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Post by Financial Thing on Jan 12, 2017 3:19:35 GMT
This has probably been highlighted in other threads but is anyone concerned about the increasing number of loans that have passed their loan terms? Does anyone have any inside info as to how SS is handling these loans?
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Post by jackpease on Jan 16, 2017 8:57:34 GMT
Well there's certainly a growing number on the secondary market this morning! This is a presentational problem for SS - they have decided to handle overdue loans by displaying them as clearly overdue and it looks a mess. FC and current darling-Moneything seem to simply repackage rather than put them as overdue, so it all looks fine and dandy.
SS's transparent but self depreciating presentation does call a spade a spade so it is far easier to avoid perma-extended bad uns
Jack P
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GeorgeT
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Post by GeorgeT on Jan 16, 2017 12:05:08 GMT
Well there's certainly a growing number on the secondary market this morning! This is a presentational problem for SS - they have decided to handle overdue loans by displaying them as clearly overdue and it looks a mess. FC and current darling-Moneything seem to simply repackage rather than put them as overdue, so it all looks fine and dandy. SS's transparent but self depreciating presentation does call a spade a spade so it is far easier to avoid perma-extended bad uns Jack P i've would have said the use of the words saving stream and transparent next to each other is oxymoronic . Also I have never been struck by savings stream's tendency to call a spade a spade. Quite the opposite if anything.
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Post by trentenders on Jan 16, 2017 12:47:33 GMT
More a deluxe shovel than a spade - and one that is situated in storage facility within a much sought-after corner of a prestigious allotment, thereby justifying it's increased market value.
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bramhall17
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Post by bramhall17 on Jan 16, 2017 21:00:56 GMT
Yes I'm very aware of the situation but not currently seriously concerned. However, now the new man is on board the good ship SS, it would be timely for him to focus on getting more comprehensive and prompt updates on the loans that are significantly overdue. There is now some disquiet on this forum about a few of these loans and IMO this needs urgent clarification as to how SS is going to close them out. Property projects always involve various parties,often complex and frequently over-run. Whether you call it Investor Relations or simply a duty of care I'd have thought it would be in their interests to be seen to be in control. Maybe anything over say 60 days overdue needs a revised communications protocol.
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am
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Post by am on Jan 16, 2017 22:30:53 GMT
Well there's certainly a growing number on the secondary market this morning! This is a presentational problem for SS - they have decided to handle overdue loans by displaying them as clearly overdue and it looks a mess. FC and current darling-Moneything seem to simply repackage rather than put them as overdue, so it all looks fine and dandy. SS's transparent but self depreciating presentation does call a spade a spade so it is far easier to avoid perma-extended bad uns Jack P As I understand, overdue loans should be performing loans (the borrower is paying interest monthly) that have overrun their official duration but have not been formally extended (with the borrower paying the interest for the extension period in advance). But there have been allegations here that SS aren't reliable about updating the loan duration for the formal extension. And suspicions have been expressed that there are non-performing loans in there as well. So overdue loans may include 3 distinct categories of loan. A lot of MoneyThing loans are for working capital, and are intended to be rolled over at the end of their term, so they're not overdue. The art and supercar loans are more comparable to SS's extended loans. As for looking fine and dandy, look at the loan titles for the series of extensions for the Pressbury bridging loan. FC has quite a few overrunning property loans. In some ways they're worse than SS - they can't collect (or at least pay) interest on overdue loans prior to the eventual repayment, or even pay the last scheduled interest payment (surely it's not that hard to fix their IT systems). Nor do they let us see valuation reports. The positive difference is that there are relatively few loans that we expect the borrower will be unable to repay. (There are two problematical London loans, and I'm rather nervous about North Devon, which is more of an SS style loan.)
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Post by Deleted on Jan 17, 2017 2:17:21 GMT
Yes, negative days are more than a presentational issue aren't they? Since SS take interest up front, positive days implies the upfront interest is still paying the lenders, negative days does have a real meaning...
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lobster
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Post by lobster on Jan 17, 2017 7:20:17 GMT
Indeed, it would be helpful if savingstream were to disclose for which (if any) negative day loans the interest has been paid up front. |
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ablender
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Post by ablender on Jan 17, 2017 7:37:29 GMT
If I recall correctly, this issue has been dealt with in another thread and my understanding is that if a borrower is paying interest monthly, the date is updated (making it positive) other wise we can understand that the borrower is not paying interest.
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ilmoro
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Post by ilmoro on Jan 17, 2017 8:18:00 GMT
And round we go again! from the well flogged & definately dead now horse's mouth (reported here. link in FAQ)  "The only customers that are not paying interest, have been defaulted unless there is an excellent case for not doing so i.e a sale or refinance is imminent and there is demonstrably enough equity within the property to pay our interest on redemption." They said it, up to everyone to decide if they believe it |
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SteveT
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Post by SteveT on Jan 17, 2017 9:17:03 GMT
And round we go again! from the well flogged & definately dead now horse's mouth (reported here. link in FAQ) "The only customers that are not paying interest, have been defaulted unless there is an excellent case for not doing so i.e a sale or refinance is imminent and there is demonstrably enough equity within the property to pay our interest on redemption." They said it, up to everyone to decide if they believe it ... Which is supported by updates across a number of negative day loans. Eg. from 3 weeks ago on PBL006 (-112 days): " Borrower continues to service their interest payments and we are confident the Borrower has substantial assets so we are comfortable for this loan to continue." However it would certainly make sense for SS to change / add something on the Live Loans list to differentiate between loans past their due date but up-to-date with interest and loans that have not stumped up further interest. For example, I see nothing in the updates to suggest the Gloucs loans have been paying interest over the many months that the refinance has been "imminent"
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Post by Deleted on Jan 17, 2017 9:31:02 GMT
My assumption has been that, for negative days, SS may or may not be receiving further interest on an ongoing basis.
