PBL056 W***** Farm, Somerset DEFAULT

To answer the point by Oldgrumpy on this thread, yes I did buy into 064 but thankfully only in a small way (low thousands) so not much to worry about. I stopped buying on 10 October. At that time the loan was one of the few on the SM, everything looked OK on the updates, the neighbourhood is OK, and I was aiming to build a portfolio on SS of maybe 100k within a few months. How times change.

In buying into 064 I maybe did what many 'new' investors do - experiment with the site a little yet rely far too much on SS and their updates. I have considerable property holdings via FC and am well aware of the possible problems in all property markets including the possibility of a major systemic downturn - but 650k down to 450k indicates to me that 650 was never realistic. Did the valuers properly investigate the sale history of the land? Much lower figures have been indicated.

Some of the criticism of FC elsewhere is not warranted: if property loans extend for a few months and if interest continues to be paid then I'm happy. That is the nature often of building projects and leases - they can over-run and investors need to be aware of this. But I am not happy about what I regard as highly relevant information being either withheld or delivered only after months of delay.

ALL of this (056 etc) has the bad smell of deals that should maybe never have been offered to investors except perhaps with a warning relating to the history of some of the people involved. I have no idea who DP is.. But it is surely the job of SS - if they wish to continue to be trusted - to tell us not only the good points about borrowers but also the less good points. I'm sure they'd never lend to anyone who had bad points.

I note that people are still buying 064 - including 5000 4 days ago and 500 yesterday. Presumably they read the SS updates to the effect that all remains rosy in the pigsty.

I refer to my previous post here:

"if a borrower has a string of failed companies behind him, then we might be told. In other loan details we are told that (I paraphrase here) the borrower is 'a wealthy man, an highly experienced and successful property developer, a building surveyor with a 27 year history of developing similar sites', etc etc - so as to give prospective investors some extra degree of reassurance. If these 'positive' comments about borrowers are considered relevant to be included by SS in their information to lenders, maybe it could be argued that 'highly negative' characteristics of borrowers should be included by SS also - as an equally valid point of additional information upon which an investment decision could be based?"

The idea of a facebook page or similar, with existing investors invited to join, and outside of the control of the mods, might be one way of retaining the (in)valuable contributions from CD.

This is the information age - if CD is prepared to root around and is further prepared very kindly to make various truffles available for our collective delight, then as far as I am concerned he is to be congratulated. In this instance he is shining a light into dark corners that many of us would not know how to access.

On the point that "the borrower doesn't matter so long as the security is good" - that rather depends also on the valuations being sound.

In these and similar cases where borrowers are known (or should have been known?) to be so reputable, maybe the valuations used should be based more around what could quickly be realised if Inspector Knacker of the Yard came to call.

May we live in interesting times......

Does anyone know how to find out on the SS website whether a loan is under the old T&Cs (in which case I understand Lendy to be on the hook for losses) or the new T&Cs (in which case youall - I was never in this loan - are dependent on the generosity of the provision fund trustees).

Although not foolproof either check the Companies House records of the debtor, if the chargeholdr is shown as Lendy Ltd (eg PBL056) it is likely under the old terms, if as Saving Stream Security Holding Ltd (eg PBL064) it is likely under the new terms.  Therefore the cut off appears to be somewhere between the two, care should be taken as loans might have been given numbers in the pipeline and not been issued in chronological order.

Yes, true enough about soft drinks but a wealth of advice is freely available and people should know what high sugar drinks do to their teeth. As with smoking, we were told nearly 50 years ago and are free to accept or reject the medical and scientific advice.

In respect of P2P loans, to a large extent lenders must have trust in the platform under which their money is being lent. If updates "cannot be trusted" or as charliebrown puts it "not take them at face value" where does that leave SS credibility?

I have been sent details of DP and his 60 or so companies (many/most dissolved?) and I replied to the member who sent me the information in the following terms:

Thank you for those few kind words. Not with a disinfected 10 foot barge pole would I have touched loans related to people like this - had I known.



The real point here is (as I have recently posted on the 020 thread) is that valuations should properly have due regard to the borrower history. If a building or site development or other asset is far more likely to have to be sold at a fire-sale or similar valuation, then this should be reflected in the initial LTV valuation.



Fortunately I can afford to lose money (which is a necessary condition before anyone lends on any P2P platform) but that seems no good reason not to question the depth, validity or completeness (or otherwise) of information that P2P platforms provide. If (as they do) they encourage investments via glowing comments about borrowers, then they should also come clean about the decidedly dodgy (DD) history of other borrowers - then we can all make an informed decision.



The only other option is to assume that all loans offered by SS which do not have glowing recommendations as to the history and/or standing of borrowers do not include such statements for a very good reason. Maybe that is the case already and people need to be far more suspicious.



To a large extent P2P platforms rely on their lenders and the confidence that the platform inspires. There are after all, many alternative and competing platforms - and a simple calculation can show that even a small capital loss on a dodgy project can more than wipe out years of interest on good projects.

Moral obligations have nothing to do with most commercial transactions. Dog eat dog.

But the credibility of a platform in a competitive marketplace has much to do with platform behaviour, and that includes whether they treat their investors with the respect that arguably we deserve.

Copied from the 020 (in default) thread where valuations have been discussed in respect of loans to known decidedly dodgy (DD) borrowers.:



If Lendy/SS were negligent in obtaining and/or using valuations, does the question arise as to whether it is possible to contract out of negligence? The position on commercial contracts may be different to that in H&S legislation, for example. Do they owe lenders any duty of care?



I know even less about laws of agency.



At the moment.

seeingred:  Can you please illustrate the 'simple calculation' to which you refer above?

I ask because ISTM that it would take a large collection of small capital losses to wipe out years of interest on the good loans in a P2P portfolio.  The interest received each month from a diversified collection of, say, 25 equal-sized loans paying 12% p.a. would be the equivalent of a quarter of an individual loan's capital.  It therefore would appear that if the portfolio sustained a loss of 25% of a loan's capital every month, it still would not show an overall loss.  So the portfolio still would show some profit even if it sustained ten such losses in a year.

What am I doing wrong?

Same update for PBL064

I think this is the actual update for PBL064, and SS have just copy and pasted.  So we should see the industrial unit on the market soon

No receiver appointed for PBL064, so apparently not a forced sale.  All very strange.