DFL017 - ** H***r R*w, Old Marylebone Road DEFAULT

Contributors seem to be moving away from the subject.   We are where we are with this loan so let's focus on it.   Now exposed lenders  need to be reminding Lendy either individually or corporately that they expect a robust approach from Lendy to the borrower.  An active approach needs to followed where investors are regularly kept informed of developments  - let's have these things out in the open where they can be seen and evaluated.  Lenders need to be reassured that the borrower has been told in no uncertain terms  that dire financial consequences will certainly befall them if they do not get their house in order.

Lenders need  forcibly to remind Lendy that without us they don't have a business and for lenders confidence in the platform is everything.  For those who have the contacts the Media can be a powerful lever to pull.   This is a large loan and investors have much at stake.   Lendy have had more than enough time to get their act together.   So far the only inkling that lenders have had is that the equivalent of a reminder letter has been sent to the debtor followed by suspension from the secondary market.

I am becoming a little disappointed by others harking on about due diligence.   Due diligence does not reveal all.   Most particularly it does not reveal intention.

Like a dagger in my heart

DD reveals more than if you do no DD (and that can include intention - maybe not always, but you can't find what you don't look for).  DD in this loan revealed quite a lot, and for me was to be avoided at all cost; simples

The "intention" is an interesting note in this case.  I think that we're not being told the entire truth with this loan, as the borrower most definitely intended on proceeding with the development as if you look at the planning you will note 2 PP applications to remove 2 conditions to allow for development to start, with plans timelines and all sorts of other required documents that certainly showed intention.

As a footnote, if anyone wants to look at the above-noted PP, you'll see a good example of what information LY should be providing borrowers

Whilst Due Diligence may not reveal intention, it may well reveal a number of things that can help you draw your own conclusion about the worthiness of the borrower, the credibility of the exit plan or any number of other factors that will sway your mind as to whether to invest or not.

I'm sorry to hear you or others may have money trapped in this investment, but I rest well at night knowing I didn't invest based on my findings about the borrower, associated people/companies, the viability of the development and my overall gut feeling of the loan. 

Platforms rarely provide the information you need to make an informed decision on the viability of a loan, and while ever people don't carry out DD, they will fill.

I think I've invested in every single 12% loan that has defaulted or been suspended. I was in the garden centre, Somerset, Glos, Gateside, IOW etc etc. But I sold out before the brown stuff hit the fan. In my opinion this is a sounder investment strategy than pretending to yourself that you have enough information, knowledge and expertise to do meaningful and reliable DD.

Doing DD and then thinking it's safe to take your eye off the ball and hold to term end or near term end is very high risk. Grab some 12% for a few months and then sell out. Why take the risk. The risk of every loan increases as it ages. The risk is lowest in the first 3 months and highest in the last 3 months.

The slight tiny flaw is that several loans have been suspended a long time before they hit negative days.


re:12% loans:  i would rather take a 10% low LTV, over a high LTV 12% loan of equal quality security.   I don't see the obsession with rate!  I even took some 9% loan with uber low LTV.   

I couldn't agree more .