ben
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Post by ben on Jun 4, 2016 15:40:36 GMT
So after 55 votes 75% think there will be a 100% return of capital, one way or another. This at least explains why so much has been bought on the SM after it went into default. Let's all hope that the optimists are right. If anyone loses any capital I doubt that SS would survive in its current form. As their big selling point has been that they have never lost any capital and that the provision fund will cover any capital loss. If they are unable to do it in good market condition times with one loss all the big investors will pull out at it will be fairly clear that they would be unable to manage multiple loses which is what would be expected if the market turns. What happens to the interest accumulated is a different matter and is still unclear SS have not said clearly one way or the other so I guess at this time they are still unsure.
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Post by earthbound on Jun 4, 2016 15:48:53 GMT
Are all the reconciliation costs coming out of SS's own pockets? IMO they must be, they maintain that the PF will be kept at 2% of the loanbook, so whether the PF pays out £1.00 or £1m ..... , who's going to top it back up to 2%?
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sam i am
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Post by sam i am on Jun 4, 2016 16:58:56 GMT
Are all the reconciliation costs coming out of SS's own pockets? IMO they must be, they maintain that the PF will be kept at 2% of the loanbook, so whether the PF pays out £1.00 or £1m ..... , who's going to top it back up to 2%? I was about to post this very same comment and you beat me to it. If SS pays out or the PF pays and SS tops it up, it amounts to the same thing.
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Liz
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Post by Liz on Jun 4, 2016 17:21:31 GMT
Are all the reconciliation costs coming out of SS's own pockets? IMO they must be, they maintain that the PF will be kept at 2% of the loanbook, so whether the PF pays out £1.00 or £1m ..... , who's going to top it back up to 2%? I was about to post this very same comment and you beat me to it. If SS pays out or the PF pays and SS tops it up, it amounts to the same thing. Is the SS "to big to fail"? Let's get Dave to top up the PF 
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mikes1531
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Post by mikes1531 on Jun 4, 2016 19:22:04 GMT
I was about to post this very same comment and you beat me to it. If SS pays out or the PF pays and SS tops it up, it amounts to the same thing. Is the SS "to big to fail"? Let's get Dave to top up the PF I thought this would be a case for "Let George Do It"! 
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Post by harvey on Jun 4, 2016 19:57:50 GMT
So after 55 votes 75% think there will be a 100% return of capital, one way or another. This at least explains why so much has been bought on the SM after it went into default. Let's all hope that the optimists are right. If anyone loses any capital I doubt that SS would survive in its current form. As their big selling point has been that they have never lost any capital and that the provision fund will cover any capital loss. If they are unable to do it in good market condition times with one loss all the big investors will pull out at it will be fairly clear that they would be unable to manage multiple loses which is what would be expected if the market turns. What happens to the interest accumulated is a different matter and is still unclear SS have not said clearly one way or the other so I guess at this time they are still unsure. Well what interests me is that on the big red default box against the loan s s have written that it will continue to accrue interest which will be paid at the end of the process. If they werent certain they are going to be able to pay interest why would they put that up. I guess the reason a few people are still buying into the loan is because they can see the statement that it will accrue interest. I wonder if people who are investing in it now having read that could claim there had been some sort of mis-selling if they don't get interest because it was stated in writing that interest would continue to accrue and be paid at the end of the recovery process. Probably not because of all the platform wide terms and conditions but it still seems a bit strange to me when they could have just put a red box up with the simple wording that the loan was in default. It seems to create a higher obligation and expectation when you have specifically put that it will continue to accrue interest.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jun 4, 2016 20:07:03 GMT
If anyone loses any capital I doubt that SS would survive in its current form. As their big selling point has been that they have never lost any capital and that the provision fund will cover any capital loss. If they are unable to do it in good market condition times with one loss all the big investors will pull out at it will be fairly clear that they would be unable to manage multiple loses which is what would be expected if the market turns. What happens to the interest accumulated is a different matter and is still unclear SS have not said clearly one way or the other so I guess at this time they are still unsure. Well what interests me is that on the big red default box against the loan s s have written that it will continue to accrue interest which will be paid at the end of the process. If they are not certain they are going to be able to pay interest why would they put that up. I guess the reason a few people are still buying into the loan is because they can see the statement that it will accrue interest. I wonder if people who are investing in it now having read that could claim there had been some sort of mis-selling because it was stated in writing that interest would continue to accrue and be paid at the end of the recovery process. Probably not because of all the platform wide terms and conditions but it still seems a bit strange to me when they could have just put a red box up with the simple wording that the loan was in default. It seems to create a higher obligation and expectation when you have specifically put that it will continue to accrue interest. That's a good point. The statement in the big red box does suggest that weather or not the whole loan is recovered by the sale of the security, that the interest will be paid. Either SS have worded it badly, or they fully intend on using the PF to cover both a shortfall and the interest.
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Post by dualinvestor on Jun 4, 2016 20:47:52 GMT
Are all the reconciliation costs coming out of SS's own pockets? IMO they must be, they maintain that the PF will be kept at 2% of the loanbook, so whether the PF pays out £1.00 or £1m ..... , who's going to top it back up to 2%? I was about to post this very same comment and you beat me to it. If SS pays out or the PF pays and SS tops it up, it amounts to the same thing. Well none of know what SS's expenses are but their gross monthly income is £500k+ (0.5% of £100m+) plus arrangement fees etc so a deficit of even £1m does not seem too large in that context
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Post by earthbound on Jun 4, 2016 22:05:00 GMT
dualinvestor As we discussed on earlier threads, i agree £1m may not be far of the mark when this concludes... which now makes me think, if SS have enough funds to cover the PF to that amount, why not pay lenders off immediately, use some funds from the PF as well, and see the default thro to conclusion behind closed doors, no fuss, no negative publicity.
