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Post by Ace on Jan 22, 2020 21:44:37 GMT
LW used to be one of my favourites too.
I sold ~85% of my LW investments when they offered the free fee withdraw. I thought it would be interesting to see the state of my remaining funds, so I just checked out what would happen if I tried to sell the remaining loans. I was expecting that it wouldn't be pretty as the remaining loans must include all the unsellable loans from my original investment. Anyway, the results were:
27% of the remaining funds are unsellable.
The total fee quoted to sell those that are sellable was a little over 7% of the sellable total (including 0.5% free).
Conclusion: I made a mistake in not selling all during the fee free period, but I did good in selling the bulk. My cup's half fullty!
Fortunately I did manage to sell the accounts that I manage for others down to zero during the fee free period, though each account did take two sales to clear.
I'm leaving my remaining funds invested as it's costly now to get out and I'm curious to see if they can turn things around. The bulk of what's left is essentially from interest payments, so even if I lost the lot (extremely unlikely) it wouldn't be a big deal for me.
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benaj
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Post by benaj on Jan 22, 2020 22:37:03 GMT
LW used to be one of my favourites too. I sold ~85% of my LW investments when they offered the free fee withdraw. I thought it would be interesting to see the state of my remaining funds, so I just checked out what would happen if I tried to sell the remaining loans. I was expecting that it wouldn't be pretty as the remaining loans must include all the unsellable loans from my original investment. Anyway, the results were: 27% of the remaining funds are unsellable. The total fee quoted to sell those that are sellable was a little over 7% of the sellable total (including 0.5% free). Conclusion: I made a mistake in not selling all during the fee free period, but I did good in selling the bulk. My cup's half fullty! Fortunately I did manage to sell the accounts that I manage for others down to zero during the fee free period, though each account did take two sales to clear. I'm leaving my remaining funds invested as it's costly now to get out and I'm curious to see if they can turn things around. The bulk of what's left is essentially from interest payments, so even if I lost the lot (extremely unlikely) it wouldn't be a big deal for me. So, the average interest shortfall of last 11% from your initial investment is 6.5%! 
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Post by Ace on Jan 22, 2020 22:51:27 GMT
LW used to be one of my favourites too. I sold ~85% of my LW investments when they offered the free fee withdraw. I thought it would be interesting to see the state of my remaining funds, so I just checked out what would happen if I tried to sell the remaining loans. I was expecting that it wouldn't be pretty as the remaining loans must include all the unsellable loans from my original investment. Anyway, the results were: 27% of the remaining funds are unsellable. The total fee quoted to sell those that are sellable was a little over 7% of the sellable total (including 0.5% free). Conclusion: I made a mistake in not selling all during the fee free period, but I did good in selling the bulk. My cup's half fullty! Fortunately I did manage to sell the accounts that I manage for others down to zero during the fee free period, though each account did take two sales to clear. I'm leaving my remaining funds invested as it's costly now to get out and I'm curious to see if they can turn things around. The bulk of what's left is essentially from interest payments, so even if I lost the lot (extremely unlikely) it wouldn't be a big deal for me. So, the average interest shortfall of last 11% from your initial investment is 6.5%! Yes benaj , you are absolutely correct, and I expect you understood, but, just in case it misleads others I feel that I should point out that the two percentages are of different amounts. Perhaps it's obvious, but just in case, the fee is NOT over half the fund. I.e. The 11% is of the original fund, but the 6.5% is of the remaining fund (so 0.7% of the original fund). Sorry if this attempt at clarification is overkill. 😉
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Ukmikk
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Post by Ukmikk on Jan 23, 2020 9:27:25 GMT
LW used to be one of my favourites too. I sold ~85% of my LW investments when they offered the free fee withdraw. I thought it would be interesting to see the state of my remaining funds, so I just checked out what would happen if I tried to sell the remaining loans. I was expecting that it wouldn't be pretty as the remaining loans must include all the unsellable loans from my original investment. Anyway, the results were: 27% of the remaining funds are unsellable. The total fee quoted to sell those that are sellable was a little over 7% of the sellable total (including 0.5% free). Conclusion: I made a mistake in not selling all during the fee free period, but I did good in selling the bulk. My cup's half fullty! Fortunately I did manage to sell the accounts that I manage for others down to zero during the fee free period, though each account did take two sales to clear. I'm leaving my remaining funds invested as it's costly now to get out and I'm curious to see if they can turn things around. The bulk of what's left is essentially from interest payments, so even if I lost the lot (extremely unlikely) it wouldn't be a big deal for me. I am struggling to understand how the charging works if I'm honest, my apologies for this. Surely the payment or not of the 0.5% fee is small beer compared to the interest shortfall. Was the interest shortfall substantially less for the fee-free sale and if so why? I don't get why the shortfall would suddenly increase this month compared to last month.
