dan83
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Post by dan83 on Oct 13, 2016 11:22:32 GMT
This is all one big con to make SS more profit. In that case, I guess you'll be taking your money elsewhere. That will show them. How dare they offer lenders only 10% or 11% interest?! I'll take 10 or 11%, but I'm not risking my money on 7% or below. The investors stands to loose money, savingstream make money lending out money out, if it goes pear shaped they don't loose. That is my reason for not wanting lower rates.
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oldgrumpy
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Post by oldgrumpy on Oct 13, 2016 11:25:52 GMT
What made me smirk was SS's phrase " even higher quality loans". I recall that when MT announced that they would be introducing loans at 10% and 11% rather than 12%, there was comment but no rant/rave furore*. I wonder why. * hyperbole ..... I'm thirsty  |
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ben
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Post by ben on Oct 13, 2016 11:34:27 GMT
In that case, I guess you'll be taking your money elsewhere. That will show them. How dare they offer lenders only 10% or 11% interest?! I'll take 10 or 11%, but I'm not risking my money on 7% or below. The investors stands to loose money, savingstream make money lending out money out, if it goes pear shaped they don't loose. That is my reason for not wanting lower rates. If a loan goes pear shape they may not lose financial as it is our money but they lose the confidence of investors, if no one investsthey can not complete loans. Also if a loan goes bad it costs them money and time to recover the loan. So it is in there interest for loans to work. Sometimes a laon paying lower interest can be better value then a loan paying 12%, so to suggest that you will not risk your money at below 7% is probably a bit short sighted, I have far more in investments at below 7% then I do above 7%.
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averageguy
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Post by averageguy on Oct 13, 2016 11:43:50 GMT
There's a lot of angst on this thread..sitting patiently to see what actually happens  |
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dovap
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Post by dovap on Oct 13, 2016 11:49:33 GMT
What made me smirk was SS's phrase " even higher quality loans". yes imagine that the mind boggles 
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Post by meledor on Oct 13, 2016 12:09:01 GMT
To quote the email:
'This will allow us to offer lower cost finance to borrowers, which should feedback to a higher volume of even higher quality loan flow.
During September alone there was an opportunity to lend at least another £25m but because our funds were too expensive we did not win the business.'
So their funds are too expensive to source all the business they would like to do. They want to reduce interest rates they receive from loans and by doing this that will increase the volume of 'even higher quality loans'. : I think Jaydee 's point was that SS's statement can be interpreted as meaning that they wanted to reduce the interest borrowers pay (in total) rather than say they wanted to reduce the interest or fees that borrowers pay to them (SS). If SS don't shave their own income from borrowers at the same time then their share of the money received from borrowers (their margin) goes up and the share we lenders/investors get goes down. We'll have to wait and see whether we really get 'higher quality loans'. That SS comment simply could be spin intended to appeal to those who believe you always get what you pay for -- so lower interest rates must mean higher quality loans.
You may right in your interpretation but Jaydee's comment "This is just a way of savingstream increasing their bottom line." suggested to me that he thought SS were not going to pass on the reduction that we suffer.
What SS make on a loan does not really concern me and I do not see this level of scrutiny of other platforms' profit margins. In fact I would be surprised if SS had not been reducing their profit margin on the larger deals over the last 12 months in an effort to remain competitive.
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Post by dodgeydave on Oct 13, 2016 12:10:36 GMT
What made me smirk was SS's phrase " even higher quality loans". I recall that when MT announced that they would be introducing loans at 10% and 11% rather than 12%, there was comment but no rant/rave furore*. I wonder why. * hyperbole ..... I'm thirsty I think the meant some high quality loans better than the suspicious loans that are in the pipeline and recently launched. Bring on next week and the Somerset office block outcome.
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am
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Post by am on Oct 13, 2016 12:13:52 GMT
What made me smirk was SS's phrase " even higher quality loans". I recall that when MT announced that they would be introducing loans at 10% and 11% rather than 12%, there was comment but no rant/rave furore*. I wonder why. * hyperbole ..... I'm thirsty Do you recall that it was only a year ago the SS was (nearly) everybody's darling. (My prediction, if forum awards are voted on again at the end of this year, is that MT will be the big winner this time.)
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tombraider
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Post by tombraider on Oct 13, 2016 13:01:25 GMT
I don't mind slightly lower rates but I do expect those to have genuine security in a LTV better than the 60-70% and I mean a genuine first charge security. I factor in a default percentage into my investing and this relies on a LTV, % interest and provision fund to cover a shortfall should one default. If you drop the % interest then the LTV must drop accordingly. I presume thats what a quality loan implies?
