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Post by davefoz on Jun 23, 2022 11:29:06 GMT
It’s a little concerning that whilst bond interest rates are increasing, SOMO investment returns are declining at a time when the market seems more risky and the platform lacks a degree of liquidity. Additionally there seems to be considerable delays in loans going live. Possibly a deliberate ploy to fund borrowers first few weeks without giving a return to investors ?
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Greenwood2
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Post by Greenwood2 on Jun 23, 2022 14:38:28 GMT
It’s a little concerning that whilst bond interest rates are increasing, SOMO investment returns are declining at a time when the market seems more risky and the platform lacks a degree of liquidity. Additionally there seems to be considerable delays in loans going live. Possibly a deliberate ploy to fund borrowers first few weeks without giving a return to investors ? Rates seem to be down all over P2P. I tend to go for 'live' loans (rather than pipeline) on Somo to avoid cash drag, there have been plenty of those recently. I haven't had any trouble selling on the SM in the past, usually within a day. I saw a few loans on there the other day but checking now they have all gone, so things still seems to be selling pretty fast.
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SteveT
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Post by SteveT on Jun 23, 2022 17:04:24 GMT
It’s a little concerning that whilst bond interest rates are increasing, SOMO investment returns are declining at a time when the market seems more risky and the platform lacks a degree of liquidity. Additionally there seems to be considerable delays in loans going live. Possibly a deliberate ploy to fund borrowers first few weeks without giving a return to investors ? Do you have any evidence that loans are being advanced to borrowers before being activated for lenders? It would seem a most extraordinary thing for SoMo to do and I very much doubt they are. Some loans have always taken a lot longer than others for the necessary legals to be completed, and a few eventually have to be cancelled by SoMo when it becomes clear it’s not going to happen.
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p2pfan
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Post by p2pfan on Jun 23, 2022 18:38:47 GMT
It’s a little concerning that whilst bond interest rates are increasing, SOMO investment returns are declining at a time when the market seems more risky and the platform lacks a degree of liquidity. Additionally there seems to be considerable delays in loans going live. Possibly a deliberate ploy to fund borrowers first few weeks without giving a return to investors ? I totally agree with these points. The rates have been in freefall and this has been by a far higher rate than on P2P platforms. For instance, where loans on CP have plummeted from, say, 8% to 7.4%, those on SoMo have collapsed from c. 10% to 7.8%. Considering the risk profile of these loans and the fact that SoMo doesn't have the safeguards in place of a P2P network, that is not good news at all. I also concur with the statement about the long delays in loans going live, which wasn't the case in years gone by on SoMo. I've got a long queue of loans that haven't gone live. That means fairly considerable periods of time when we don't earn any interest. I don't personally believe SoMo are doing this deliberately, but it seems like their priorities are elsewhere. Despite the above, SoMo remains a top-tier platform IMHO. Their aggressiveness and successful track-record in chasing defaulting borrowers puts every P2P platform to shame. With P2P networks their staff can't stop enthusiastically blabbering the same ridiculous excuses ("Brexit!", "General Election!", "Covid!", "War in Ukraine!", "PartyGate!", "Dog Ate Their Cheque!") why their borrowers won't pay and who make it blatantly obvious that their bias/obsession is blindly looking after the interests of their borrowers versus their lenders. I am always bewildered at how eager and enthusiastic P2P network staff are to act as advocates for defaulting borrowers and how they will never say one single word against them to me even if they have not paid the due interest for months on end. Those posh meals and "Christmas presents" gifted by borrowers certainly are lethally effective.
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Post by davefoz on Jun 24, 2022 9:00:30 GMT
It’s a little concerning that whilst bond interest rates are increasing, SOMO investment returns are declining at a time when the market seems more risky and the platform lacks a degree of liquidity. Additionally there seems to be considerable delays in loans going live. Possibly a deliberate ploy to fund borrowers first few weeks without giving a return to investors ? Do you have any evidence that loans are being advanced to borrowers before being activated for lenders? It would seem a most extraordinary thing for SoMo to do and I very much doubt they are. Some loans have always taken a lot longer than others for the necessary legals to be completed, and a few eventually have to be cancelled by SoMo when it becomes clear it’s not going to happen. No I don’t but I know the platform is under pressure as regards margin. Let me give you this hypothetical albeit possibly typical scenario. Interest 7% to investor somo charges 10% default 13% & 15%. 6 month loan that is pipeline for 1 month and runs over by 2 months. 1st month investor interest 0% Somo 10%; the default months as Somo doesn’t immediately pay default interest; investor interest 7%, Somo claims 15%. Over the 9 month term investor interest 6.22% Somo interest 11.11%. Margin is significantly enhanced from the norm 3%. Let me qualify this by saying I really like the platform - however one criticism is there is too much ambiguity- the example scenario could be accurate or BS, we just don’t know.
