|
|
Post by geoffp on Mar 14, 2016 19:45:41 GMT
Sorry Blanik. I was going to include your quote. Must have been disturbed by Zopa Team post.
|
|
|
|
Post by GSV3MIaC on Mar 14, 2016 19:55:53 GMT
Sorry Blanik. I was going to include your quote. Must have been disturbed by Zopa Team post. For 'blanik' read 'blank'? *grin* I'd definitely want to wait and see what the rates actually turn out to be, in the real world .. having been bitten by optimistic forecasts and pessimistic deliveries too often at Zopa in the past. There is also (AIUI) still some doubt around how, exactly, this 'relief of losses against income' is going to work (maybe we find out this week) .. the devil will be in the fine print; one of the issues being when does a loss actually become a loss (merely having payments stop doesn't do it, iirc). Getting relief on the losses is all very well, but if you have to wait X years to claim (and produce copious paper trails) it might turn out to be less tasty. Remember we are into the realms of politics here, regular 2+2=4 type math, and accounting sanity, don't necessarily apply.
|
|
wapping35
Member of DD Central
Posts: 385 
Likes: 210
|
Post by wapping35 on Mar 14, 2016 21:41:29 GMT
|
|
|
|
Post by propman on Mar 15, 2016 9:04:22 GMT
While I know that any projection will remain uncertain, I hope that the expected return takes account of loss of interest on bad debts. If you assume that the loss of interest is equal to the loss of capital (this would assume even defaults, but shouldn't be too far out) and the expected default rates are of capital (as previously). If the "Net return" were merely gross return less expected defaults, the actual returns are likely to be materially lower. So An E loan yielding an "expected" 12% with 11% bad debt, would return a gross 23%, but only on 89% so actually a gross return of 20.5%, so only 9.5% net, only 79% of the purported "expected" rates. I think historically the assumption was that the default rates were pessimistic so the atual return would cover the difference. With such high bad debt rates, the atual bad debt rate would need to be below 9% to compensate (ie the "default" in the calculation needs to include lost interest).
As a result, I will be comparing the average rates to that required on my basis, so nearly 26% gross required in my example above.
|
|
wapping35
Member of DD Central
Posts: 385
Likes: 210
|
Post by wapping35 on Mar 15, 2016 12:36:46 GMT
Indeed it would be good if Zopa could add some colour on the default calculations.
I would be interested to know for example do "defaults" include projected recoveries from bad debtors who go into default..i.e. From my experience I do get back "some" of the monies from debtors who go into the Default category (effectively recovered bad debt)..
|
|
wapping35
Member of DD Central
Posts: 385
Likes: 210
|
Post by wapping35 on Mar 16, 2016 15:04:42 GMT
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,333
Likes: 11,552
|
Post by ilmoro on Mar 16, 2016 15:20:27 GMT
Thanks, some interesting reading. Not sure the govt has really got the hang of this substitutionally platform naming lark, Wending Lorks just isnt trying!
|
|
warn
Member of DD Central
Curmudgeon
Posts: 638
Likes: 660
|
Post by warn on Mar 16, 2016 16:21:07 GMT
Not sure the govt has really got the hang of this substitutionally platform naming lark, Wending Lorks just isnt trying! And as for Mini-Thong...
|
|
wapping35
Member of DD Central
Posts: 385
Likes: 210
|
Post by wapping35 on Mar 16, 2016 16:41:23 GMT
By the way the New Products are live on Zopa... I believe I have managed to place money in the Z+ product queue....  |
|
|
|
Post by newlender on Mar 16, 2016 16:54:36 GMT
First impressions are good. Is there an option to make a card payment or am I confusing it with RS? Anyway, have set up a bank transfer mandate which is easier.
|
|
ashtondav
Member of DD Central
Posts: 1,814
Likes: 1,092
|
Post by ashtondav on Mar 16, 2016 17:39:15 GMT
Yep, just plonked 3.5K in the Z+ queue. And as a founder member I am salivating at the prospect of (a fee free) 7.5%, and bad debt tax deductible - no more withrawals for me if that rate is met!
|
|
|
|
Post by newlender on Mar 16, 2016 17:54:00 GMT
That's 350 more loans to add to your list! I wish we could have the option of £20 (or even bigger) microloans. I see Zopa+ as a place for money I could possibly expect to lose and don't mind a bigger punt. After all, I'm told that my Seedrs investments will probably bite the dust and they're each in the £100s.
