rxdav
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Post by rxdav on Oct 25, 2016 9:40:17 GMT
Hi littleoldlady,
That's pretty much what happens on some other P2P platforms when a loan is required to be extended beyond a point where initial investors could realistically be expected to stay in the loan without being given the option to exit. Of the five P2P platforms I use only LI does not have a secondary market of any description. Consequently, it has near zero liquidity beyond the points when loans are contracted to mature or on early repayment - and in the specific case here not even these options have been available. Hence, I am currently reducing my holding in LI until such time as an SM is made available (if ever?).
This particular loan matures on 13 December - quite close now - after its second three month extension (so now a year term, initially contracted for six months). It will be interesting to see what happens at this time if the borrower is not in a position to repay - very much an acid test of LI from my perspective. If not repaid on or before that date then there are only two options that will satisfy me, either relist the loan and let me exit or default the loan and get on with selling the security. If they go for another extension then I will be pulling out of LI totally as soon as I am able - most private investors like me need adequate liquidity (and there is currently no shortage of other sound P2P platforms available).
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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 25, 2016 19:45:18 GMT
I don't know of any platform that will let investors exit unless there are others willing to take over one way or another, either a SM or relisting with repayment delayed until the relist is filled. If you do please tell. I don't see where the cash could come from unless the platform had huge working capital that it was prepared to risk.
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rxdav
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Post by rxdav on Oct 26, 2016 8:19:36 GMT
Hi littleoldlady,
I think you are missing my point - it's the lack of liquidity that I allude to. If I hold a loan/loan part on SS for example, I can sell that loan/loan part on the SM at any time. I accept there has to be someone willing to buy it - but the reality is that there is - I do it regularly to churn my portfolio to meet my self imposed criteria. BUT, and this is the point, on SS (an all my other P2P platforms) I have that option available to me.
On LI there is no secondary market - hence I have to wait until a loan matures or is paid back early - and I accept this limitation of this platform when I buy into a loan. However, what I don't/didn't buy into was the unanticipated multiple extensions of a loan - in this example by 100% (so far!!) of its initially contracted term. In the absence of an SM I believe it is incumbent on LI not to trap loan holders and effectively hold them hostage to the vagaries of their loan team.
I will wait until 13 December when this loan matures again (for the third time). If I am not offered a potential exit at this juncture (either immediately by LI relisting the loan, or alternatively by calling a default) I will exit LI in totality as soon as I am able.
I have no issues with LI and have been content with their platform - but they are only one of five P2P platforms I use and their on-going lack of an SM (and hence comparable liquidity with other platforms) is now becoming too great a weakness for me to accept.
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rxdav
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Post by rxdav on Oct 28, 2016 20:12:02 GMT
Well - I'm afraid it seems I will have to rename this thread:
Henceforth it should become: Extensions on extensions on extensions (x3?)!! Subsequent to asking of this loans status almost at the point of it's THIRD maturity (13 Dec) I regret it is a case of 'press replay' (again)!!
I have determined I will not be held hostage to an organisation that is demonstrating continuing reluctance to default a delinquent loan and have informed LI that I will be withdrawing all funds (I am already 40% out) subsequent to this decision. MoneyThing are already the recipients of the repatriated funds and will substitute LI as the fifth of my five P2P platforms.
Lenders will be delighted to hear that LI are 'hopeful' of an eventual positive outcome (but not half as much as I am I suspect)!! Sales of high end properties are proving difficult to sell (hey - that's news!?) and it seems we might not get all our capital back under a distressed sale. Which imho is code for the valuation was optimistically high and the LTV means it will be a nett loser to lenders - and consequently we don't want such public exposure as a distressed sale will make LI look foolish. Now I'm not whining here - I accept this happens and it's all part of the risk profile. However, I want out but the continuing lack of an SM means repayment, refinancing or default are the only options. I would actually like a vote (as happens on AC in similar circumstances) so I can have a direct say in how my funds (and yes, LI should remember they are my funds) should be administered in this situation. I would follow a majority decision - sadly, democracy is not de rigueur at LI.
