coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Jun 20, 2020 12:17:24 GMT
Good question. My suspicions would be something to do with a) The FCA or b) Metro Bank
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chris1200
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Post by chris1200 on Jun 20, 2020 12:21:04 GMT
Their original justification - as has been discussed previously on here - was due to the implementation of the Stabilisation Period. They wanted some time for this to 'bed in' so they could be more confident that new investors understood what was going on. That said, it's been a little while now and no change, so I do wonder if the FCA hasn't had a word (or, at least, RS is concerned they might).
Edit: exact wording in the online Q&A is as follows
"We are temporarily not open to new investors. We want to make sure the interest reduction announcement beds in, and also update our Appropriateness Test (the test all new investors need to complete before opening an account with RateSetter) to ensure new investors understand the interest reduction. We expect this to take a week or two, and we will then reopen to new investors."
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Post by scepticalinvestor on Jun 20, 2020 12:48:21 GMT
Preparing to be bought out, by Metro Bank or another suitor and don't expect to retain the current retail-investor model.
They stopped responding to Trustpilot reviews at the end of May and haven't resumed it since, which also suggests that they may not be particularly worried about the prospects of new retail investors signing up.
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Greenwood2
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Post by Greenwood2 on Jun 20, 2020 12:55:16 GMT
Their original justification - as has been discussed previously on here - was due to the implementation of the Stabilisation Period. They wanted some time for this to 'bed in' so they could be more confident that new investors understood what was going on. That said, it's been a little while now and no change, so I do wonder if the FCA hasn't had a word (or, at least, RS is concerned they might). Edit: exact wording in the online Q&A is as follows " We are temporarily not open to new investors. We want to make sure the interest reduction announcement beds in, and also update our Appropriateness Test (the test all new investors need to complete before opening an account with RateSetter) to ensure new investors understand the interest reduction. We expect this to take a week or two, and we will then reopen to new investors." They could hardly let new investors start lending if they didn't realise they would only get half the interest rate they were expecting. But I don't think there would be a great rush of new investors anyway with rates half what they were and liquidity difficulties on the platform (assuming they understood the situation!).
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Jun 20, 2020 17:26:20 GMT
Their original justification - as has been discussed previously on here - was due to the implementation of the Stabilisation Period. They wanted some time for this to 'bed in' so they could be more confident that new investors understood what was going on. That said, it's been a little while now and no change, so I do wonder if the FCA hasn't had a word (or, at least, RS is concerned they might). Edit: exact wording in the online Q&A is as follows " We are temporarily not open to new investors. We want to make sure the interest reduction announcement beds in, and also update our Appropriateness Test (the test all new investors need to complete before opening an account with RateSetter) to ensure new investors understand the interest reduction. We expect this to take a week or two, and we will then reopen to new investors." They could hardly let new investors start lending if they didn't realise they would only get half the interest rate they were expecting. But I don't think there would be a great rush of new investors anyway with rates half what they were and liquidity difficulties on the platform (assuming they understood the situation!). But they 'clearly' (though not in my view - In fact, I started a thread on the subject a while ago) advertise to potential new investors on the website the current position regarding rates.
I can't help feeling something is afoot here. Either they are in a more severe financial position than they are letting on and fear some sort of mis-selling scandal should they go under post-introduction of the stabalisation period and/or the FCA has barred them from taking on new deposits OR they have shut up shop at the behest of Metro Bank, at least while exclusive talks about a possible takeover prevail.
Why else would any business close itself up to new clients?
Just my hunch, nothing more.
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gg
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Post by gg on Jun 20, 2020 19:47:43 GMT
I also think they are in more trouble than they care to make public. It’s a shame. RateSetter interest formed a pretty significant part in my retirement planning.
Fortunately, I have taken nearly everything out. Sadly, £65.5k in Premium Bonds returned just £25 last month.
Good luck everybody.
gg
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Greenwood2
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Post by Greenwood2 on Jun 20, 2020 20:00:54 GMT
I also think they are in more trouble than they care to make public. It’s a shame. RateSetter interest formed a pretty significant part in my retirement planning. Fortunately, I have taken nearly everything out. Sadly, £65.5k in Premium Bonds returned just £25 last month. Good luck everybody. gg You can only have £50k in premium bonds. Still £25 is a bit poor. Edit: Or are you looking at more than one account?
