rscal
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Post by rscal on Aug 18, 2023 13:33:02 GMT
Which is a positive however they’re not exactly selling are they. IMHO SOMO needs to stop continually bringing more and more loans to the platform when there is insufficient investor capital to fund them. Instead of pressing the pause button and protecting the platform by taking a 6/8 week break from bringing further new loans on line. Greed has overtaken common sense with the result loans now take weeks rather than days to fund, with investors more and more reluctant to fund prior go live, and even when live. SOMO exacerbated the situation by increasing the pipeline funding lead time. At the other end of the platform the secondary market has collapsed; redemptions appear to be coming in at a trickle. Default interest is not applied once loan term has lapsed, and extensions take 3/4 months to be agreed with the new interest rate only being applied, at point of confirmation on the platform, not from the point the original loan technically went into default. Having heavily invested over the past few years I’m getting out until they start managing the platform in an orderly manner. (Now who's being greedy?) Given SoMo's reputation for mauling miscreant borrowers do you want them to go in even harder?
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Greenwood2
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Post by Greenwood2 on Aug 18, 2023 13:42:45 GMT
Which is a positive however they’re not exactly selling are they. IMHO SOMO needs to stop continually bringing more and more loans to the platform when there is insufficient investor capital to fund them. Instead of pressing the pause button and protecting the platform by taking a 6/8 week break from bringing further new loans on line. Greed has overtaken common sense with the result loans now take weeks rather than days to fund, with investors more and more reluctant to fund prior go live, and even when live. SOMO exacerbated the situation by increasing the pipeline funding lead time. At the other end of the platform the secondary market has collapsed; redemptions appear to be coming in at a trickle. Default interest is not applied once loan term has lapsed, and extensions take 3/4 months to be agreed with the new interest rate only being applied, at point of confirmation on the platform, not from the point the original loan technically went into default. Having heavily invested over the past few years I’m getting out until they start managing the platform in an orderly manner. Although there are 6 loans available on the PM currently the total value available is only equivalent to one decent sized loan, ie, about £160,000 so the market is not swamped with too much value of loans. The SM is difficult if you want to sell loans bought when the market was low, but that is one of the risks with an SM you may not always be able to sell. The last of my lower rate loans will finish in the next month or so and recent loans are at 10% - 11% which is pretty competitive. I've had a few loans redeem recently, I guess that just depends on which loans you are in. I'm still pretty happy.
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Post by davefoz on Aug 18, 2023 14:20:37 GMT
Which is a positive however they’re not exactly selling are they. IMHO SOMO needs to stop continually bringing more and more loans to the platform when there is insufficient investor capital to fund them. Instead of pressing the pause button and protecting the platform by taking a 6/8 week break from bringing further new loans on line. Greed has overtaken common sense with the result loans now take weeks rather than days to fund, with investors more and more reluctant to fund prior go live, and even when live. SOMO exacerbated the situation by increasing the pipeline funding lead time. At the other end of the platform the secondary market has collapsed; redemptions appear to be coming in at a trickle. Default interest is not applied once loan term has lapsed, and extensions take 3/4 months to be agreed with the new interest rate only being applied, at point of confirmation on the platform, not from the point the original loan technically went into default. Having heavily invested over the past few years I’m getting out until they start managing the platform in an orderly manner. (Now who's being greedy?) Given SoMo's reputation for mauling miscreant borrowers do you want them to go in even harder? Borrowers have had the length of the term to arrange alternative finance or a loan extension … just like when my mortgage fixed rate lapses the new or default rate should be applied… retrospectively if necessary. Hopefully that would see a much more loans being redeemed within or at term. Additionally when SOMO extend a loan it can take over 4 months to agree to a 6 month extension - what’s to say SOMO are retrospectively applying the revised rate and not passing it onto investors.