I have suggested that a penal rate of interest should be levied (as happens on some other platforms) to focus the borrowers mind and assuage my growing frustration - I'm not holding my breath. I once got caught in FC in a similar situation but now use their SM to exit loans prematurely - but that's not an option on LI.
LI have paid the lowest returns of my P2P platforms these past twelve months and it is increasingly obvious that the risk/reward ratios are untenable. So - be aware - LI it seems will put LI first, borrowers second - and lenders most definitely a poor third in their hierarchy of priorities.
We live and we learn (don't use a P2P platform that has no SM) - and the exit for this lender now beckons.
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Post by carol167 on Oct 29, 2016 11:57:37 GMT
Despite it's faults and current bad patch with the new website, I still intend to invest here.
My advise is to not put anymore here that you would need in the short to medium term.
Property loans without an SM are always potentially going to run on.
I agree an SM would be good and in the best interests of all concerned, but with lack of speedy resolution of website issues I'm not going to hold my breath on major new developments like that in the short term.
As a P-T-P platform, Lend Invest is probably not going to be the first choice for a lot of people but for me it's a useful part of my overall portfolio which falls nicely into the middle ground category of interst rates.
I currently invest in 9 platforms with similar amounts in each ranging from the lower rates such as Zopa right up to the 12%ers.
I'm investing for income over the longer term and what matters most to me is the overall average rate of return of my entire loan book and I actively manage things to attempt to maintain my predefined goal.
Things ebb and flow and I might be looking to increase or reduce my holdings by as much as 25% in any one particular platform accordingly but it would take something quite major to make me want to sell out completely in any one platform.
Spread, depth and long term view is the key.
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rxdav
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Post by rxdav on Oct 29, 2016 17:14:30 GMT
Hi carol167,
I understand your adherence to LI - you are as I was, merely using it as a tool to enhance your diversity of P2P platforms (and more broadly my overall asset allocation) and hence associated investment risk?
However, I now consider that LI is outstanding solely for its mediocrity - not exactly where you would elect to be if asked to make a polarising decision I suspect? With regard to Bridging Loans (hence, exempt the likes of Zopa etc - who are a totally different beast) they are offering very poor returns by market standards. But I felt they were a relatively low risk platform - hence I had a moderate stake in this platform. However, recent events have convinced me they are not as low risk as I first thought - hence my comment about the unacceptably adverse risk/reward ratio I now believe exists - and hence my pending exit.
I wish you well.
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bababill
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Post by bababill on Oct 30, 2016 7:26:45 GMT
Well - I'm afraid it seems I will have to rename this thread:
Henceforth it should become: Extensions on extensions on extensions (x3?)!! Subsequent to asking of this loans status almost at the point of it's THIRD maturity (13 Dec) I regret it is a case of 'press replay' (again)!!
Can you kindly clarify. You mentioned in your first post that the loan was extended a second time by three months on September 13. That would make it an expiry of Dec 13. But above you say it was extended a third time? So the new expiry is March 13 2017?
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rxdav
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Post by rxdav on Oct 30, 2016 7:50:53 GMT
Hi bababill,
I have emailed LI asking if this loan will be repaid on or before 13 Dec and received an extensive response from Joel citing myriad extenuating circumstances which can be synthesised down to one word - no (it wont be).
So - looks like yet another extension of as yet unknown length.
Should this loan now be reclassified as an interest only mortgage of seemingly infinite term (as opposed to a Bridging Loan of fixed/known term) !?!?
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rxdav
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Posts: 354
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Post by rxdav on Dec 13, 2016 19:17:59 GMT
Well - much to my amazement this loan was repaid today, although I had previously been told it would not be? Given it's unlikely that two multi-million properties have been sold and finances settled in the past couple of weeks I can only assume the borrowers have refinanced elsewhere (I'm pleased to say)? Whatever the reason I have now had several thousand released which was looking like being tied down for an indefinite period - so thank you LI. However, the lesson I have learned remains unchanged - don't invest in any P2P platform which does not offer lenders a potential early escape via a secondary market (as none of us know with total certainty what the future holds).
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