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aju
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Post by aju on Jun 21, 2020 9:10:35 GMT
As someone, in a seemingly endless line of Lenders, trying to withdraw from RS as soon as possible and in view of some of the above statements I wondered are RS still accepting new borrowers or has new loans lending ground to a proverbial standstill leaving just existing loans being recycled. I have new lending on old products (1Y&5Y) turned off (Set to holding) and have new products (Access Only) set at 8% relend rate to trap any returned funds when moved to "On Market". I keep watch of the next Access returns dates and ensure to come in on the day they are closing (Most are quite a long way off now anyway). I check everyday for premature closures too as it takes a couple of minutes at most to check our accounts.( I do the same with Zopa but its a lot more cumbersome unless you know how to navigate the system using personal links, again minutes though) Just curious if anyone knows - I did try to get a loan but despite being very capable of paying a loan down if I was stupid enough to borrow in my circumstances (I am fortunate enough to be able to afford most of the loans available without borrowing) and as I expected it rejected me even on the simplest of cases. (Probably as a result of simple non invasive credit checks that should show I already have a lot of credit cards I never actually use except to gain from them and always pay off as soon as I use them)  |
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rscal
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Post by rscal on Jun 21, 2020 9:28:15 GMT
What's the source of the money for Releases at present if not new 'lenders'?
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aju
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Post by aju on Jun 21, 2020 10:00:51 GMT
What's the source of the money for Releases at present if not new 'lenders'? I agree but the ideas I read from the above comments was that new lending was being limited if not stopped by not allowing new investors. The point of the chart was to show that there has been a very large drop down of lending since the lockdown. The existing loans are being drawn down and the money is recycled if there are more borrowers in the game then and less recycling lenders to gather up loans that are being sold by other lenders. This whole thing slows the selling for those that wish to. The other key issue is that with less borrowing and lending then the PF will be depleting too. sadly there may come a point when the defaults will mount and the effect will eventually pass on to lenders too. I assume most sellers who know how to are taking steps to mitigate their ability to relend when they don't want to too. The fact there are no new lenders is a key reason things have stalled. The premise of the statements I referred to is that RS is not allowing new lenders into the system at this time this then as you say slows down the sales of existing lenders to the reduced market size. If RS is still taking on borrowers then this reduces the Loan sales for lenders further.
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chris1200
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Post by chris1200 on Jun 21, 2020 10:05:02 GMT
What's the source of the money for Releases at present if not new 'lenders'? Existing lenders either investing new money or re-investing returned money.
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rscal
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Post by rscal on Jun 21, 2020 15:01:25 GMT
The only way to release capital is then by having the repayment stream ... but where that goes to other lenders 'holding' it simply disappears. The new money to release the old money can't come from any source except new lenders and without new lenders there is no functional 'RYI'
What would persuade me to stay in? Swinging release fees like 5% possibly?
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aju
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Post by aju on Jun 21, 2020 16:54:55 GMT
The only way to release capital is then by having the repayment stream ... but where that goes to other lenders 'holding' it simply disappears. The new money to release the old money can't come from any source except new lenders and without new lenders there is no functional 'RYI'
What would persuade me to stay in? Swinging release fees like 5% possibly? But assuming RS is right and there are more lenders staying than trying to leave then surely the returned funds need loans to lend to. I don't know how RS does this whether it's automated or whether its manually fed at the end of the daily processing cycles. If I'm reading the stats correctly then there is not much new borrowing coming in - I asked if anyone knew if borrowing was still happening and like you I assume it must be. If its not though then surely the lenders who have their settings to relend still and lets assume they don't game the system - I'm pretty sure most don't they just accept the rates given using the default relend settings - then there will surely be opportunities for sales to be picked up to feed the relenders needs as well. At present I'm not sure the fees are relevant unless all of a sudden the RYI in front of us completes all of a sudden, Mrs Aju and myself have removed just over 2000 so far by effectively turning relend off but we still have quite a way to go. We don't actually have much in the new products - just over 1000 in access between us. some of which closes soon too. If the release fees were as you say much higher then I too would reconsider turning off the sale items.
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aju
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Post by aju on Jun 21, 2020 17:25:24 GMT
Not sure if its much help but I've taken the most recent RS "Weekly Delivery Numbers" and added in the Rate trends screen weekly volume numbers. Not sure if its showing anything much but thought it might be interesting.
