adrianc
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Post by adrianc on Feb 14, 2017 13:24:19 GMT
I'm really not sure it is, y'know. So you sell a loan part. Or have you? Can you withdraw the money or buy other parts with it? Or do you have to wait until the buyer sorts themselves out or it bounces back? A one hour delay isn't much - it's not hard to see how a delay outside of the buyer's control could stop a transfer-in arriving in that time. It would be a horrific mess from the seller's point of view. It'd be the same as the situation you have at the moment with a partially sold loan. Not really. You can buy the unsold remainder of the part-sold part, and instantly get the money for the bit that has already sold. It's sold-sold, and won't come back to you.
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Post by directlender on Feb 14, 2017 17:23:24 GMT
Am I the only one less concerned about the announcement that INPL is being withdrawn and more concerned that, at the current rate, roughly 13 loans may well go over the 180 days tolerance period and DEFAULT between now and March 2017?? (assuming SS apply their new overdue loans default policy, made available in the same 10 Feb announcement). Some of those 13 loans might be extended (from borrower's cash or refinance), but I doubt all will be. Incidentally, if I am reading this correctly, this also also means that interest due on loans that are 90 days over "will not be credited until, for example, the sale of the security completes", with the final interest credit dependent upon the amount of repayment that SS are ultimately able to secure. Genuine questions: 1. how will investors react when their loans are marked "TP Accruing” and interest in not paid monthly (assuming that's not already the case)? 2. how will investors react if/when a bunch of loans are moved to the "default loans" section, as they should under the new policy? 3. how will the press react if/when a bunch of loans are move to the "default loans" section and, more importantly, how will investors react to (negative) press announcements? Keen to hear your thoughts... |
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 14, 2017 17:33:57 GMT
Am I the only one less concerned about the announcement that INPL is being withdrawn and more concerned that, at the current rate, roughly 13 loans may well go over the 180 days tolerance period and DEFAULT between now and March 2017?? (assuming SS apply their new overdue loans default policy, made available in the same 10 Feb announcement). Some of those 13 loans might be extended (from borrower's cash or refinance), but I doubt all will be. Incidentally, if I am reading this correctly, this also also means that interest due on loans that are 90 days over "will not be credited until, for example, the sale of the security completes", with the final interest credit dependent upon the amount of repayment that SS are ultimately able to secure. Genuine questions: 1. how will investors react when their loans are marked "TP Accruing” and interest in not paid monthly (assuming that's not already the case)? 2. how will investors react if/when a bunch of loans are moved to the "default loans", as they should under the new policy? 3. how will the press react if/when a bunch of loans are move to the "default loans" and, more importantly, how will investors react to (negative) press announcements? Keen to hear your thoughts... The announcement is long overdue - there is a line of thought amongst members that there are several loans on SS that have de-facto defaulted, but no policy was in place to confirm this. Defaults are to be expected with high rate returns and should not be masked or hidden from investors. How the market reacts, on both the negative duration loans and all other loans will be interesting and important to keep a close eye on; personally, I'm hoping that it will make investors more aware of the risks attached to these loans I'm not concerned about defaults - I am concerned about the lower rates that SS are now getting away with (with no reduction in risk).
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Post by directlender on Feb 14, 2017 21:46:36 GMT
cooling_dude I share your concern: a rate drop that does not mirror reduced risk is concerning - but it's perhaps to be expected in instances like these where demand outstrips supply and both the primary and secondary markets are heavily oversubscribed (reel 'em with juicy rates, get them hooked and then drop the rates to something more sustainable... classic). Also, consider this (possible?) scenario if you will: it's March end 2017, SS have enforced their new policy and a handful of defaults are formally registered on the platform. That's a 500% uptick on the current 1 default. Forums are quickly ablaze with concerned members, the press/P2P industry jumps on the bandwagon and talks about 'how SS is one of the more risky outfits and how a flight to quality / p2p consolidation will ensue' (which is pretty much what would happen IMO). Soon thereafter, a fair proportion of SS investors suffer nervous jitters and move to reduce their exposure, quickly. The secondary market which was awash with demand is now now awash with supply (of varying loan types, but especially anything close to or past its 'sell by date'). More loans being available on the secondary market results in yet more loans being made available on the secondary market - a vicious cycle in which supply drives supply (I explain: if the supply of loans on the secondary market goes from an average remaining term of 15 days to 40 days following 'bulk' selling... ask yourself: how long before you and I and others sell our 50/60/70 days remaining term loans to avoid crystallizing any potential default losses?). The numbers I use are purely fictitious, to exemplify the argument... but you get the point... Bottom line: a big uptick in official defaults could mean a big uptick in secondary market supply, meaning some (/most?) investors would get partly locked in until demand picked up again... assuming it picked up again. The deeper the 'panic sale' the more extensive the lock in. The secondary market on SS is a tool for the more savvy investors to manage risk. If it falters, then risk is that much harder to manage. There's a reason why SS rarely record heavily overdue loans as defaulted - above is one of them IMO.
