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Post by jackpease on Feb 15, 2017 10:38:34 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! Unfortunately as we see from the PPI 'scandal' and the like, not reading terms and conditions, not caring, expecting something for nothing and general stupidity does not mean that in the future, the regulator will claim p2p loans were missold and the platforms ie us will all end up paying out because people thought all this was 'safe'.... Jack P
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sl75
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Post by sl75 on Feb 15, 2017 10:43:48 GMT
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. Per SteveT comment, I very much doubt that people who remain unaware of the change for over 6 weeks will be the type to be immediately reconciling every interest payment the moment it is received. At most, I'd expect a slow trickle of queries starting from that date rather than a sudden deluge, but this will of course be partly dependent on how well the change is communicated during the next month (in particular how easy it is to fail to notice the new status indicators that are promised from 1 Mar). There are probably still people who've not yet discovered that not all loans are 12% and/or that they're getting multiple chunks of the same DFLs - before those changes, the site could be quite effectively operated on "auto-pilot" by setting default pre-funding and ignoring all emails except the ones that ask you to resolve a negative balance, and there are undoubtedly users who have chosen to operate the site that way.
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gt94sss2
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Post by gt94sss2 on Feb 15, 2017 19:27:16 GMT
If loan parts are going to be 'stuck' in the SM for longer as a result of this change in policy (which I expect) SS will need to look again at their policy of not paying interest while parts are listed for sale..
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Post by reeknralf on Feb 16, 2017 10:31:28 GMT
Until discounts are introduced, SM liquidity will continue to be erratic, with periods of over-supply undermining confidence in the platform. Any market with no means to regulate supply and demand is inherently unstable. I know some investors like the simplicity of the current arrangement, but I'm not one of them.
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toffeeboy
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Post by toffeeboy on Feb 16, 2017 12:43:06 GMT
Until discounts are introduced, SM liquidity will continue to be erratic, with periods of over-supply undermining confidence in the platform. Any market with no means to regulate supply and demand is inherently unstable. I know some investors like the simplicity of the current arrangement, but I'm not one of them. It all depends on the purpose of the SM, I have no intention of trading in loan portions so I am happy that the SM is there if I should want to access my money before it is repaid. The money that I have in SS is long term investment money that I am happy to lend for longer than the loan period as long as it is paying interest. I only lend to borrowers that I chose after DD and therefore the SM on SS is exactly what I want it to be.
I don't use the other sites that allow you to effectively trade in the loans by offering discounts and I am happy that SS haven't gone down that route. I don't think that over supply undermines confidence at all in anyone that has done any kind of research into P2P, just how much has appeared on the SM as a percentage of the total SS loan book. I don't know but I am guessing it is only ever a small percentage as I have never seen a £100k available on any loan on the SM (typical I go into SS and there is now £200k+ on PBL073). Even now there is £530k on the SM but that is less than half a percent of the total loan book so a very insignificant amount over the whole platform so it is only people who don't like the way the platform works that claim confidence is undermined by less than half a percent.
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sl75
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Post by sl75 on Feb 16, 2017 12:54:41 GMT
If loan parts are going to be 'stuck' in the SM for longer as a result of this change in policy (which I expect) SS will need to look again at their policy of not paying interest while parts are listed for sale.. That seems to me very much of a "be careful what you wish for". If you think the SM is sluggish now, it'll have the potential to be many times more sluggish if there's no incentive for those near the start of a long sales queue to cancel a sale and wait for the queue to get a bit shorter... for those who are aware of the penalty, it can concentrate the mind a bit, at least when waiting to sell a loan that is still paying interest; how many days' interest is it really worth forfeiting in order to acheive a sale? In many ways, I like the fact that there's an incentive to cancel a pending sale - often I'm the one doing the cancelling (moving the queue forward faster for anyone behind me than it would if interest were paid on loan parts for sale), but I'd like to think I'd also benefit from it if I was willing to forfeit a few day's interest to retain my queue position. Another approach would be to upgrade it from what I assume was merely a side-effect of another design decision to an intentional design feature - highlight exactly how much interest has been "lost" and can be regained by going to the back of the sales queue... maybe even have a single "go to the back of the queue to regain £x.xx of accrued interest" button, rather than needing to do a separate cancel and sell.
