zlb
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Post by zlb on Feb 2, 2020 18:26:44 GMT
So the main issue is a fluctuating advertised rate, eg flexible was 4 then 3.8% then 4 again, is not what the real underlying rate is (that is anticipated for 6 months to replenish the shield)?
Is this a particularly different risk to Zopa, in terms of outcome? If the shield were never replenished and lender rates weren't that great, how much default is required to mean zero returns?
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benaj
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Post by benaj on Feb 2, 2020 20:32:36 GMT
So the main issue is a fluctuating advertised rate, eg flexible was 4 then 3.8% then 4 again, is not what the real underlying rate is (that is anticipated for 6 months to replenish the shield)? Is this a particularly different risk to Zopa, in terms of outcome? If the shield were never replenished and lender rates weren't that great, how much default is required to mean zero returns? I had a quick dip in Flexible back between Aug- Oct 2019, and I downloaded my loan book. The average APR for the flexible borrower is 15.9%. My guess is since Flexible product doesn't subject to interest shortfall when selling, the return should be on "target". Unless there is a Flexible investor tell us a different story we don't expect. I don't have any Flexible anymore, but those loans are on "Active", not "late/defaulted/repaid". Earliest loan start date in my Loan book for Flexible is Nov 2018. Invested ££ in 8 different loan chunks.
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Post by propman on Feb 3, 2020 11:11:21 GMT
Assuming the musings here are broadly right, what is there for Matthew to say? THey are putting in their returns into the shield so there is no more money. A ruling that money is due to investors will only lead to debts that LW cannot afford to pay and probably reduced money for the remaining as we pay the wind up costs. Is possible disqualification of Senior Management from FS really worth this?
I fully understand that people feel angry, but if LW had a magic money tree they wouldn't be here!
- PM
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r00lish67
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Post by r00lish67 on Feb 3, 2020 11:22:24 GMT
Assuming the musings here are broadly right, what is there for Matthew to say? THey are putting in their returns into the shield so there is no more money. A ruling that money is due to investors will only lead to debts that LW cannot afford to pay and probably reduced money for the remaining as we pay the wind up costs. Is possible disqualification of Senior Management from FS really worth this?
I fully understand that people feel angry, but if LW had a magic money tree they wouldn't be here!
- PM
I think people are more angry about feeling misled about how the changes were communicated to them as opposed to the diminished returns themselves. They expected a metaphorical trim and ended up with a short back and sides. This said, it's pretty darn clear that if LW had transparently said "You're getting 1% interest until we say otherwise" there would have been a stampede for a zero fee sellout. Not sure what the right answer is/was. I do think there's cause for complaint there, though.
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ashtondav
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Post by ashtondav on Feb 3, 2020 12:29:52 GMT
Maybe i was not treading the small print - i expected my interest rate to fall from 6.5% to 5.4%. I had no problems with that but was sufficiently wary of the reasoning behind it that i sold 50% in December. I certainly didn't expect a sale fee approaching 6%.
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savernake
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Post by savernake on Feb 3, 2020 17:12:55 GMT
I don't understand why LW can't get a funding round on Seedrs going to replenish their shield?
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Post by propman on Feb 4, 2020 9:24:39 GMT
I don't understand why LW can't get a funding round on Seedrs going to replenish their shield? So are you volunteering to support them?
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Post by propman on Feb 4, 2020 9:30:18 GMT
Maybe i was not treading the small print - i expected my interest rate to fall from 6.5% to 5.4%. I had no problems with that but was sufficiently wary of the reasoning behind it that i sold 50% in December. I certainly didn't expect a sale fee approaching 6%. I agree that the information provided was the minimum they thought they could say and that it was far from clear. Playing devil's advocate, the fee free transfer was not for the disappointing position, it was for the change in terms to what was required if they are to stand a chance of surviving an interest rate cut. As such, they may see their only requirement that they did not do anything not allowed under the new terms rather than let people know what was coming (ie the implementation).
I admit to not seeing the severity of the change in rate implemented, but I was concerned that they would not have the liquidity required from a 1.1% rate drop and posted as much.
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r00lish67
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Post by r00lish67 on Feb 4, 2020 9:33:46 GMT
I don't understand why LW can't get a funding round on Seedrs going to replenish their shield? So are you volunteering to support them? The shield, despite being at effectively zero, still has a net outflow forecast. This is why investors are being forced to cough up. All that would be happening if someone replenished the shield would be transferring that cost to them - not a great investment! It sounds like LW's new aim (according to their most recent blog post) is to not build up the shield again but just bring us to a 1-in, 1-out situation (borrower contributions paying for defaults each month). Seems ambitious to me, or at least ambitious without lenders being asked to pay for most of it!
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IFISAcava
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Post by IFISAcava on Feb 5, 2020 19:31:25 GMT
We shouldn't forget that for a long time LW was offering much lower rates on the 5-year/Growth products - 4.5% at one stage I think from memory. They then raised it to 6.5%, presumably to attract more inflows, and perhaps with the taking on of higher return/higher risk loans. However, it was an unrealistically high rate and in my view they should have realised this earlier and reduced rates sooner, which would have been a more sustainable and gradual change and less damaging to their reputation.
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Post by gravitykillz on Feb 5, 2020 19:37:30 GMT
I am sure lw could replenish the shield in a way that would not penalise and destroy their investor base and reputation.
They could sell a portion of their business or sell the entire business.
They should really consider this if they wish to survive in the long term.
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Post by carol167 on Feb 5, 2020 19:53:02 GMT
I am sure lw could replenish the shield in a way that would not penalise and destroy their investor base and reputation. They could sell a portion of their business or sell the entire business. They should really consider this if they wish to survive in the long term. I think the horse has already bolted on that one. They won't be getting any more of my money or anyone I have any influence over once they hear the facts of what LW have done and the way that they've done it.
What muppets retrospectively take away interest already paid to their investors - backdated up to 5 years ??
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IFISAcava
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Post by IFISAcava on Feb 5, 2020 20:08:34 GMT
I am sure lw could replenish the shield in a way that would not penalise and destroy their investor base and reputation. They could sell a portion of their business or sell the entire business. They should really consider this if they wish to survive in the long term. I think the horse has already bolted on that one. They won't be getting any more of my money or anyone I have any influence over once they hear the facts of what LW have done and the way that they've done it.
What muppets retrospectively take away interest already paid to their investors - backdated up to 5 years ??
Without telling them explicitly that was what was happening. That's the bit that grates most.
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Post by carol167 on Feb 5, 2020 20:34:42 GMT
I think the horse has already bolted on that one. They won't be getting any more of my money or anyone I have any influence over once they hear the facts of what LW have done and the way that they've done it.
What muppets retrospectively take away interest already paid to their investors - backdated up to 5 years ??
Without telling them explicitly that was what was happening. That's the bit that grates most.
Well it's obvious why they didn't.... they'd have had very little of their investor base left as most would have cashed out in December at minimal cost.
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Post by df on Feb 5, 2020 20:51:37 GMT
Without telling them explicitly that was what was happening. That's the bit that grates most.
Well it's obvious why they didn't.... they'd have had very little of their investor base left as most would have cashed out in December at minimal cost. I'm guessing after a long "struggle" the cash drag problem is resolved now (i.e. no queue for new money if anyone wishes to increase their stake  ).
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).