State of defaulted loans

red_panda

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Likes: 13

State of defaulted loans Jul 28, 2019 9:34:24 GMT p2pfan likes this

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Post by red_panda on Jul 28, 2019 9:34:24 GMT

I've been with Mintos for almost 4 years now, I'm generally happy with how my investments through this platform are going, but what I am not happy with is the state of the defaulted no-buyback loans and the low quality and frequency of updates. I have 8 loans in default (5% of my loans) and this is the state of debt collection for some of them.

Capitalia
Business loan - Defaulted in 09/2016
Last two years of updates can be summarized by "There are no updates since the latest status update."

Invoice financing loan - Defaulted in 03/2017
Last year of updates can be summarized by "There are no updates since the latest status update."

Debitum
2 Invoice financing loans, likely same debtor - Defaulted in 08-2017
No update for the past 7 months.

Mogo
Car loan - Defaulted in 12/2017
No update for the past 16 months.

Car loan - Defaulted in 10/2018
No update for the past 8 months.

As you can see, some of the loans just become "sleeper defaults", where it seems the loan originator completely ignores them. I have chased Mintos to chase the loan originators for a proper update, but to no progress. I'd like closure on these loans, either have them written off as bad debt or at least be informed on a quarterly basis what the next steps and expectations are. I am definitely not happy with how Mintos is handling this.

What are your thoughts and experiences?

Last Edit: Jul 28, 2019 9:34:38 GMT by red_panda

benaj
Member of DD Central

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Likes: 1,591

State of defaulted loans Jul 28, 2019 9:51:12 GMT

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Post by benaj on Jul 28, 2019 9:51:12 GMT

I prefer buyback loans (99.7%) and have had very few loans without buyback guarantee: 1PM & Capitalia. My experience regarding the weighted average interest rate difference between buyback guarantee and no buyback is almost negligible, 13.80% (BB) vs 13.79% (noBB). My Mintos current NAR after 8 months is 11.81%.

I haven't experienced any defaults myself on Mintos. Invoice financing loans from Capitalia Lithuania so far has 0% default and 3.1% are beyond 60 days late. My current 2 loans with no buyback guarantee are self selected and have been receiving repayment on time and up to date.

But it is interesting to note Capital Estonia has small amount of outstanding Invoice financing loans defaulted and have 98.5% capital repaid for total amount lent.

blog.mintos.com/is-it-the-loan-performance-or-loan-originator-that-matters/

Loans with buyback guarantee can be risky too, for example Eurocent.

blog.mintos.com/the-current-situation-with-eurocent/
"As of July 2019, the District Court of Krakow still has not approved Eurocent’s creditor list."

Last Edit: Jul 28, 2019 10:18:41 GMT by benaj

p2pfan
Member of DD Central

Full-Time Investor

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State of defaulted loans Aug 4, 2019 23:12:19 GMT

Quote

Post by p2pfan on Aug 4, 2019 23:12:19 GMT

Jul 28, 2019 9:34:24 GMT red_panda said:

I've been with Mintos for almost 4 years now, I'm generally happy with how my investments through this platform are going, but what I am not happy with is the state of the defaulted no-buyback loans and the low quality and frequency of updates. I have 8 loans in default (5% of my loans) and this is the state of debt collection for some of them.

Capitalia
Business loan - Defaulted in 09/2016
Last two years of updates can be summarized by "There are no updates since the latest status update."

Invoice financing loan - Defaulted in 03/2017
Last year of updates can be summarized by "There are no updates since the latest status update."

Debitum
2 Invoice financing loans, likely same debtor - Defaulted in 08-2017
No update for the past 7 months.

Mogo
Car loan - Defaulted in 12/2017
No update for the past 16 months.

Car loan - Defaulted in 10/2018
No update for the past 8 months.

As you can see, some of the loans just become "sleeper defaults", where it seems the loan originator completely ignores them. I have chased Mintos to chase the loan originators for a proper update, but to no progress. I'd like closure on these loans, either have them written off as bad debt or at least be informed on a quarterly basis what the next steps and expectations are. I am definitely not happy with how Mintos is handling this.

