Zopa temporarily pulling out of C, D and E risk loans.

I don't have any that are in "Financial Stress", so far but not sure yet about Mrs Aju. We do have a few that are marked "Financial Difficulties", none are in default as such yet and they are quite old in my book so I guess they are not part of this.

I do agree that Zopa does have a duty of care with our funds and where there are mishaps, lets face it top class software design is not the easiest/cheapest of tasks and many companies do tend to see it as less valuable than getting things done on time. Zopa has no excuse in this in my view and should act accordingly.

No probs, if it is FD then I guess I need to check more clearly myself and with Mrs Aju too, I can quite easily check any of them when they last paid if at all as I track that very item monthly anyway.

On Zopa addressing any issues, whilst its not right they take their time I wouldn't be holding my breath waiting for an all singing all dancing improvement that has been promised for a couple of years I know about but never actually seems to happen. I'd actually settle for just making the website work better and get rid of the annoying timeouts - although I can get round a lot of that without having to sign back in.

Some answers from Zopa (I did not write this so questions to Zopa not me please):
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For your first point, relating to our approach in which risk markets we will lend to during this market uncertainty, this will not affect the C, D, and E loans you have on offer. This approach that we are taking is specifically for new loans and his point was that we will stop originating loans that would have fallen in our C, D, and E risk bands. This means that new Zopa loans will only be A*, A, or B.

As for our secondary market, I want to provide you with reassurance the market remains unchanged. What I mean by this is that your C, D, and E loans on the market are still there to be picked up and will still be sold. Therefore, we are taking the approach for investors still actively lending on our platform to have a 70/30 split. For loans they pick up about 70% will be new loans originated on the platform with our tighter restriction while 30% will be loans picked up on the secondary market.

On the point you raised involving the MRA, the recent change is reflective of the uncertainty we are currently dealing with. If there are any material changes to the MRA, we would communicate this in advance and pause loan sales for 24-48 hours. We would do this to give investors the opportunity to cancel their sale if that bests suits their situation. It will be the same approach we took at the end of March. Furthermore, interest rates have gone up for newly originated loans as of April. However, the MRAs set at the end of March have accounted for this adjustment. This means that MRAs should not change materially through April. With that said, we are reviewing the MRA frequently. The hope is that we could potentially reduce MRAs once there is more stability in the market.

One final point on the MRA I would like to raise is that we do allow 24-48 hours after an MRA change is communicated to our investors. As mentioned above, we took this approach at the end of March. It is of course a balancing act, so we have taken your feedback on board. Granted, it may cause more issues if loan sales were to be frozen for a 10-day timeline, but we will investigate other options if we do face a material change in the MRA if it is increasing. Once more, we do not expect this to happen in April, but we will keep our Investors informed.

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Broadly I am okay with this although I have added it would be sensible to allow the 24-48 hour notice period to span working days not a weekend. i.e. If they have website problems (I know that never happens... cringe) so those website issues can be escalated to Zopa.

p.s. the 70:30 split probably starts to explain the reason there is a big queue of buyers and sellers.... i.e. Due to the small amount of new lending...

You can also sell loans that have been in arrears but caught up. I don't think that's right either - they must be more risky than a loan that has never been in arrears.

I did ask Zopa about this i.e. loans being sold that had previously been in arrears not paying an MRA to reflect the increased risk.

They said they would not pay an MRA for higher risk loans in those situations (really B-E's) because when they priced the loans they assumed periods when the loans would be in arrears. They did add however that MRA are paid for A loans that have gone into prior arrears and then caught up (I have seen that, whether it is sufficient is another question for the individual investor to consider).

It was in the email that comes monthly.
The browser version is here:
view.mail.zopa.com/?qs=bd657d30bad3211e35a7d505f82e4bb2998ec6301a4305d78cb579b8fa7646bd6dd3d940d3ccdbd1f38183124ab3e147461551482a97c5710436b6fb0278419e1c6651da892b399ace795e76d3512248

No problem aju. It’s just my first name. Interestingly, it suggests it’s the May update when it’s actually the April one.