agent69
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Post by agent69 on May 29, 2015 17:56:02 GMT
It has been confirmed that the forthcoming tranche 2 will rank behind existing tranche 1 in terms of security.
Good time to top up your tranche 1 holdings, given there is a bit available on the SM?
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Post by jevans4949 on May 30, 2015 1:08:28 GMT
Best way to manage risk in P2P, IMO, is to set a limit on your investment in any one borrower. Hence the only way I would put money into Tranche 2 of anything is if Tranche 1 is being repaid.
I also tend to ask myself: this guy had a business plan for which he needed £x, why does he now need £5x? Is the original plan going pear-shaped?
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bigfoot12
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Post by bigfoot12 on May 30, 2015 5:52:33 GMT
Best way to manage risk in P2P, IMO, is to set a limit on your investment in any one borrower. I agree. ... this guy had a business plan for which he needed £x, why does he now need £5x? Is the original plan going pear-shaped? This was in the original plan. Once the first planning permission is granted the value goes up and so it is easy to borrow money for the next stage. It is there in the first credit report. Without meaning that you should exceed your personal borrower limit, however the risk on the first tranche seems to have fallen; the point made by agent69.
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agent69
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Post by agent69 on May 30, 2015 13:17:54 GMT
Is there a number for the tranch 2 loan ? I can't see it yet. I think it's fermenting in the background PS I see all the available units in tranche one have now been hoovered up
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upland
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Post by upland on Jul 29, 2015 11:50:39 GMT
I am new to all this. May I ask in practice does a security being a second charge cause much of a problem if there is a default. If a borrower becomes unable to repay why should the holder of the first charge do anything ?
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Post by pepperpot on Jul 29, 2015 12:06:40 GMT
AIUI, the 1st charge holder cannot stop any other charge holder from enforcing action. They do however have the right to chose which LPA receiver to appoint to oversee the process of securing and administering the best outcome for all lenders from the value in the asset.
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upland
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Post by upland on Jul 30, 2015 8:10:32 GMT
Thanks , I should perhaps look at second charges securities again. I dont suppose that AC would set up a loan that was totally irretrievable if it went wrong.
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bigfoot12
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Post by bigfoot12 on Jul 30, 2015 8:48:32 GMT
Thanks , I should perhaps look at second charges securities again. I dont suppose that AC would set up a loan that was totally irretrievable if it went wrong. I'm sure that AC are doing their best reduce the risk for us, but unusual things do happen. There is a lot of safety room in these two loans but buildings burn down and insurance companies try to avoid paying, buildings have subsidence or incorrect previous planning permission that significantly reduces the value building works go wrong... I'm sure there are many other things which I haven't considered. You should make sure you are somewhat diversified even with security.
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