jane
Posts: 145
Likes: 214
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Post by jane on Apr 9, 2020 13:53:32 GMT
Firstly China claims to have bought this under control. Secondly, I'm referring to the UK bringing this under control or more importantly allowing people back to work, what happens in the rest of the world is not so relevant to RS. Many of the businesses/people RS lend to are not going to default if they are helped through this with deferred payments and have a job to go back to. These are not payday loans for the unemployed. Unfortunately Ratesetter has been lending out an ever increasing amount on property deals in recent months. These are going to be commercial property rather than residential and the borrowers are not going to repay their loans just to make a loss if property values fall by a large amount. Very easy for a limited company to walk away.
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johnt
Investing in Ratesetter, Zopa and Assetz Capital since 2013
Posts: 127
Likes: 71
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Post by johnt on Apr 23, 2020 11:19:40 GMT
Not sure this is great news.
I tried to enquire about the size of the loans that were sold off but Ratesetter were not obliging but knowing people in the industry, I know bad debts are typically sold at 15% of their value so that means Ratesetter probably sold £31 million worth of loans for just £4.65 million which is not a great deal for us.
You might think £4.65 million is better than nothing but debt collection agencies wouldn't be in business if they weren't able to recover more than money than they paid out.
Ratesetter should have tried harder to pursue those debts and not give up so easily.
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alanh
Posts: 556
Likes: 560
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Post by alanh on Apr 23, 2020 12:42:11 GMT
Not sure this is great news. I tried to enquire about the size of the loans that were sold off but Ratesetter were not obliging but knowing people in the industry, I know bad debts are typically sold at 15% of their value so that means Ratesetter probably sold £31 million worth of loans for just £4.65 million which is not a great deal for us. You might think £4.65 million is better than nothing but debt collection agencies wouldn't be in business if they weren't able to recover more than money than they paid out. Ratesetter should have tried harder to pursue those debts and not give up so easily. Talk about a totally speculative calculation - its meaningless. Also RS did say they didn't have to reduce their price expectations for these loans which indicates that the sale value was around the same as the carrying value.
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