|
|
Post by shanghaiscouse on Jun 7, 2020 14:56:07 GMT
A member of my family, who had been denied loans from all commercial providers pre-lockdown, just borrowed £21k from the CBILS loan scheme. She had no assets to guarantee it with, and not even any plan for how to use the money. The £21k is now sitting in her account. This is truly crazy. There will be a tsunami of bad debts from this scheme.
|
|
iRobot
Member of DD Central
Posts: 1,660
Likes: 2,454
|
Post by iRobot on Jun 7, 2020 15:39:55 GMT
A member of my family, who had been denied loans from all commercial providers pre-lockdown, just borrowed £21k from the CBILS loan scheme. She had no assets to guarantee it with, and not even any plan for how to use the money. The £21k is now sitting in her account. This is truly crazy. There will be a tsunami of bad debts from this scheme. Even though she'd approached all those other commercial providers? Would be really useful to know who did hand over the cash, if only to avoid them like the plague should any investment opportunity arise. Actually, was it CBILS or Bounce Back Loan Scheme (BBLS)? The latter tops out at £50k and the criteria are less stringent than CBILS, as I understand it. I think BBLS are 100% backed by the Gov't (you and I) as opposed to CBILS at 80% underwritten. Would still very much like to know who the lender is, either way .... What's in it for them? Do they 'do a Lendy'? ie: loan £23k and keep a couple of grand back for a lenders fee?
|
|
dorset
Member of DD Central
Posts: 281 
Likes: 187
|
Post by dorset on Jun 7, 2020 16:54:34 GMT
Faulty Credits are the perfect go to partner for CBILs.
They are world renowned for the quality of their DD.
On an equally more positive note have had a further 9 early full repayments in the last week making 24 since mid-May. At this rate CBILs will have my full loan book by mid-summer.
|
|
|
|
Post by shanghaiscouse on Jun 8, 2020 7:42:44 GMT
It amazes me you have so many, I only had 1 early loan repayment. What vintage were your loans? I imagine what might be happening is that yours are earlier vintage than mine, better credits of genuine borrowers who find lower rates / better terms and refinance. Whereas my vintages, around the IPO time, include many fraudsters who will be simply borrowing as much as possible from as many sources as possible with no intention of repaying, and hence are not refinancing.
|
|
|
|
Post by shanghaiscouse on Jun 8, 2020 8:01:51 GMT
|
|
agent69
Member of DD Central
Posts: 5,641
Likes: 4,213
|
Post by agent69 on Jun 8, 2020 8:45:49 GMT
The headline says £36b of loans will be toxic, but if you read further down the page it says up to £36b could become toxic (which I assume is a statement of the obvious).
Another great impartial Guardian article.
|
|
dorset
Member of DD Central
Posts: 281
Likes: 187
|
Post by dorset on Jun 8, 2020 9:11:08 GMT
It amazes me you have so many, I only had 1 early loan repayment. What vintage were your loans? I imagine what might be happening is that yours are earlier vintage than mine, better credits of genuine borrowers who find lower rates / better terms and refinance. Whereas my vintages, around the IPO time, include many fraudsters who will be simply borrowing as much as possible from as many sources as possible with no intention of repaying, and hence are not refinancing. All my loans are pre Sept 2017 but my 2016 plus H1 2017 loans had loads of defaults.
|
|
|
|
Post by jochietoch on Jun 8, 2020 10:08:17 GMT
It amazes me you have so many, I only had 1 early loan repayment. What vintage were your loans? I imagine what might be happening is that yours are earlier vintage than mine, better credits of genuine borrowers who find lower rates / better terms and refinance. Whereas my vintages, around the IPO time, include many fraudsters who will be simply borrowing as much as possible from as many sources as possible with no intention of repaying, and hence are not refinancing. I had one a day for about two weeks at the end of May, but now it seems to have stopped again. Maybe when I'm bored I'll check if there is some pattern in the vintages of prepayments, though most of my book is post-IPO (not before neither around IPO time). Another hypothesis is that FC are actively pushing borrowers to refinance through CBILS - perhaps they are running through the book in some vintage-determined order.