MT doesn't have a provision fund from what I can remember (correct me if I'm wrong there) so when comparing SS to MT its slightly distorted as there is no fund. whether this fund will cover anything has yet to be tested.....
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am
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Post by am on Oct 13, 2016 13:08:32 GMT
I don't mind slightly lower rates but I do expect those to have genuine security in a LTV better than the 60-70% and I mean a genuine first charge security. I factor in a default percentage into my investing and this relies on a LTV, % interest and provision fund to cover a shortfall should one default. If you drop the % interest then the LTV must drop accordingly. I presume thats what a quality loan implies? MT doesn't have a provision fund from what I can remember (correct me if I'm wrong there) so when comparing SS to MT its slightly distorted as there is no fund. whether this fund will cover anything has yet to be tested..... The quality of a loan is not completely determined by the LTV. Firstly the business plan and exit strategy matter (a high quality loan is one in which we're not likely to have to rely on the security). Secondly there is matter of additional security, such as debentures and personal guarantees. Thirdly the uncertainty in the valuation depends on the nature of the property - for a given LTV the less uncertainty in the value the better the loan quality. Fourthly differently classes of property have different price volatility - for a given LTV the less volatile the price the better the loan quality. That's why residential and BTL mortgages are cheap compared to commercial mortgages.
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tombraider
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Post by tombraider on Oct 13, 2016 13:14:06 GMT
from my cynical point of view that a default is a fairly likely outcome sooner or later I feel the need for a lower LTV to compensate for the lower returns. I think a glass half full outlook is appropriate with investing in p2p. But yes exit route etc all factor in to this.
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Liz
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Post by Liz on Oct 13, 2016 13:38:40 GMT
In that case, I guess you'll be taking your money elsewhere. That will show them. How dare they offer lenders only 10% or 11% interest?! I have already started my wind down along with many others. You can blindly accept all the bull that they throw out but some of us do read between the lines. I doubt very much if SS will change their criteria for loans. we will continue to see the same rubbish with the good. I agree. Instead of getting a basket of different risk loans, we will now be left with just the worst loans for our 12%. I also think that during barron times SS can just drop the rate, they will say they won't but i'm not buying it. You will end up with loans priced on liquidity and not risk. If it isn't broke then fixing it may end up breaking it. Now we just need FS to wake up, start paying monthly interest and adopt a SS style SM and they will nick a load of investors from this change.
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dandy
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Post by dandy on Oct 13, 2016 14:02:02 GMT
I have already started my wind down along with many others. You can blindly accept all the bull that they throw out but some of us do read between the lines. I doubt very much if SS will change their criteria for loans. we will continue to see the same rubbish with the good. I agree. Instead of getting a basket of different risk loans, we will now be left with just the worst loans for our 12%. I also think that during barron times SS can just drop the rate, they will say they won't but i'm not buying it. You will end up with loans priced on liquidity and not risk. If it isn't broke then fixing it may end up breaking it. Now we just need FS to wake up, start paying monthly interest and adopt a SS style SM and they will nick a load of investors from this change. Hi I am new to this site but invested in P2P for about 2 years. I do not understand the uproar over this. On Octopus for example the rate is sub 5% for similar type loans and also Lendinvest where it is 6-8% - both perhaps slightly lower LTV. Surely SS can drop rates to 10% and it would still be a no brainer as opposed to many other platforms. I know there is slightly higher risk on some loans but most seem to be fine.
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Post by savingstream on Oct 13, 2016 14:30:24 GMT
In that case, I guess you'll be taking your money elsewhere. That will show them. How dare they offer lenders only 10% or 11% interest?! I have already started my wind down along with many others. You can blindly accept all the bull that they throw out but some of us do read between the lines. I doubt very much if SS will change their criteria for loans. we will continue to see the same rubbish with the good. Always the cynic...
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oldgrumpy
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Post by oldgrumpy on Oct 13, 2016 14:32:51 GMT
dandy Welcome to the think-pot Have a leisurely read through all the threads discussing current loans on the SS book. Yes, some are more positively regarded, but you may like to know the reasons why some are not.
"...we will now be left with just the worst loans for our 12%...."Liz ... And I'll bet my next bunch (hand) of u-no-wot that neither you nor I will be investing in them. 
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