ped
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Post by ped on Sept 18, 2016 22:07:54 GMT
SS now has 23 negative loans and a further 8 to go that way in the next couple of weeks. I understand bridging finance is a little unpredictable but does this put pressure on the platform and is it something SS are becoming concerned about?
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Post by chrisuk on Sept 19, 2016 9:04:34 GMT
I don't know if it concerns SS but it certainly concerns me! I always try and sell my loan parts when they reach negative territory but other forum members have said we shouldn't be too concerned as it's the nature of the beast. Other members have told me if I don't like the heat then get out of the kitchen (which I thought was a bit harsh)!
Obviously with any type of investment that pays 12% interest there has to be some risk so don't invest more than you can afford to lose. The Financial Conduct Authority once said you shouldn't invest more than 10% of your savings with P2P platforms, although in the current climate I can understand people investing more than that. And diversify! Not just with SavingStream but on other platforms as well.
Hope that helps.
Chris
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adrianc
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Post by adrianc on Sept 19, 2016 9:43:02 GMT
I don't know if it concerns SS but it certainly concerns me! I always try and sell my loan parts when they reach negative territory but other forum members have said we shouldn't be too concerned as it's the nature of the beast. The only real difference between a part with (say) +90 days remaining and one with (say) -90 days remaining is that the +ve day part still has some pre-paid interest banked with SS, while the borrower on the -ve day loan is paying interest month-by-month. Even they're (probably) not hard-and-fast rules, and there may be clues in the loan updates as to whether the -ve day loan has paid a wodge of interest in advance. Either can still go south if the borrower fails.
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ben
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Post by ben on Sept 19, 2016 11:02:15 GMT
Nobody wants a default but common sense states it is going to happen so I only invest in the loans that I would be willing to hold in case of default, ie the security seems sufficient, there is plenty of loans with negative days that meet that criteria and also plenty of loans that have been recently issued that do not.
A lot of people seem to buy what they can and sell when the loan starts to get near end of the time, this is fine for now when secondary market is fine. But it will not always be this way and you might find yourself holding a loan you do not want as nobody else wants it.
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Post by martin44 on Sept 22, 2016 21:21:46 GMT
Are the negative day loans such a worry?
Personally i am still in two of them pbls 47 and 57, for obvious reasons, low LTV and positive updates.
Should i/we make decisions based on the SS updates?
edit.. Apologies, there seems to be another thread already running on this subject, although the general points are different.
Mods.. please feel free to move this thread out of the way if its just repeating recent threads.
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Liz
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Post by Liz on Sept 22, 2016 21:41:14 GMT
Should i/we make decisions based on the SS updates?  I think you know that answer to that question It is very worrying the large amount of negative loans and "can kicking" When we get more defaults, it could have negative impacts on SS and confidence in the site. If we see several defaults or a big loss on a loan, then I would worry a lot. I think we all hope to see a lot of loans repaid over the next few month. Edit: You are braver than me holding negative loans.
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ben
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Post by ben on Sept 22, 2016 21:48:50 GMT
I hold several negative loans, as the security is good, some of the more recent ones have worse security. Bridging loans rarely work to a set timescale.
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toffeeboy
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Post by toffeeboy on Sept 23, 2016 12:02:05 GMT
Are the negative day loans such a worry? Personally i am still in two of them pbls 47 and 57, for obvious reasons, low LTV and positive updates. Should i/we make decisions based on the SS updates? edit.. Apologies, there seems to be another thread already running on this subject, although the general points are different. Mods.. please feel free to move this thread out of the way if its just repeating recent threads. At the moment only one loan is actually in default, I believe, which means that all of the others whilst they have gone over their expected repayment date are still funding the interest on the loan so there is no need to panic as your money is still earning interest and the money will be repaid when the project is completed.
It has been said elsewhere that the loans shouldn't show negative days if the borrower has paid interest for the coming month but that could result in a lot changing constantly on the days so would lead to a lot of confusion.
As Ben has stated bridging loans very rarely work to a timescale and as long as the asset is there with a charge held over it then no one will lose much money. Even PBL 20 will return some if not all of the lenders money when the asset is sold and the Provision Fund will cover any lost capital (I believe as I am not sure if SS have confirmed this fact, but if not what does the PF actually do).
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lobster
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Post by lobster on Sept 23, 2016 12:49:00 GMT
Well right now there are 15 available loans, and every single one of them is a negative day loan.
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Post by Deleted on Sept 23, 2016 12:59:46 GMT
I think there is a place for negative day loans in ones portfolio, but.... the danger is the competence of the loan manager. On other sites there are far too many comments, we rang and the main contact is in hospital/out of the country/ etc. So I suggest negative days should be less than 10% of your portfolio and if you can maintain a healthy weighted average of positive days that would be sensible.
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toffeeboy
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Post by toffeeboy on Sept 23, 2016 17:21:08 GMT
Well right now there are 15 available loans, and every single one of them is a negative day loan. I am guessing you mean that there are 15 loans with parts available to purchase and all have negative days. There are currently approximately 70 live loans and about 20 of them have gone into negative days.
