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Post by trainman on Sept 30, 2016 18:46:36 GMT
new to p2p investing
loan has defaulted, not guaranteed to get investment back
i understand that any short fall will or might be met by using the provision fund.
cant get why people are still buying into this loan or am i missing something
any advice will be appreciated,,
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Sept 30, 2016 18:54:38 GMT
new to p2p investing loan has defaulted, not guaranteed to get investment back i understand that any short fall will or might be met by using the provision fund. cant get why people are still buying into this loan or am i missing something any advice will be appreciated,, What loan are you referring to? PBL020 has defaulted, whereas PBL056 hasn't defaulted (but is in administration...). The reason investors are still investing in the above is vast. I will try to list small selection... > Misreading the big red box notice (it dies IMHO indicate that interest will be paid out after the security sells; whereas this is plausibly not the case) > In the case of PBL056, the investor not understanding the situation > Investor not partaking or simply viewing this forum (same applies to the updates) > Investors simply putting their absolute faith in the platform > Excess Alchohol...
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Post by mrclondon on Sept 30, 2016 19:02:15 GMT
(Assuming you are referring to PBL020) Put simply there is insufficeint information in the public domain to base investment decisions on, but some people will be seeking out additional information.
Here is a scenario, which may or may not be relevent .... you are a HNWI (high net worth individual) targetting lending £50,000 per loan you participate in. There are relatively few platforms that allow you to place investments of such a size, FS and TC being the obvious examples at present that have a number of loans yielding say 9% plus that will accept investments of £10k plus per loan. It will be very hard to achieve a sensible level of diversification with just those 2 platforms.
You are aware that there is £120k of availability on a SS loan that is defaulted but in the later stages of recovery. It would be worth your while making the necessary enquires to follow the progress of that recovery, and make investment decisions based on the information you receive.
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Post by trainman on Sept 30, 2016 19:03:03 GMT
refering to loan 20
been red boxed,,, there didnt seem to be any sold parts for ages then suddenly parts being bought,whilst still in default
thanks
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Jeepers
Member of DD Central
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Post by Jeepers on Sept 30, 2016 19:47:58 GMT
IMO all lenders in PBL 20 should be accuring at least 18% interest. The higher risk deserves a higher reward. SS are charging a much higher default rate of interest so why should this be passed on to the lenders who are ultimately the ones taking the risk?
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Post by Deleted on Sept 30, 2016 21:39:09 GMT
IMO all lenders in PBL 20 should be accuring at least 18% interest. The higher risk deserves a higher reward. SS are charging a much higher default rate of interest so why should this be passed on to the lenders who are ultimately the ones taking the risk? This is funny. Who do you think is SS charging a 'default rate of interest'? Default means the borrower has defaulted from his obligations, i.e. does NOT want to pay anything at all (not a higher rate, and not even a standard rate).... For PBL20 there is a strong uncertainty and it is very likely investors will not receive interest (at least from the recovery of the asset).
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dovap
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Post by dovap on Sept 30, 2016 22:17:57 GMT
well the funny thing is that SS still offer the defaulted loan to be bought or sold
but it's backed up by the pf (if the updates on the pf are better than the standard updates)
still maybe we'll get a better idea on these pan out with the defaulted 56
(and 64 to follow?)
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mikes1531
Member of DD Central
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Post by mikes1531 on Sept 30, 2016 23:49:52 GMT
IMO all lenders in PBL 20 should be accuring at least 18% interest. The higher risk deserves a higher reward. SS are charging a much higher default rate of interest so why should this be passed on to the lenders who are ultimately the ones taking the risk? I really don't know what SS are charging this defaulting borrower. Do you? And until all the dust settles, I don't know whether the SS investors really are taking the risk, because this is one of the loans written under the earlier Ts&Cs, where investors were lending their money to the platform and the platform was lending to the borrower. If, in the end, the investors receive all they are owed despite there being a shortfall from the security sale proceeds, then it's SS/Lendy who will have taken all the risk of the loan.
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skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
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Post by skippyonspeed on Oct 1, 2016 9:07:26 GMT
(Assuming you are referring to PBL020) Put simply there is insufficeint information in the public domain to base investment decisions on, but some people will be seeking out additional information. Here is a scenario, which may or may not be relevent .... you are a HNWI (high net worth individual) targetting lending £50,000 per loan you participate in. There are relatively few platforms that allow you to place investments of such a size, FS and TC being the obvious examples at present that have a number of loans yielding say 9% plus that will accept investments of £10k plus per loan. It will be very hard to achieve a sensible level of diversification with just those 2 platforms. You are aware that there is £120k of availability on a SS loan that is defaulted but in the later stages of recovery. It would be worth your while making the necessary enquires to follow the progress of that recovery, and make investment decisions based on the information you receive. As I a do not fall into HNWI category, this is purely a guess, could any loss made here be used as an advantage, ie to offset a tax bill for example???
