Property Loan 20 - Repaid in full after Default

apologies CD, live and learn.   

Yes, but PBL07 it was only a tiddler (£168,000), so it will be interesting to see how this £1,700,000 defaulted loan will be handled...

Of course there is always the Provision Fund, which should cover any losses.

Is the PF relevant for a loan on the old T&C? We lent to Lendy not the end borrower so the default is their concern not ours. Lendy has to pay us back or default themselves ie liquidate the platform. Or am I missing something?

ben Afaiu the provision fund can be used on any loan, solely at the discretion of SS , the PF will always be 2% min of the SS loan book. not sure if that means 2% of every loan, but you may be right their.

This default has definitely dragged the SM quality down, nothing but short dated loans available, with the odd bits on better stuff, maybe spooked a few. 

edit 23.59 approaching, i wonder what will happen after midnight.

In reading the description of how the PF works, all I see are references to paying out if there are losses of capital.  I see nothing mentioning the PF might also cover accrued interest.

Someone earlier was speculating that SS/Lendy might be charging penalties or higher interest on defaulted loans.  Do we have any evidence of such clauses in the standard loan agreement?  (Do I remember correctly that someone asked for a copy of a loan agreement and was given one?  If so, what did it say about this?) 

If a borrower isn't subject to such penalties for non-payment, what incentive do they have to cover the accruing interest in a situation such as PBL020?  If the sale proceeds are sufficient to pay all accrued interest, then any accrued interest simply would reduce the amount left for the borrower.  If the borrower had paid it as it was accruing, there'd be less to subtract from the proceeds and the borrower would effectively get what they paid out back again when the sale completes.  If the sale proceeds aren't enough to cover all accrued interest, however, then the borrower won't get anything out of the proceeds, so having paid any of the interest as it accrued would have been throwing money away.  ISTM that in those circumstances, the question whether to make interest payments is a no-brainer --DON'T!