate on Jan 24, 2020 9:04:57 GMT
There have been two different cases one concerning alleged development funding (Lendy) and one concerning a number of loans secured on bling (Unbolted). Each case has different circumstances, but any claim doesn't need to have merit to be initiated, and the commonality is in my view the type of borrower. These cases have shown that there are some unpleasant vexatious litigious borrowers who are prepared to try it on, push at the boundaries or test the legal system in order to avoid their debts (I would contend not necessarily expecting to win), threatening lenders is an intimidation tactic, none has succeeded but the threat is worrying for lenders/investors until such time as it is legally ruled out. I am not a lawyer and have no legal knowledge, but personally, despite some platforms publicly claiming it couldn’t possibly happen to them, I don’t think any platform is immune. I can see this is a concern. We believe we have bases covered on this, but we will expend some brain power and perhaps a little cash, and solve it.
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blender
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Post by blender on Jan 24, 2020 9:48:39 GMT
When it comes down to essentials, the borrower has a contract with the lenders, and it is very difficult for a platform to give an absolute guarantee that action could not be initiated. An indemnity offered by the platform to the lenders, backed by insurance, would be a practical solution - but it is not a problem that I worry about.
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number5
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Post by number5 on Mar 12, 2020 17:34:02 GMT
Any idea why the SM has gone really quiet (in my view) and also why there are some ridiculous discounts??
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benaj
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Post by benaj on Mar 12, 2020 18:12:18 GMT
I traded ££££ 3 weeks ago. Not too sure how active the SM right now. The price differences do suggest some investors must have offloaded their loans in a hurry.
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Post by Ace on Mar 12, 2020 18:51:02 GMT
I just watched the news. Apparently there's a bug doing the rounds 🤒. I wonder if it's related 🤔
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nw99
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Post by nw99 on Mar 12, 2020 20:44:10 GMT
Virus forced sellers chance to pick up some great bargains
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