GeorgeT
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Post by GeorgeT on Jun 5, 2017 20:27:44 GMT
It is true that one massive multi-million-pound repayment would turn the situation completely the other way. We saw that to a limited extent only last month's when Watford repaid.
The problem is that it seems the majority of loans do not repay when the original term ends and drag over into negative days and an increasing number of going into default status. If that trend continues the situation will only get worse. However as you say all it would take is one or two big repayments and suddenly the situation would be looking a whole lot rosier.
For now I am doing what many investors are doing and steadily reducing my exposure to this platform and strengthening my portfolio by focusing only on high interest rate long dated loans. I shifted my stake in the Riviera within 2 days over the past weekend and DD specialists would tell you that was a rotter. I can say from first-hand experience it is still in the high quality loan category. Stick to 12% loans and try to stick to loans with 250 days + left to run. Liquidity is not much of a problem in that situation and given loans only default when they are 6 months overdue you are reducing your risk down to the underlying risk of platform failure. There are several loans on this platform which pass the DD tests but because of the interest rate or short dated nature of them they are illiquid.
Fine if you are happy to hold a loan until the end and hope for a happy outcome but nobody rational would do that in my opinion when you can eliminate that risk simply by selling out after a couple of months and moving on to newer loans.
But of course doing some DD and avoiding shockers in the first place can never be a bad idea because you can never rely on liquidity and if you are stuck to holding until the end it's much better to be in better loans than in dodgy loans to dodgy Borrowers.
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Post by mrg on Jun 5, 2017 20:59:48 GMT
Very interesting thanks.
"The problem is that it seems the majority of loans do not repay when the original term ends and drag over into negative days and an increasing number of going into default status"
1) Would be interesting to look at the statistics on 'increasing number of going into default status'. I wonder if this is the case or it just seems like it. Larger percentage of loan book defaulting do you think, or is it just there are more loans in total so more defaults are expected? I see you can look at the repayment time of historical loans would be interesting to collect that data and see the average 'how many negative days until paid off'. Will check this out some time.
2) 'The problem is that it seems the majority of loans do not repay when the original term ends' - Would be interested to see if loans are less likely to do this if they originally requested a shorter term. As you pointed out a 250+ loan would be more attractive that a 100 day loan, but is that still the case if the 100 day loan was originally a 180 day loan - would imagine Lendy demand a higher rate on loans that run into the negative day zone (even though we wont see any of it) as a method to encourage borrowers to pay back on time. So if a borrower requests a smaller original loan term does this suggest they are more confident in repaying on time than someone that asks for longer? In which case buying longer dated short term loans would be a better bet?
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david42
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Post by david42 on Jun 5, 2017 21:19:08 GMT
1) Would be interesting to look at the statistics on ' increasing number of going into default status'. I wonder if this is the case or it just seems like it. You can see the increasing volume of defaulted loans most clearly in the fourth chart in this post: Jonah year to date analysisEdit: On reflection the above chart does not answer mrg's question. The above chart shows the increasing volume of defaulted loans on the secondary market, not the increasing volume of defaulted loans in existence. The nearest analysis was a forward looking chart by cooling_dude in February when he showed the increasing volume of defaults that we would expect to see. We are now seeing this happening much as he predicted.
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ilmoro
Member of DD Central
'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 Jun 5, 2017 22:04:45 GMT
Very interesting thanks. "The problem is that it seems the majority of loans do not repay when the original term ends and drag over into negative days and an increasing number of going into default status" 1) Would be interesting to look at the statistics on ' increasing number of going into default status'. I wonder if this is the case or it just seems like it. Larger percentage of loan book defaulting do you think, or is it just there are more loans in total so more defaults are expected? I see you can look at the repayment time of historical loans would be interesting to collect that data and see the average 'how many negative days until paid off'. Will check this out some time. 2) 'The problem is that it seems the majority of loans do not repay when the original term ends' - Would be interested to see if loans are less likely to do this if they originally requested a shorter term. As you pointed out a 250+ loan would be more attractive that a 100 day loan, but is that still the case if the 100 day loan was originally a 180 day loan - would imagine Lendy demand a higher rate on loans that run into the negative day zone (even though we wont see any of it) as a method to encourage borrowers to pay back on time. So if a borrower requests a smaller original loan term does this suggest they are more confident in repaying on time than someone that asks for longer? In which case buying longer dated short term loans would be a better bet? I used to keep a record of overruns. I gave up because pretty well every loan overran ... have a look at the Superyacht, PBL006 or 4a/b which went years past their original terms. Alot of the loans would have gone IA under the current system and some DEF either though they never formally defaulted
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ilmoro
Member of DD Central
'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 Jun 5, 2017 23:00:33 GMT
The nearest analysis was a forward looking chart by cooling_dude in February when he showed the increasing volume of defaults that we would expect to see. We are now seeing this happening much as he predicted. Here's an updated version for your pleasure  Please note - the following presumes no repayments, no extensions and no new loans. All unlikely, and thus should be treated with caution  Difficult to compare forecast position in Feb graph with current as youve changed the format. However, roughly you predicted £16m default after 3 months and thats where we are give or take 1/2m but the total negative is much less 32m v a predicted 72m, hence the relatively stable default position after another month.
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Post by p2plender on Jun 6, 2017 4:08:56 GMT
Illiquid monster? Just checked my email account and it is a glorious sight. There are a lot of buyers in action on the SM today: NB. My loans are all long dated 12%ers. But the quality stuff still sells fast. I listed all this stuff yesterday. Please stay clam. One decent repayment would get the sm moving again imo. It's just that Lendy don't seem able to achieve this at present. My outlook would possibly change if they could achieve this as would others I'm sure. It's a snowball effect either way.
