littleoldlady
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Post by littleoldlady on Jan 8, 2017 9:17:52 GMT
Looking back at the poll I see that 15% of users of this forum think SS will repay in full with interest out of the PF, so adding in those who don't read here I guess that answers my question as to who is buying. Even taking GeorgeT's point that it might suit SS to repay in order to maintain their claim that no investor has ever lost capital, they would not need to pay any interest in order to do that. I think the difference in opinion is due to different interpretations of the word "accrue". I read the use of this word to mean that there is no implicit promise to actually pay it, but others take a different view. |
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littleoldlady
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Post by littleoldlady on Jan 8, 2017 9:23:22 GMT
There's no reason to invest at 12%. It doesn't justify the risk. It would be much more interesting if at the point the loan is declared defaulted and interest stops being paid monthly that it accures and the final holder of the loan part receives the interest for the entire period. If that was put into practice now, the risk tolerant buyer could get an extra 12% in interest (potentially) but comes at a much greater risk of capital loss. It also helps the sellers who just want their money back. You mean that someone who sells after default has interest already received deducted from the proceeds? That might work but what about someone who sold before the default, how do you reclaim the interest already paid to him, in order to pass it to the latest buyer?
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ablender
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Post by ablender on Jan 8, 2017 10:50:42 GMT
There's no reason to invest at 12%. It doesn't justify the risk. It would be much more interesting if at the point the loan is declared defaulted and interest stops being paid monthly that it accures and the final holder of the loan part receives the interest for the entire period. If that was put into practice now, the risk tolerant buyer could get an extra 12% in interest (potentially) but comes at a much greater risk of capital loss. It also helps the sellers who just want their money back. You mean that someone who sells after default has interest already received deducted from the proceeds? That might work but what about someone who sold before the default, how do you reclaim the interest already paid to him, in order to pass it to the latest buyer? Why should there be an interest reclaim? If someone held a part in this loan for any duration, they took the risk for that time and the interest is theirs and theirs alone.
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Post by trentenders on Jan 8, 2017 11:08:43 GMT
IMO, if the interest is to be taken from sales proceeds then that should be reflected in an ever increasing LTV.
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littleoldlady
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Post by littleoldlady on Jan 8, 2017 12:10:40 GMT
You mean that someone who sells after default has interest already received deducted from the proceeds? That might work but what about someone who sold before the default, how do you reclaim the interest already paid to him, in order to pass it to the latest buyer? Why should there be an interest reclaim? If someone held a part in this loan for any duration, they took the risk for that time and the interest is theirs and theirs alone. I agree. I was just exploring Jeepers's idea.
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Jeepers
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Post by Jeepers on Jan 8, 2017 13:53:59 GMT
Why should there be an interest reclaim? If someone held a part in this loan for any duration, they took the risk for that time and the interest is theirs and theirs alone. I agree. I was just exploring Jeepers's idea. For that reason it couldn't be put in to practice on this loan. IMO it would satisfy the risk adverse investor who would have a much better chance of selling and just getting their capital back but gives an incentive for a risk tolerant investor to buy.
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Post by dualinvestor on Jan 8, 2017 14:20:29 GMT
And people are buying this?? From a dedicated default page!! What manor of madness is this?? It's 12% not a roulette black or red double your money scenario, why risk it?
There are a number of different loans where receivers have been instructed and the reality is those lines are in a similar position to this one. The only difference is that they have put this one under the defaulted loans tab and let the others under the main tab. The reason this line has better prospects than some of the others is because it is the only loan involving receivers where saving stream have stated clearly in writing that interest will be paid at the end when it is all sorted out. It would be a normal us for them to pay interest on people's Investments but not return the actual Investments on which the interest was accrued. Therefore this loan has a higher priority in the payout packing order because you have the written guarantee on this one which you don't have on certain others and that is why I believe many investors are happy to continue to hold it because even though they don't know when they will get there investment and all the interest they no they will get it and the same cannot be said for a few of the other loans. The only Circumstance in which people would not receive their 12% would be in the event of the whole platform failing and saving stream not having the money to pay out but if that were to be the case the whole thing would be kaput so again this particular loan is not at any greater risk It goes without saying that other loans with long terms where receivers have not been appointed are better bats but at a time of famine it's still a good deal if you don't mind waiting an unknown period of time to get your money and interest There is only one other loan where Receivers are on record at CH as being appointed. One other has the sale recorded as being by "LPA Receivers" by the agent, but despite several references in the 23 December update to Receivers there doesn't seem to be any evidence of it. As for interest no-one really knows whether it will be paid post 25 May but it is known that the previous offer that fell through was for less than the loan. No-one knows whether the PF will pay any, or what proportion of a, shortfall or how much of the proceeds will be applied to the other £1.1million of debt that Lendy Ltd are recorded by the Administrators as owed. So I am puzzled by the first sentence of your comment.