The reason there are only negative day loans available to purchase is because new loans with positive days are overly subscribed so the only time you will see them on the market is the small excess or if someone needs money back for some reason. These loans are available because some lenders get nervous about small positive and negative days, personally I don't see the problem as long as there is enough security in the asset to cover my money then the days shown don't really matter. IT all comes down to different opinions on the risks.
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stevio
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Post by stevio on Sept 23, 2016 18:39:32 GMT
I don't know if it concerns SS but it certainly concerns me! I always try and sell my loan parts when they reach negative territory but other forum members have said we shouldn't be too concerned as it's the nature of the beast. The only real difference between a part with (say) +90 days remaining and one with (say) -90 days remaining is that the +ve day part still has some pre-paid interest banked with SS, while the borrower on the -ve day loan is paying interest month-by-month. Even they're (probably) not hard-and-fast rules, and there may be clues in the loan updates as to whether the -ve day loan has paid a wodge of interest in advance. Either can still go south if the borrower fails. So this is what happens when over runs, the borrower still pays interest upfront, but just on a month by month basis? Does this add additional risk? I would guess that this is the point when the borrower is most stretched, they have had to pay the interest to date in advance, the project has probably reached close to the expected cost if not already over run. However I guess there might be some pre-sales on a development which might fund this final stretch? Admin can this thread be merged with the other of almost identical title?
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stevio
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Post by stevio on Sept 23, 2016 18:43:28 GMT
Nobody wants a default but common sense states it is going to happen so I only invest in the loans that I would be willing to hold in case of default, ie the security seems sufficient, there is plenty of loans with negative days that meet that criteria and also plenty of loans that have been recently issued that do not. A lot of people seem to buy what they can and sell when the loan starts to get near end of the time, this is fine for now when secondary market is fine. But it will not always be this way and you might find yourself holding a loan you do not want as nobody else wants it. I hear what your saying ben but if the loan does repay (which is more likely with negative loans), you could be stuck with a wad of cash, just when a lot of others have also and then the SM might be very scarce and if you want to get reinvested without a long wait or have other alternatives, you might be forced to invest in whatever is available. Have this happen a few times and your portfolio starts to downgrade.
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ben
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Post by ben on Sept 23, 2016 19:18:43 GMT
Nobody wants a default but common sense states it is going to happen so I only invest in the loans that I would be willing to hold in case of default, ie the security seems sufficient, there is plenty of loans with negative days that meet that criteria and also plenty of loans that have been recently issued that do not. A lot of people seem to buy what they can and sell when the loan starts to get near end of the time, this is fine for now when secondary market is fine. But it will not always be this way and you might find yourself holding a loan you do not want as nobody else wants it. I hear what your saying ben but if the loan does repay (which is more likely with negative loans), you could be stuck with a wad of cash, just when a lot of others have also and then the SM might be very scarce and if you want to get reinvested without a long wait or have other alternatives, you might be forced to invest in whatever is available. Have this happen a few times and your portfolio starts to downgrade. I personally would rather have cash sat in my account earning nothing then invested in a loan I did not want, however I get round this as I have other investments so if I get a repayment that I did not expect and nothing I wanted to invest I would invest the money out of p2p. I can only think of this happening once and even then if I had waited less then a week I could have reinvested it again. Even on SS for example for each £1,000 you are looking at losing about £2.50 a week before tax in interest.
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mikes1531
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Post by mikes1531 on Sept 23, 2016 22:29:27 GMT
Even PBL 20 will return some if not all of the lenders money when the asset is sold and the Provision Fund will cover any lost capital (I believe as I am not sure if SS have confirmed this fact, but if not what does the PF actually do). The reason there are only negative day loans available to purchase is because new loans with positive days are overly subscribed so the only time you will see them on the market is the small excess or if someone needs money back for some reason. These loans are available because some lenders get nervous about small positive and negative days, personally I don't see the problem as long as there is enough security in the asset to cover my money then the days shown don't really matter. IT all comes down to different opinions on the risks. There's generally an opportunity to buy parts in loans with positive terms remaining whenever a new loan is released. At that time, if people find that their new allocation is more than they want to increase their SS investment by, they will take the opportunity to reduce their position in some of their older -- but still with positive days remaining -- loans. A problem with holding negative day loans is that we don't know how long interest will continue to be paid. There's likely to be very little notice that a red notice is coming, and when it does interest switches from being paid monthly to being paid at resolution, and the SM for that loan is likely to dry up. As PBL020 has shown, resolution can take months to achieve. And until we see exactly what happens to PBL020, we won't have any idea how SS might actually allow the PF to be used. If the security sale proceeds are insufficient, investors could find that no interest is paid after the red notice appears. And we don't even know if all investors' capital will be returned with the help of the PF. While I'm sure savingstream would like for the PF to cover at least all capital, they have to balance the likely demands on the PF with its assets -- and their assets. If a number of loans look like they'd need support from the PF, they could decide that 100% return of capital just isn't feasible.
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