jonah
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Post by jonah on Dec 9, 2015 22:25:52 GMT
Personally, I think the sooner something defaults on SS the better. It should introduce some fear to combat the greed. But you will still recoup some or all of the loss when the asset is eventually sold. So not really scary compared to equities for example Totally hypothetical example... A second charge for 1m on an 6m property, which takes the LTV to 70%. The company building it goes in liquidation due to issues on another site relating to build quality which generates a little t of expensive law suits. So, although the asset is in theory worth 6m, due to its part complete state and concerns the same issues may be present, it gets sold at fire sale prices. The first loan gets 45% back, the second charge gets nothing. I'm not saying this will happen, but it could. The reason we get 12% is due to the risks involved. SS have so far been really successful in shielding us from them and I hope that continues, but the risks will always be there, lurking.
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adrianc
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Post by adrianc on Dec 9, 2015 22:34:14 GMT
Personally, I think the sooner something defaults on SS the better. It should introduce some fear to combat the greed. But you will still recoup some or all of the loss when the asset is eventually sold. So not really scary compared to equities for example ...or personal guarantees...
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unmadem
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Post by unmadem on Dec 9, 2015 22:47:57 GMT
Personally, I think the sooner something defaults on SS the better. It should introduce some fear to combat the greed. I see where you are coming from but could you arrange for it to be one of the ones I don't hold please 
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Post by pepperpot on Dec 9, 2015 23:01:49 GMT
Personally, I think the sooner something defaults on SS the better. It should introduce some fear to combat the greed. I see where you are coming from but could you arrange for it to be one of the ones I don't hold please A better definition of 'soon' would also be beneficial. (at least he didn't say imminent) 
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ablender
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Post by ablender on Dec 9, 2015 23:12:48 GMT
Personally, I think the sooner something defaults on SS the better. It should introduce some fear to combat the greed. I like to learn from someone else's experience - so if you can tell me which loan is going to default I am happy to sell you my holdings in that loan before it defaults.
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mikes1531
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Post by mikes1531 on Dec 10, 2015 3:32:52 GMT
Is anyone here willing to admit having placed a pre-bid of greater than £20k for PBL071? If so, were you allocated 10.5% of your pre-bid or 10.5% of a lower amount? Purely in the interest of testing this theory out, you understand, my allocation was £3,139.00 (£30k) Thanks for testing the theory -- and for reporting the results. That seems to prove that a £20k limit was not applied to PBL071 pre-bids. Was a higher limit applied? Or no limit at all? Was it deliberate? Or accidental? Is this indicative of new SS policy? Only savingstream know. Would they be so kind as to tell us what the rules are?
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star dust
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Post by star dust on Dec 10, 2015 7:13:33 GMT
I am struggling to know what the issue is, other than excessive demand, and a sense of outrage at people 'gaming' the system ... I'm personally not that bothered what SS do since it's only a small part of my buy-and-hold P2P portfolio. However, I can see why some people are pretty frustrated. SS are offering investors free leverage (borrowing at 0%) between drawdown time T and settlement T+2, with no stated repercussions if you fail to settle. It's currently a free option to put in a massive bid since you can effectively squeeze the other lenders into buying it from you on the SM. You can also exploit two days of free carry at almost zero risk; it's seems almost like an arbitrage. So it's currently pure greed and no fear and from SS's perspective this is creating fantastic (though illusory) demand. The solution is add back a modest amount of fear. So, as some have already proposed, prohibiting secondary market trading of the the new loan between drawdown at time T and settlement at T+2, is a pretty good start. You'd have to settle the full position you bid on. SS needs to start charging 12% on negative balances to negate the positive carry on portions of new loans that haven't been paid for. You can reserve a big position, but you get no return