And for situations where SS has received another lump up-front, they reset the loan to positive.
But again, its about the consistency isn't it... who knows
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toffeeboy
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Post by toffeeboy on Jan 17, 2017 15:39:06 GMT
Currently the SS live loan book is £155.854mm, of which £33.861mm have negative days. So, at worst case if none of the borrowers for the negative day loans are paying interest, then 21.7% of the loan book is in arrears with a total accrued interest owed to lenders of £799k (lender rate x neg days / 365) that SS has stepped in to replace. How much margin did SS make upfront on these currently impaired loans? SS stated in 2015 that they charged borrowers interest of 18%, 1.5%/month, upfront. Now competitive pressures may have reduced that rate but I'll assume it's correct. If we assume all the impaired loans were 180 day loans at initiation, then SS would have taken £3.005mm in interest upfront and paid out £2.003mm by expiry, leaving a margin of £1.001mm. If we assume all these impaired loans were 360 day loans at initiation, then SS would have taken £6.011mm in interest upfront and paid out £4.008mm by their expiry term, leaving a margin of £2.003mm. In all likelihood, therefore, SS has enough bid-offer margin to step-in to replace missed cashflows, even in the above worst case scenario where none of borrowers for these loans are now paying interest. Of course this ignores all SS costs but equally I've ignored the SS initial set-up fee of 4% (albeit 2% of that to the broker) on these impaired loans. So this 'back of the envelope' calculation would imply that SS is unlikely, yet, to have any major cashflow issues with its current negative day loan book (of course that doesn't mean it's not eroding their profitability). *SS take a vast margin out of lenders (think of it like a fund with a 6% management fee and 33% performance fee and you wouldn't be far wrong) but the flip-side is that the margin does provide SS with a significant cashflow cushion. *Very good point samford71 , the fairly recent introduction of the SS policy of 'rate variation' would further assist the business in maintaining its margins so perhaps it is also we as investors who are playing a (growing?) role in servicing interest payments on past due loans? Should this be the case then SS would find themselves walking a fine line with respect to Portal competitiveness with respect to offered returns to investor's, much has been written to forum by Formulite's about this and the desire by some to drift funds away in pursuit of higher yields and a the attainment of a greater sense of 'security' elsewhere. Past due loans and the handling thereof by SS is IMHO a matter of key importance to us all. so you think that SS is funding all negative loans do you? so where they add comments about renegotiating for a month or three months you don't think they are getting more interest from the borrower but actually putting their own money in to cover late loans. They aren't very good business men if they are doing that, they have security over the assets so that they don't have to prop up loans. The only loan that isn't being serviced is PBL020 which is why it has been moved to default.
I believe that there is one loan (maybe more I don't know) that SS have funded the latest interest themselves but they are confident that their is enough equity in the asset for them to get their money back.
If you want to cast dispersions on SS then do so with PBL081 where they are lending the borrower more money not just funding the loan but again they are happy that there is enough equity to cover both the lenders money and their own so I don't see it as a problem.
If it is something that bothers you then you know where the door is. I don't mind people with gut feelings about problems with SS but to come on saying they are walking fine line as a business when it is obvious rubbish is scaremongering and I don't see the point at all. Unless you have any proof that they are funding all negative day loans themselves can I kindly suggest you keep your conspiracy theories off this site as we like to deal in facts not accusations.
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ilmoro
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Post by ilmoro on Jan 17, 2017 15:53:30 GMT
*Very good point samford71 , the fairly recent introduction of the SS policy of 'rate variation' would further assist the business in maintaining its margins so perhaps it is also we as investors who are playing a (growing?) role in servicing interest payments on past due loans? Should this be the case then SS would find themselves walking a fine line with respect to Portal competitiveness with respect to offered returns to investor's, much has been written to forum by Formulite's about this and the desire by some to drift funds away in pursuit of higher yields and a the attainment of a greater sense of 'security' elsewhere. Past due loans and the handling thereof by SS is IMHO a matter of key importance to us all. so you think that SS is funding all negative loans do you? so where they add comments about renegotiating for a month or three months you don't think they are getting more interest from the borrower but actually putting their own money in to cover late loans. They aren't very good business men if they are doing that, they have security over the assets so that they don't have to prop up loans. The only loan that isn't being serviced is PBL020 which is why it has been moved to default.
I believe that there is one loan (maybe more I don't know) that SS have funded the latest interest themselves but they are confident that their is enough equity in the asset for them to get their money back.
If you want to cast dispersions on SS then do so with PBL081 where they are lending the borrower more money not just funding the loan but again they are happy that there is enough equity to cover both the lenders money and their own so I don't see it as a problem.
If it is something that bothers you then you know where the door is. I don't mind people with gut feelings about problems with SS but to come on saying they are walking fine line as a business when it is obvious rubbish is scaremongering and I don't see the point at all. Unless you have any proof that they are funding all negative day loans themselves can I kindly suggest you keep your conspiracy theories off this site as we like to deal in facts not accusations. PBL056 is the loan you refer to, borrower not covering interest and is in default (reciever appointed). SS was covering the interest for 2-3 months but that expired end of Dec so current status is unclear.
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jcb208
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Post by jcb208 on Jan 17, 2017 18:58:08 GMT
Would it not be better if savingstream updated the loan time remaining to take in account the borrowers who service the interest .An example being 006 which is 112 days over due but the last update quoted "Borrower continues to service their interest payments and we are confident the Borrower has substantial assets so we are comfortable for this loan to continue."
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