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Post by GSV3MIaC on Aug 26, 2016 13:45:21 GMT
What is the alternative? declare a default and increase costs all round? /mod hat off Nope, the alternative is some more realistic forecasts and updates, assuming the borrower is still funding the interest, rather than just regurgitating what the borrower may have said. The next alternative is to offer lenders an exit, by rolling the loan into a new short term loan, maybe at a different interest rate, since the term is 'undefined', and the third, if the borrower really ISN'T paying interest any more, is to take their toys away before the LTV gets stupid. I am sure there are more alternatives, but the current one, where everything slips a week every week, is not going down well with the customers.
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xpubman1
Member of DD Central
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Post by xpubman1 on Aug 26, 2016 13:46:03 GMT
What is the alternative? declare a default and increase costs all round? These things require a lot of ducks to be aligned. For me the bottom line is if the security is good and interest is being paid no problem. Two very big IFs There is a very high proportion of loans in this state, the borrowers have probably exhausted most of their options, so some of the overdue loans at least are in an "extend and pretend" state and it is the belief of many that SS are imitating ostriches with their head in the sand.
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Post by chrisj on Aug 26, 2016 14:06:13 GMT
I think a lot of people here are unrealistic about what they should get in exchange for a 12% interest rate. Some of the suggestions are laughable and would better be served up with a generous 0.5% interest rate.
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Post by dualinvestor on Aug 26, 2016 14:13:51 GMT
I think a lot of people here are unrealistic about what they should get in exchange for a 12% interest rate. Some of the suggestions are laughable and would better be served up with a generous 0.5% interest rate. Interesting point of view and possibly as "laughable" as the demands from others. 12% is not a particularly good return for pawnbroking with a LTV of 70%, it would be more like 30/40%,with a very low LTV of around 25% in the "real world. So yes if those returns were on offer and the LTVs in that area but they are not. Borrowers are receiving good returns but not those they should be, in return for their margin, that does not involve them in any risk, the platforms should be providing a much better service and more information.
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duck
Member of DD Central
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Post by duck on Aug 26, 2016 15:20:33 GMT
..... with a duck garnish .... OK I know my place but 'garnish', that is lowering the level a tad too low!
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on Aug 26, 2016 17:23:39 GMT
Borrowers are receiving good returns but not those they should be, in return for their margin, that does not involve them in any risk, the platforms should be providing a much better service and more information. I always read your posts as you seem more clued up than some of us, but your sentence above baffles me. Could you paraphrase?
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Aug 26, 2016 17:56:04 GMT
Borrowers are receiving good returns but not those they should be, in return for their margin, that does not involve them in any risk, the platforms should be providing a much better service and more information. I always read your posts as you seem more clued up than some of us, but your sentence above baffles me. Could you paraphrase? I believe he is trying to say that the % that we get is not great if you look at the risk, and to compensate the platforms should offer better comms. I don't quite agree with the first part of his observation; From my own research, I tend to agree that there are some loans on SS that (in my personal opinion) warrants a better return than 12% (the ones I avoid), but there are also loans that you would be lucky to get the generous 12% on the variable % platforms. Personally, I'm happy with this situation. The second part of dualinvestor observations I slightly agree with (in regards to SS anyway); comms aren't bad but could be better (e-mail comms for me are top notch), updates could be more accurate and loan overviews could be slightly improved.
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littleoldlady
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Post by littleoldlady on Aug 26, 2016 18:29:48 GMT
So
Borrowers Lenders are receiving good returns but not those they should be. In return for their margin, that does not involve them in any risk, the platforms should be providing a much better service and more information.
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Post by dualinvestor on Aug 26, 2016 18:43:33 GMT
Borrowers are receiving good returns but not those they should be, in return for their margin, that does not involve them in any risk, the platforms should be providing a much better service and more information. I always read your posts as you seem more clued up than some of us, but your sentence above baffles me. Could you paraphrase? Apologies, in eseence I am saying, in a reply to another poster who said that lender demands were "laughable" that they were entirely reasonable. My reasoning is thus 1 Lender returns are good (c.12%) but the platform are effectively acting as pawnbrokers. 2. Pawnbrokers charge 30/40% and operate on LTVs of c25%, if lender returns were on this level and LTVs similar the platforms would IMO not have any further information observations, but they are not. 3. Platforms do not provide any service to compensate for this discrepancy and do not do anything to justify their risk free margin. 4. By definition the LTVs should always be Forced Sale, the only time security will be relied upon is after a default, therefore the starting position for any sale will be Forced Sale in the eyes of potential purchaser. In most cases the platforms use Open Market Value (OMV) for their LTV calculation in the loan particulars. 5. Any property that is not complete probably has a slightly lower value than the ground it stands upon. Once again apologies for the earlier confusing sentence (and mixing up borrowers and lenders)
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littleoldlady
Member of DD Central
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Post by littleoldlady on Aug 26, 2016 21:36:07 GMT
I do agree (once I had decyphered it!)
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