elliotn
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Post by elliotn on Feb 12, 2017 1:59:47 GMT
Is anyone able to clarify if you sell a loan that's older than 90 days but not defaulted do you lose the interest accrual ? If so what happens does the buyer receive it ? Is this policy only for new loans or does it include current loans with negative days if so does it mean they are going to default some loans and other loans will not pay interest only accrue it. Some clarity is needed ! The policy only starts on the 1st - you accrue interest but will only have it paid to your account when the borrower 1. sends interest to cover that period, 2. the borrower repays in full, 3. The assets sell sufficiently covering the cap + interest (if the loan defaults). Of course if the loan defaults and the sale of the assets fail to cover the interest (and capital) you may never see your interest (depends on the PF) Selling on the SM makes no difference - you keep all the interest up to the point it sells, but you'll have to wait for the above (if they occur at all)for the interest that occurred while the loan is in negative 90-days to be paid. 4 Refinance on SS where default and extension interest is sufficiently prefunded.
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elliotn
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Post by elliotn on Feb 12, 2017 2:07:17 GMT
Since it occurs on the 1st of the month (so all previous interest has been paid) my guess is the policy will effect all present and future loans. This may open a can of worms if people already holding some loans suddenly start accruing interest instead of paying, if these same people do not manage to sell their parts before the new rules kick in. I would surely object if I was in that position. I say new rules because all negative day loans were paying interest unless formally defaulted. A fair point. For the litigious it may come down to whether c3 weeks notice is TCF and whether the precedent of paying overdue interest is sufficient to compel SS to continue to do so for exisiting loans in the previous absence of a T&C stating SS was liable for it. My professional exams in law were only of an introductory nature so will defer to someone more able to answer than myself. Edit - perhaps SS may be vulnerable where lenders have been directly told that loans were being serviced by the borrower unless defaulted and invested on that basis.
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am
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Post by am on Feb 12, 2017 9:45:22 GMT
Is anyone able to clarify if you sell a loan that's older than 90 days but not defaulted do you lose the interest accrual ? If so what happens does the buyer receive it ? Is this policy only for new loans or does it include current loans with negative days if so does it mean they are going to default some loans and other loans will not pay interest only accrue it. Some clarity is needed ! The policy only starts on the 1st - you accrue interest but will only have it paid to your account when the borrower 1. sends interest to cover that period, 2. the borrower repays in full, 3. The assets sell sufficiently covering the cap + interest (if the loan defaults). Of course if the loan defaults and the sale of the assets fail to cover the interest (and capital) you may never see your interest (depends on the PF) Selling on the SM makes no difference - you keep all the interest up to the point it sells, but you'll have to wait for the above (if they occur at all)for the interest that occurred while the loan is in negative 90-days to be paid. I thought that you kept the interest up to the point where you put in on the SM, not up to then point it sells.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 12, 2017 12:07:46 GMT
The policy only starts on the 1st - you accrue interest but will only have it paid to your account when the borrower 1. sends interest to cover that period, 2. the borrower repays in full, 3. The assets sell sufficiently covering the cap + interest (if the loan defaults). Of course if the loan defaults and the sale of the assets fail to cover the interest (and capital) you may never see your interest (depends on the PF) Selling on the SM makes no difference - you keep all the interest up to the point it sells, but you'll have to wait for the above (if they occur at all)for the interest that occurred while the loan is in negative 90-days to be paid. I thought that you kept the interest up to the point where you put in on the SM, not up to then point it sells. You do (unless you cancel the SM listing before the end the month) - all this kerfuffle about the new negative loan rules I forgot about the SM, which still presumably applies
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ben
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Post by ben on Feb 12, 2017 13:07:58 GMT
This may open a can of worms if people already holding some loans suddenly start accruing interest instead of paying, if these same people do not manage to sell their parts before the new rules kick in. I would surely object if I was in that position. I say new rules because all negative day loans were paying interest unless formally defaulted. A fair point. For the litigious it may come down to whether c3 weeks notice is TCF and whether the precedent of paying overdue interest is sufficient to compel SS to continue to do so for exisiting loans in the previous absence of a T&C stating SS was liable for it. My professional exams in law were only of an introductory nature so will defer to someone more able to answer than myself. Edit - perhaps SS may be vulnerable where lenders have been directly told that loans were being serviced by the borrower unless defaulted and invested on that basis. If they have given out deliberatley false information then yes they can be held liable,i.e in this case stating that borrowers were paying interest and they were not. As that would change you investment strategy.