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ben
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Post by ben on Jun 4, 2016 22:45:22 GMT
dualinvestor As we discussed on earlier threads, i agree £1m may not be far of the mark when this concludes... which now makes me think, if SS have enough funds to cover the PF to that amount, why not pay lenders off immediately, use some funds from the PF as well, and see the default thro to conclusion behind closed doors, no fuss, no negative publicity. They may have the funds to cover but what happens if another one goes bad next week? All SS needed to do was state what there intention was with regards to the interest and most of these post for the last week or so would never have happened. I think most people expect SS/provsion fund to cover any captial defaults upon eventual sale but what is unclear is the interest and if tis will be paid if the security does not cover it.
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Post by earthbound on Jun 4, 2016 22:55:07 GMT
dualinvestor As we discussed on earlier threads, i agree £1m may not be far of the mark when this concludes... which now makes me think, if SS have enough funds to cover the PF to that amount, why not pay lenders off immediately, use some funds from the PF as well, and see the default thro to conclusion behind closed doors, no fuss, no negative publicity. They may have the funds to cover but what happens if another one goes bad next week? All SS needed to do was state what there intention was with regards to the interest and most of these post for the last week or so would never have happened. I think most people expect SS/provsion fund to cover any captial defaults upon eventual sale but what is unclear is the interest and if tis will be paid if the security does not cover it. .. but if another one goes bad next week , then they really are in the brown stuff, whereas had they sorted this straight away they would not have the now millstone of accrued interest round their necks, if this drags on for a very long time and they end up having to liquidate the assets, the costs to the PF could be very large.
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Post by geraldine1210 on Jun 5, 2016 1:08:26 GMT
So after 62 votes 79% think there will be a 100% return of capital, one way or another. This at least explains why so much has been bought on the SM after it went into default. Let's all hope that the optimists are right. Wow, I had not realised they were withdrawing the 2% of the loan each time it was paid in full. That is folly. The money should be deposited and ring fenced and then left there until needed.
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Post by geraldine1210 on Jun 5, 2016 1:23:34 GMT
Well what interests me is that on the big red default box against the loan s s have written that it will continue to accrue interest which will be paid at the end of the process. If they are not certain they are going to be able to pay interest why would they put that up. I guess the reason a few people are still buying into the loan is because they can see the statement that it will accrue interest. I wonder if people who are investing in it now having read that could claim there had been some sort of mis-selling because it was stated in writing that interest would continue to accrue and be paid at the end of the recovery process. Probably not because of all the platform wide terms and conditions but it still seems a bit strange to me when they could have just put a red box up with the simple wording that the loan was in default. It seems to create a higher obligation and expectation when you have specifically put that it will continue to accrue interest. That's a good point. The statement in the big red box does suggest that weather or not the whole loan is recovered by the sale of the security, that the interest will be paid. Either SS have worded it badly, or they fully intend on using the PF to cover both a shortfall and the interest. I think the wording should be that interest will continue to accrue and will be paid if there are sufficient funds from sale after the default. Investors should be paid in this order: 1 Capital of investors up to point of default. 2,Interest to point of default. 3 Interest after default for those who held prior to default. 4 Capital for those purchasing after default. 5 Interest accrued after default for those who purchased after default. I would use the provision fund to top up to 100% for number 1 and possibly to 75% for number 2. If the provision fund has to come into play, in my opinion payouts should not be paid for 3,4 and 5. The PF simply must be 2% of existing Unpaid loans AND must keep growing and not be depleted each time a loan is successfully paid back.
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freddy
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Post by freddy on Jun 5, 2016 3:33:47 GMT
That's a good point. The statement in the big red box does suggest that weather or not the whole loan is recovered by the sale of the security, that the interest will be paid. Either SS have worded it badly, or they fully intend on using the PF to cover both a shortfall and the interest. I think the wording should be that interest will continue to accrue and will be paid if there are sufficient funds from sale after the default. Investors should be paid in this order: 1 Capital of investors up to point of default. 2,Interest to point of default. 3 Interest after default for those who held prior to default. 4 Capital for those purchasing after default. 5 Interest accrued after default for those who purchased after default. I would use the provision fund to top up to 100% for number 1 and possibly to 75% for number 2. If the provision fund has to come into play, in my opinion payouts should not be paid for 3,4 and 5. The PF simply must be 2% of existing Unpaid loans AND must keep growing and not be depleted each time a loan is successfully paid back. I thought No2 had already been taken care of with investors already having received their interest up to point of default?
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sam i am
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Post by sam i am on Jun 5, 2016 5:55:57 GMT
Well what interests me is that on the big red default box against the loan s s have written that it will continue to accrue interest which will be paid at the end of the process. If they are not certain they are going to be able to pay interest why would they put that up. I guess the reason a few people are still buying into the loan is because they can see the statement that it will accrue interest. I wonder if people who are investing in it now having read that could claim there had been some sort of mis-selling because it was stated in writing that interest would continue to accrue and be paid at the end of the recovery process. Probably not because of all the platform wide terms and conditions but it still seems a bit strange to me when they could have just put a red box up with the simple wording that the loan was in default. It seems to create a higher obligation and expectation when you have specifically put that it will continue to accrue interest. That's a good point. The statement in the big red box does suggest that weather or not the whole loan is recovered by the sale of the security, that the interest will be paid. Either SS have worded it badly, or they fully intend on using the PF to cover both a shortfall and the interest. I strongly suspect that SS wrote this in the context of warning investors that interest would not be paid on an ongoing basis while the loan is in default. This reinforces the recent change in T&Cs. Unfortunately, as is pointed out above, the wording can take on a very different meaning if not read in this context.
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