Property Loan 20 - Repaid in full after Default

If the PF were to adopt this approach -- and it wouldn't be unreasonable if they did -- I expect it would kill the SM for this loan.  Except, perhaps, because people wouldn't find out about it until afterwards since the use of the PF is discretionary.

If it happened once, would it kill the SM for future defaulted loans?  Or would investors still buy parts despite knowing that they might not receive any interest?  How clear would SS have to make that situation?

The Investor Activity I can see now for this loan totals £562.37 today.  Has SM activity decreased considerably since yesterday?  Or have there been a lot more transactions today that already have scrolled off the table?

For what its worth my feeling is that we are going round in circles like a chickenless head no one knows what exactly is going to happen and all that is happening is people are just repeating what other peole have already said, best thing would be for this thread to stop accepting new views( after this one) and just wait untill SS or Lendy put out a statement.

No need for panic. It's likely that all will be resolved with at least most money paid, even if not as agreed in the terms at the time of loan inception.

It's how close what Lendy does compared to what was agreed at inception that I'm watching - the closer they get the better from the point of view of lender trust.

Hopefully nobody from Lendy pays any attention to this discussion until after the holiday. It'll wait, after all, nothing of interest is likely to happen when no professionals are working.I doubt that'll happen, Lendy will probably just pay once the assets of the firm they lent to are sold. It's fairly natural for a protection fund not to pay until then but it's also fairly natural for one to pay out initially and get repaid from the sale of assets. Either way works, what matters here is just that lenders are told accurately what will happen at the time they lent and that this is not subsequently changed.

In the case of this loan, it's to Lendy so it's Lendy that has the obligations to pay interest and capital as in the original loan agreement Lendy made with the consumer lenders at the time.

Typical, child (or aguably parents) were at fault, poor Gorilla pays the price.
Brian

I struggle to see how there can't be a shortfall between the valuation the loan was based on and what the asset sells for eventually because the security was partly a business and 1.3 million pounds of the valuation was for the business including profit Goodwill fixtures fittings and all the rest of it and the business has failed hasn't it and is now in administration so common sense tells you that a lot of that value must have gone. Then you got the house and the agricultural land and not a lot else because the garden centre would not have a lot of substantial physical buildings on it more like open spaces and greenhouses I would have thought. And then you have all of the legal and admin costs and selling costs to factor in and that will stack up to quite a lot and that's all got to be paid for as well.

My guess is that this process will take quite a long time because an administrator has been appointed and that's the person in charge I think and saving stream I doubt can go straight in there and start doing their own thing with the security.

I think the provision fund will have to be brought into play here and the question is how and to what extent. And also the bigger question which we keep coming back to about what terms and conditions apply to this particular loan and individual investors who may have been in it from the start or who may have gone into it much more recently after the terms changed on the website.

Somewhat off topic but

www.change.org/p/cincinnati-zoo-justice-for-harambe

Not something that's likely to happen, it's just discussing very unlikely eventualities and where people might stand if those unlikely things were to happen. Personally I'm confident that that sort of thing won't end up happening even if in extremis it's what could happen.
Were any of those loans taken out by FC itself? For this loan, Lendy is the borrower from the consumer lenders and has the obligations to pay. It's expected that the ultimate borrowers might not pay but it's not expected as a routine event that a P2P platform will take out a loan and not pay. One of the selling points of these older loans is that Lendy had that payment obligation so things like it not being necessary to worry about which loan money was lent on happened as a result.

The more recent loans at SavingStream aren't directly to Lendy so that issue doesn't arise for them. And for new loans taken out from 11 May it's also clear that there is no obligation to pay interest until after sale of assets if the ultimate borrower defaults.

Of course in this case I think that Lendy will ultimately pay.

There's legislation relating to Unfair Terms in Consumer Contracts Regulations and guidance from the OFT on it (now CMA but the guidance bears the OFT name). For Lendy to argue that it is not responsible for repaying money that it borrowed in its own name, as it did for this loan, would be a good example of such an unfair term. For new contracts since 2015 the unfair terms in consumer contracts law has been replaced by the Consumer Rights Act (2015) and the CMA has a guidance document on what the rights are.

Both an unfair contract term and breach of FCA guidance on what it expects in contracts between consumers and financial businesses that it regulates. Such a term needs to specify the circumstances and possible natures of the changes. This is one reason why most people who have bank accounts over the last few years have been getting notices fo variations in terms that adds details of when the terms might be changed instead of a whenever we like version. A firm can't just go and disclaim all of its past statements about how it would act, except possibly for new transactions carried out after the change, and even then if there is not a specific revocation of an undertaking I'd expect it to still be bound by it. Otherwise every time there is a change of contract that doesn't have to be notified to consumers the consumers would have to present the firm with a list of all of its previous undertakings and ask which, if any, of them it still intended to keep to for new agreements. You'll probably have noticed that changes are normally pointed out when banks update their agreements.

Complaint path for this would be ideally first to the firm, then the FOS in a specific situation or alternatively to the FCA's unfair contract terms team, whether there is or isn't a current dispute. The most relevant thing for the FCA team at the moment would be Lendy modifying its own obligation to pay interest each month on a loan it took out itself. No problem for future contracts, just past ones.

And while I think these cases are pretty clear cut it's unlikely that any recourse to those eventualities will be needed. It's more in the "what could happen in unlikely circumstances" sort of discussion.