jlend
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Post by jlend on Nov 18, 2020 12:14:49 GMT
I didn't exit completely at Xmas, but I did exit after Xmas prior to the accounts locking up.
I did the same in Ratesetter, Growth Street and the Assetz Accounts and exited after Xmas. Only Assetz have I put money back in when I felt the discount rates were high.
It is what it is with the new Lending Works terms and conditions.
There is simply not enough future income from borrower interest to feed into the Provision Fund so negative interest rates or a capital reduction are inevitable.
I do think LW have ended up with a far too complicated model rather than a single PF pool and their style of communication is too complicated.... but the simple fact remains that the PF needs propping up now due to Covid-19.
I am a little surprised that the new LW owners haven't put some money into the PF to prop it up. It is probably not a huge amount. This would have had a dramatic impact on how lenders felt in the short and medium term. LW now have a mountain to climb to get lenders back on board at scale once lending resumes. The alternative is LW flip primarily to institutional lending.
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benaj
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Post by benaj on Nov 18, 2020 16:04:07 GMT
Another update from my partner's "account" (2018, 2019 Cohorts) Balance: 31.10.20: 1511.6 Withdrawal (November): 30.33 Today Balance (13th Nov): 1481.22 -ve interest: 5pWell, it seems -ve interest so far is more the capital repayment by shield. Balance 31.10.2020 | 1511.6 | Withdrawal (November) | 30.33 | Balance today (18th Nov) | 1478.81 | Capital repayment by shield (Nov) | 1.13 | -ve interest | >2.46 (no idea how much by the end of the month) |
I do wonder what Shield cash balance is right now since it was reported £1.29 mil at the end of October. Seriously, are we better off temporarily by topping money into the shield?www.lendingworks.co.uk/about-us/statisticsCapital repayment by shield (October ) in my partner's account is 2.01
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Post by jamiee on Nov 18, 2020 22:42:05 GMT
I'll just leave this here.
“You need to try and drag positives out of any situation and we’ve certainly been able to do so,”
“We’re building products on open banking and all in all, it’s a terrible thing to say, but it’s been a good crisis for us and we’re ending the year better than how we started which is pretty incredible.”
Nick Harding, Chief Executive of Lending Works
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Post by essexboy on Nov 18, 2020 23:26:09 GMT
Has anyone sought any legal advice on what LW are doing? I’d be genuinely interested in chatting! Also, could we get a sense amongst us of the negative rate with: (Charge / Balance) x 365......where Charge is the daily acc depletion not due to capital repayments?
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macq
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Post by macq on Nov 19, 2020 12:35:22 GMT
I'll just leave this here. “You need to try and drag positives out of any situation and we’ve certainly been able to do so,” “We’re building products on open banking and all in all, it’s a terrible thing to say, but it’s been a good crisis for us and we’re ending the year better than how we started which is pretty incredible.” Nick Harding, Chief Executive of Lending Works Sounds like they may have the same speech writer as Mr Trump
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mogish
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Post by mogish on Nov 19, 2020 15:20:32 GMT
I'll just leave this here. “You need to try and drag positives out of any situation and we’ve certainly been able to do so,” “We’re building products on open banking and all in all, it’s a terrible thing to say, but it’s been a good crisis for us and we’re ending the year better than how we started which is pretty incredible.” Nick Harding, Chief Executive of Lending Works Sounds like they may have the same speech writer as Mr Trump or Mr Welles***
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criston
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Post by criston on Nov 20, 2020 12:52:45 GMT
The following relevant details I have taken from the T & Cs, if any legal minds can put up a defence.
28.3 To ensure Lending Works continues to receive sufficient income to cover its operational overheads during winddown, a servicing fee may be charged on the balance of outstanding Loan Agreements. Such servicing fee shall not exceed 2% per annum of the outstanding loan balances (subject to a minimum fee to be determined at such time), payable monthly by deduction from the interest collected by us under the relevant Loan Agreements.