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agent69
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Post by agent69 on Jan 8, 2017 16:51:53 GMT
I'm not involved in this loan, but I wonder if a more relevant question might be "when will we get any money back"?
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GeorgeT
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Post by GeorgeT on Jan 8, 2017 17:46:34 GMT
Because it is a safer investment than several other loans.
There are a number of different loans where receivers have been instructed and the reality is those lines are in a similar position to this one. The only difference is that they have put this one under the defaulted loans tab and let the others under the main tab. The reason this line has better prospects than some of the others is because it is the only loan involving receivers where saving stream have stated clearly in writing that interest will be paid at the end when it is all sorted out. It would be a normal us for them to pay interest on people's Investments but not return the actual Investments on which the interest was accrued. Therefore this loan has a higher priority in the payout packing order because you have the written guarantee on this one which you don't have on certain others and that is why I believe many investors are happy to continue to hold it because even though they don't know when they will get there investment and all the interest they no they will get it and the same cannot be said for a few of the other loans. The only Circumstance in which people would not receive their 12% would be in the event of the whole platform failing and saving stream not having the money to pay out but if that were to be the case the whole thing would be kaput so again this particular loan is not at any greater risk It goes without saying that other loans with long terms where receivers have not been appointed are better bats but at a time of famine it's still a good deal if you don't mind waiting an unknown period of time to get your money and interest There is only one other loan where Receivers are on record at CH as being appointed. One other has the sale recorded as being by "LPA Receivers" by the agent, but despite several references in the 23 December update to Receivers there doesn't seem to be any evidence of it. As for interest no-one really knows whether it will be paid post 25 May but it is known that the previous offer that fell through was for less than the loan. No-one knows whether the PF will pay any, or what proportion of a, shortfall or how much of the proceeds will be applied to the other £1.1million of debt that Lendy Ltd are recorded by the Administrators as owed. So I am puzzled by the first sentence of your comment. This is the only overdue loan where saving stream have given a written undertaking that all the interest will be accrued up and paid at the end. There are other overdue loans that don't have this guarantee. Anybody who is still holding parts of the loan or who has invested in it lately is doing so on those terms and conditions and if they didn't honour that term and condition they would be guilty of financial mis-selling and people could go to the ombudsman or to court for specific performance and that is why out of all the many overdue loans this one is the safest in some ways. You haven't got any cast iron guarantees on others but you have on this one but it is subject to saving stream having the money to pay out and if they haven't then there is a bigger problem than this Loan alone
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littleoldlady
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Post by littleoldlady on Jan 8, 2017 18:03:53 GMT
Directly from their site:
The Provision Fund does not guarantee loans or provide insurance against loss. In the event of a shortfall The Directors will consider any losses made by investors and may grant compensation at their discretion. You should be aware that your capital is at risk and interest payments are not guaranteed if a borrower defaults.
Seems clear to me.