until you actually pay for it; seems fair. Finally, if you don't settle promptly there need to be punitive repercussions. So perhaps SS sells down the rest of your book to pay for the new loans (bad for that carefully built diversification) and then charges say 24% (or higher) on any residual balances left over if you can't sell the new loan down yourself. SS have said Once the 48 hr BACS deficit period has elapsed; the unpaid for loan parts will be release back into the general market / or if there was oversubs, offered to those who have cleared their BACS deficit unless they have informed us of any mitigating circumstances. and here and I think mentioned dealing with recalcitrant investors on other occasions too, and I also said ...... I'm trusting SS to sort out the extreme serial abusers trying to bid for what they can't possibly fund or garner unfunded interest. It is a bit disappointing to learn that the £20k cap on smaller loans is not in place, and I hope they fix that. I also intimated that bad news i.e. default/s, and /or more supply would dampen this in my opinion, I think the latter has already calmed things a little. As for defaults, I was an investor during their only default to date, and not unnaturally it did quell demand somewhat until a satisfactory resolution was observed, I'm sure its inevitable, but I wouldn't want to go as far as wishing for one. Just for the record I do not pre-fund for more that I could FP over in a worst case scenario (although I'd rather not have to), and I always settle by selling down or FPing within 24hrs. For all I know the majority of others do the same. I would have no objections to not receiving interest until funds arrive to cover any negative balance I have, but if I had to pay for an unknown pre-fund amount allocated with no prior notice, I'm not sure I would use it again, the people who would benefit there in my mind would be the deep pockets.
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mack
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Post by mack on Dec 10, 2015 7:58:25 GMT
Do people not diversify with other investments?
I spent over a year building a very large sum with Saving Stream (large 6 figure). Waiting for loans to pay back. Buying on the SM. Just because there has been a blip for the last few weeks where not much was available this will certainly not be be in the case in the future.
Modifying and changing the platform every couple of weeks will just put off investors.
Right now there is plenty available to diversify. Please stop complaining.
Also wanting defaults to occur to "scare" investors is a barmy sentiment. Would prefer if investors leave because there is too much demand.
Just DEMAND Saving Stream does careful due diligence and does not cram the pipe line with rubbish. If I can't invest for a while will just invest elsewhere for a bit and keep an eye on SS. No one has a god given right to be able invest how they choose and please. SS please worry more about your loan quality right now.
This forum used to be great for useful info and helped at the outset.....
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Post by bonfemme on Dec 10, 2015 8:06:28 GMT
Modifying and changing the platform every couple of weeks will just put off investors. Right now there is plenty available to diversify. Please stop complaining. Also wanting defaults to occur to "scare" investors is a barmy sentiment. Would prefer if investors leave because there is too much demand. Totally agree.
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webwiz
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Post by webwiz on Dec 10, 2015 8:07:11 GMT
I cannot understand why invest first/pay tomorrow is considered such a sacred cow. True, it is an attractive gimmick and a USP for SS which may have helped their growth but how much value to an investor is it really? If 24 (preferably 48) hours notice of new loans was given what difference would it make to our cash flow? It would solve the problem of having to pre-fund a large multiple of what one actually wants. The main problems pre-funding solves are...
- You don't have to produce your money until you know how much you owe. Insisting that people bring in funds before bidding might OK if there wasn't such a supply/demand imbalance, but lenders transferring in a collective £4M in order to fund a £300k loan -- and SS having to process £3.7M of withdrawals afterwards -- is a waste of resources.
My assumption (unproven until tested) is that lenders would not transfer in as much as they are prepared to pre-fund under the current arrangements. I also assume that transfers are completely automated so there is no use of resources. Your assertion that The main problems pre-funding solves are...
You don't have to produce your money until you know how much you owe makes no sense to me. Why is that a problem? How does pre-funding solve it? Can you elaborate?