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andyb
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Post by andyb on Feb 12, 2017 21:02:43 GMT
Wow this sucks....
I sold out of ss a few weeks back but after a change of heart and a rethink decided to add some funds again, now this.
Back to the original plan and as Duncan Bannatyne would say, I'm oooout
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ablender
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Post by ablender on Feb 12, 2017 23:53:19 GMT
I had a deeper look at the current loan book [date 12/2/17] (Excluding PBL020)
If the new rules had to be applied today [12/2/17]:
11 loans will be in tolerance period paying interest - total investment of £15,014,223.00
14 loans will be accruing interest - total investment of £12,069.500
2 loans will be defaulted - total investment of £637,000.00
Total : 27 loans - £27,720,723.00
On 1/3/17 [assuming no extra payments made on the loans involved]
14 loans will be in tolerance period paying interest - total investment of £22,775,224.00
15 loans will be accruing interest - total investment of £12,799,500.00
3 loans will be defaulted - total investment of £3,612,000.00
Total: 32 loans - £39,186,724.00
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elliotn
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Post by elliotn on Feb 13, 2017 8:52:00 GMT
I had a deeper look at the current loan book [date 12/2/17] (Excluding PBL020) If the new rules had to be applied today [12/2/17]: 11 loans will be in tolerance period paying interest - total investment of £15,014,223.00 14 loans will be accruing interest - total investment of £12,069.500 2 loans will be defaulted - total investment of £637,000.00 Total : 27 loans - £27,720,723.00 On 1/3/17 [assuming no extra payments made on the loans involved] 14 loans will be in tolerance period paying interest - total investment of £22,775,224.00 15 loans will be accruing interest - total investment of £12,799,500.00 3 loans will be defaulted - total investment of £3,612,000.00 Total: 32 loans - £39,186,724.00 Interesting analysis abl, thank you. Understandable why SS would want to draw a line under paying interest looking at the above maturing of the loan book. No noteworthy fall-out for loans accruing from March on SM yet although presumably holders used to receiving monthly interest courtesy of SS's generosity may want to re-position (unless they're such BHs this only reflects a small % of their investments). SM with cleared funds only may make that re-positioning harder from March if demand for >90D overdue loans drops. Or will we not find out until semi-engaged lenders look at their new interest on April 1st?
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Post by geraldine1210 on Feb 13, 2017 11:56:26 GMT
I had a deeper look at the current loan book [date 12/2/17] (Excluding PBL020) If the new rules had to be applied today [12/2/17]: 11 loans will be in tolerance period paying interest - total investment of £15,014,223.00 14 loans will be accruing interest - total investment of £12,069.500 2 loans will be defaulted - total investment of £637,000.00 Total : 27 loans - £27,720,723.00 On 1/3/17 [assuming no extra payments made on the loans involved] 14 loans will be in tolerance period paying interest - total investment of £22,775,224.00 15 loans will be accruing interest - total investment of £12,799,500.00 3 loans will be defaulted - total investment of £3,612,000.00 Total: 32 loans - £39,186,724.00 Interesting analysis abl, thank you. Understandable why SS would want to draw a line under paying interest looking at the above maturing of the loan book. No noteworthy fall-out for loans accruing from March on SM yet although presumably holders used to receiving monthly interest courtesy of SS's generosity may want to re-position (unless they're such BHs this only reflects a small % of their investments). SM with cleared funds only may make that re-positioning harder from March if demand for >90D overdue loans drops. Or will we not find out until semi-engaged lenders look at their new interest on April 1st? I suspect some people won't even twig until 1 April.