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Mar 16, 2016 18:13:24 GMT
Effectively unless the Finance Act is not pass we will get this relief , indeed from 6 April 2015. I note relief is for " a loan made at any time has, on or after 6 April 2015, become irrecoverable".... That seems to indicate we get relief for pre-SG loans which go into default from 6 April 2015 (last year), it is the default date rather than original loan date which seems to dictate whether you get the relief. To the best of my knowledge Zopa has so far not categorised any of the loans that I have made as irrecoverable, not even the ones where the borrower hasn't been located for six years or where the borrower has been made bankrupt or otherwise made insolvent without prospect of recovery. Plenty classed as defaulted but we all I hope know that money on merely defaulted loans isn't "irrecoverable". Even borrowers made bankrupt have sometimes made payments, apparently. But I haven't read the rules yet so maybe that's covered somehow in them. And having done some more reading it remains no clearer than mud: "A loan may be accepted as having become irrecoverable when there is no reasonable prospect of the recovery of the loan. When assessing recoverability, the funds available and potentially available to the borrower must be considered. A claim therefore cannot be established simply because the borrower has insufficient liquidity on the date the loan had been called in." "When the borrower has entered formal recovery procedures such as liquidation, administration, receivership or bankruptcy the debt would normally be considered irrecoverable." So a bankrupt human or business would be OK for a claim if there is no money for the receiver to pay out but a merely defaulted consumer who lost their job might get a job later and hence has the prospect of recovery. At least until the loan becomes statute limited, if ever. So, as with the draft rules, these do not seem to be delivering on the undertaking that was made, nor anything close to it unless platforms start to make deductions for recoverable loans.
|
|
wapping35
Member of DD Central
Posts: 385
Likes: 210
|
Post by wapping35 on Mar 16, 2016 18:20:11 GMT
Effectively unless the Finance Act is not pass we will get this relief , indeed from 6 April 2015. I note relief is for " a loan made at any time has, on or after 6 April 2015, become irrecoverable".... That seems to indicate we get relief for pre-SG loans which go into default from 6 April 2015 (last year), it is the default date rather than original loan date which seems to dictate whether you get the relief. To the best of my knowledge Zopa has so far not categorised any of the loans that I have made as irrecoverable, not even the ones where the borrower hasn't been located for six years or where the borrower has been made bankrupt or otherwise made insolvent without prospect of recovery. Plenty classed as defaulted but we all I hope know that money on merely defaulted loans isn't "irrecoverable". Even borrowers made bankrupt have sometimes made payments, apparently. But I haven't read the rules yet so maybe that's covered somehow in them. If you looked at the Statements , Account Summary, For Tax Year to date , Earning and click the details... It seems Zopa are deducting New defaults and indeed adding back recoveries within the tax year...
|
|
james
Posts: 2,205
Likes: 955
|
Post by james on Mar 16, 2016 18:30:14 GMT
If you looked at the Statements , Account Summary, For Tax Year to date , Earning and click the details... It seems Zopa are deducting New defaults and indeed adding back recoveries within the tax year... Yes, I did and noted to myself at the time that it didn't appear to comply with the proposed draft rules, as it currently does not seem to comply with these rules. In both cases because they seem to be using mere default as the criterion. Zopa seemed to be deducting repayments from past year defaults so you get to pay tax on those even though there was no relief to claim. Which means you can't just use the Zopa numbers but have to look at the loan details to see whether the collections were for loans which were eligible for the relief. At least Zopa provides the statements so it's not impossible to do that. Now, personally, I think that default is actually a sensible thing to use, provided a platform has some useful definition of default, or if not, say 180 days from last payment might be a substitute. Unless barred by law it seems that I'll end up having to calculate most of my own claims myself, since neither of the two relevant platforms seems to be doing something that meets the legal requirements. On the other hand, maybe we'll get lucky and Zopa will say that HMRC has approved their handling and that they will split out collection from eligible defaulted loans from collection for ineligible defaulted loans. And if pigs start to fly Bondora might do something in this area that would take care of the vast majority of my own losses.
|
|
? (you really couldn't make this up)