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Oct 1, 2016 9:11:47 GMT
(Assuming you are referring to PBL020) Put simply there is insufficeint information in the public domain to base investment decisions on, but some people will be seeking out additional information. Here is a scenario, which may or may not be relevent .... you are a HNWI (high net worth individual) targetting lending £50,000 per loan you participate in. There are relatively few platforms that allow you to place investments of such a size, FS and TC being the obvious examples at present that have a number of loans yielding say 9% plus that will accept investments of £10k plus per loan. It will be very hard to achieve a sensible level of diversification with just those 2 platforms. You are aware that there is £120k of availability on a SS loan that is defaulted but in the later stages of recovery. It would be worth your while making the necessary enquires to follow the progress of that recovery, and make investment decisions based on the information you receive. As I a do not fall into HNWI category, this purely a guess, could any loss made here be used as an advantage ie to offset a tax for eg??? Yes - They can offset as losses against earnings to lower their impending tax bill (although if the amount is recovered, it will be taxed at a later date).
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Post by chrisj on Oct 1, 2016 9:41:26 GMT
looks like 3 people have taken 50K between them in recent times. Maybe they know something the rest of us dont, cannot think of any other reason why it would be bought in those sorts of quantities.
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Post by Deleted on Oct 1, 2016 11:16:13 GMT
looks like 3 people have taken 50K between them in recent times. Maybe they know something the rest of us dont, cannot think of any other reason why it would be bought in those sorts of quantities. The best possible case in PBL20 would be anyway a full recovery + interest. Not sure why they would need to choose to invest massively that particular (defaulted) loan against others progressively appearing on the SM or in the pipeline. The only thing I can think of is someone using automatic distribution of money (A small fund? An automated financial tool?) over any single existing loan without any DD.
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freddy
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Post by freddy on Oct 1, 2016 11:30:48 GMT
Said it before but like a broken record, I'll say it again. I will be pi**ed off a little if the PF is used to pay interest from the date of default. All investors were paid interest up to that date and the full return of capital invested should be the only expectation. Ridiculous (IMHO) that a defaulted loan can be purchased after it has defaulted with the new bestows expecting to recieve interest from the PF of sale value doesn't cover it.
The PF should be used solely as a vehicle for covering investment shortfall. Any investor in this high risk game should be more than happy receiving their initial investment back after default. If all interest is also covered then where exactly is the risk, other than platform failure.
i think it likely that more defaults are on the horizon and will be more than miffed if I were told that their were sufficient funds in the PF to cover my initial investment of others before me had received their full investment + interest.
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mikes1531
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Post by mikes1531 on Oct 1, 2016 18:19:30 GMT
freddy: I suppose I'll be sounding like a broken record as well, but... It's important to remember that PBL020 was written under SS's old Ts&Cs, where SS investors were lending their money to SS/Lendy and SS/Lendy was lending to the borrower. If, in this case, the investors do not receive all their capital back plus all accrued interest, then it will be SS/Lendy that will have defaulted. SS/Lendy are no doubt well aware of this and may wish to avoid this. To do that, they'd have to dig into their own pocket and make up the losses. If they're going to do that -- and we won't know if they are until it happens -- might they be better off using the PF to cover the whole loss (including accrued interest) and then topping up the PF? It would cost them the same as the other scenario, but they'd be demonstrating the benefit of the PF. (Unless, of course, they'd be worried about setting a precedent.) PS. As near as forum members can tell, PBL056 also was written under the old Ts&Cs, whereas PBL064 was written under the new ones.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Oct 1, 2016 18:59:40 GMT
It's important to remember that PBL020 was written under SS's old Ts&Cs, where SS investors were lending their money to SS/Lendy and SS/Lendy was lending to the borrower. If, in this case, the investors do not receive all their capital back plus all accrued interest, then it will be SS/Lendy that will have defaulted. . Are you sure about that? ISTM that other platforms lend the money first and then sell parts of the loan to investors with the risk going with the part, not remaining with the platform. But I am not a lawyer.
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