Ukmikk
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Post by Ukmikk on Jul 29, 2019 15:44:53 GMT
I have attempted to sell my medium term loans manually on the SM. Some parts have sold, but 2x £100 parts of loan 52831724943 remain unsold at this time. Plus a few smaller parts of the same loan from my non ISA account.
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Ukmikk
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Post by Ukmikk on Jul 31, 2019 9:35:23 GMT
Just checked what's left of my investments and noticed 3 new loans today. Bit confused though as two list at 5% and Medium-Term Loan and the 3rd new one lists at 7.5%. Drill down into the agreement page via "Show Loan Agreement" for ANY of them and they all show the following:
3.1 Loan Amount – £80000
3.2 Loan Term – 1827 days
3.3 Interest Rate – 12%
3.4 Total amount repayable – £128000
3.5 APR – 22.26%
* and just to add, I had no prior email informing me about these new types of loan
That's a lot of days. If 5 year is a medium term, what would be a long term? I've never seen anything longer than 61 months on p2p platforms. In any case, it looks like FO is trying to get a slice of "Rebs/LC" pie. It is weird that the loan is split at different rates to lenders. I think para 9.6 in the updated terms and conditions explains what these mysterious new Medium Term loans are (2 x loans £80k and £75k); 9.6. In addition to performing introductory functions on behalf of borrowers and investors, we also act as a borrower with investors from time to time. You authorise us to enter into direct loan agreement with you that meets your criteria under Auto-Match™ function. The amount borrowed will be mainly used for marketing our products and services in order to achieve better utilisation and better return on your investment.
So it looks like they have helped themselves to our uninvested cash without asking in order to try and get their new site off the ground. This explains how they have taken different chunks at different rates within the same loan.
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Ace
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Post by Ace on Jul 31, 2019 23:45:49 GMT
That's a lot of days. If 5 year is a medium term, what would be a long term? I've never seen anything longer than 61 months on p2p platforms. In any case, it looks like FO is trying to get a slice of "Rebs/LC" pie. It is weird that the loan is split at different rates to lenders. I think para 9.6 in the updated terms and conditions explains what these mysterious new Medium Term loans are (2 x loans £80k and £75k); 9.6. In addition to performing introductory functions on behalf of borrowers and investors, we also act as a borrower with investors from time to time. You authorise us to enter into direct loan agreement with you that meets your criteria under Auto-Match™ function. The amount borrowed will be mainly used for marketing our products and services in order to achieve better utilisation and better return on your investment.
So it looks like they have helped themselves to our uninvested cash without asking in order to try and get their new site off the ground. This explains how they have taken different chunks at different rates within the same loan. Nice work in spotting this Ukmikk . My understanding of the different chunks at different rates within the same loan issue, is that this can apply to all loans. Can't recall where I saw the explanation, but I think it went something like this: once FO decide on the risk rate for a loan they assign it a lender rate (say 8% for example). They then look for lender's investments that are set to lend at that 8% risk rate. If there is sufficient investment availability at that rate then the whole loan will be lent out at 8%. If not, then they will look in the next risk rate (I.e. 8.5%). If they can satisfy the remainder of the loan at this rate they will do so. If not they will then try the next higher rate, and so on. So even for standard short-term loans they can, and have done, lend out different chunks at different rates. Perhaps someone will recall where the proper explanation of this is and will be kind enough to provide a link, or perhaps I'm misremembering and going mad! Anyway, it seems FO have been helping themselves to our uninvested cash again. I got several chunks of two new versions of these medium-term, non-PF-funding loans yesterday. It's considerably improved my cash drag situation, but I can't say I'm happy about the radio silence. Surely such a major change in loan type should have been preanounced with a clear explanation of what they were doing and why, and a clear explanation of how one could avoid these types of loans if they wanted to. Leaving us to cobble some kind of explanation together ourselves, which is unlikely to be 100% correct, is pretty poor form IMO. The lending stats have had a large jump (£300k) due to this lending back to FO. I think this should be broken out separately in the stats as it is otherwise misleading.
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Post by df on Aug 2, 2019 0:12:49 GMT
So it looks like they have helped themselves to our uninvested cash without asking in order to try and get their new site off the ground. This explains how they have taken different chunks at different rates within the same loan. Goes well with the brand (both, old WLU and new FO).