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Greenwood2
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Post by Greenwood2 on Aug 18, 2023 19:18:10 GMT
(Now who's being greedy?) Given SoMo's reputation for mauling miscreant borrowers do you want them to go in even harder? Borrowers have had the length of the term to arrange alternative finance or a loan extension … just like when my mortgage fixed rate lapses the new or default rate should be applied… retrospectively if necessary. Hopefully that would see a much more loans being redeemed within or at term. Additionally when SOMO extend a loan it can take over 4 months to agree to a 6 month extension - what’s to say SOMO are retrospectively applying the revised rate and not passing it onto investors. I guess borrowers often they think it will work out but it doesn't, and they get stuck. If interest gets paid and they don't default, I don't mind too much if it takes a while to sort out.
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Post by davefoz on Aug 19, 2023 6:11:40 GMT
Borrowers have had the length of the term to arrange alternative finance or a loan extension … just like when my mortgage fixed rate lapses the new or default rate should be applied… retrospectively if necessary. Hopefully that would see a much more loans being redeemed within or at term. Additionally when SOMO extend a loan it can take over 4 months to agree to a 6 month extension - what’s to say SOMO are retrospectively applying the revised rate and not passing it onto investors. I guess borrowers often they think it will work out but it doesn't, and they get stuck. If interest gets paid and they don't default, I don't mind too much if it takes a while to sort out.
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Post by davefoz on Aug 19, 2023 6:20:15 GMT
I guess borrowers often they think it will work out but it doesn't, and they get stuck. If interest gets paid and they don't default, I don't mind too much if it takes a while to sort out. Or borrowers are delaying hanging on to the previous rate ahead of default or the revised rate prevailing? There are numerous examples of defaults after refinance failing on the platform whilst P…Co is an example of refinance which has been happening since May and has been happening in the next 7 days since the beginning of August. I guess my issue is the ambiguity - we as investors need to know where we stand. Maybe a 2% premium on day 1 of the rate lapsing until a final decision is made within 2 months would be a fairer scenario for all concerned. Presently Somo look totally unprofessional and could be using the ambiguity to cream a premium which is not passed on to investors.
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michaelc
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Post by michaelc on Aug 20, 2023 16:33:52 GMT
Or borrowers are delaying hanging on to the previous rate ahead of default or the revised rate prevailing? There are numerous examples of defaults after refinance failing on the platform whilst P…Co is an example of refinance which has been happening since May and has been happening in the next 7 days since the beginning of August. I guess my issue is the ambiguity - we as investors need to know where we stand. Maybe a 2% premium on day 1 of the rate lapsing until a final decision is made within 2 months would be a fairer scenario for all concerned. Presently Somo look totally unprofessional and could be using the ambiguity to cream a premium which is not passed on to investors.We don't know that and the fact we don't know is part of the main problem with all p2p/social money lending platforms. Is the FCA ever going to do anything other than require a few tick boxes to be checked in an attempt to prevent people spending their own money? Surely its not too much to ask for the FCA to require a list of things to be published to investors? Such a list might include summary details for each loan including how much the platform's fees were from the borrower. All the fees and payments.
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ilmoro
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Post by ilmoro on Aug 20, 2023 16:41:28 GMT
Or borrowers are delaying hanging on to the previous rate ahead of default or the revised rate prevailing? There are numerous examples of defaults after refinance failing on the platform whilst P…Co is an example of refinance which has been happening since May and has been happening in the next 7 days since the beginning of August. I guess my issue is the ambiguity - we as investors need to know where we stand. Maybe a 2% premium on day 1 of the rate lapsing until a final decision is made within 2 months would be a fairer scenario for all concerned. Presently Somo look totally unprofessional and could be using the ambiguity to cream a premium which is not passed on to investors.We don't know that and the fact we don't know is part of the main problem with all p2p/social money lending platforms. Is the FCA ever going to do anything other than require a few tick boxes to be checked in an attempt to prevent people spending their own money? Surely its not too much to ask for the FCA to require a list of things to be published to investors? Such a list might include summary details for each loan including how much the platform's fees were from the borrower. All the fees and payments. The FCA do require that for regulated P2P platforms COBS 18.12.26 ... obviously Somo is not subject to that requirement.
