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Post by savingstream on Feb 26, 2016 19:32:13 GMT
Hi All,
The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion.
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Liz
Member of DD Central
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Post by Liz on Feb 26, 2016 19:35:14 GMT
Thanks Savingstream, good to know.
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jonah
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Post by jonah on Feb 26, 2016 19:49:38 GMT
Maybe some would be concerned that liquidity would not be as good if waiting until everyone else is selling too... Yes, exactly .. you don't want to put £500 of superyacht for sale when someone has woken up at 1AM and listed £500k before you (ditto anything else with limited buyer appeal). I've done this before now for less popular loans on a launch day. Whilst there is high liquidity now there might not be in the future. I would rather lose a days interest than have loan parts 'stuck'
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 26, 2016 19:50:44 GMT
Hi All, The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion. Thank you for the update savingstream The problem with this loan was not the fact that we didn't trust your DD; after all, you haven't lost a penny of our investments so we do appreciate what you guys do behind the scenes to keep things stable. Personally, the problem for me was simply the fact that on this occasion you seemed to have deterred from your own rule to "only offering loans with a max LTV of 70%". I don't mind the slight discrepancies in some loans where in my own opinion the LTV is slightly worse than what is listed, but when (in this case) the LTV is effectively infinity %....... well that worried me slightly. Keep up the good work guys, and keep finding us safe loans to invest in! The fact you listened to your investors is absolutely fantastic 
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am
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Post by am on Feb 26, 2016 20:29:07 GMT
Hi All, The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion. Can you tell us how much of the prefunding was default prefunding, and how much was positively assigned to this loan by lenders?
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peteuk
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Post by peteuk on Feb 26, 2016 20:35:02 GMT
Thanks ss.as I did not prefund this loan myself Because it just didn't feel right ,its great to see were on the same wavelength keep up the good work! Some times things are just intuitive
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awk
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Post by awk on Feb 26, 2016 20:36:53 GMT
Hi All, The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion. Hi Savings Stream, Thank you for responding on a Friday evening - it is much appreciated. Clearly, we don't know all the ins and outs of this particular loan, but I suspect that you are just moving a little too quickly for us. With your help, I have understood what is important for PBL loans and very much look at the security on offer and the likelyhood of recovering the investment. I think you said that there would be some communications about DFL loans before launching the first one and was keen to understand how to look at the fully developed value etc - in particular, I was keen to understand whether funds would be released against milestones. However, on the face of it you have introduced another the of loan here where the as-is value doesn't cover the loan. There were clearly "other" things here which gave you confidence, but not the members of this forum. Hopefully, you can spend some time to spell out the key points for each type of loan and take us with you. many thanks
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am
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Post by am on Feb 26, 2016 20:43:00 GMT
Hi All, The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion. Thank you for the update savingstream The problem with this loan was not the fact that we didn't trust your DD; after all, you haven't lost a penny of our investments so we do appreciate what you guys do behind the scenes to keep things stable. Personally, the problem for me was simply the fact that on this occasion you seemed to have deterred from your own rule to "only offering loans with a max LTV of 70%". I don't mind the slight discrepancies in some loans where in my own opinion the LTV is slightly worse than what is listed, but when (in this case) the LTV is effectively infinity %....... well that worried me slightly. Keep up the good work guys, and keep finding us safe loans to invest in! The fact you listened to your investors is absolutely fantastic A problem is that some LTVs are a weighted mean of the LTV if the project goes OK and the LTV if the project fails. But if the project goes OK we don't need the security, so the LTV that matters is the LTV if the project fails (and in this case the valuation if the project fails could be negative). A variation on this is when a property belongs to a class with a high beta - we are more likely to need the security if the economic weather has worsened, but under such circumstances the LTV will have fallen. For some other loans the problem is that the error bars on the valuation are large.
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locutus
Member of DD Central
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Post by locutus on Feb 26, 2016 21:34:53 GMT
Hi All, The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion. A+ from me. Keep acting like this and you'll get even more of my money. Humility and positive response to criticism are rare and refreshing traits to find in any company.
