Greenwood2
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Post by Greenwood2 on Nov 18, 2019 16:54:52 GMT
The fact remains that Zopa have unilaterally changed the terms of business to our cost. It used to be that the 1% fee included them bearing the costs of recovery of defaulted debts. Now that cost is being incurred by the company who buys the debts and so they pay us less than the amount actually recoverable (plus they keep their profit of course, so a double whammy). Don't kid yourselves - Zopa is doing this for its benefit, not ours. We are the saps taking the hit. But Zopa have tried and failed to recover these debts and they have been written off. Whoever buys them is taking a risk on how much they will be able to recover, obviously they expect they will be able to recover more than they have paid Zopa for them. And at least I can start to get some return on the percentage of the bad debt I get back now, rather than wait for years to get marginally more back... maybe. I also like the fact that I will be able to exit Zopa at some time rather than be tied in forever with 'irrecoverable' bad debt, which looks like happening on most platforms.
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aju
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Post by aju on Nov 18, 2019 16:57:38 GMT
Do you mean 17% these latest "Settled" ones that are crystalised defaults. I mean that I received a payment of around 17% of the outstanding money owed to me from the defaulted loans that are now 'settled' ie for every £10 of loan that was settled in this sale, I received £1.70. I didn't check the % for the last sale. Well that's quite interesting I measured the percentage in the same way - I think! total received / total outstanding of all our settled's in this tranche and got the following.
My Invest 15%
My ISA 17%
Mrs Aju Invest 17%
Mrs Aju ISA 17%spooky or what. Probably not as its possible they just split it that way i.e each lender would get 16-17% of the sold value for each loan in the debt sale.
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Greenwood2
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Post by Greenwood2 on Nov 19, 2019 11:32:13 GMT
I mean that I received a payment of around 17% of the outstanding money owed to me from the defaulted loans that are now 'settled' ie for every £10 of loan that was settled in this sale, I received £1.70. I didn't check the % for the last sale. Well that's quite interesting I measured the percentage in the same way - I think! total received / total outstanding of all our settled's in this tranche and got the following.
My Invest 15%
My ISA 17%
Mrs Aju Invest 17%
Mrs Aju ISA 17%spooky or what. Probably not as its possible they just split it that way i.e each lender would get 16-17% of the sold value for each loan in the debt sale. I would think it likely that the buyer would just pay a fixed percentage of the total of the amounts outstanding on the loans, not go into details of each loan. If it's about 17% it doesn't seem too bad.
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aju
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Post by aju on Nov 19, 2019 12:13:50 GMT
Well that's quite interesting I measured the percentage in the same way - I think! total received / total outstanding of all our settled's in this tranche and got the following.
My Invest 15%
My ISA 17%
Mrs Aju Invest 17%
Mrs Aju ISA 17%spooky or what. Probably not as its possible they just split it that way i.e each lender would get 16-17% of the sold value for each loan in the debt sale. I would think it likely that the buyer would just pay a fixed percentage of the total of the amounts outstanding on the loans, not go into details of each loan. If it's about 17% it doesn't seem too bad. Thats seem likely, thing is though it took Zopa over a week to sort this out compared to previous debt sales so I asked a couple of pertinent questions last week and received this response yesterday
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Post by propman on Nov 19, 2019 13:48:55 GMT
The fact remains that Zopa have unilaterally changed the terms of business to our cost. It used to be that the 1% fee included them bearing the costs of recovery of defaulted debts. Now that cost is being incurred by the company who buys the debts and so they pay us less than the amount actually recoverable (plus they keep their profit of course, so a double whammy). Don't kid yourselves - Zopa is doing this for its benefit, not ours. We are the saps taking the hit. But Zopa have tried and failed to recover these debts and they have been written off. Whoever buys them is taking a risk on how much they will be able to recover, obviously they expect they will be able to recover more than they have paid Zopa for them. And at least I can start to get some return on the percentage of the bad debt I get back now, rather than wait for years to get marginally more back... maybe. I also like the fact that I will be able to exit Zopa at some time rather than be tied in forever with 'irrecoverable' bad debt, which looks like happening on most platforms. I have at least one settled loan that isn't even 90 days overdue. May be a special case (DRO/Bankrupcy?) or else they are leaving the hard work (DMC making insulting offer or IVA application) to others. Less than 15% of the loans that have been defaulted have NOT been settled, only 2/3 of the amount in collections or arrangements. So suggests defaulted only for a few months, hardly long enough to recover what you can readily do. barely enough to issue a default notice and threaten court. my experience is that few defaults pay in the first year, but a fair proportion start making payments subsequently as the processes are invoked.