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Post by mrg on Jun 6, 2017 5:58:39 GMT
So I continued reading the threads last night and it seems the belief is that if you cancel a sale before the end of the month you get to keep all of the interest you would have otherwise lost, is that correct? In which case it makes sense to stick everything you own but don't favour up for sale on the 1st of the month and see how it goes, and if you don't sell within the month cancel the sale on the last day, or if you have moved closer to the sale and really don't want the loan leave it up and give up the interest.
Its basically a free option?
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Post by dan1 on Jun 6, 2017 7:36:46 GMT
So I continued reading the threads last night and it seems the belief is that if you cancel a sale before the end of the month you get to keep all of the interest you would have otherwise lost, is that correct? In which case it makes sense to stick everything you own but don't favour up for sale on the 1st of the month and see how it goes, and if you don't sell within the month cancel the sale on the last day, or if you have moved closer to the sale and really don't want the loan leave it up and give up the interest. Its basically a free option? Your understanding is correct. If you have the time to monitor the sales queue then you could list loan parts as the queue increases, and when your parts near the front then cancel and relist. This strategy is great apart from when a big loan repayment comes in and all your loan parts go within minutes of frenzy buying.
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nick
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Post by nick on Jun 6, 2017 7:44:39 GMT
I believe a major factor why there is currently a slack in demand on the SM (and the PM) is that many are taking money of the table prior to this weeks' election. This isn't an isolated SS phenomenon, I am observing the same slack across all the P2P platforms i'm invested. This is not driven solely by fear of uncertainty, but also keeping powder dry for opportunities that can arise from such events. Barring a shock result, I would be surprised if the slack remains for long after the election has passed.
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Post by dan1 on Jun 6, 2017 8:43:00 GMT
I believe a major factor why there is currently a slack in demand on the SM (and the PM) is that many are taking money of the table prior to this weeks' election. This isn't an isolated SS phenomenon, I am observing the same slack across all the P2P platforms i'm invested. This is not driven solely by fear of uncertainty, but also keeping powder dry for opportunities that can arise from such events. Barring a shock result, I would be surprised if the slack remains for long after the election has passed. I couldn't agree more. LE investors remember the SM following brexit, and given we've had the Trump shock since then investors are positioning themselves in anticipation. Traditionally this is a busy period with borrowers and platforms keen to push out loans before the summer recess.
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chunkie
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Post by chunkie on Jun 6, 2017 13:16:24 GMT
SM now at GBP 6.4 million
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skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
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Post by skippyonspeed on Jun 6, 2017 15:33:29 GMT
NB. My loans are all long dated 12%ers. But the quality stuff still sells fast. I listed all this stuff yesterday. Please stay clam. My wallet is indeed staying shut like a clam. Mine is clinging onto my pocket like a limpet. Not even the mussels of CD could get it out Edit: I think L are being a bit shellfish in not trying to alleviate the situation. However, at least I haven't had a "Please resolve....." for several days now. I just went thru' my current loan book (all 12% with >100days b4 default) all but 3 had a Q of many squid. And those 3 all had 300days+ b4 default. I put some small parts up for sale as a test......all sold in <2mins
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Post by mrg on Jun 6, 2017 19:20:38 GMT
Quick question: Looking at the default loans I see there are still people buying these. Whats the rational behind this? I'm wondering if a loan has been accruing interest for 180 days then defaults, and then you buy the loan. If the property sells at a profit and interest is paid does the last holder of the loan get the entire interest from when it started accruing. In which case defaulted loans might be the best value loans on the whole platform.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jun 6, 2017 19:55:14 GMT
Quick question: Looking at the default loans I see there are still people buying these. Whats the rational behind this? I'm wondering if a loan has been accruing interest for 180 days then defaults, and then you buy the loan. If the property sells at a profit and interest is paid does the last holder of the loan get the entire interest from when it started accruing. In which case defaulted loans might be the best value loans on the whole platform. That is not how it works - the accrued interest starts when you buy the loan part, not for the previous period. Likewise, any investor that has sold a defaulted loan part will receive the interest up to the point they placed the loan part on the SM (when or if the interest is recovered) Why do people buy these loan ATM (i.e. while the SM is bloated and easy to find good loans)... I have no idea - and can only presume a lot of alcohol is involved. If the SM is bear, you have excess capital and there is a good looking defaulted loan (i.e. it looks like recovery will cover both the capital & interest) then I can sort of understand it - but not now I do, and I would wager Dude that you and all the other Dudes on here know too. Lemmings, who unfortunately think P2P is a Savings Account With Extraordinary Interest Rates. Your comment re alcohol involvement may also have some bearing.
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bramhall17
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Post by bramhall17 on Jun 8, 2017 17:29:29 GMT
I have six P2P accounts 3 retail , one B2B ( though with a rather undistinguished foray into Property), one which is a mixture of quasi-pawn brokerage ,property and miscellaneous and then Lendy as a property only account. Collectively I have circa 20% of my capital in these accounts combined. With respect to SS/Lendy I have generally not put any focus on churning projects but have tried to major on projects below <60% LTV where there is a ready made asset to dispose of (like a conventional house/flat) or where a development project makes sense to me (student accommodation/ vibrant city centre projects, plus more selectively holiday home/nursing homes etc). To date, I only have one default holding ( care village) which I managed to reduce my holding by 50% some time ago but alas it is at 65% LTV .
I'm still broadly comfortable with my project portfolio (and returns) but as the default list has increased and as the SM has grown to amounts where the queues can be long and therefore loss of interest prolonged, I have some concern that some of my existing holdings will drift into the default box. I have always realised that property projects can have a protracted conclusion, so I'm still relaxed and in for the long term but it would be reassuring to see some of these defaulted projects sold and closed out and more buoyancy on the SM.
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