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Greenwood2
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Post by Greenwood2 on Aug 2, 2019 7:01:18 GMT
So it looks like they have helped themselves to our uninvested cash without asking in order to try and get their new site off the ground. This explains how they have taken different chunks at different rates within the same loan. Goes well with the brand (both, old WLU and new FO). We are lending them money for them to run a business for us to lend money.... funding themselves nicely. Lending directly to a platform is not P2P, can it be P2B? Do the FCA allow that sort of relationship between a platform and lenders? Seems like very dodgy practice, particularly not explaining it to lenders. What do FO do if FO fail to pay lenders back, pay it out of the pf or sue themselves? Edit: And how do FO decide what rate of interest FO are worthy of?
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Post by tfw on Aug 2, 2019 9:37:36 GMT
It's not unusual. For example, Seedrs raised funds on its own platform few times before.
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Greenwood2
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Post by Greenwood2 on Aug 2, 2019 11:06:33 GMT
It's not unusual. For example, Seedrs raised funds on its own platform few times before. If Seedrs openly advertised a funding round on their platform for themselves I don't see a problem, you could invest or not invest in the company, just like any other funding round. FO is a P2P company introducing lenders to borrowers deciding the rates and administering the loans it seems to me to be a conflict of interest in them lending our money at rates they decide to themselves, and increases the lending risk, ie, if the platform became insolvent those loans would disappear with it, for all other loans a borrower would still exist to pursue for payment. Imagine the outcry now if Lendy had borrowed big sums from it's own lenders.
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ilmoro
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'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 Aug 2, 2019 12:01:51 GMT
I would want clarification that this is allowable by the FCA as they dont permit balance sheet lending/direct skin in the game, so I would be surprised if they allowed balance sheet borrowing. All their permissions relate to lending.
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Ukmikk
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Post by Ukmikk on Aug 2, 2019 13:05:52 GMT
Goes well with the brand (both, old WLU and new FO). We are lending them money for them to run a business for us to lend money.... funding themselves nicely. Lending directly to a platform is not P2P, can it be P2B? Do the FCA allow that sort of relationship between a platform and lenders? Seems like very dodgy practice, particularly not explaining it to lenders. What do FO do if FO fail to pay lenders back, pay it out of the pf or sue themselves? Edit: And how do FO decide what rate of interest FO are worthy of? I agree, lending to the platform is an entirely different risk, and one which we had not agreed to. The way FO have gone about this, sneaky change to T&CS and then immediately auto-opt in and take the cash, is, IMO, sneaky and underhand at best. I am not impressed and doubt the FCA will be either.
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benaj
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Post by benaj on Aug 2, 2019 13:43:51 GMT
Just received an email update about these new loans and instructions to pass the unloved new loans for those who doesn't know how.
An update for the FO Statistics page (not available on the WLU portal) and new incentives for the patient investors.
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Ace
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Post by Ace on Aug 2, 2019 15:54:31 GMT
The email states that where FO act as the borrower the rates will be between 10% and 15%. I seem to have a couple of these at 5%!
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markyg61
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Post by markyg61 on Aug 2, 2019 18:39:34 GMT
The email states that where FO act as the borrower the rates will be between 10% and 15%. I seem to have a couple of these at 5%!
Likewise !!
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Post by nsiam on Aug 2, 2019 20:29:58 GMT
The email states that where FO act as the borrower the rates will be between 10% and 15%. I seem to have a couple of these at 5%!
Likewise !!
and markyg61, please PM or email me and we will look into it.
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Ace
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Post by Ace on Aug 2, 2019 23:19:05 GMT
Ace and markyg61 , please PM or email me and we will look into it. I had already emailed customer support to question this earlier. These loans are no longer showing as 5%. They are now all showing as either 12% or 15%. Looks like someone has been changing rates behind the scenes. The only evidence remaining that I can see is a vague entry in the event log that says "Investment modification" at 08:44 on 2/8/2019. I suppose all's well that ends well, but if errors have been made and have been corrected, I would have liked to have been informed.
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Ukmikk
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Post by Ukmikk on Aug 3, 2019 9:15:22 GMT
Ace and markyg61 , please PM or email me and we will look into it. I had already emailed customer support to question this earlier. These loans are no longer showing as 5%. They are now all showing as either 12% or 15%. Looks like someone has been changing rates behind the scenes. The only evidence remaining that I can see is a vague entry in the event log that says "Investment modification" at 08:44 on 2/8/2019. I suppose all's well that ends well, but if errors have been made and have been corrected, I would have liked to have been informed. It feels like they are making it up as they go along. Not very confidence inspiring.
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