Liz
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Post by Liz on Jun 5, 2016 10:55:14 GMT
Do we want the PF in the long term to repay capital only, or also repay interest but potentially risk the stability of the fund.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jun 5, 2016 10:58:07 GMT
Do we want the PF in the long term to repay capital only, or also repay interest but potentially risk the stability of the fund  OK... your poll is better... 
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Liz
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Post by Liz on Jun 5, 2016 11:06:32 GMT
Do we want the PF in the long term to repay capital only, or also repay interest but potentially risk the stability of the fund OK... your poll is better... We aren't too good with complicated polls here  It's a shame we didn't run this poll before PBL20 defaulted, because we are all biased now. I really do think we should know Savingstream's position, although that position may take a long time to materialise, and may be fluid.
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Jeepers
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Post by Jeepers on Jun 5, 2016 11:11:50 GMT
Maybe going slightly off topic here but...
I'd like to see money which is deposited in the provision fund stay there.
At the moment it is always 2% of the loan book meaning that when loans are repaid, money is withdrawn from the provision fund.
Although the provision fund currently stands at just over £2m, there are a lot of loans due for repayment imminently so we can expect that to decrease substantially.
Since the 2% of each loan which is added to the PF comes from the fee charged to the borrower, I don't see the need to keep making withdrawals every time a loan is repaid.
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Post by dualinvestor on Jun 5, 2016 11:23:02 GMT
Maybe going slightly off topic here but... I'd like to see money which is deposited in the provision fund stay there. At the moment it is always 2% of the loan book meaning that when loans are repaid, money is withdrawn from the provision fund. Although the provision fund currently stands at just over £2m, there are a lot of loans due for repayment imminently so we can expect that to decrease substantially. Since the 2% of each loan which is added to the PF comes from the fee charged to the borrower, I don't see the need to keep making withdrawals every time a loan is repaid.Lendy Ltd might disagree with that as they probably view the money paid into the PF (which comes from the borrower) as a deferred fee.
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jamesc
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Post by jamesc on Jun 5, 2016 11:31:00 GMT
I think an interesting poll would be how much everyone thinks will be realised from the security on PBL20 without any intervention from the PF. This would give a better idea what people think of their security in a default situation, and I know every security is different but it might make people think twice about a lot of the recent large 70% LTV loans. In the distance past most of the early large loans tended to be much lower LTV e.g. PBL33, 35, etc. were sub 50% LTV and shortly due to repay (hopefully but at least a better case in a default).
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Investor
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Post by Investor on Jun 5, 2016 11:40:44 GMT
Do we want the PF in the long term to repay capital only, or also repay interest but potentially risk the stability of the fund. I think the first three words of your post say more about savingstream change in interaction levels with this forum over the last few months than I ever could.
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Liz
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Post by Liz on Jun 5, 2016 11:52:52 GMT
I think an interesting poll would be how much everyone thinks will be realised from the security on PBL20 without any intervention from the PF. This would give a better idea what people think of their security in a default situation, and I know every security is different but it might make people think twice about a lot of the recent large 70% LTV loans. In the distance past most of the early large loans tended to be much lower LTV e.g. PBL33, 35, etc. were sub 50% LTV and shortly due to repay (hopefully but at least a better case in a default). Feel free to start a poll 
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beechside
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Post by beechside on Jun 5, 2016 12:11:14 GMT
I'd like to see money which is deposited in the provision fund stay there. Sorry but I can't agree with this at all. That money is SS's profit and, if always left there, the PF could end up bigger than the entire loan book! In accounting terms, the PF is like a debtor to SS. Money they hope to recover at some point but with no guarantee that they will. I wouldn't want to support something that fundamentally affects the business model.
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agent69
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Post by agent69 on Jun 5, 2016 12:32:26 GMT
If you're lending on a platform paying 12% it's madness to expect the provision fund to cover all losses. Everyone should expect losses (capital and interest), but hopefully limited by the security which is held. As an example if 10% of your loans defaulted and there was a 20% shortfall on each one then that would equate to a loss of 2% overall. Who wouldn't be happy with 10% return after fees and bad debt? The larger the loan the larger the chance that the PF wont't cope with the loss. I think there should be a sliding scale of reimbursement, something along the lines of: - first £100k loss is 100% covered by the PF
- second £100k 50% covered
- £200k - £500k 10%
- £500k - £1m 5%
- Over £1m - you're on your own son
Maybe the payout should also be adjusted by a risk factor so that if you had a punt on a 70% LTV you would get less back than if it was a more secure investment (say 50% LTV). Definitely don't think SS should be bailing this one out just so they can say "nobody has ever lost a penny investing with us". PS I'm not in this one so good luck. |
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Post by reeknralf on Jun 5, 2016 12:57:27 GMT
There isn't an option for neither capital nor interest, so I haven't voted.
I think PF's are an utterly stupid marketing gimmick. They lull people into a false sense of security. They mean loans that shouldn't be funded, are subsidised by loans that would otherwise be more profitable. They undermine the whole idea of P2P, in that you're paid money from loans you haven't invested in. Any allocation of the PF will end up favoring one set of lenders over others. PF's are confusing and unequitable. They shouldn't exist.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jun 5, 2016 13:26:57 GMT
There isn't an option for neither capital nor interest, so I haven't voted. I think PF's are an utterly stupid marketing gimmick. They lull people into a false sense of security. They mean loans that shouldn't be funded, are subsidised by loans that would otherwise be more profitable. They undermine the whole idea of P2P, in that you're paid money from loans you haven't invested in. Any allocation of the PF will end up favoring one set of lenders over others. PF's are confusing and unequitable. They shouldn't exist. I think Ratesteer would be a rather unpopular platform if it didn't have a PF However, in the case of SS, I tend to agree... almost.There is an element of DD we can do as investors, but because the majority of DD is completed by Lendy Ltd, with us investors not in the loop, then they should be obliged to offer some sort of PF.
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MarkT
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Post by MarkT on Jun 5, 2016 13:38:47 GMT
A provision fund isn't a bad idea if it's clear what it is for, under what circumstances it should be used and people are fully informed about that.
The problem here is that no one seems to know what it's for, including Lendy.
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Liz
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Post by Liz on Jun 5, 2016 13:46:41 GMT
There isn't an option for neither capital nor interest, so I haven't voted. I think PF's are an utterly stupid marketing gimmick. They lull people into a false sense of security. They mean loans that shouldn't be funded, are subsidised by loans that would otherwise be more profitable. They undermine the whole idea of P2P, in that you're paid money from loans you haven't invested in. Any allocation of the PF will end up favoring one set of lenders over others. PF's are confusing and unequitable. They shouldn't exist. If you don't like the business model or return on investment structure, there are plenty of other p2p platforms out there. £106m of peoples' monies like the platform.
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Post by earthbound on Jun 5, 2016 13:49:46 GMT
Good points.. But i actually think the FCA should change their rules and Force all P2P platforms to have a PF, whether they like it or not. There is no protection within P2P from the FSCS, and rightly so, But 12% risk/return does not mean there has to be significant losses. RS have a PF that is fit for purpose, why not all the others?
The situation at SS at the moment with pbl020 is sustainable , But it wont be if just one of the big ones gets stressed before this one is sorted. At the moment any lenders in pbl020 are in a fortunate position, i think they can probably expect their capital back but not their interest.
Take a look at FS.. What do you think will happen there when the inevitable property defaults start to occur.
edit ..typos
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