Insolvent Wind-down
28.4 In the event that the Lending Works Platform were to permanently fail or cease to operate for any reason (except matters under clause 28.2), including if we become Insolvent, we may carry out one of the following wind-down strategies:
(b) Lending Works may wind down your Investment Account(s) and thereafter cease trading by carrying out all of the Lender Services, including those under in section 13 and other services set out in other sections of these Terms and Conditions, until all Loan Agreements have been settled or otherwise determined. We will carry out this process in conjunction with a third-party insolvency practitioner and under a formal Winddown Plan, which we are required under current regulations to have in place at all times. To ensure Lending Works continues to receive sufficient income to cover its operational overheads, including any fees and other costs payable to any insolvency practitioner, during wind-down, a servicing fee may be charged on the balance of outstanding Loan Agreements. Such servicing fee shall not exceed 2% per annum of the outstanding loan balances of Loans on the Lending Works Platform (subject to a minimum fee to be determined at such time), payable monthly by deduction from the interest collected by us under the relevant Loan Agreements. arrangements including changing any parties involved in those arrangements. We may also change the amount of the fees referred to in clauses 28.2-28.4 if such change is necessary to ensure an orderly wind-down of the Investment Accounts.
29 NORMALISATION PERIOD
29.1 (f) We may deduct an amount not exceeding 2% per annum of the outstanding loan balances of Loans on the Lending Works Platform payable monthly by deduction from the interest collected by us, to ensure we can continue to carry out of our services set out in these Terms and Conditions.
29.2 We will only invoke a Normalisation Period for up to three months, although we may at our discretion, and depending on the severity of the external event or circumstances, extend the Normalisation Period for an additional three months.
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macq
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Post by macq on Nov 20, 2020 13:22:14 GMT
I made my choice and left but playing devil's advocate - if what LW first did to the product at the end of last year and then with Covid normalisation and what they are now doing with negative/clawback is legal and allowed and is not being made up as they go along and is within the terms etc then so be it. But as was proved last year/early this year with the first change and subsequent changes the way it is implemented is poorly explained and communicated and the average investor who signed up to a Black box account years ago has no idea about cohorts or negative interest or any of the other hundred and One things going on in the background and even if they end up in profit (or loss) will have no idea why - and in my humble opinion the product is at best suited to a institutional investor
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Post by essexboy on Nov 20, 2020 13:43:28 GMT
The following relevant details I have taken from the T & Cs, if any legal minds can put up a defence. 28.3 To ensure Lending Works continues to receive sufficient income to cover its operational overheads during winddown, a servicing fee may be charged on the balance of outstanding Loan Agreements. Such servicing fee shall not exceed 2% per annum of the outstanding loan balances (subject to a minimum fee to be determined at such time), payable monthly by deduction from the interest collected by us under the relevant Loan Agreements. Insolvent Wind-down 28.4 In the event that the Lending Works Platform were to permanently fail or cease to operate for any reason (except matters under clause 28.2), including if we become Insolvent, we may carry out one of the following wind-down strategies: (b) Lending Works may wind down your Investment Account(s) and thereafter cease trading by carrying out all of the Lender Services, including those under in section 13 and other services set out in other sections of these Terms and Conditions, until all Loan Agreements have been settled or otherwise determined. We will carry out this process in conjunction with a third-party insolvency practitioner and under a formal Winddown Plan, which we are required under current regulations to have in place at all times. To ensure Lending Works continues to receive sufficient income to cover its operational overheads, including any fees and other costs payable to any insolvency practitioner, during wind-down, a servicing fee may be charged on the balance of outstanding Loan Agreements. Such servicing fee shall not exceed 2% per annum of the outstanding loan balances of Loans on the Lending Works Platform (subject to a minimum fee to be determined at such time), payable monthly by deduction from the interest collected by us under the relevant Loan Agreements. arrangements including changing any parties involved in those arrangements. We may also change the amount of the fees referred to in clauses 28.2-28.4 if such change is necessary to ensure an orderly wind-down of the Investment Accounts. 29 NORMALISATION PERIOD 29.1 (f) We may deduct an amount not exceeding 2% per annum of the outstanding loan balances of Loans on the Lending Works Platform payable monthly by deduction from the interest collected by us, to ensure we can continue to carry out of our services set out in these Terms and Conditions. 29.2 We will only invoke a Normalisation Period for up to three months, although we may at our discretion, and depending on the severity of the external event or circumstances, extend the Normalisation Period for an additional three months.Like I said, I have not been keeping a close eye on LW, but it seems to me that if interest is zero then this 2% has already been reached, without also then applying a negative rate. And they are also over the deadline on the normalization period? Someone mentioned the FCA. Has anyone actually made a complaint to them yet? Or is LW just going to say its not a charge for them to continue business, its a 'reserve' going to the shield (though not one any of us actually WANT)?