If they gave loans to a borrower previously and now refuse the same borrower as not having high enough quality for CBILS, then they would have to be careful as that would be an interesting point of evidence around the weakness of their IPO-time due diligence.
|
|
|
|
Post by jochietoch on Jun 12, 2020 12:38:15 GMT
So I tried to have a look at the vintage of my early repayments. Unfortunately there is no origination date in the "Loan Parts" csv, only a "Date acquired"). Based on the number of repayments left, and the assumption that FC loans are all for 60 months (is that true? no idea), the split-out by vintage is:
pre-IPO (2017 and earlier): 11 (28% of 39 loans of that vintage)
IPO (2018): 3 (7.6% of 81 loans of that vintage)
Post-IPO (2019): 13 (7.3% of 179 loans of that vintage)
So seems the pre-IPO loans are over-represented in early prepayments. However that will reflect some amount of survivorship bias: these would mostly have been bought on the secondary market (I went in late, then tried to get out again pretty quickly after that) so the worst of that cohort would have been deselected by already having been late or in default.
|
|
|
|
Post by shanghaiscouse on Jun 14, 2020 11:11:04 GMT
I wouldn't say over-represented, I would say MASSIVELY over-represented. Nice data, thank you.
|
|
dorset
Member of DD Central
Posts: 281
Likes: 187
|
Post by dorset on Jun 15, 2020 9:24:49 GMT
Now had 28 repayments all from pre 9/2017 loans.
Issue here is that FC is stripping away all of my decent loans and leaving me with the late loans (currently 125 out of 357 all pre 9/2017).
This will of course depress my eventual returns (probably a 25% capital loss) on my rundown.
Only saving grace is that my investment into FC has long since been withdrawn and I have to date taken out 62% of the profit I have made since 2011. Even if I lose everything on the existing loans I will have still made a 4% annual return since 2011.
|
|
|
|
Post by shanghaiscouse on Jun 15, 2020 10:23:41 GMT
tbh they should not be allowed to refinance like this without penalty. I guess there is a penalty, but where does that go? does FC distibute it as compensation to lenders, or keep it for itself?
|
|
|
|
Post by jochietoch on Jun 15, 2020 12:07:29 GMT
Now had 28 repayments all from pre 9/2017 loans. Issue here is that FC is stripping away all of my decent loans and leaving me with the late loans (currently 125 out of 357 all pre 9/2017). This will of course depress my eventual returns (probably a 25% capital loss) on my rundown. Only saving grace is that my investment into FC has long since been withdrawn and I have to date taken out 62% of the profit I have made since 2011. Even if I lose everything on the existing loans I will have still made a 4% annual return since 2011. Yes, this'll deteriorate average quality of the remaining loans even faster than sales. That said, in the end I'm mostly happy to get more of my money back quicker, even if I likely can't match the return. It'll also produce clarity on likely losses as the condensate of toxic waste remains in the portfolio...
|
|
richv
Posts: 42
Likes: 11
|
Post by richv on Jun 19, 2020 14:56:20 GMT
I sold most of my loans early last year, just a few perpetual late loaned left.
I do have a load of defaulted loaned about £9,000 worth, some of which where paying a bit each month, about £80 but it jumped about a lot. and slowed a lot in march/April and early May.
The last 3 weeks however I have seen a rush of money coming back, most of it from loans that are 'fully repaying' sometimes with interest.
I don't know, but If I where to guess this might be from people who have taken these CBILS loans (or other government loans) Is anybody else seeing this or know why its happening.
I suspect, that theses where the 'better defaults' and when the government stops handing out loans like this, I will be getting less, maybe a lot less each month than the £80 I was, but I'm just glad to see it in my account.
|
|
