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Post by overthehill on Nov 22, 2023 14:08:14 GMT
Do Somo ever extend or rewrite when a loan becomes due and can investors exit ?
Or do all loans remain as overdue or default until repaid ?
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benaj
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Post by benaj on Nov 22, 2023 14:19:39 GMT
My memory with the only loan with this platform: Somo managed to recover all capital after 3 years, but I remember this one wasn’t registered as one of the stats as Ace was suggesting rounding. |
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Greenwood2
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Post by Greenwood2 on Nov 22, 2023 14:31:58 GMT
You can't sell loans that run past the end date. Somo may agree an extension to a loan subject to revaluation with possible change in LTV and rate (recently rates have gone up on extended loans), in that case you are 'invited' to sell or stay in the loan, not sure if Somo buy these if no one else does but they always seem to sell. If the the borrower asks for an extension but the loan no longer meets the criteria for a Somo loan the borrower has to pay back or Somo will start default proceedings.
After a loan is extended you can sell on the SM in the usual way if there is a buyer.
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Post by Ace on Nov 22, 2023 14:56:36 GMT
Do Somo ever extend or rewrite when a loan becomes due and can investors exit ? Or do all loans remain as overdue or default until repaid ? I'm in a loan that is seeking its second 6 month extension. During the first extension it was labelled as overdue until the extension was agreed. A higher rate was agreed for the extension. My only option to exit was via the SM, which wouldn't be possible until the extension is agreed. Here are the anonymised comments provided by Somo in blue: One month later: A further 7 weeks later: The increased interest rate was paid from the date of that message. No extra or default interest was paid for the 11 weeks that it took to agree the extension. 3 and a bit months later (i.e. 6 months after the first message above): Yet another month later: That last message was 2 weeks ago. The loan remains untradeable as the second extension still hasn't been agreed. Interest continues to be paid at the increased rate that was agreed for the previous extension.
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Post by overthehill on Nov 22, 2023 15:18:30 GMT
Do Somo ever extend or rewrite when a loan becomes due and can investors exit ? Or do all loans remain as overdue or default until repaid ? I'm in a loan that is seeking its second 6 month extension. During the first extension it was labelled as overdue until the extension was agreed. A higher rate was agreed for the extension. My only option to exit was via the SM, which wouldn't be possible until the extension is agreed. Here are the anonymised comments provided by Somo in blue: One month later: A further 7 weeks later: The increased interest rate was paid from the date of that message. No extra or default interest was paid for the 11 weeks that it took to agree the extension. 3 and a bit months later (i.e. 6 months after the first message above): Yet another month later: That last message was 2 weeks ago. The loan remains untradeable as the second extension still hasn't been agreed. Interest continues to be paid at the increased rate that was agreed for the previous extension. That isn't a great movie and what I feared. In addition, when you put your loan on the secondary market, your interest is stopped.
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rscal
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Post by rscal on Nov 22, 2023 16:37:29 GMT
That isn't a great movie and what I feared. In addition, when you put your loan on the secondary market, your interest is stopped. I sold once a loan and it went within an hour. You need to check the state of competition and list when it is most likely someone will be checking availability. You only lose a day's interest at a time and can unlist and list at will I believe.
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Greenwood2
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Post by Greenwood2 on Nov 22, 2023 17:17:20 GMT
When I sold a loan going into extension (a while ago) it sold same day, as said above not sure if Somo bought it. I have run with the recent once because the new rate has been pretty good. It can take a while, but defaults take a while to recover too, ones that go on to extend carry on paying interest throughout (or all the ones I've seen have).
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Post by overthehill on Nov 22, 2023 18:18:49 GMT
When I sold a loan going into extension (a while ago) it sold same day, as said above not sure if Somo bought it. I have run with the recent once because the new rate has been pretty good. It can take a while, but defaults take a while to recover too, ones that go on to extend carry on paying interest throughout (or all the ones I've seen have).
I've tried 3 times to sell a loan for 3 or 4 days at 7.8% for 40% LTV and it hasn't sold. Last time there were only 4 other loans.
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Greenwood2
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Post by Greenwood2 on Nov 22, 2023 19:41:14 GMT
When I sold a loan going into extension (a while ago) it sold same day, as said above not sure if Somo bought it. I have run with the recent once because the new rate has been pretty good. It can take a while, but defaults take a while to recover too, ones that go on to extend carry on paying interest throughout (or all the ones I've seen have).
I've tried 3 times to sell a loan for 3 or 4 days at 7.8% for 40% LTV and it hasn't sold. Last time there were only 4 other loans.
This is market forces, if you can buy on the PM at a higher rate, it's difficult to sell on the SM. Loans being extended seem to not be subject to this problem, unless you know different...
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michaelc
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Post by michaelc on Nov 22, 2023 21:39:18 GMT
That isn't a great movie and what I feared. In addition, when you put your loan on the secondary market, your interest is stopped. I sold once a loan and it went within an hour. You need to check the state of competition and list when it is most likely someone will be checking availability. You only lose a day's interest at a time and can unlist and list at will I believe. I've sold loans in the past quickly too. I've also had to wait over a year. What does it all prove? Not much.
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Greenwood2
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Post by Greenwood2 on Nov 26, 2023 17:45:34 GMT
I sold once a loan and it went within an hour. You need to check the state of competition and list when it is most likely someone will be checking availability. You only lose a day's interest at a time and can unlist and list at will I believe. I've sold loans in the past quickly too. I've also had to wait over a year. What does it all prove? Not much. Wow you left it for sale for a year with no interest! Or you couldn't sell because it was over due?
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michaelc
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Post by michaelc on Nov 26, 2023 18:40:43 GMT
I've sold loans in the past quickly too. I've also had to wait over a year. What does it all prove? Not much. Wow you left it for sale for a year with no interest! Or you couldn't sell because it was over due? The latter. I don't think any loan has ever been on for sale for a year not least because it would be unlikely to meet to the criteria for that long or because nobody would be that stubborn (or stupid).
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Post by davefoz on Dec 13, 2023 17:32:36 GMT
What is annoying is the number of extensions that are given without lenders being able to exit or gain additional interest. The borrower has had the length of the term to sort alternative finance, its about time SOMO started imposimg additional interest immediately after the term has lapsed.
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Post by overthehill on Mar 20, 2024 14:21:34 GMT
How long on average before SOMO updates an overdue loan ?
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Post by brummiefred on Mar 20, 2024 16:00:44 GMT
I recently asked Somo that question and the response was 'the 10th of the month following the end of the month that the loan fell due'
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