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Greenwood2
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Post by Greenwood2 on Nov 20, 2020 14:10:08 GMT
I don't know much about LW, but are they trying to share losses across all accounts in a convoluted way? A bit like RS with the interest rate haircut, which will possibly be followed by a capital haircut to prop up the provision fund. Or is this fundamentally different?
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Post by EJi on Nov 20, 2020 15:02:59 GMT
I don't know why Matthew doesn't come and say a few words. Or does he not care about the bussiness anymore since he's selling his shares (* *, Jack, I'm alright)
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benaj
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Post by benaj on Nov 20, 2020 15:18:20 GMT
Is the loanbook really bad compared to Z & RS?
Digging deeper into LW's loanbook. For the 2019 cohort:
Total amount outstanding: 31mil Amount defaulted: 1.4 Mil (3.72%) Outstanding amount of late loans: 8.85 Mil (8.85%)
It's comparable to Z plus I experienced, except LW started the normalisation period in April and no interest paid since then. Not so great for the 2019 cohort lenders.
Without much explanation from LW, it's not clear how they are managing the repayment from borrowers and distributing money to lenders with the complicated mechanism.
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Post by carol167 on Nov 20, 2020 15:33:53 GMT
Lending Works....
"The fair and simple P2P platform"
You couldn't make it up!
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scooter
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Post by scooter on Nov 20, 2020 15:40:26 GMT
The following relevant details I have taken from the T & Cs, if any legal minds can put up a defence. 28.3 To ensure Lending Works continues to receive sufficient income to cover its operational overheads during winddown, a servicing fee may be charged on the balance of outstanding Loan Agreements. Such servicing fee shall not exceed 2% per annum of the outstanding loan balances (subject to a minimum fee to be determined at such time), payable monthly by deduction from the interest collected by us under the relevant Loan Agreements. Insolvent Wind-down 28.4 In the event that the Lending Works Platform were to permanently fail or cease to operate for any reason (except matters under clause 28.2), including if we become Insolvent, we may carry out one of the following wind-down strategies: (b) Lending Works may wind down your Investment Account(s) and thereafter cease trading by carrying out all of the Lender Services, including those under in section 13 and other services set out in other sections of these Terms and Conditions, until all Loan Agreements have been settled or otherwise determined. We will carry out this process in conjunction with a third-party insolvency practitioner and under a formal Winddown Plan, which we are required under current regulations to have in place at all times. To ensure Lending Works continues to receive sufficient income to cover its operational overheads, including any fees and other costs payable to any insolvency practitioner, during wind-down, a servicing fee may be charged on the balance of outstanding Loan Agreements. Such servicing fee shall not exceed 2% per annum of the outstanding loan balances of Loans on the Lending Works Platform (subject to a minimum fee to be determined at such time), payable monthly by deduction from the interest collected by us under the relevant Loan Agreements. arrangements including changing any parties involved in those arrangements. We may also change the amount of the fees referred to in clauses 28.2-28.4 if such change is necessary to ensure an orderly wind-down of the Investment Accounts. 29 NORMALISATION PERIOD 29.1 (f) We may deduct an amount not exceeding 2% per annum of the outstanding loan balances of Loans on the Lending Works Platform payable monthly by deduction from the interest collected by us, to ensure we can continue to carry out of our services set out in these Terms and Conditions. 29.2 We will only invoke a Normalisation Period for up to three months, although we may at our discretion, and depending on the severity of the external event or circumstances, extend the Normalisation Period for an additional three months.Like I said, I have not been keeping a close eye on LW, but it seems to me that if interest is zero then this 2% has already been reached, without also then applying a negative rate. And they are also over the deadline on the normalization period? Someone mentioned the FCA. Has anyone actually made a complaint to them yet? Or is LW just going to say its not a charge for them to continue business, its a 'reserve' going to the shield (though not one any of us actually WANT)? Hi, I have left this alone until now and decided to look into it a little. I have read the LW Shield policy and it it is quite clear that they can do what they are doing... accept that the policy is undated and therefore might have been written or updated since the changes were made. The T&C's are dated 2020 and there are no older copies available so it is impossible to know what changes they made to the T&C's in 2020. I expect they sent an email notifying of any changes but I've gone into "Can't be bothered with it" mode again...... I'm not happy, but when I see my defaults elsewhere i'm not chuffed about them either. It's one big learning curve for me...
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morris
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Post by morris on Nov 20, 2020 15:57:17 GMT
Lending Works said in their last update that these deductions would be available on the dashboard in November. Nothing has appeared yet, unless they mean that you maintain records of daily balances to see how they move and make your own conclusions.
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