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SteveT
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Post by SteveT on Dec 10, 2015 8:07:39 GMT
Do people not diversify with other investments? I spent over a year building a very large sum with Saving Stream (large 6 figure). Waiting for loans to pay back. Buying on the SM. Just because there has been a blip for the last few weeks where not much was available this will certainly not be be in the case in the future. Modifying and changing the platform every couple of weeks will just put off investors. Right now there is plenty available to diversify. Please stop complaining. Also wanting defaults to occur to "scare" investors is a barmy sentiment. Would prefer if investors leave because there is too much demand. Just DEMAND Saving Stream does careful due diligence and does not cram the pipe line with rubbish. If I can't invest for a while will just invest elsewhere for a bit and keep an eye on SS. No one has a god given right to be able invest how they choose and please. SS please worry more about your loan quality right now. This forum used to be great for useful info and helped at the outset..... Couldn't agree more!
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SteveT
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Post by SteveT on Dec 10, 2015 8:17:23 GMT
The main problems pre-funding solves are...
- You don't have to produce your money until you know how much you owe. Insisting that people bring in funds before bidding might OK if there wasn't such a supply/demand imbalance, but lenders transferring in a collective £4M in order to fund a £300k loan -- and SS having to process £3.7M of withdrawals afterwards -- is a waste of resources.
My assumption (unproven until tested) is that lenders would not transfer in as much as they are prepared to pre-fund under the current arrangements. I also assume that transfers are completely automated so there is no use of resources. Your assertion that The main problems pre-funding solves are...
You don't have to produce your money until you know how much you owe makes no sense to me. Why is that a problem? How does pre-funding solve it? Can you elaborate? It solves it because you don't know WHEN a new loan will launch and WHICH ONE of the pipeline it will be (nor do SS until pretty much the last minute), nor do you know in advance HOW MUCH you're going to be allocated. Having large sums of money standing idle waiting for the next launch would be wasteful and so lenders would be willing to commit less. By letting lenders wait until AFTER a loan launches (when they know how much they have been allocated) to transfer their funds, it becomes highly efficient with no idle cash. This has been instrumental in filling very large loans quickly, but does cause some strains with the smaller loans which would easily be improved by capping the maximum pre-fund level for smaller loans. I agree that paying no interest on "deficit parts" for the first 24 hours would tidy things up a bit but I guess the programming complexity (and Customer Service time spent dealing with inevitable queries) outweighs the cash cost to SS. They already have said they will take action where they see evidence of their generosity being abused, and I hope they will.
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webwiz
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Post by webwiz on Dec 10, 2015 8:30:24 GMT
I certainly am not objecting to pre-funding, just suggesting that when a loan goes live the amount purchased is restricted to the cash available. It would be vital, as I said, that 24 or preferably 48 hours notice was given. In addition to allowing time to transfer funds this would also give time for investors to study the documents and possibly set or amend their pre-funding. I also suggested that as compensation for this change SS could pay interest on loans on the SM.
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SteveT
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Post by SteveT on Dec 10, 2015 8:38:35 GMT
I certainly am not objecting to pre-funding, just suggesting that when a loan goes live the amount purchased is restricted to the cash available. It would be vital, as I said, that 24 or preferably 48 hours notice was given. In addition to allowing time to transfer funds this would also give time for investors to study the documents and possibly set or amend their pre-funding. Even if SS were able to hold back new launches for 24 or 48 hours as you suggest, that still would give lenders no certainty of how much cash they need to transfer in. The Saving Stream system is built to support the rapid filling of very large loans by lenders happy to invest tens of thousands (and likely unhappy to have such sums transferring in and out with no certainty of investment). The fact that it also still supports smaller lenders is great and something to be fostered / protected.
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webwiz
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Post by webwiz on Dec 10, 2015 9:09:41 GMT
SS loans are generally underwritten so I cannot see that holding back for a day or two would be a problem. If the facility to invest and earn interest on money not paid in was not already provided I doubt that anyone would expect or request it. No other platform (or indeed any other financial organisation TIKO) offers this. If it is so good for both parties I wonder why not.
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