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Post by Ace on Jan 23, 2020 10:24:52 GMT
LW used to be one of my favourites too. I sold ~85% of my LW investments when they offered the free fee withdraw. I thought it would be interesting to see the state of my remaining funds, so I just checked out what would happen if I tried to sell the remaining loans. I was expecting that it wouldn't be pretty as the remaining loans must include all the unsellable loans from my original investment. Anyway, the results were: 27% of the remaining funds are unsellable. The total fee quoted to sell those that are sellable was a little over 7% of the sellable total (including 0.5% free). Conclusion: I made a mistake in not selling all during the fee free period, but I did good in selling the bulk. My cup's half fullty! Fortunately I did manage to sell the accounts that I manage for others down to zero during the fee free period, though each account did take two sales to clear. I'm leaving my remaining funds invested as it's costly now to get out and I'm curious to see if they can turn things around. The bulk of what's left is essentially from interest payments, so even if I lost the lot (extremely unlikely) it wouldn't be a big deal for me. I am struggling to understand how the charging works if I'm honest, my apologies for this. Surely the payment or not of the 0.5% fee is small beer compared to the interest shortfall. Was the interest shortfall substantially less for the fee-free sale and if so why? I don't get why the shortfall would suddenly increase this month compared to last month. Sorry Ukmikk , but you seemed to have confused me with someone who understands the new interest shortfall mechanism 😉. I think that the reason that the interest shortfall during the fee-free sales period was based on the pre-change mechanism, which would explain why it was much smaller. As an example, I liquidated an account during that period of ~£11k for an interest shortfall fee of 0.4%, which obviously compares very favourably with the ~6.5% I'm being quoted now. As for how the new interest shortfall fee is calculated, I don't have a Scooby, sorry.
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Post by befuddled on Jan 23, 2020 11:12:59 GMT
Let me try to explain...! If you were invested at 6.5% - so LW pay you 6.5% for up to 5 years... Then you sell out, at a time when investor rates are lower, say 5.4% LW recycle the part paid off loan to a new lender who only gets the current 5.4% LW are in the money by 1.4%, seller paids expected .5%, new investor gets expected 5.4% Everyone's happy, nothing has materially changed except interest now paid to a different person Hang-on... Something doesn't add up... there is no shortfall ! The interest differential rate fee (below) is understandable if rates have gone up, but not when they go down Can anyone rationalise this...? Are LW legally bound to operate has they describe on their website, or can they suddenly conjure up a 5% fee ? Like a fool I took them at their word on their website and believed the statement below. Have I been mugged for £110 ?  |
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Ukmikk
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Post by Ukmikk on Jan 23, 2020 11:15:44 GMT
I am struggling to understand how the charging works if I'm honest, my apologies for this. Surely the payment or not of the 0.5% fee is small beer compared to the interest shortfall. Was the interest shortfall substantially less for the fee-free sale and if so why? I don't get why the shortfall would suddenly increase this month compared to last month. Sorry Ukmikk , but you seemed to have confused me with someone who understands the new interest shortfall mechanism 😉. I think that the reason that the interest shortfall during the fee-free sales period was based on the pre-change mechanism, which would explain why it was much smaller. As an example, I liquidated an account during that period of ~£11k for an interest shortfall fee of 0.4%, which obviously compares very favourably with the ~6.5% I'm being quoted now. As for how the new interest shortfall fee is calculated, I don't have a Scooby, sorry. Well you're doing a better job than I am 😊 Can anyone else explain this? I would have thought that the new reduced expected rates would decrease any shortfall rather than increase it! Maybe Matthew could please come and clear this up with a full clarification, and also explain why this was not made clear last month when we had the opportunity to sell without fees or magnified losses. I notice he is conspicuously absent when difficult questions are asked.
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keystone
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Post by keystone on Jan 23, 2020 11:42:15 GMT
He is on paternity leave apparently, but he has been back on since the start of the year but failed to answer my question on this issue when I first raised it 3 weeks ago on 3rd January 2020. p2pindependentforum.com/post/362825/threadLending Works failed to inform anyone about this before hand as no one appears to have any idea where this huge difference has come from so I'll ask it again Why wasn't this disclosed in the notice to lenders? |
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Post by carol167 on Jan 23, 2020 11:44:10 GMT
I suggest one of you email support at LW.