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Greenwood2
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Post by Greenwood2 on Jun 24, 2022 10:23:04 GMT
Do you have any evidence that loans are being advanced to borrowers before being activated for lenders? It would seem a most extraordinary thing for SoMo to do and I very much doubt they are. Some loans have always taken a lot longer than others for the necessary legals to be completed, and a few eventually have to be cancelled by SoMo when it becomes clear it’s not going to happen. No I don’t but I know the platform is under pressure as regards margin. Let me give you this hypothetical albeit possibly typical scenario. Interest 7% to investor somo charges 10% default 13% & 15%. 6 month loan that is pipeline for 1 month and runs over by 2 months. 1st month investor interest 0% Somo 10%; the default months as Somo doesn’t immediately pay default interest; investor interest 7%, Somo claims 15%. Over the 9 month term investor interest 6.22% Somo interest 11.11%. Margin is significantly enhanced from the norm 3%. Let me qualify this by saying I really like the platform - however one criticism is there is too much ambiguity- the example scenario could be accurate or BS, we just don’t know. It doesn't seem ambiguous to me, the Loan Certificates give the loan start dates (and your investment start date) all officially signed off by Somo, are you saying those documents are not correct? I really don't think that is likely. Edit: Or have you found discrepancies?
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Post by davefoz on Jun 24, 2022 11:40:51 GMT
No I haven’t and I’m not saying anything untoward is occurring. However there is wriggle room on their part. To my knowledge default interest never kicks in immediately after the loan term has come to an end. The loan certs are between lenders and Somo ? Therefore there is an opportunity for borrowers to be paying interest on pipeline loans.
One other thing that is a bit disingenuous is occurring at present with the pipeline loan @ 53%LTV. ITS BEEN PIPELINE FOR 4 Weeks. Sold out on 2 maybe 3 occasions. However all of a sudden another £75k is added to the platform. Giving investors a false impression of the appetite for the loan and potential liquidity on the secondary market.
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Greenwood2
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Post by Greenwood2 on Jun 24, 2022 14:24:58 GMT
No I haven’t and I’m not saying anything untoward is occurring. However there is wriggle room on their part. To my knowledge default interest never kicks in immediately after the loan term has come to an end. The loan certs are between lenders and Somo ? Therefore there is an opportunity for borrowers to be paying interest on pipeline loans. One other thing that is a bit disingenuous is occurring at present with the pipeline loan @ 53%LTV. ITS BEEN PIPELINE FOR 4 Weeks. Sold out on 2 maybe 3 occasions. However all of a sudden another £75k is added to the platform. Giving investors a false impression of the appetite for the loan and potential liquidity on the secondary market. Somo also claim to enforce client account rules, which I'm sure would not allow them to release lender funds to a borrower before the start of the lender's loan. But I guess if you start from the position of not trusting Somo anything is possible particularly if you look at Collateral and Lendy, etc. But I think Somo are better than that. Extra loan amounts can become available if Somo release some of the loan they have reserved for themselves back to lenders, or if someone with an automatic bid retracts it (within 48 hrs I think), and if you want to back out of a loan that hasn't gone live if you ring them up they may agree to release the funds and that part of the loan will go back on the market. If you think something nefarious is going on with pipeline loans (or you just want to avoid cash drag) invest in live loans.
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Post by overthehill on Jun 27, 2022 10:21:04 GMT
There are two 1st charge 70% LTV loans at 6.96% available. It's only a matter of time before P2P rates start to rise, they are all trying to capitalise on the lowering rates but they'll lose investors if they get it wrong. I wan't to invest with SOMO but I don't like these loans, the valuations are right at the top hopeful end, higher than anything similar that has sold in the past.