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Post by directlender on Feb 15, 2017 4:39:04 GMT
Thanks for your thoughts, directlender , and a genuine welcome to the forum.  Just out of curiosity, do have a particular angle here? Are you a member the press or otherwise seeking information to publish? Do you have a current or former affiliation with a P2P or other financial organisation? Do you invest with SS? (I hope you don't mind my asking.) Thank you Like everyone else on this forum (I hope!) I am here to have meaningful conversations as a bona fide SS investor. Haha, no, not a member of the press (I'd make a lousy journo!), not seeking information to publish, don't work/never have worked for any P2P/financial organisation - I do invest across a range of direct lending platforms (very sizeable portfolio so I'm attentive), but that's the only skin I have in the game.
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jonah
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Post by jonah on Feb 15, 2017 6:29:03 GMT
What you say directlender seems to be almost inevitable and a self fulfilling prophecy based on what we currently know. I am already not picking up any shorter term loans for a short hold but have to hope that someone still buys what I need to sell. We may not have to wait for March to see some changes. Whilst the SM is a long way from the highs of 2016, availability of loans continues to rise and has done since the announcement. I think this is tracked somewhere...
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Post by directlender on Feb 15, 2017 6:45:54 GMT
What you say directlender seems to be almost inevitable and a self fulfilling prophecy based on what we currently know. I am already not picking up any shorter term loans for a short hold but have to hope that someone still buys what I need to sell. We may not have to wait for March to see some changes. Whilst the SM is a long way from the highs of 2016, availability of loans continues to rise and has done since the announcement. I think this is tracked somewhere... Correct - however, the new default policy does not come into effect until 1 March. Will be interesting to see whether SS take a more formal stance on defaults and record them as so on their platform (I'm not convinced they will)
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ablender
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Post by ablender on Feb 15, 2017 7:12:41 GMT
Whilst the SM is a long way from the highs of 2016, availability of loans continues to rise and has done since the announcement. I think this is tracked somewhere... Correct - however, the new default policy does not come into effect until 1 March. Will be interesting to see whether SS take a more formal stance on defaults and record them as so on their platform (I'm not convinced they will) If they don't, then why have a policy? I am surprised that the sell up of loans that you mentioned a few posts back has not increased more already. The only significant sale at the moment is PBL73.
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will
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Post by will on Feb 15, 2017 7:28:40 GMT
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Post by directlender on Feb 15, 2017 7:53:19 GMT
Correct - however, the new default policy does not come into effect until 1 March. Will be interesting to see whether SS take a more formal stance on defaults and record them as so on their platform (I'm not convinced they will) If they don't, then why have a policy? I am surprised that the sell up of loans that you mentioned a few posts back has not increased more already. The only significant sale at the moment is PBL73. Give it time, I suspect most investors haven't seen the new default policy let alone thought through possible implications.
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Post by geraldine1210 on Feb 15, 2017 7:58:21 GMT
If they don't, then why have a policy? I am surprised that the sell up of loans that you mentioned a few posts back has not increased more already. The only significant sale at the moment is PBL73. Give it time, I suspect most investors haven't seen the new default policy let alone thought through possible implications. Large chunk will have ignored, skimmed, or not understood the email. I guarantee that SS will be deluged by March 2 with queries about non payment of interest.
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pom
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Post by pom on Feb 15, 2017 9:29:24 GMT
Like many others I think this plus the default changes can't help to change the dynamic of the SM....and after last summer I've been expecting it to get congested again for a while...the only real question in my mind is will it be a blip or more permanent. Have already been gradually reducing my holdings thru natural wastage and lack of juicy new deals to half what it was in the summer I'm going to have to pay a lot more attention to what I'm holding - with so many other platforms I've probably relied too much on you guys to spot things that might make loans difficult to shift. So I may end up concluding SS aren't worth it any more - then again fewer juicy deals means less to keep track of anyway !! Well we shall see...at least I don't have anything anywhere near -ve territory right now so have a bit of time.
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sl75
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Post by sl75 on Feb 15, 2017 10:07:58 GMT
Large chunk will have ignored, skimmed, or not understood the email. I guarantee that SS will be deluged by March 2 with queries about non payment of interest. Why? The new policy doesn't come into effect until March 1, so we would be expecting to receive the February interest as normal... it'd be April 1 when we would be first expecting to directly observe non-paid interest, by which time there will have been ample opportunity to observe the other changes on the website for how loan status gets marked, etc.
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Post by geraldine1210 on Feb 15, 2017 10:23:19 GMT
Large chunk will have ignored, skimmed, or not understood the email. I guarantee that SS will be deluged by March 2 with queries about non payment of interest. Why? The new policy doesn't come into effect until March 1, so we would be expecting to receive the February interest as normal... it'd be April 1 when we would be first expecting to directly observe non-paid interest, by which time there will have been ample opportunity to observe the other changes on the website for how loan status gets marked, etc. I stand corrected on date. I should have said April 1. I don't think that everyone will be aware of/understanding the changes by that date. I am still certain there will be a large amount of interest queries.
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SteveT
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Post by SteveT on Feb 15, 2017 10:24:45 GMT
The sort of lenders that don't read General Update emails are probably the sort that don't pay much attention to their monthly interest payments either!
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