What are your thoughts and experiences?

Extremely sorry to hear about your experiences with these loans.

This is very poor form by Mintos and they ought to pull their fingers out. It's ridiculous that they are not providing updates for not days or week or months but years.

Have Mintos given you any indication if your loans are being actively pursued?

Might be worth regularly telephoning them if they're not replying to your emails.

red_panda

Posts: 113

Likes: 13

State of defaulted loans Aug 9, 2019 10:51:00 GMT

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Post by red_panda on Aug 9, 2019 10:51:00 GMT

All I got was just a standard response like the one below. Nothing else. I will follow up however.

Thank you for your message and for all of the information provided.

I did contact our Risk team regarding your question.

They will contact <LOANORIGINATOR> and ask them for an update regarding these loans.

Info should be updated at the loan information page in the nearest future.

red_panda Posts: 113 Likes: 13	State of defaulted loans Aug 12, 2019 15:41:37 GMT Quote Select Post Deselect Post Link to Post Back to Top Post by red_panda on Aug 12, 2019 15:41:37 GMT One of the loans now updated to bad debt.

benaj
Member of DD Central

Posts: 4,853

Likes: 1,591

State of defaulted loans Oct 26, 2019 16:30:21 GMT JamesFrance likes this

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Post by benaj on Oct 26, 2019 16:30:21 GMT

I haven't got any defaulted loans on Mintos yet. Here are my "interesting" findings on Loans without Buyback

- Defaulted loans are being traded on the SM even after debt collection initiation

Mogo:
- Some examples shown Mogo repossessed the vehicles within 6 months
- Some debt collection costs are high, 1000 Eur on a 3.5k Eur car loan
- Some debt collection costs are 0, 49 eur recovery on 280 Eur remaining principal
- Recovery money can be tiny, 100 eur recovered on 3.5k loan after vehicle being sold
For example:
www.mintos.com/en/172848-01

Capitalia Business loan
- long recovery process involving courts and bailiffs, but recovery results vary.
- For example, www.mintos.com/en/29366-01 less than 800 eur recovered for 10k eur principal
- Some recovery processes are fruitless, bailiffs visits do not generate recovery

Hippo Credit
- Long recovery process involving mortgage loan
- For example www.mintos.com/en/159365-01
- Bailiffs recovered 2/3 principal from borrower in the above cases, no property sold on a 6% (42% LTV) mortgage.
- In another case, auction resulted 90% principal recovery on a 6% (46% LTV) mortgage.

Defibo Invoicing loan
- Long recovery process involving courts
- For example www.mintos.com/en/670927-01
- A number of defaulted loans from the same borrower with loan term duration.
- In the above example, so far 0 have been recovered

Last Edit: Oct 26, 2019 16:37:29 GMT by benaj

fric
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Likes: 79

State of defaulted loans Oct 29, 2019 7:08:35 GMT JamesFrance likes this

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Post by fric on Oct 29, 2019 7:08:35 GMT

For Mogo - its a car loan, those are very risky and the collateral is very weak. Somebody buys a 10 year old diesel from one of those car lots... Don't expect that after a few years the car would be worth the same as before... Also - if a person buys this car for lets say 2-5k eur, he probably doesn't have the money to do serious repairs. So yeah, the car loan collateral is bad...

As for Hipocredit and mortgage loans - as a Latvian i sometimes were able to find the auctions of the defaulted loans. Those LTVs and valuation stated on Mintos were heavily overestimated... The appraiser for the auction valued it @ like 50% of the Hipocredit one... And also forced sale is always cheaper than at the market value...

Post by red_panda on Jul 28, 2019 9:34:24 GMT

Post by benaj on Jul 28, 2019 9:51:12 GMT

Post by p2pfan on Aug 4, 2019 23:12:19 GMT

Post by red_panda on Aug 9, 2019 10:51:00 GMT

Post by red_panda on Aug 12, 2019 15:41:37 GMT

Post by benaj on Oct 26, 2019 16:30:21 GMT

Post by fric on Oct 29, 2019 7:08:35 GMT