That's what Matthew suggests we do rather than rely on him for an answer.
I'm sure we'd all like clarification on this important matter, asap.
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Post by befuddled on Jan 23, 2020 11:52:37 GMT
I have emailed LW this morning - will report back...
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IFISAcava
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Post by IFISAcava on Jan 23, 2020 12:50:39 GMT
Let me try to explain...! If you were invested at 6.5% - so LW pay you 6.5% for up to 5 years... Then you sell out, at a time when investor rates are lower, say 5.4% LW recycle the part paid off loan to a new lender who only gets the current 5.4% LW are in the money by 1.4%, seller paids expected .5%, new investor gets expected 5.4% Everyone's happy, nothing has materially changed except interest now paid to a different person Hang-on... Something doesn't add up... there is no shortfall ! The interest differential rate fee (below) is understandable if rates have gone up, but not when they go down Can anyone rationalise this...?Are LW legally bound to operate has they describe on their website, or can they suddenly conjure up a 5% fee ? Like a fool I took them at their word on their website and believed the statement below. Have I been mugged for £110 ? Current loans AREN'T CURRENTLY getting 5.4% - they are getting 1 or 2% so that over the 5 years, with a few years at 6.5% and a few years at 2%, it averages out at a projected 5.4%. i.e. loans are currently having an interest haircut to replenish the Shield. That is my hypothesised rationalisation.
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IFISAcava
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Post by IFISAcava on Jan 23, 2020 12:52:52 GMT
LW used to be one of my favourites too. I sold ~85% of my LW investments when they offered the free fee withdraw. I thought it would be interesting to see the state of my remaining funds, so I just checked out what would happen if I tried to sell the remaining loans. I was expecting that it wouldn't be pretty as the remaining loans must include all the unsellable loans from my original investment. Anyway, the results were: 27% of the remaining funds are unsellable. The total fee quoted to sell those that are sellable was a little over 7% of the sellable total (including 0.5% free). Conclusion: I made a mistake in not selling all during the fee free period, but I did good in selling the bulk. My cup's half fullty! Fortunately I did manage to sell the accounts that I manage for others down to zero during the fee free period, though each account did take two sales to clear. I'm leaving my remaining funds invested as it's costly now to get out and I'm curious to see if they can turn things around. The bulk of what's left is essentially from interest payments, so even if I lost the lot (extremely unlikely) it wouldn't be a big deal for me. I am struggling to understand how the charging works if I'm honest, my apologies for this. Surely the payment or not of the 0.5% fee is small beer compared to the interest shortfall. Was the interest shortfall substantially less for the fee-free sale and if so why? I don't get why the shortfall would suddenly increase this month compared to last month.because this month we have an interest rate haircut on existing loans. Can't be any other explanation.
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Ukmikk
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Post by Ukmikk on Jan 23, 2020 14:14:37 GMT
I am struggling to understand how the charging works if I'm honest, my apologies for this. Surely the payment or not of the 0.5% fee is small beer compared to the interest shortfall. Was the interest shortfall substantially less for the fee-free sale and if so why? I don't get why the shortfall would suddenly increase this month compared to last month.because this month we have an interest rate haircut on existing loans. Can't be any other explanation. Yes, my understand is the rate was cut from 6.5 to 5.4%, with the difference plus LW fees going to the shield to cover the increase in losses. Again this should reduce an interest shortfall on sale as sale rate and new expected rate are more closely aligned.This is starting to look like a massive scam by LW which is deeply troubling.
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IFISAcava
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Post by IFISAcava on Jan 23, 2020 14:20:27 GMT
because this month we have an interest rate haircut on existing loans. Can't be any other explanation. Yes, my understand is the rate was cut from 6.5 to 5.4%, with the difference plus LW fees going to the shield to cover the increase in losses. Again this should reduce an interest shortfall on sale as sale rate and new expected rate are more closely aligned.This is starting to look like a massive scam by LW which is deeply troubling. The rate was cut to 5.4% assuming you hold for 5 yearsif you sell early, those loans are currently earning less than 5.4% is how I understand it must be. I will be checking my XIRR to see what is actually happening.
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Post by carol167 on Jan 23, 2020 14:48:45 GMT
I thought it was being cut to 5.4% going forward. I don't recall anyone saying 5.4% over the entire lifetime of the loan, hence requiring a much smaller percentage than 5.4 going forward to balance out having had 6.5% up to this point. If that is the case then I, for one, am pretty annoyed and may well have considered selling out before xmas.
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