sl75
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Post by sl75 on Aug 2, 2015 21:39:36 GMT
Assuming that's correct.... who on Earth borrows £10.01 over 23 months in a 3 year market?... unless of course the loans are being sold out? Almost certainly the case that they were someone else's sellouts... new 3 year loans would be for 36 months, as well as being for larger amounts.
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spiral
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Post by spiral on Aug 3, 2015 9:03:46 GMT
So unless RS become the owner of sold out loans and create new contracts to sell these on at current rates, such that RS are the "borrower" of your money, the contract should state (and therefore you receive) the rate of the original loan. All 8 contracts were matched at 5.2% AER (contract rate 5.09%) as expected.
These were the amounts that got matched and how long each of these "3 year/36 month deals" were:
£39.69 - 25 months £14.71 - 24 months £138.14 - 24 months £55.17 - 23 months £10.01 - 23 months £130.76 - 23 months £56.87 - 22 months £54.65 - 21 months It would seem very unlikely that all of these loans were for 5.2% when originally matched so it raises the question, who have you lent this money too? As I pointed out (unless repurchased contracts state something different) the rate stated on the contract is what the borrower is paying you. Now under stable conditions, no issues, but what if RS went belly up! If RS are the borrowers I assume you claim on the PF, if they're not, there's likely to be some strange accounting practices showing Joe Bloggs paying a different rate of interest to what you're receiving. If the former and you claim on the PF and the failure of RS is because of a failing PF, this could lead to a double whammy as RS themselves would add a whole chunk of defaults to the pot. If the latter, you may find yourself receiving a different rate of interest to the contract rate.
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sl75
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Post by sl75 on Aug 3, 2015 14:01:40 GMT
It would seem very unlikely that all of these loans were for 5.2% when originally matched so it raises the question, who have you lent this money too? For contracts less than 5.2%, the seller would have paid an "assignment fee". I would expect that this would either be deducted from the sale price, or held in reserve to be added to the borrower repayments, so that the buyer gets the 5.2% rate they expected. The loan contract itself would certainly still have the borrower as the counterparty - this is the core proposition of P2P. It certainly raises a handful of further questions about who gets the extra money if a borrower pays early (e.g. could be deducted from the borrower's settlement amount, added to the buyer's effective return, accumulated within the Provision Fund, or used to line RateSetter's back pockets).
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spiral
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Post by spiral on Aug 3, 2015 14:27:15 GMT
The loan contract itself would certainly still have the borrower as the counterparty - this is the core proposition of P2P. This then is when the contract becomes misleading because it states : "Interest Rate" means x.xx% which is the annual interest rate calculated in arrears and applied to the outstanding balance at the beginning of the period which shall be paid by the Borrower to the Lender;" If the original borrower is the "contract name" you have, and you have picked up a cashed out loan, the interest they are paying is likely to differ from that stated on the contract and that statement is therefore incorrect. The sum of the borrowers parts will no longer equal the sum of the lenders parts which is not the case when a loan is new. The question is, would this matter if RS went bust?
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