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Post by befuddled on Jan 23, 2020 16:18:22 GMT
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.
if 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.This must be it, but it's outrageous if they have retrospectively applied an interest rate cut. I've never known any financial product retrospectively remove gains already "banked". Sign of a desperate company ? they can't have expected to get away with it, smacks of desperation. If the options were a retrospective hair cut or the Shield crashing - I suppose the former is the lesser of two evils.... ....so current lenders won't even be getting 5.4 on existing/past holdings unless they hold to term - and I suspect 5 years is going to feel like a long time with LW !!! If this is the case it's a game changer, and LW and flung the ball back to Ratesetter...
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Post by skidrow on Jan 24, 2020 15:53:30 GMT
I was lucky enough to get out in December so I'm just an interested observer.
If I still had money invested then I'd be very unhappy but I guess the upside of this is that LW is still in control of the company and there is a decent chance that all capital will be returned. The alternative is much worse.
I really think that LW could have gone to the wall without this change. Of course, they should have acted much sooner.
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Post by gravitykillz on Jan 24, 2020 16:04:48 GMT
Yes but are 2019 and before investors now subsidising 2020 investors and is this what they signed up for when they invested originally? I left lending works in the summer of 2019 after getting my bonus payments.
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IFISAcava
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Post by IFISAcava on Jan 24, 2020 16:40:49 GMT
I was lucky enough to get out in December so I'm just an interested observer. If I still had money invested then I'd be very unhappy but I guess the upside of this is that LW is still in control of the company and there is a decent chance that all capital will be returned. The alternative is much worse. I really think that LW could have gone to the wall without this change. Of course, they should have acted much sooner. kicking myself for only getting half of my investment out in December. Didn't realise quite how big the haircut was (partly because it wasn't explained well), although posts here (e.g. by r00lish67) had warned of the perilous state of the PF. Will probably wait for it to drawdown now - would cost me over 5% to withdraw early, whereas was just a few quid in December. Hoping also the interest rate differential for early withdrawal may reduce over time.
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Post by gravitykillz on Jan 24, 2020 17:45:09 GMT
This may be a form of 'pooling event'.
Albeit a more organized one but structured in a different format. The aim is the same to boost the provision fund in 2020 so hopefully in a year the platform can return to the 2019 format.
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benaj
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Post by benaj on Jan 25, 2020 18:55:32 GMT
I think I will rebase the XIRR and see what it is - I predict very low for the foreseeable. Investors will see clearly what they are earning in Lender Monthly Statements from Jan 2020. Although no net losses thanks of Shield, it will be shockingly low like the Z plus for January, not sure what it would be like in February.
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IFISAcava
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Post by IFISAcava on Jan 26, 2020 1:14:12 GMT
I think I will rebase the XIRR and see what it is - I predict very low for the foreseeable. Investors will see clearly what they are earning in Lender Monthly Statements from Jan 2020. Although no net losses thanks of Shield, it will be shockingly low like the Z plus for January, not sure what it would be like in February. Clarity would be good and welcome
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