jonbvn
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Post by jonbvn on May 11, 2016 15:41:00 GMT
Just received this by email from SS.
It may be in Lendy's best interest to allow trading. However, given that loans are traded at face value on the SM, it is clear that this may not be in the lender's best interest. It will certainly muddy the waters on the SM.
Clearly, defaulted loans will have to be clearly flagged. Failure to do so is likely to have legal implications.
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cooling_dude
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Post by cooling_dude on May 11, 2016 15:42:22 GMT
Just received this by email from SS. It may be in Lendy's best interest to allow trading. However, given that loans are traded at face value on the SM, it is clear that this may not be in the lender's best interest. It will certainly muddy the waters on the SM. Clearly, defaulted loans will have to be clearly flagged. Failure to do so is likely to have legal implications. I thought that this update had already been implemented when the T&Cs were introduced? It's certainly what I've been telling everyone... No interest paid out until the loan is recovered if they are within the new T&Cs Also, the update isn't specific; is it all the loans currently on SS, on the ones on the new T&Cs, or all loans from now on...
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pom
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Post by pom on May 11, 2016 16:03:15 GMT
Clearly, defaulted loans will have to be clearly flagged. Failure to do so is likely to have legal implications. Last time they had a default they replaced the photo with DEFAULTED in big red letters
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on May 11, 2016 16:08:20 GMT
Clearly, defaulted loans will have to be clearly flagged. Failure to do so is likely to have legal implications. Last time they had a default they replaced the photo with DEFAULTED in big red letters I wasn't about then, but I seem to recall when reading the relevant thread that it took SS some time before they actually made it clear on the defaulted loan page that it had defaulted. However, I fully expect them to make it clear in any future defaulted loan page. That defaulted loan was traded quite successfully on the SM IIRC; I bet if a loan defaults now, with no active interest being paid, it would be far harder to get rid of a defaulted loan.
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pom
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Post by pom on May 11, 2016 16:12:31 GMT
Last time they had a default they replaced the photo with DEFAULTED in big red letters I wasn't about then, but I seem to recall when reading the relevant thread that it took SS some time before they actually made it clear on the defaulted loan page that it had defaulted. However, I fully expect them to make it clear in any future defaulted loan page. That defaulted loan was traded quite successfully on the SM IIRC; I bet if a loan defaults now, with no active interest being paid, it would be far harder to get rid of a defaulted loan. Ah - you may be right, I think it was already in default when I started investing...am sure it will be clear anyway. And yeah, I can't imagine there being much trade in them! Have to wonder what knock-on effect it may also have on those with -ve days remaining
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ilmoro
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Post by ilmoro on May 11, 2016 16:19:56 GMT
General Update just arrived: Interesting new structure change for default loans...
"We have made a slight change to our operating procedures for ‘loans in default’ (we have only ever had one to date) - once we declare a loan to be in default, instead of crediting interest to investor's accounts monthly, interest will accrue on account and will be paid once the loan capital is recovered. This rule will only apply to the loan in default and not other loans, which will operate as usual. Loans in default can continue to be traded on the secondary market. Our solicitors have advised us to implement this as the FCA perceives Lendy's own covering of the interest as a potential cashflow risk to the sustainability of the platform."
I thought that this had already been implemented when the T&Cs were introduced; it's certainly what I've been telling everyone? No interest paid out until the loan is recovered if they are within the new T&Cs Also, the update isn't specific; is it all the loans currently on SS, on the ones on the new T&Cs, or all loans from now on... Possible needs some further clarification. As written, it just means that on defaulted loans, whether old or new T&Cs, interest will accrue rather than be paid monthly. Lendy will still be the borrower on old T&CS and liable for capital & interest it just means they arent committed to forking out unfunded sums for a potentially prolonged period during recovery. Wonder whether it will have any impcat on predrawdown interest being covered by SS? savingstream Can you please clarify the situation regarding terms & conditions? For loans under the old terms & conditions, does Lendy remain the borrower and therefore would be liable for payment of default interest in full even in the event of shortfall in recovery, with todays change meaning this interest would be paid at recovery rather than monthly, or would payment of interest be dependent on sufficient funds being recovered from realisation of the security? Also in the light of this change can you please ensure and confirm that all loan terms are accurately reported on the site and it is clear that ongoing interest is being covered - there are still several loans where there are discrepancies/uncertainty between information provided in updates and remaining term displayed on the site. PBL7 was amended to show default in big letters on advice from forums - trading after initial default was slow but normalised once it became clear that interest was being paid and recovery prospects were good
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Post by pepperpot on May 11, 2016 16:21:48 GMT
I wasn't about then, but I seem to recall when reading the relevant thread that it took SS some time before they actually made it clear on the defaulted loan page that it had defaulted. However, I fully expect them to make it clear in any future defaulted loan page. That defaulted loan was traded quite successfully on the SM IIRC; I bet if a loan defaults now, with no active interest being paid, it would be far harder to get rid of a defaulted loan. Ah - you may be right, I think it was already in default when I started investing...am sure it will be clear anyway. And yeah, I can't imagine there being much trade in them! Have to wonder what knock-on effect it may also have on those with -ve days remaining Yeah, they needed a nudge to put the notice up, but it was quite prominent, hard to miss. Depends how big the loan is / wider demand levels. I doubt you'd have much trouble selling a small defaulter atm, not with £3m sloshing around.