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Greenwood2
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Post by Greenwood2 on Aug 20, 2023 18:45:39 GMT
We don't know that and the fact we don't know is part of the main problem with all p2p/social money lending platforms. Is the FCA ever going to do anything other than require a few tick boxes to be checked in an attempt to prevent people spending their own money? Surely its not too much to ask for the FCA to require a list of things to be published to investors? Such a list might include summary details for each loan including how much the platform's fees were from the borrower. All the fees and payments. The FCA do require that for regulated P2P platforms COBS 18.12.26 ... obviously Somo is not subject to that requirement. The Somo loan agreement says that interest minus the small Somo percentage is passed to lenders. If Somo didn't do that they would be in breach of the agreement. Of course there is no proof that happens immediately when loans are extended and rates change, but why would they not abide by their own rules for so little to gain and so much trust in the platform to be lost? If you read the borrower info it gives expected fees etc. Obviously if you don't trust the platform you should vote with your feet, but I have not (yet) any reason to think Somo are doing anything nefarious, quite the reverse.
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ilmoro
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Post by ilmoro on Aug 20, 2023 19:32:36 GMT
The FCA do require that for regulated P2P platforms COBS 18.12.26 ... obviously Somo is not subject to that requirement. The Somo loan agreement says that interest minus the small Somo percentage is passed to lenders. If Somo didn't do that they would be in breach of the agreement. Of course there is no proof that happens immediately when loans are extended and rates change, but why would they not abide by their own rules for so little to gain and so much trust in the platform to be lost? If you read the borrower info it gives expected fees etc. Obviously if you don't trust the platform you should vote with your feet, but I have not (yet) any reason to think Somo are doing anything nefarious, quite the reverse. Small Somo %? Have they ever advertised what it is? IIRC the spread quoted in FOS cases was a 50% uplift on lender rates (a few years ago admittedly)
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Greenwood2
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Post by Greenwood2 on Aug 20, 2023 21:07:30 GMT
The Somo loan agreement says that interest minus the small Somo percentage is passed to lenders. If Somo didn't do that they would be in breach of the agreement. Of course there is no proof that happens immediately when loans are extended and rates change, but why would they not abide by their own rules for so little to gain and so much trust in the platform to be lost? If you read the borrower info it gives expected fees etc. Obviously if you don't trust the platform you should vote with your feet, but I have not (yet) any reason to think Somo are doing anything nefarious, quite the reverse. Small Somo %? Have they ever advertised what it is? IIRC the spread quoted in FOS cases was a 50% uplift on lender rates (a few years ago admittedly) As an example lender rate of 1%/month they said they took 0.25% on top (from I think their global lender provisions) so maybe not so small, but I thought reasonable, how they pro rata that with other lender rates I don't know.
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dh1
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Post by dh1 on Aug 21, 2023 6:34:04 GMT
Well, there are a couple of loans (2603 and 2591) on the secondary market going for a 10% discount at the moment. That would make for a good return!
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Post by Ace on Aug 21, 2023 7:09:33 GMT
Well, there are a couple of loans (2603 and 2591) on the secondary market going for a 10% discount at the moment. That would make for a good return! There's almost no chance that those loans are still available. I've bid on a few 1% discounted loans that were advertised as available, and gone to the trouble of transferring cash in to pay for them, but invariably an email arrives a day or so later to say that I missed out. I consider it a major failing of SoMo's platform that SM loans are left indicated as available when they've already been taken.
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Post by davefoz on Aug 21, 2023 7:41:59 GMT
Greed got the better of me and I took a punt on one of those … the loans are only allocated if you’ve got available funds
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Post by Ace on Aug 21, 2023 8:10:10 GMT
Greed got the better of me and I took a punt on one of those … the loans are only allocated if you’ve got available funds The trouble is that if multiple people all go for it, they all think they've got it until the email comes that says you were Unlucky this time, regardless of whether you have available funds. SoMo should remove the "Available" indicator when the first person takes it. I hope that you were lucky.
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