r1200gs
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Post by r1200gs on Jun 12, 2017 14:39:41 GMT
Call me naïve if you must, but I'm expecting most of these defaults to have relatively good outcomes. I still think a couple of good repayments and a few defaults cleared and things will be much better on the SM. Or worse, depending on how you look at it. I have to admit, even a cold hearted investor with balls of steel would gulp when they look at the SM now. Even I withdrew my interest this month and I'm not easy to spook. I have been surprised (and rather suspicious) of some of the recent recoveries, so always happy to be proven wrong, but I simply can't see full recovery in the event of most the defaulted loans being recovered by sale. It is why I believe LY are holding out on the borrowers to find the funds. ISTM that LY should have been stepping in much quicker to resolve what were obviously bad loans, but I think they know that the security would be hard to shift at anywhere near the MV (as reported by the VR) It does depend largely on how much is in the PF, and how much LY will want to utilise it, but if we see a 90% recovery across the board, the PF fully stocked up (2%) should cover it. Anything lower, and it would start to struggle - but I have my suspicions that Lendy may continue to cover shortfalls to keep the platform looking "healthy" I guess only time will tell, but the Somerset Loans are the two I'm most interest in - how they deal with that particular borrower is going to be a gauge of how good LY are at handling defaulted loans (in particular; the "bad" defaulted loans) If the Somerset borrower is true to form, it might be difficult to work out who is dealing with who. 
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adrianc
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Post by adrianc on Jun 12, 2017 15:50:26 GMT
Slight correction to your post; It is at 10.78% - it will be 12.32% if (or indeed when) 027 defaults Call me naïve if you must, but I'm expecting most of these defaults to have relatively good outcomes. I still think a couple of good repayments and a few defaults cleared and things will be much better on the SM. Or worse, depending on how you look at it. I have to admit, even a cold hearted investor with balls of steel would gulp when they look at the SM now. Even I withdrew my interest this month and I'm not easy to spook. Yep, 81 is really not a big risk at all - and that's £3m of the £20m total.
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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 12, 2017 16:28:07 GMT
I thought I might sell some of my loans but when I saw the queue I changed my mind. Lendy must be making a fortune with the interest they are not paying! Doesn't inspire me with confidence in the platform though and so I won't be increasing my holdings for a while. Interest lost to lenders selling, is the Provision Funds gain...  I think you left out the most important word "discretionary"
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dzo
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Post by dzo on Jun 12, 2017 17:22:51 GMT
I thought I might sell some of my loans but when I saw the queue I changed my mind. Lendy must be making a fortune with the interest they are not paying! Doesn't inspire me with confidence in the platform though and so I won't be increasing my holdings for a while. Interest lost to lenders selling, is the Provision Funds gain... Maybe this is their cunning plan. Save money by flooding the SM and use it to bail out the defaulted loans.
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david42
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Post by david42 on Jun 12, 2017 18:30:06 GMT
Interest lost to lenders selling, is the Provision Funds gain... I don't think this is true - LY note that the PF is funded by the new loans (via a % of the arrangement), and make no mention of the lost interest on the SM
"The Fund will aim to have a minimum balance of 2% of the total live loan amount at any time. Every time a new loan is made a proportion of the fee charged to the borrower is paid into the Provision Fund (the amount is dependent on the loan size). If the Provision Fund is used to cover a shortfall in asset disposal, then it may take time to top the Provision Fund back up from company cashflow"That depends which of Lendy's statements you believe. In March 2016 they told us that the interest we had foregone on the secondary market went to the provision fund: p2pindependentforum.com/post/104149/thread
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Post by mrg on Jun 12, 2017 20:41:13 GMT
Some huge amounts available in DFL loans which presumably haven't received all their tranches yet. If Lendy have already agreed to finance a complete project (which I assume is the case) will they need to fork out the following tranches themselves? Can't see why anyone would pre-fund a new tranche while there is already a load of the project up for grabs. If they would need to finance it themselves I would expect a halt in pipelines and pressure put on defaults (auctions). Unless as I have previously suggested they are confident in some massive repayments soon.
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twoheads
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Programming
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Post by twoheads on Jun 12, 2017 21:42:18 GMT
Some huge amounts available in DFL loans which presumably haven't received all their tranches yet. If Lendy have already agreed to finance a complete project (which I assume is the case) will they need to fork out the following tranches themselves? Can't see why anyone would pre-fund a new tranche while there is already a load of the project up for grabs. If they would need to finance it themselves I would expect a halt in pipelines and pressure put on defaults (auctions). Unless as I have previously suggested they are confident in some massive repayments soon. mrg, similar questions have been asked many times: Why prefund when there is value available on the SM?
The most often quoted reason (in my opinion) is that there are a number of 'disconnected' investors (to give them a name) who have a constant prefund level set up, which fills the smaller tranches easily. Whether this is true, I cannot say, but it seems plausible.
