Jumping Ship

ablender Can you link to where they state this? I wasn't aware.


After seeing what happened to Trustbuddy and the negligence that has occurred, you have to have an iron stomach to trust that companies are doing right by their investors. At the end of the day, companies can tell their investors one thing and doing whatever they want. The recourse is unknown.

I've never seen an issue with loans being undersold so I can't comment on how they would handle this but they sometimes offer cashback when loans are slow to fill.

Pretty sure this will be HNW individuals underwriting not necessarily Lendy themselves though wouldnt surprise me if Lendy dont have some skin in the game. Back when they started doing PBLs they put out a request for UWs.

Quite a few of the recent loans have not filled through the pre-funding.
p2pindependentforum.com/thread/3253/pre-funding-information

The biggest gap was PBL059 - nearly £2m short, and it took over two weeks of chunks being released to the SM before it was all gone.

No idea. savingstream may be willing to give you a definitive answer.

My own gut feel is that it's academic to us whether their underwriting is internal or external. Bear in mind, too, that loans don't necessarily draw-down immediately, and that they take and hold-back all the interest from loans, so will have substantial-enough cash reserves on hand to fill any gaps, so I don't see it as impossible.

Positive IMO. Certainly originally Lendy financed the boats & early Pbls themselves until scale required UW support to offer bigger loans.

In a perfect market the gross yield would be perfectly correlated with risk.  In the imperfect real world, SS have muddied the water slightly with a fixed 12% yield, which disguises the fact that if their loans were to appear on AC or TC the gross yields would probably vary between 10% and 15% to more accurately reflect the underlying risk.

Last time I looked FC were claiming after defaults a yield of 7.1% could be anticipated. AC provision fund backed accounts yield 7%, RS 5 year term is 6% to 7% zopa & Wellesley somewhat less.

I suggest it might be helpful to consider the risk of loan failures in a completely separate compartment to the risk of platform failure.  A good starting point is to make the assumption that a well diversified basket of loans from a given platform will, after defaults return around 7%.  So, taking SS as an example (but it applies to every platform) two questions need to be asked

a) do you feel that long term the loans being offered by SS will yield less than 7% after defaults ?  (If so the 12% is too low)
b) would the failure of the Lendy/SS dramatically reduce the probability of achieveing a 7% yield after defaults once the loan book is wound up ?  (If so the 12% is too low)

(assuming no TrustBuddy style creative accounting ... )


If a SME loan with an unsupported PG fails, the probability of significant recovery is low, but a bridging loan failure at a low LTV is very likely to result in a full recovery.  So a simple assessement of the risk of the SS loanbook could be distilled down to one question "On how many of the loans have the security valuations been overstated ?"   Unfortunately you've only to look at some of the AC bridging loans (Kent , Ipswich, Anglesey) and FS (Lubin art, aboriginal art, Michael Jackson memorbillia) to realise that the probability is a proportion of secured loans on p2p/p2b platforms will actually have inadequate security cover. 

The weakness of the current SS structure only matters is you are able to weed out ALL loans that will go bad from your selection.  Otherwise you might as well accept your share of all bad loans were the platform to fail and be subject to administration.  If you are in every loan, the end result will be the same irrespective of the structure.