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Greenwood2
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Post by Greenwood2 on Jun 27, 2022 11:10:16 GMT
There are two 1st charge 70% LTV loans at 6.96% available. It's only a matter of time before P2P rates start to rise, they are all trying to capitalise on the lowering rates but they'll lose investors if they get it wrong. I wan't to invest with SOMO but I don't like these loans, the valuations are right at the top hopeful end, higher than anytthing similar that has sold in the past.
There are also 40% (2nd) and 50% (1st) LTV loans at 6%, and 53% LTV (1st) at 7.2% (almost gone). Edit: added 1st/2nd charge in brackets. Edit: You are looking at standard rates and I'm looking at 'Investor family' rates. I had assumed you had been investing with Somo long enough to be in the family rates.
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Post by davefoz on Jun 27, 2022 11:46:59 GMT
There are two 1st charge 70% LTV loans at 6.96% available. It's only a matter of time before P2P rates start to rise, they are all trying to capitalise on the lowering rates but they'll lose investors if they get it wrong. I wan't to invest with SOMO but I don't like these loans, the valuations are right at the top hopeful end, higher than anytthing similar that has sold in the past.
There are also 40% (2nd) and 50% (1st) LTV loans at 6%, and 53% LTV (1st) at 7.2% (almost gone). Edit: added 1st/2nd charge in brackets. Edit: You are looking at standard rates and I'm looking at 'Investor family' rates. I had assumed you had been investing with Somo long enough to be in the family rates. They’ve done it again - that 7.2% almost gone has just had £112.5k added.
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michaelc
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Post by michaelc on Jun 27, 2022 13:04:13 GMT
A p2pindependentforum board administrator who hasn't been seen on the forum for a very long time once told me the board was a "nest of vipers". I didn't understand at the time but having been around for a while myself now I think I get it.
One of the problems that you will see time and time again is that those who are heavily invested in a particular platform have a vested interest in it doing well and that means not frightening existing investors and attracting new ones. All done under the cover of apparent "reasonable" and "impartial" commentary.
Therefore I am always highly skeptical of cheerleaders for any platform.
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Post by overthehill on Jun 27, 2022 13:56:29 GMT
There are two 1st charge 70% LTV loans at 6.96% available. It's only a matter of time before P2P rates start to rise, they are all trying to capitalise on the lowering rates but they'll lose investors if they get it wrong. I wan't to invest with SOMO but I don't like these loans, the valuations are right at the top hopeful end, higher than anytthing similar that has sold in the past.
There are also 40% (2nd) and 50% (1st) LTV loans at 6%, and 53% LTV (1st) at 7.2% (almost gone). Edit: added 1st/2nd charge in brackets. Edit: You are looking at standard rates and I'm looking at 'Investor family' rates. I had assumed you had been investing with Somo long enough to be in the family rates.
I don't know anything about family rates, what's the difference in lender rates? Never been a fan of incentives or marketing when it comes to investing unless it comes with zero conditions!
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nick
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Post by nick on Jun 27, 2022 14:07:31 GMT
There are also 40% (2nd) and 50% (1st) LTV loans at 6%, and 53% LTV (1st) at 7.2% (almost gone). Edit: added 1st/2nd charge in brackets. Edit: You are looking at standard rates and I'm looking at 'Investor family' rates. I had assumed you had been investing with Somo long enough to be in the family rates.
I don't know anything about family rates, what's the difference in lender rates? Never been a fan of incentives or marketing when it comes to investing unless it comes with zero conditions!
Family rates are 25% higher than the standard rates (or they were last time I checked about a year ago).
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Greenwood2
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Post by Greenwood2 on Jun 27, 2022 14:30:48 GMT
I don't know anything about family rates, what's the difference in lender rates? Never been a fan of incentives or marketing when it comes to investing unless it comes with zero conditions!
Family rates are 25% higher than the standard rates (or they were last time I checked about a year ago). It was an incentive (thank you) to existing investors when rates started dropping a while ago existing lenders became 'family'. I can see both rates on the lending screen and assumed everyone did. A bit like the 'early adopter' bonus on Zopa.
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