It is also likely that Lendy have one or more underwriters who ensure that certain loans (at least new tranches) are properly funded. These underwriters are probably paid a greater rate of interest than we 'regular' investors, but, when their share is to be sold, it is always at the back of the sale queue - which is right and proper given their privileged status.
I do not think that Lendy are allowed to fund loans themselves if they are to gain FCA accreditation. I have little idea of what the real rules are: pretty much all that I know on this subject is gleaned from reading the informed posts on this forum. With my limited knowledge, I have to assume that the pressure is mounting at Lendy to turn around some of the overdue and default loans.
The 'sorting' of a decent proportion of overdue loans is absolutely necessary in order to maintain investor confidence and retain their money within the Lendy platform. Time will tell whether this happens.
Sorry mrg, I initially tried to answer your question but I became side-tracked with other issues.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jun 13, 2017 7:13:35 GMT
Some huge amounts available in DFL loans which presumably haven't received all their tranches yet. If Lendy have already agreed to finance a complete project ( which I assume is the case) will they need to fork out the following tranches themselves? Can't see why anyone would pre-fund a new tranche while there is already a load of the project up for grabs. If they would need to finance it themselves I would expect a halt in pipelines and pressure put on defaults (auctions). Unless as I have previously suggested they are confident in some massive repayments soon. Is this assumption correct? Anybody know?
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elliotn
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Post by elliotn on Jun 13, 2017 7:41:54 GMT
Some huge amounts available in DFL loans which presumably haven't received all their tranches yet. If Lendy have already agreed to finance a complete project ( which I assume is the case) will they need to fork out the following tranches themselves? Can't see why anyone would pre-fund a new tranche while there is already a load of the project up for grabs. If they would need to finance it themselves I would expect a halt in pipelines and pressure put on defaults (auctions). Unless as I have previously suggested they are confident in some massive repayments soon. Is this assumption correct? Anybody know? SS were on record with the move into DFLs that they would do everything to help a stalled development complete as that is where the maximum value lay. (ilmoro may have a link on Ly pinned post). Presumably as Ly seeking authorisation they may not step in directly (as with, say, rectifying the residential PP or helping out Scottish estates) but presumably someone underwrote the recently unfilled Herc/Arb tranches. We have not seen contracts obliging Ly to fund all these Dfl's themselves if lenders do not, presumably fca would de-risk this use of intermediary balance sheets and borrowers would have to seek further alternative funding.
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Post by excalibur on Jun 13, 2017 10:51:05 GMT
Not sure whether Lendy have a strategy for clearing the secondary market because this will snowball into it becoming harder and harder to fill fresh loans. My suggestion is they allow people to discount / premium the loans like FS because until then I will not be loaning out any more money.
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spyrogyra
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Post by spyrogyra on Jun 13, 2017 11:55:19 GMT
Lately I've been advocating for the introduction of premiums and discounts. I'm mildly surprised that the idea seems not very popular among lenders. And no comments from Lendy.
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Post by dan1 on Jun 13, 2017 12:03:39 GMT
Lately I've been advocating for the introduction of premiums and discounts. I'm mildly surprised that the idea seems not very popular among lenders. And no comments from Lendy. One of Lendy's attractions is its simplicity. Premiums/discounts attracts the flippers, complicates your tax position (capital gains), and buying at a premium leads to the very real possibility of making a capital loss (i.e. negative yield) if the loan repays early.
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mary
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Post by mary on Jun 13, 2017 12:22:07 GMT
Lately I've been advocating for the introduction of premiums and discounts. I'm mildly surprised that the idea seems not very popular among lenders. And no comments from Lendy. One of Lendy's attractions is its simplicity. Premiums/discounts attracts the flippers, complicates your tax position (capital gains), and buying at a premium leads to the very real possibility of making a capital loss (i.e. negative yield) if the loan repays early. Completely agree!
If I want complexity there are other platforms to choose from. Simplicity is attractive.
Note that many other platforms are also at highs for the SM, so its not just a Lendy thing, and highlights that the SM should never be relied on as an exit plan.
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dan83
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Post by dan83 on Jun 13, 2017 12:39:46 GMT
I think discounting loan or putting a premium on them is a stupid idea.
I think the fair way is they way we have now, 1st person to sell a loan goes to the front of the que.
I have quite a bit myself for sale on the secondary market stuck in big que's, I'm prepared to keep them there as long as it take.
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Investor
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Post by Investor on Jun 13, 2017 12:53:17 GMT
I think discounting loan or putting a premium on them is a stupid idea. I think the fair way is they way we have now, 1st person to sell a loan goes to the front of the que. I have quite a bit myself for sale on the secondary market stuck in big que's, I'm prepared to keep them there as long as it take. So you're happy to have 'quite a bit....stuck in big que's (sic)...as long as it takes', but would not want the opportunity to reduce the time to sale by offering at a discount even if a 1% discount saved you two months queuing? Being pedantic but it is not '1st person to sell a loan goes to the front.....' but actually first person to put a loan up for sale goes to the front, if you can see the ramifications of the subtle difference between these two statements you might understand why discounts (not premiums) would make the 'market' work.
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