New Loans (FS)

I too have recently invested in MoneyThing. I do like the personal touch currently offered by Ed and do like the feel of the MT platform. One of the concerns I have is that such a personal touch is not scalable.

FS certainly aren't winning any prizes for their response here.  And it's not as if they've been ignoring the forum, since they've regularly been posting notices of upcoming loans.  They have, however, updated the comments on their website for at least one of the overdue loans.

The last two FS loans haven't exactly lifted off. 

I wasn't surprised by yesterday's.  Yes, the LTV is very attractive, but a lot of investors probably already will have lent all they want to against that particular security. 

I am a bit surprised by today's slow uptake, though I suppose it isn't doing that badly -- it's about 55% funded after an hour, so I'll guess that it will reach full funding before the maximum lending amount restriction ends tomorrow afternoon.  The LTV seems reasonable at 60%, but perhaps investors are a bit spooked by the current  number of overdue loans, and the reports of some defaulting loans' security sales producing proceeds that are well under the amount needed to repay the capital lent, much less any of the accrued interest.

I'm not surprised about the 'spooked' comment and cannot disagree. I think some of the gloss has gone from FS when there was a great deal of clamour for what little was available. Whilst FS may be announcing new loans they are unfortunately a bit short on the detail at times - in fact fairly often. IIRC, loans were often backed by written valuations but now this seems to be a thing of the past in many cases. Today's jewellery collection has a valuation of 86k but just who has done the valuation. As we've seen from a couple of defaults recently the shortfall in actual monies realised and the original valuation is nothing short of a disaster which is something I suspect others in addition to myself will find more than alarming.

Now a small variation here and there can be accepted but as FS move into higher value items then the valuations need to be more robust and IMO backed up. So whilst I've entered into the latest 86k loan, generally I'm in scale back mode.

Must be a St Georges Day offer. 13% & interest paid from the day before the loan is listed 

The rest will be paid off from the proceeds of tomorrow's £245k loan.

Put another way, the £60k loan is being paid off completely, and £245k of the £275k loan will be rolled over into the new loan.

It's a good move for the borrower as it will reduce their interest accruals considerably.  In addition to the reduction in principal, the large previous loan also was paying bonus interest of up to 2% p.a., and that will stop with the refinancing.

I understand the confusion.  I referred to it a rollover/renewal because I expect that's what it will look like to the borrower.  I honestly don't expect them to repay the last £245k to FS one day and have FS send it back to them later that day or the next day.

From the point of view of FS lenders, it will look like two loans completely paid off and a new loan to the same borrower using most of the same security.  I expect that most of the money credited to FS lenders' accounts tomorrow morning will be reoffered on the new loan at 11am.  And FS have a good idea of what lenders intend to do because they know what proportion have set the old loans to renew automatically.  So the funds FS have to have available for withdrawal will be only a fraction of the £245k being 'rolled over'.  They probably can cover that need from their own working capital.  And if they're worried that they might not be able to cover it, then they'll have arranged for an underwriter to provide the funds for the short period they might need them.

In short, I expect that most of the payout of the old loans and the setting up of the new loan will be accomplished by accounting entries rather than actually moving any money around.

But that's JMHO.