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ablender
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Post by ablender on Feb 13, 2017 17:32:33 GMT
I am not sure if anyone has raised the following question or if its answer is already in the documents released by SS.
I was thinking, what will happen for a loan than goes beyond one of the boundaries during a particular month?
Ex. A loan goes beyond -90 days on the 20th of a month
1. Will I receive interest for 20 days and accrue the rest
2. Will I receive the interest fro the whole of that month - given that the month started with interest paid
3. Will it end up with the whole month accrued.
Similar thinking can be done for the -180 days boundary.
Ideas??
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ablender
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Post by ablender on Feb 13, 2017 18:09:34 GMT
I am not sure if anyone has raised the following question or if its answer is already in the documents released by SS. I was thinking, what will happen for a loan than goes beyond one of the boundaries during a particular month? Ex. A loan goes beyond -90 days on the 20th of a month 1. Will I receive interest for 20 days and accrue the rest 2. Will I receive the interest fro the whole of that month - given that the month started with interest paid 3. Will it end up with the whole month accrued. Similar thinking can be done for the -180 days boundary. Ideas?? Why over-complicate your life stressing out over this SS tweak or that SS tweak why not just up sticks and go where you can just concentrate on making money? On the whole I like SS. I have been investing here for almost 2 years now. I just need to understand how the new system will change my approach, if a change is required in the first place.
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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 Feb 13, 2017 19:35:10 GMT
I am not sure if anyone has raised the following question or if its answer is already in the documents released by SS. I was thinking, what will happen for a loan than goes beyond one of the boundaries during a particular month? Ex. A loan goes beyond -90 days on the 20th of a month 1. Will I receive interest for 20 days and accrue the rest 2. Will I receive the interest fro the whole of that month - given that the month started with interest paid 3. Will it end up with the whole month accrued. Similar thinking can be done for the -180 days boundary. Ideas?? The precedent set by the previous application of this policy PBL020 IRC was that interest was paid up until the point the new policy was implemented and then accrued form that point on. Interest earnt for the days of the month prior to the implementation was paid at the end of the month as normal. I would check the threads relevant to PBL020/its updates/email sent out if you have it or just ask SS as they may have changed their minds. Edit PL020 paid up to 27th May, the month the new policy for defuailt interest was introduced.
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grahamg
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Post by grahamg on Feb 14, 2017 1:27:30 GMT
Since it occurs on the 1st of the month (so all previous interest has been paid) my guess is the policy will effect all present and future loans. This may open a can of worms if people already holding some loans suddenly start accruing interest instead of paying, if these same people do not manage to sell their parts before the new rules kick in. I would surely object if I was in that position. I say new rules because all negative day loans were paying interest unless formally defaulted. And i had a nice reply from savingstream "When the default policy comes into effect on 1st March it will apply to all existing loans and all future loans." So worms it is!
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elliotn
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Post by elliotn on Feb 14, 2017 5:47:10 GMT
From grahamg's confirmation I would prepare for all loans >90D overdue loans to start accruing from Mar 1st and from ilmoro's example for loans that cross the threshold afterwards to pay interest up until D-90 in that month and then accrue from D-91.
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mikes1531
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Post by mikes1531 on Feb 15, 2017 21:48:53 GMT
I thought that you kept the interest up to the point where you put in on the SM, not up to then point it sells. You do (unless you cancel the SM listing before the end the month) - all this kerfuffle about the new negative loan rules I forgot about the SM, which still presumably applies This could become a policy with considerable impact if SM liquidity drops significantly when the changes come into effect. Up to now, investors didn't have to worry very much about how much interest they might lose when putting parts on the SM because it rarely took long to sell a part. If the typical time from offering to selling stretches to a week or more, SS may need to rethink this policy, which made some sense when SS effectively were funding SM sales via INPL but might not after INPL is gone and all SM purchases are funded by cash sitting in the SS client account.
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