Firstly I have to say I’m a big fan of BC, their track record speaks for itself. However I’m a little concerned at the number of loans coming onto the platform particularly second charge loans with late 60’s LTVs. The beauty of the platform is its 100% capital redemption record and liquidity, I just hope the drive for growth (I believe they’re hoping for a 3 fold increase) rate doesn’t impact upon their impeccable record.
One other concern is BC appear to be less aggressive than other platforms in addressing defaults, with timescales on the long side.
Last Edit: Oct 11, 2020 18:40:39 GMT by Ton ⓉⓞⓃ: To add "BC" to the title
Re: second charge loans with high(ish) LTVs - if they concern you as a cohort, just avoid them. I do, for the most part - and always those where the loan is described as being 'for business purposes'.
Re: 'less aggressive' - I've not noticed that* and I'd go as far to say they are one of the more 'aggressive' platforms, in terms of standing for no-nonsense from borrowers and pursuing every legal recourse available to them as promptly as possible.
However, if anyone is relying on liquidity as an exit - ie they never hold a loan to term - then I would have concerns. My personal view is that - thanks to CV-19 and the effects it has had and will continue to have on the economy for some time - there will be an increase in mortgage defaults and a possible downturn in pricing. At some point - and it won't necessarily be soon, but the timing is sufficiently difficult for me to predict so as to make me cautious now - that will, I think, have an impact on platform liquidity. (There was a significant surge in SM listing early on in CV-19, and it took a while to clear. Whether that was through sale or by withdrawal of the listing as the initial 'panic' (concern) subsided, I don't know.
As always, NEVER invest money that may be needed short-to-medium term in (fundamentally) illiquid investments such as P2P. Sorry, that's not me trying to teach you how to suck eggs - I know you've been in this particular investment game long enough to take a sensible approach to exposure - but rather anyone looking at P2P / BC as a potential investment.
* - as per the above, my caution has seen me reduce exposure to the platform throughout 2020, so, TBH, I've not been following newer defaults to the same extent as I have done in previous years.
Last Edit: Oct 11, 2020 12:50:15 GMT by iRobot: borrowers, not lenders!
"The risk of financial loss when investing in p2p loans is real, and relying on info posted on a chat forum to make decisions on investments is crazy." [source]
I find with more loans coming to the market you can be more selective and have time to do DD on loans. In the past you had to pretty much grab anything or it would be gone in literally seconds.
Which platforms are more aggressive? Unfortunately there are legal procedures to go through to repossess properties, which take time and currently court dates are long. There have been one or two borrowers who have used every possible legal argument to thwart BC recovering funds, but BC have never given up and just continue pursuing them through the courts.
Last Edit: Oct 11, 2020 14:08:50 GMT by Greenwood2