am
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Post by am on Oct 25, 2016 20:55:03 GMT
i,m still trying to see how this pbl matches the platform news 12/10 In order to increase the supply of high quality loans, we intend to begin offering investors the chance to invest in lower risk loans that will pay a lower monthly rate. This will allow us to offer lower cost finance to borrowers, which should feedback to a higher volume of even higher quality loan flow. 9% for 70% risk It's not a 70% risk. It's a 70% LTV. I don't know what a 70% risk would be, but a possible measure of risk would be the annualised expected loss of capital over a portfolio of similar loans (as stated on FC). There is not a one-to-one relationship between LTV and risk - not all 70% LTV's are equal, but more importantly a big element of the risk is whether we ever need to exercise the security in the first place. Evaluating the business plan/exit strategy is an important part of due diligence. Edit: The mean annualised expected loss of capital is not a particularly good measure, as the variance in the loss of capital is also important - a 50% chance of losing 8% of your capital and a 4% change of losing 100% of your capital have the same mean loss, but they're not the same. (The utility value of money is not a linear function for an individual - winning £10m or £20m on the lottery would in either case be more money than I could spend. Winning £1m on the Premium Bonds would be a nice accession of capital.)
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michaelc
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Post by michaelc on Oct 25, 2016 21:00:57 GMT
I've just noticed the best thing about this loan. Its the apt name of the applicant !
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treeman
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Post by treeman on Oct 25, 2016 21:18:58 GMT
I hate to say it but almost undoubtedly a noisy minority. <SNIP> I'd say that the information produced on this forum is valuable and is providing the platforms with a useful service (all for free!). A poll 6 months ago had 148 people indicating that they had investments in SS. (It's possible that some people were lying, but it's also possible that some forumites didn't participate in the pool.) SS seems to be running at about 2,000 lenders in each new loan. Round that up to 3,000 active lenders, as some will be picky, and others won't be rich enough to participate in each loan, and that has the forum as representing 5% of investors. That also matches my estimate from the same poll that the forum holds 5% (or more) of SavingStream's portfolio. Not forgetting the forum has a significant lurker population too. The SS board usually has at least as many lurkers as members; often 2 or 3 times as many. For example, as I type, there's 25 members and 41 guests viewing. So you could probably double that 5% to approx 10% - no majority for sure, but not insignificant. As for useful services; don't forget, for instance,the free beta-testing service provided by forumites, when SS were running in the new website a while back ............ 
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grahamg
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Post by grahamg on Oct 25, 2016 22:39:56 GMT
Ah but do Lendy know all about the wrinkles on that, I wonder? AC found out the hard way as I recall. Not knowing, and being caught out by 'errant' behaviour on the part of the borrower are two different things. I find it very difficult to believe that SS are not aware of the implications: that would be a huge red flag in general if they did not. Anyone live close enough to go see who is in residence
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 25, 2016 22:48:32 GMT
Im pretty sure P2P platforms arent allow to lend in the domestic mortgage market as they dont have the required permissions. I seem to remember that this was one of the issues that arose in the relevant AC case that the loan would not have been permitted if the borrower was an owner occupier.
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ablender
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Post by ablender on Oct 25, 2016 23:16:16 GMT
Im pretty sure P2P platforms arent allow to lend in the domestic mortgage market as they dont have the required permissions. I seem to remember that this was one of the issues that arose in the relevant AC case that the loan would not have been permitted if the borrower was an owner occupier. Can the owner move in once the loan is in place? Edit: Went to check the valuation report: 7.1 At the time of inspection the property did appear owner occupied. We have seen a tenancy agreement which we understand was to an unrelated party. The Applicant’s representative advises that the former tenant moved elsewhere. The Applicant’s representative advises that “this property is vacant”.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 25, 2016 23:27:05 GMT
Im pretty sure P2P platforms arent allow to lend in the domestic mortgage market as they dont have the required permissions. I seem to remember that this was one of the issues that arose in the relevant AC case that the loan would not have been permitted if the borrower was an owner occupier. Can the owner move in once the loan is in place? No, should be prohibited by the loan agreement and would be an instant default but SS would then have to gain possession which is where it gets very complicated.
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mikes1531
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Post by mikes1531 on Oct 26, 2016 0:32:07 GMT
Can the owner move in once the loan is in place? No, should be prohibited by the loan agreement and would be an instant default but SS would then have to gain possession which is where it gets very complicated. AIUI, that's a good description of what happened at AC. Something like a year later the lawyers are still fighting in court over whether the prohibition in the loan agreement was appropriate and whether the property occupier can be forced to vacate. To be fair, it's an expensive property. Which means the borrower has a lot to lose if they lose control of the property. Which means significant lawyer fees might be worth paying if it works out successfully for them. Perhaps they've even managed to find a 'no-win, no-fee' lawyer to take on the case.
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mikes1531
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Post by mikes1531 on Oct 26, 2016 0:41:07 GMT
I do love this forum but all these comments re 9% seem like hyperbole. what else are SS expected to do to gain more/better borrowers?? ISTM that if this loan was perceived by forum contributors as being a lowe risk than previous SS loans, then the comments about the9% would be minimal. ... be nice to know why the other lender didn't proceed : Do we know that the other lender didn't proceed? I tend to agree with the suggestion that the existing lender might have been in place for some time but now wishes to exit the loan. Or perhaps it was another bridging loan and the lender does not wish to extend it. It could be as simple as the loan having been taken out as an ordinary mortgage and the lender doesn't want to do a BtL mortgage.
