cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 25, 2017 12:40:43 GMT
I always thought SS collected the interest for the term at the start of the loan and therefore as long as they are issuing new loans and people are investing then the merry-go-round keeps them nicely in the black. It will be very interesting to see what does actually go into default on the 1st Mar. I imagine one or two of the 180days+ loans will get date changes or repayments next week. Bit surprised there isn't a lot more available on the SM for the 3 over 180 days. They do collect the interest for the term - but it was always assumed that negative loans were having their interest serviced but this turns out not to be the case. I've always been surprised by the lack of activity on the SM with regards to the perceived "Bad Loans", and it makes me wonder what sort of expectations investors apply when they invest. The new 01/03 rules will affect the SM, but I think the payout from PBL020 will also have just as big an influence the market (could be negative or positive, depending on the type of payout is provided)
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ped
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Post by ped on Feb 25, 2017 12:47:29 GMT
Yeah a very interesting few months ahead C_D.
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MarkT
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Post by MarkT on Feb 25, 2017 13:35:56 GMT
And it will be fascinating to see how / if the PF is used.
I suspect a lot of investors are putting a lot of faith in it.
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ablender
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Post by ablender on Feb 25, 2017 19:29:13 GMT
Speculation: When the new default policy come in force, can we assume that the period 0 to -90 days are the safest of these loans? I base this on : "4. For the first 90 days of the Tolerance Period, we will continue to pay interest due to investors out of our own funds" This sounds to me as if SS if guaranteeing the loans. I appreciate comments on the above including from Paul savingstream . We might even go to the step that any non-comment from SS means that they agree. |
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jonah
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Post by jonah on Feb 25, 2017 20:08:35 GMT
Don't forget they can default at their discretion...
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ablender
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Post by ablender on Feb 25, 2017 20:09:49 GMT
Don't forget they can default at their discretion... I thought about that but is it written in the new policy?
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jonah
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Post by jonah on Feb 25, 2017 20:12:38 GMT
Don't forget they can default at their discretion... I thought about that but is it written in the new policy? Yes.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 25, 2017 20:43:33 GMT
Of they can - a default can happen for variety, of reasons - this new timeline is simply the grace period for borrowers, and new guides for investors (and a money saving measure for SS!)
A loan can default at any time, including within its term - always important to remember when investing!
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GeorgeT
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Post by GeorgeT on Feb 25, 2017 20:57:13 GMT
Of they can - a default can happen for variety, of reasons - this new timeline is simply the grace period for borrowers, and new guides for investors (and a money saving measure for SS!) A loan can default at any time, including within its term - always important to remember when investing! Considering that borrowers have to pay all the interest upfront for the whole loan term duration it would take an extraordinary circumstance for a loan to default within the originally agreed loan term when still in positive day territory. It hasn't happened yet.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 25, 2017 21:01:05 GMT
Of they can - a default can happen for variety, of reasons - this new timeline is simply the grace period for borrowers, and new guides for investors (and a money saving measure for SS!) A loan can default at any time, including within its term - always important to remember when investing! Considering that borrowers have to pay all the interest upfront for the whole loan term duration it would take an extraordinary circumstance for a loan to default within the originally agreed loan term when still in positive day territory. It hasn't happened yet. The borrowers doesn't pay any interest upfront, we do it for them. A default within term hasn't happened on SS (but has elsewhere - as noted by @leopardcat as I was typing this post), but that doesn't mean it won't. In fact, I wouldn't call it an extraordinary circumstance... > the security loosing its value (fire, flood etc) > a business can fail > a different charge can take action against the borrower > the borrower (if an individual) can become ill (or worse!) > Borrower going AWOL All the above can occur at any time and thus could cause a loan to default within term
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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 25, 2017 21:21:12 GMT
Of they can - a default can happen for variety, of reasons - this new timeline is simply the grace period for borrowers, and new guides for investors (and a money saving measure for SS!) A loan can default at any time, including within its term - always important to remember when investing! Considering that borrowers have to pay all the interest upfront for the whole loan term duration it would take an extraordinary circumstance for a loan to default within the originally agreed loan term when still in positive day territory. It hasn't happened yet. That we know of ...
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Feb 25, 2017 21:27:48 GMT
Considering that borrowers have to pay all the interest upfront for the whole loan term duration it would take an extraordinary circumstance for a loan to default within the originally agreed loan term when still in positive day territory. It hasn't happened yet. That we know of ... I'm sure some would have considered PBL081 as defaulted when the planning issues came to light (which I believe occurred when the loan was still had a positive term).
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ablender
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Post by ablender on Feb 25, 2017 21:33:21 GMT
I thought about that but is it written in the new policy? Yes. Yes, you are right found it now. "At our absolute discretion we will default a loan at any time throughout the Tolerance Period." Also there is the following on the last page: "23. Exceptions may be made to this policy where deemed appropriate by our Credit Committee." So it is not that much set in stone either.
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ablender
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Post by ablender on Feb 25, 2017 21:35:56 GMT
I'm sure some would have considered PBL081 as defaulted when the planning issues came to light (which I believe occurred when the loan was still had a positive term). I did, and got rid of it.
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GeorgeT
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Post by GeorgeT on Feb 25, 2017 21:52:27 GMT
Considering that borrowers have to pay all the interest upfront for the whole loan term duration it would take an extraordinary circumstance for a loan to default within the originally agreed loan term when still in positive day territory. It hasn't happened yet. The borrowers doesn't pay any interest upfront, we do it for them. A default within term hasn't happened on SS (but has elsewhere - as noted by @leopardcat as I was typing this post), but that doesn't mean it won't. In fact, I wouldn't call it an extraordinary circumstance... > the security loosing its value (fire, flood etc) - But as far as I know SS doesn't have the security revalued during the term. If they do, they don't tell us.Also all assets have to be insured against these risks, surely? That's basic DD.> a business can fail - Yes but if the security asset covers the loan amount, SS won't default it.> a different charge can take action against the borrower - Stick to loans where SS has first charge over the security. It's overriding isn't it? - They usually insist on a first charge.> the borrower (if an individual) can become ill (or worse!) - Yes people die, but again, as long as loan security is adequate this seems to satisfy SS.They do everything to avoid defaulting.> Borrower going AWOL - As above. Although, granted, considerable legal costs could be incurred in serving the necessary papers but if the security is sound and SS has a first charge over it?
All the above can occur at any time and thus could cause a loan to default within term Playing devil's advocate a bit - my comments are in blue.
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