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mikes1531
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Post by mikes1531 on May 11, 2016 18:55:53 GMT
PBL7 was amended to show default in big letters on advice from forums - trading after initial default was slow but normalised once it became clear that interest was being paid and recovery prospects were good Depends how big the loan is / wider demand levels. I doubt you'd have much trouble selling a small defaulter atm, not with £3m sloshing around. PBL007 was under the old Ts&Cs. As such, Lendy/SS were obligated to repay the investors in full no matter what the result of the security sale. My interpretation of the change notified today was that it had no impact on loans under the new Ts&Cs, but simply meant that loans under the old Ts&Cs would accrue interest after being declared to be in default rather than interest continuing to be paid monthly as they would have been before -- and as PBL7 did. Since Lendy/SS remains the borrower under the old Ts&Cs, I'd expect this change to have a minimal impact on SM trading of old Ts&Cs parts since investors probably still will have confidence that they'd get their interest eventually. And while I don't see this change having any impact on loans under the new Ts&Cs, I do expect it will become difficult to sell parts of those when they start showing a negative term remaining -- since in that situation payment of the accrued interest will depend on either a successful recovery or a payout from the discretionary PF. And IMHO that reduced marketability will begin as soon as the term remaining goes negative rather than being delayed until the borrower is declared to be in default.
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littleoldlady
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Post by littleoldlady on May 11, 2016 20:35:52 GMT
Maybe SS intend to convert all current loans on the old terms to the new terms. That would at least simplify matters.
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star dust
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Post by star dust on May 11, 2016 20:46:48 GMT
Maybe SS intend to convert all current loans on the old terms to the new terms. That would at least simplify matters. I think they stated they were going to do that a long time ago. However as the majority now have less than three months to run, and apart from PBL 06 are all theoretically about to repay, it hardly seems worth the inevitable legal hassle. The renewed PBL 06 might be on the new terms for all we know too. I guess if the contract column is ever populated we may find out!
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sam i am
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Post by sam i am on May 11, 2016 20:55:55 GMT
And IMHO that reduced marketability will begin as soon as the term remaining goes negative rather than being delayed until the borrower is declared to be in default. If savingstream could get its act together and update loan terms when loans are extended and further interest is paid then we would see far fewer negative terms on the site. Maybe if there is reduced marketability and subsequent complaints then this may just nudge them into doing it.
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mikes1531
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Post by mikes1531 on May 12, 2016 0:36:30 GMT
And IMHO that reduced marketability will begin as soon as the term remaining goes negative rather than being delayed until the borrower is declared to be in default. If savingstream could get its act together and update loan terms when loans are extended and further interest is paid then we would see far fewer negative terms on the site. Maybe if there is reduced marketability and subsequent complaints then this may just nudge them into doing it. : Are you suggesting that you're aware that some of the loans now showing negative terms remaining actually have been extended and had further interest prepaid? If so, which ones?
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on May 12, 2016 8:25:03 GMT
If savingstream could get its act together and update loan terms when loans are extended and further interest is paid then we would see far fewer negative terms on the site. Maybe if there is reduced marketability and subsequent complaints then this may just nudge them into doing it. : Are you suggesting that you're aware that some of the loans now showing negative terms remaining actually have been extended and had further interest prepaid? If so, which ones? There is nothing on SS with a negative "remaining duration" that has had an extension or interest paid, but in the past, there were several loans that have since been repaid that fell foul of this false information. There are some getting close to the mark; PBL033 has 19 days remaining but had a received interest for three-month extension only one month ago.
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SteveT
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Post by SteveT on May 12, 2016 8:27:31 GMT
sam i am : Are you suggesting that you're aware that some of the loans now showing negative terms remaining actually have been extended and had further interest prepaid? If so, which ones? There is nothing on SS with a negative "remaining duration" that has had an extension or interest paid, but in the past, there were several loans that have since been repaid that fell foul of this false information. There are some getting close to the mark; PBL033 has 19 days remaining but had a received interest for three-month extension only one month ago. My assumption is that the 3 month extension payment may have been received a little over a month late, which would explain the 19 days remaining...
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sam i am
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Post by sam i am on May 12, 2016 8:45:08 GMT
If savingstream could get its act together and update loan terms when loans are extended and further interest is paid then we would see far fewer negative terms on the site. Maybe if there is reduced marketability and subsequent complaints then this may just nudge them into doing it. : Are you suggesting that you're aware that some of the loans now showing negative terms remaining actually have been extended and had further interest prepaid? If so, which ones? Of the loans currently in negative territory, PBL022 is currently servicing interest and PBL036 did have (or was expected to have) and extension to January which would have reduced the negative term (but would still be negative now). On further review I note that there are far fewer negative remaining terms than there used to be so I suspect that savingstream have done some tidying up in the past few weeks and I missed some of them (as I am not invested in any negative term loans). So it looks like my comment may be a little out of date. Would be good to get an update on the interest position for those loans that are still negative.
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