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mikes1531
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Post by mikes1531 on Oct 26, 2016 1:02:02 GMT
I hope that savingstream read this thread to get a feel of the reactions for this loan. Are we reflective of the average invester or just a noisy minority? We're definitely a noisy minority! I expect SS are reading this thread and seeing the reactions. And watching the pre-funding settings. The great majority here may opt to give this one a miss, but who knows what the typical SS investor will do? I also expect SS consider this loan to be an experiment, and will see how it goes before releasing any more sub-12% loans. The loan will produce more useful feedback than this forum will. I expect it will have a noticeably smaller number of investors at launch, but it's small enough that I expect it to be 100% taken up via pre-funding. It will be interesting to see what happens when parts appear on the SM. Will they sit for a while waiting for a buyer?
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ablender
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Post by ablender on Oct 26, 2016 4:01:23 GMT
I expect it will have a noticeably smaller number of investors at launch, but it's small enough that I expect it to be 100% taken up via pre-funding. It will be interesting to see what happens when parts appear on the SM. Will they sit for a while waiting for a buyer? To add to this, I would like to see how this loan will fare in comparison with PBL86, another BTL with 67%LTV and 12% interest, which by the way, is at -35 days at the moment. Admittedly a different location but PBL86 is half the size. Another comparison can be made with PBL39 et al, whose valuation document says "Owner Occupied". Much larger loan, especially taking into account all 6 loans, but 12%, with all the delays and issues mentioned/uncovered about this loan. The history of this group of loans is interesting as it shows how the platform can proceed with a loan and later find out that there are this, that and the other.
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Post by spareapennyor2 on Oct 26, 2016 4:53:17 GMT
i,m still trying to see how this pbl matches the platform news 12/10 In order to increase the supply of high quality loans, we intend to begin offering investors the chance to invest in lower risk loans that will pay a lower monthly rate. This will allow us to offer lower cost finance to borrowers, which should feedback to a higher volume of even higher quality loan flow. 9% for 70% risk It's not a 70% risk. It's a 70% LTV. I don't know what a 70% risk would be, but a possible measure of risk would be the annualised expected loss of capital over a portfolio of similar loans (as stated on FC). There is not a one-to-one relationship between LTV and risk - not all 70% LTV's are equal, but more importantly a big element of the risk is whether we ever need to exercise the security in the first place. Evaluating the business plan/exit strategy is an important part of due diligence. Edit: The mean annualised expected loss of capital is not a particularly good measure, as the variance in the loss of capital is also important - a 50% chance of losing 8% of your capital and a 4% change of losing 100% of your capital have the same mean loss, but they're not the same. (The utility value of money is not a linear function for an individual - winning £10m or £20m on the lottery would in either case be more money than I could spend. Winning £1m on the Premium Bonds would be a nice accession of capital.) i thought it would have been a lower LTV for a lower %
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duck
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Post by duck on Oct 26, 2016 5:31:35 GMT
Not forgetting the forum has a significant lurker population too. The SS board usually has at least as many lurkers as members; often 2 or 3 times as many. For example, as I type, there's 25 members and 41 guests viewing. I doubt if this forum is any different to the one that I am a Mod on where +90% of the guests are bots/web crawlers and similar. When I'm bored I one touch ban a few just to see how long it is before they re-appear ..... life can be sad at times 
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star dust
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Post by star dust on Oct 26, 2016 8:01:18 GMT
Not knowing, and being caught out by 'errant' behaviour on the part of the borrower are two different things. I find it very difficult to believe that SS are not aware of the implications: that would be a huge red flag in general if they did not. Anyone live close enough to go see who is in residence I’m not sure this is a very good idea, does anyone know what the borrower looks like and how would anyone determine what exactly they are doing at the property if they thought they were there, are you suggesting someone should camp outside? Or are you proposing someone should ring the doorbell and ask? I think this is one of the reasons why borrowers should not be identified here or perhaps even by the P2P platform’s themselves. I have heard that at least one borrower refused a loan because they were harassed by prospective investor’s, although I have no information to be able to verify this myself. Going to have a look at a large development site build and reporting back on it is one thing spying on the occupants of a residential dwelling strikes me as quite another.
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adrianc
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Post by adrianc on Oct 26, 2016 8:24:24 GMT
I think this is one of the reasons why borrowers should not be identified here or perhaps even by the P2P platform’s themselves. Without borrower identification, due diligence is impossible. So you have to trust the platform's DD implicitly. FC (and probably others) have redacted borrower's names, but they've been quickly identified by comparing the accounts given in the loan particulars with publicly filed information - so, to maintain anonymity, those accounts can't be shared, either. Well, sorry, but I think various platforms have proved - over and over again - that their standards of DD are not necessarily the same as mine. Mine may vary to those of others. This is not, of course, the same as saying that borrowers should be contacted directly to request additional information directly. Of course they shouldn't. That's just basic common sense. If you want more information, request it from the platform. If the platform doesn't/can't/won't provide it, then that should be an end to it.
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