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Post by dualinvestor on Jan 8, 2017 18:05:14 GMT
There is only one other loan where Receivers are on record at CH as being appointed. One other has the sale recorded as being by "LPA Receivers" by the agent, but despite several references in the 23 December update to Receivers there doesn't seem to be any evidence of it. As for interest no-one really knows whether it will be paid post 25 May but it is known that the previous offer that fell through was for less than the loan. No-one knows whether the PF will pay any, or what proportion of a, shortfall or how much of the proceeds will be applied to the other £1.1million of debt that Lendy Ltd are recorded by the Administrators as owed. So I am puzzled by the first sentence of your comment. This is the only overdue loan where saving stream have given a written undertaking that all the interest will be accrued up and paid at the end. There are other overdue loans that don't have this guarantee. Anybody who is still holding parts of the loan or who has invested in it lately is doing so on those terms and conditions and if they didn't honour that term and condition they would be guilty of financial mis-selling and people could go to the ombudsman or to court for specific performance and that is why out of all the many overdue loans this one is the safest in some ways. You haven't got any cast iron guarantees on others but you have on this one but it is subject to saving stream having the money to pay out and if they haven't then there is a bigger problem than this Loan alone Have SS said that? If they have it is apparent that only 18 people (out of 120) who have voted in this poll believe it to be the case? I am not sure you can rely on what is wzritten in "the big red box" to be a statement of intention to pay ALL (or any) of the accrued interest. Although it might make a few fees for lawyers 
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Post by bracknellboy on Jan 8, 2017 18:24:27 GMT
..This is the only overdue loan where saving stream have given a written undertaking that all the interest will be accrued up and paid at the end. .. I am not and never have been in this loan, and am only a tiny weeny bit part player on SS. I'm intrigued as to why GeorgeT you believe such a statement has been made while many others do not ? What's the evidence for that ? Ts and Cs at time of loan ? Or some other correspondence ? I know that CD has referenced (though I believe not ascribing to the same theory) this statement on the loan: If anyone is hanging their coat on that, then I fear they may lose not just their coat but also their shirt. Just from a pure use of English viewpoint, I could not in anyway interpret that as having the meaning that would need to be ascribed to it for it to constitute an undertaking that payment of interest is guaranteed. As stands, one cannot ascribe to it anything more than a statement regarding the earliest point at which any interest might be paid; not any guarantee that such will be paid. Any conditions which would REQUIRE interest to be paid would be per relevant Ts and Cs and outcomes. Of course it would be a totally different story if it was worded as "and will be.." as opposed to "but will not be..." Just MHO.
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GeorgeT
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Post by GeorgeT on Jan 8, 2017 18:29:33 GMT
Directly from their site: The Provision Fund does not guarantee loans or provide insurance against loss. In the event of a shortfall The Directors will consider any losses made by investors and may grant compensation at their discretion. You should be aware that your capital is at risk and interest payments are not guaranteed if a borrower defaults.Seems clear to me. The provision fund and the general generic terms and conditions are less relevant than a specific additional term that has been added specifically to one specific loan very recently. And not only added to it recently after it went overdue but also added as boldly as could possibly be added in red. It is a clear statement and variation of the general terms applicable to other default loans and is clearly added to maintain liquidity in the loan and confidence in the platform. It does not say interest may continue to accrue it says interest WILL continue to accrue and if interest is a growing then unless saving stream I'll planning on stealing it from the investors then it must be paid to the investors when the receivers have finished their work. Any other outcome would lead to multiple claims against saving stream resulting in them fighting a very expensive and bad publicity and potentially platform destroying legal battle which they would never attempt to fight in the first place so it is pretty clear to me
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littleoldlady
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Post by littleoldlady on Jan 8, 2017 18:36:46 GMT
savingstream could settle this. I wonder why they don't. The PF stands at about £3m and this loan at £1.9m less any future recovery so they could easily afford it - but possibly setting a precedent and infuriating investors in the next default.
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littleoldlady
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Post by littleoldlady on Jan 8, 2017 18:48:57 GMT
I agree. I was just exploring Jeepers 's idea. For that reason it couldn't be put in to practice on this loan. IMO it would satisfy the risk adverse investor who would have a much better chance of selling and just getting their capital back but gives an incentive for a risk tolerant investor to buy.The snag I highlighted would seem to apply to every loan. To achieve the laudable objective you are seeking another way would be for a system change so that investors could invite offers for their holdings. This would also be useful in may other scenarios. But the only incentive for SS to bear the cost of the system change would be to keep investors happy.
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