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Greenwood2
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Post by Greenwood2 on Nov 19, 2019 14:20:55 GMT
But Zopa have tried and failed to recover these debts and they have been written off. Whoever buys them is taking a risk on how much they will be able to recover, obviously they expect they will be able to recover more than they have paid Zopa for them. And at least I can start to get some return on the percentage of the bad debt I get back now, rather than wait for years to get marginally more back... maybe. I also like the fact that I will be able to exit Zopa at some time rather than be tied in forever with 'irrecoverable' bad debt, which looks like happening on most platforms. I have at least one settled loan that isn't even 90 days overdue. May be a special case (DRO/Bankrupcy?) or else they are leaving the hard work (DMC making insulting offer or IVA application) to others. Less than 15% of the loans that have been defaulted have NOT been settled, only 2/3 of the amount in collections or arrangements. So suggests defaulted only for a few months, hardly long enough to recover what you can readily do. barely enough to issue a default notice and threaten court. my experience is that few defaults pay in the first year, but a fair proportion start making payments subsequently as the processes are invoked. I just noted that I have a very large amount of recovered previously defaulted loans on my account this month nearly all of which had been eligible for tax relief (more than 15x as much as usual) and a little bit over the amount raised by the sale. The same thing happened with the last bad debt sale, so I assume it was pretty much all previously written off (or irrecoverable in HMRC terms for P2P).
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aju
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Post by aju on Nov 19, 2019 14:23:47 GMT
But Zopa have tried and failed to recover these debts and they have been written off. Whoever buys them is taking a risk on how much they will be able to recover, obviously they expect they will be able to recover more than they have paid Zopa for them. And at least I can start to get some return on the percentage of the bad debt I get back now, rather than wait for years to get marginally more back... maybe. I also like the fact that I will be able to exit Zopa at some time rather than be tied in forever with 'irrecoverable' bad debt, which looks like happening on most platforms. I have at least one settled loan that isn't even 90 days overdue. May be a special case (DRO/Bankrupcy?) or else they are leaving the hard work (DMC making insulting offer or IVA application) to others. Less than 15% of the loans that have been defaulted have NOT been settled, only 2/3 of the amount in collections or arrangements. So suggests defaulted only for a few months, hardly long enough to recover what you can readily do. barely enough to issue a default notice and threaten court. my experience is that few defaults pay in the first year, but a fair proportion start making payments subsequently as the processes are invoked. Using older loanbook data I can see many bankruptcy notes in the comment field that has since been removed in the latest offline loanbook data. Online one can still see the comments field, well they could yesterday have not checked today yet. The new >90 element in the loanbook data may be useful though. I think I mentioned that one of my recent settled loans was still paying according to my statement tools, I've yet to analyse some of these and then of course bounce it on to Zopa to give some lame justification for selling it on. I thin kthe one in question was an IVA and as far as I can remember was paying less than the rates they should have been but was paying regularly again according to my personal analysis tools.
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Greenwood2
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Post by Greenwood2 on Nov 19, 2019 14:40:04 GMT
On average I seem to only get about 10% of defaults recovered, I don't know how many of the sale loans might have paid back more than that, in the fullness of time, but getting back 17% now doesn't seem like a bad deal. I may not be typical of course.
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aju
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Post by aju on Nov 19, 2019 14:44:02 GMT
On average I seem to only get about 10% of defaults recovered, I don't know how many of the sale loans might have paid back more than that, in the fullness of time, but getting back 17% now doesn't seem like a bad deal. I may not be typical of course. Oh i'll keep quiet then just in case someone at zopa thinks they are selling too high or worse whoever is buying zopa defaults can see. 
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Post by fuzzyiceberg on Nov 23, 2019 12:58:38 GMT
On average I seem to only get about 10% of defaults recovered, I don't know how many of the sale loans might have paid back more than that, in the fullness of time, but getting back 17% now doesn't seem like a bad deal. I may not be typical of course. The only thing we can say about 17% is that whoever paid that amount to Zopa will now have to fund all the admin of chasing debtors, getting them to court etc and will expect to earn a healthy profit on top. It used to be Zopa did all the admin (for the fee we already paid them) and did not take a profit from it so clearly we investors are now losing out. I do understand that some folk will prefer a smaller lump sum payment now to a larger amount spread over time, either because their personal cash discount rate is high, or they just like the clean exit. Personally I'd prefer the larger sum over time.
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johni
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Post by johni on Nov 25, 2019 9:01:47 GMT
I got £39 back but I now have £66 of new defaults this month so far. This is a win win for Zopa less defaults on their books less admin costs, less staff needed to chase defaults, in fact they probably dont bother so much as it doesn't cost them any more. Bigger profits going totheir bottom line.
It's the lenders it costs the defaults each month are still definately growing. They do have a problem which they are not getting on top of.
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alant
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Post by alant on Nov 26, 2019 20:43:49 GMT
Having worked in the loans industry for 25 years before retirement and having tried my utmost to collect defaulted payments I know first hand how difficult it can be. Whilst I hate debts being sold off, at a small percentage of their worth, it's reassuring to know that at least some of my investment is being returned to me. Cabot (the debt recovery company last used) will have far more expertise, time and means to claw money from the debtors than Zopa ever could. Take what is being given to you and accept it, albeit grudgingly, with thanks.
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Post by stevexxx on Dec 4, 2019 14:39:49 GMT
I cant see zopa getting the money back from those bad debts, they are otherwise dead so yes its a good move and at least we get something back but with my real time rates running at 3.7% and falling its not enough for me and I'm not re-investing for the short term while returns are so low..
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jo
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Post by jo on Feb 27, 2020 9:16:16 GMT
I'm all for this.
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Post by erniec on Feb 27, 2020 15:01:22 GMT
June, November and now February.
Are they possibly doing this every three months now?
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