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on Feb 16, 2017 13:08:18 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! Unfortunately as we see from the PPI 'scandal' and the like, not reading terms and conditions, not caring, expecting something for nothing and general stupidity does not mean that in the future, the regulator will claim p2p loans were missold and the platforms ie us will all end up paying out because people thought all this was 'safe'.... Jack P Have you missed out a 'not' after 'claim'?
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n
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Yet another Nick
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Post by n on Feb 16, 2017 14:22:12 GMT
Unfortunately as we see from the PPI 'scandal' and the like, not reading terms and conditions, not caring, expecting something for nothing and general stupidity does not mean that in the future, the regulator will claim p2p loans were missold and the platforms ie us will all end up paying out because people thought all this was 'safe'.... Jack P Have you missed out a 'not' after 'claim'? 'before' / 'after'?
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Post by jackpease on Feb 16, 2017 15:18:05 GMT
Unfortunately as we see from the PPI 'scandal' and the like, not reading terms and conditions, not caring, expecting something for nothing and general stupidity does not mean that in the future, the regulator will claim p2p loans were missold and the platforms ie us will all end up paying out because people thought all this was 'safe'.... Jack P Have you missed out a 'not' after 'claim'? Actually i hadn't - I think someone will come along in a few years time and with the benefit of hindsight say that ordinary people could not have forseen they might suffer large losses and that the risk warnings were inadequate. In my view the warnings *are* very clear BUT what is also clear that quite a few people are buying defaulted/near defaulted loans, I am not sure those risk warnings are having any effect and changes coming up will catch many out. For me the dead giveaway is when people talk about 12% loans and low risk in one sentence... Jack P
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twoheads
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Programming
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Post by twoheads on Feb 16, 2017 15:50:53 GMT
Interestingly, the wording in the now famous Overdue Loans Default Policy document only allows SS leeway to default a loan early.
The wording is very strict in that SS cannot delay a default once the 180 day tolerance period has expired.
Of course loans may be extended, but this requires the borrower to providing funds to cover the interest for the extension of the term.
All good stuff.
Then you get to: 23. Exceptions may be made to this policy where deemed appropriate by our Credit Committee.
This caveat, or universal get-out clause, seems to render the entire document next to useless.
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elliotn
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Post by elliotn on Feb 16, 2017 16:01:29 GMT
Interestingly, the wording in the now famous Overdue Loans Default Policy document only allows SS leeway to default a loan early.
The wording is very strict in that SS cannot delay a default once the 180 day tolerance period has expired.
Of course loans may be extended, but this requires the borrower to providing funds to cover the interest for the extension of the term.
All good stuff.
Then you get to: 23. Exceptions may be made to this policy where deemed appropriate by our Credit Committee.
This caveat, or universal get-out clause, seems to render the entire document next to useless. Potentially, although the saving grace might be that they now have to provide the update why within 5WDs so the evidence for any non-default should at least be available for scrutiny/judgement if they stick to their commitments/want to maintain platform credibility.
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Post by geraldine1210 on Feb 16, 2017 16:47:45 GMT
It is my opinion that an awful lot of people have either missed, or just skimmed the email. It did look like any normal update until you read more closely.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Feb 16, 2017 17:59:56 GMT
Have you missed out a 'not' after 'claim'? I think someone will come along in a few years time and with the benefit of hindsight say that ordinary people could not have forseen they might suffer large losses and that the risk warnings were inadequate. In my view the warnings *are* very clear BUT what is also clear that quite a few people are buying defaulted/near defaulted loans, I am not sure those risk warnings are having any effect and changes coming up will catch many out.
For me the dead giveaway is when people talk about 12% loans and low risk in one sentence...
Jack PI agree with this. But in order to mean this I still think you need a 'not' after 'claim' in your OP. Beware double negatives.
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Post by directlender on Mar 1, 2017 16:56:50 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. And so it begins: 3 loans now appear as "defaulted" (as predicted), with more to come this month it would seem...
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dp
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Post by dp on Mar 2, 2017 12:36:14 GMT
Is there now a faster way to deposit cash on to account to purchase on the SM? Or is it sent over and only available the following morning?
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