Weekly delivery numbers: (Wk Vol M) (TotM)
- This week we have delivered £4.8m of releases (Partial Values) 7.25m 12.05m
- In the week commencing 30 Nov, we delivered £10.5m of RYI requests 6.10m 16.60m
- In the week commencing 23 Nov, we delivered £3.5m of RYI requests 5.90m 9.40m
- In the week commencing 16 Nov, we delivered £6.6m of RYI requests 3.78m 10.38m
- In the week commencing 8 Nov, we delivered £5.9m of RYI requests 7.27m 13.17m
- In the week commencing 2 Nov, we delivered £7.0m of RYI requests 6.69m 13.69m
- In the week commencing 26 Oct, we delivered £5.2m of RYI requests 7.47m 12.67m
- In the week commencing 19 Oct, we delivered £5.2m of RYI requests 7.41m 12.61m
- In the week commencing 12 Oct, we delivered £5.5m of RYI requests 9.34m 13.84m
- In the week commencing 5 Oct, we delivered £2.1m of RYI requests 7.15m 9.25m
- In the week commencing 28 Sept, we delivered £3.2m of RYI requests 5.54m 8.74m
- In the week commencing 21 Sept, we delivered £2.8m of RYI requests 5.86m 8.66m
- In the week commencing 14 Sept, we delivered £3.7m of RYI requests 5.31m 9.01m
- In the week commencing 7 Sept, we delivered £3.1m of RYI requests 6.12m 9.22m
- In the week commencing 31 Aug, we delivered £3.2m of RYI requests 7.28m 10.48m
- In the week commencing 24 Aug, we delivered £2.5m of RYI requests 8.91m 11.41m
- In the week commencing 17 Aug, we delivered £2.6m of RYI requests 9.71m 12.31m
- In the week commencing 10 Aug, we delivered £2.0m of RYI requests 8.87m 10.87m
- In the week commencing 3 Aug, we delivered £2.9m of RYI requests 5.25m 8.15m
- In the week commencing 27 July, we delivered £2.3m of RYI requests 5.66m 7.96m
- In the week commencing 20 July, we delivered £2.7m of RYI requests 5.49m 8.19m
- In the week commencing 13 July, we delivered £2.4m of RYI requests 5.19m 7.59m
- In the week commencing 6 July, we delivered £3.6m of RYI requests 6.69m 10.29m
- In the week commencing 29 June, we delivered £4.3m of RYI requests 5.76m 10.06m
- In the week commencing 22 June, we delivered £2.8m of RYI requests 5.18m 7.98m
- In the week commencing 15 June, we delivered £3.5m of RYI requests 4.31m 7.81m
- In the week commencing 8 June, we delivered £3.7m of RYI requests 5.22m 8.92m
- In the week commencing 1 June, we delivered £3.5m of RYI requests 4.82m 8.32m
- In the week commencing 25 May, we delivered £3.4m of RYI requests 3.45m 6.85m
- In the week commencing 18 May, we delivered £4.0m of RYI requests 4.90m 8.90m
- In the week commencing 11 May, we delivered £3.6m of RYI requests 7.60m 11.20m
- In the week commencing 4 May, we delivered £3.6m of RYI requests 3.94m 7.54m
- In the week commencing 27 April,we delivered £5.0m of RYI requests 5.41m 10.41m
- In the week commencing 20 April,we delivered £4.5m of RYI requests 4.22m 8.72m
- In the week commencing 13 April,we delivered £5.1m of RYI requests 3.39m 8.49m
- In the week commencing 6 April,we delivered £4.5m of RYI requests 4.86m 9.36m
- In the week commencing 30 March,we delivered £4.4m of RYI requests 5.46m 9.86m
- In the week commencing 23 March,we delivered £4.9m of RYI requests 10.83m 15.73m
- In the week commencing 16 March,we delivered £4.7m of RYI requests 8.22m 12.92m
Last updated: 13/12/20 @ 10:21
Edit: Added in totals of RYI+WkLendVol not sure if this is correct but it indicates the money flow as volume is lent/relent money across all products.
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Post by shanghaiscouse on Jun 22, 2020 14:03:01 GMT
RS has financial difficulties as it is not profitable and depends on fresh capital injections. Once the directors new the existing shareholders were not going to make any more capital injections then they had to stop creating new liabilities or else expose themselves to charges of trading whilst insolvent. Hence they closed it to new investors as a precautionary measure, and have been trying to raise more capital or sell the entire business. I don't think a bank would buy it (as it would have to buy the individual loans from the lenders which is way too complicated), maybe a vulture fund would at a firesale price. The other option is it goes zombie and winds down over the life of the loans, which I consider most likely.
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