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Post by ragamuffin on Feb 26, 2016 22:03:51 GMT
Hi All, The prefunding was still at least 300% over funded so no worries there. In the end, we appreciate that our investors trust us to make the right decisions and we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The will of the crowd prevailed on this occasion. 300% PF - So people would have gotten 30% IF the loan had gone through - I think I can take that as SS mug to me!! Good to see SS involved in the conversation and considering the views expressed here, winners all round. Good job.
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Post by sunspot on Feb 26, 2016 22:59:22 GMT
...we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. The business model that you advertise is based on "asset backed loans". By your own admission, this loan was backed more by a so-called "personal guarantee" than by an asset. Essentially, the borrower had all the potential upside, while we were left with the downside if that guarantee evaporated. I'm from that neck of the woods originally, and when my father was still alive, used to drink regularly not far from there, so I can tell you that there are some very astute sharks in them there waters. Since I wasn't present at your discussions, I cannot comment on whether or not you were played, but I can say with absolute certainty that there are chancers out there who would think nothing of gambling with someone else's money on a punt of this sort, and walking away if it turns sour. Indeed, I have personal experience of one such chancer, and a different one offered me a bribe to cheat my own family on a property deal - no kidding! I've said it before, but it bears repeating: Personal guarantees have absolutely no place in peer to peer lending.We cannot inspect a guarantee, evaluate it, or perform any sort of due diligence upon it, especially as we don't even get to know the names of borrowers. But most importantly of all, we cannot instruct agents to sell a personal guarantee!
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dovap
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Post by dovap on Feb 26, 2016 23:37:37 GMT
seems bizarre supposedly oversubscribed and still viable according to ss but pulled because of grumbling on here
really ?
and credit for pulling a toxic dump - blimey
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Feb 26, 2016 23:39:14 GMT
...we still feel that this loan was fine, but when feedback is so asymmetrically negative we need to consider reputational risk over the need to provide deal flow. I've said it before, but it bears repeating: Personal guarantees have absolutely no place in peer to peer lending.We cannot inspect a guarantee, evaluate it, or perform any sort of due diligence upon it, especially as we don't even get to know the names of borrowers. But most importantly of all, we cannot instruct agents to sell a personal guarantee! Very much depends on the personal guarentee and what is backing it. For instance, an infamous loan on another platform was entirely recovered bar some default interest by recourse to a personal guarentee supported by a share portfolio. Also ISTM that P2P was established on the basis of lending exclusively supported by personal guarentees alone, and the three largest platforms still predominantly offer loans backed solely by guarentees not asset security That said having been hit by worthless PGs, I now avoid them like the plague and have withdrawnl from the all 3 major platforms partly for that reason
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freddy
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Post by freddy on Feb 27, 2016 0:53:18 GMT
Good to see that SS pulled this loan and that common sense prevailed. I like investing with SS and will continue to do so. However, I'm not feeling entirely convinced by their very short explanation. If they truly felt the loan was 'Fine'!, was 3 times over subscribed then why withdraw it. I don't believe that the members on this forum make up the majority of SS investors. It was a poor decision to launch this loan in the first place and that is what worries me. Of course SS want to make money but they also need to consistently demonstrate that they have their investors best interests at the forefront of their DD and decision making processes. Would they have launched this loan under the old T&C?? We will never know!
I'm being critical I know but this episode has left me feeling a little more cautious ( maybe not a bad thing). It would be encouraging to get a fuller explanation from SS.
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mikes1531
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Post by mikes1531 on Feb 27, 2016 3:30:11 GMT
... we still feel that this loan was fine... : If you do still have confidence in this loan, go back to the borrower and try to get them to pledge some of their liquid assets to their PG. And I don't mean just a promise, I mean putting those assets -- share portfolio or whatever -- under your complete control so that you could convert them to cash without needing the borrowers permission, if the borrower were to default on the loan. (A common shortcoming of PGs is that the holder doesn't know if the PG provider's assets continue to exist, and that multiple PGs can be given on a single collection of assets.) If you could arrange control over liquid assets, this loan would become truly asset-backed, and you'd probably have no trouble at all selling it to your investors.
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