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Post by meledor on Apr 6, 2017 7:49:04 GMT
Lendy has 2% of the loan book in the provision fund but after a payout the timing of any topping up of the fund back to 2% is also discretionary. This has always been the case.
Actually this has not always been the case. "The Provision Fund will be maintained with ‘ at least’ 2% of the running loan book at any time in a separate bank account from Lendy Ltd’s operational account." See lendy.co.uk/documents/newstructure.pdf
I see your point, but I am arguing from a point of logic. Think about it: if a payout from the provision fund was always matched at the same time by an amount from Lendy into the fund to keep it at 2%, then any such payout would not be solely discretionary as regards the provision fund for it would entail agreement by the separate legal entity that it had in fact the resources to make a compensatory payment.
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Post by meledor on Apr 6, 2017 8:05:58 GMT
I am completely happy not knowing the amount in the provision fund.
The fund is discretionary and should not be a factor in lending decisions. Lendy has 2% of the loan book in the provision fund but after a payout the timing of any topping up of the fund back to 2% is also discretionary. This has always been the case.
Lendy explain this on the website and so are being transparent.
I have never been a fan of provision funds. Lendy's is small but judging by the confusion and seeming reliance on it I think it is more trouble than it is worth. The PF (and lack of information about it) absolutely SHOULD be a factor in any lenders decision to invest on this platform, if you think it will cover your loans or not. Lendy are NOT being transparent when they stop us seeing how much that fund is worth and won't tell us what it's worth, and yet still use it as a marketing tool. If you think that the only reason people are complaining about not being able to know how much is in it because they are the ones relying on it covering their asps in the case of default, think again. The lack of transparency from this platform is worrying in itself, but what do you think happens to the platform when there is another substantial shortfall to lenders that the PF can't cover? If you think that won't effect you because you were not relying on the PF personally, best think again.
I have no transparency issues with the platform, but what I do worry about is people who think the provision fund is in any way going to help them if we have a series of shortfalls. The provision fund is at best of some use for small defaults but irrelevant for most loans at worst a source of confusion and distraction.
Therefore we should largely ignore the PF. Knowing how much is in it on a frequent basis does not help when a payout could be made at any time that would make a material difference to the balance.
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r1200gs
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Post by r1200gs on Apr 6, 2017 8:19:28 GMT
The PF (and lack of information about it) absolutely SHOULD be a factor in any lenders decision to invest on this platform, if you think it will cover your loans or not. Lendy are NOT being transparent when they stop us seeing how much that fund is worth and won't tell us what it's worth, and yet still use it as a marketing tool. If you think that the only reason people are complaining about not being able to know how much is in it because they are the ones relying on it covering their asps in the case of default, think again. The lack of transparency from this platform is worrying in itself, but what do you think happens to the platform when there is another substantial shortfall to lenders that the PF can't cover? If you think that won't effect you because you were not relying on the PF personally, best think again.
I have no transparency issues with the platform, but what I do worry about is people who think the provision fund is in any way going to help them if we have a series of shortfalls. The provision fund is at best of some use for small defaults but irrelevant for most loans at worst a source of confusion and distraction.
Therefore we should largely ignore the PF. Knowing how much is in it on a frequent basis does not help when a payout could be made at any time that would make a material difference to the balance.
The PF is a marketing tool attracting investors, and all those investors feeling warm and fuzzy about being covered in the event of a shortfall means more money being thrown at the platform and that effects rates offered, that effects YOU. If the PF is empty, that probably means that nobody is going to be covered in any way and if that happens, the resulting effects to the platform will effect YOU. Again, if you think those of us concerned with the lack of transparency here are merely concerned about our own asps being covered by that fund in the event that one of our loans cannot be paid back, you need to think again. I don't care about having a PF and I too think it needs to be gone. However, if it largely is, then LfSS need to say so and stop using it to attract money that lowers the rate they pay me, an investor NOT relying on that fund.
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Post by meledor on Apr 6, 2017 8:32:12 GMT
I have no transparency issues with the platform, but what I do worry about is people who think the provision fund is in any way going to help them if we have a series of shortfalls. The provision fund is at best of some use for small defaults but irrelevant for most loans at worst a source of confusion and distraction.
Therefore we should largely ignore the PF. Knowing how much is in it on a frequent basis does not help when a payout could be made at any time that would make a material difference to the balance.
The PF is a marketing tool attracting investors, and all those investors feeling warm and fuzzy about being covered in the event of a shortfall means more money being thrown at the platform and that effects rates offered, that effects YOU. If the PF is empty, that probably means that nobody is going to be covered in any way and if that happens, the resulting effects to the platform will effect YOU. Again, if you think those of us concerned with the lack of transparency here are merely concerned about our own asps being covered by that fund in the event that one of our loans cannot be paid back, you need to think again. I don't care about having a PF and I too think it needs to be gone. However, if it largely is, then LfSS need to say so and stop using it to attract money that lowers the rate they pay me, an investor NOT relying on that fund.
You keep saying that it is a marketing tool and you imply that investors are being misled. Yet Lendy are very clear in what they say. In fact one could argue that quoting a figure could be misleading because it might give investors a false sense of security.
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r1200gs
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Post by r1200gs on Apr 6, 2017 8:40:42 GMT
The PF is a marketing tool attracting investors, and all those investors feeling warm and fuzzy about being covered in the event of a shortfall means more money being thrown at the platform and that effects rates offered, that effects YOU. If the PF is empty, that probably means that nobody is going to be covered in any way and if that happens, the resulting effects to the platform will effect YOU. Again, if you think those of us concerned with the lack of transparency here are merely concerned about our own asps being covered by that fund in the event that one of our loans cannot be paid back, you need to think again. I don't care about having a PF and I too think it needs to be gone. However, if it largely is, then LfSS need to say so and stop using it to attract money that lowers the rate they pay me, an investor NOT relying on that fund.
You keep saying that it is a marketing tool and you imply that investors are being misled. Yet Lendy are very clear in what they say. In fact one could argue that quoting a figure could be misleading because it might give investors a false sense of security.
A figure giving a false sense of security? Like 2 percent of the loan book? I'm sorry, but your argument is bizarre. You suggest the provision fund does not effect you when I have shown it clearly does, both by attracting competing funds that lower rates and by the possible fall out when it does not do what it should do, because it's not there. And now you suggest being honest with investors could mislead them? So, best to keep quiet about how much the shortfall is? I best not respond again.
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adrianc
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Post by adrianc on Apr 6, 2017 9:12:58 GMT
We know the target for the PF. 2%.
We know the PF has been heavily depleted recently.
We know the PF hasn't had time to get back to strength.
That is all a PLUS for showing the PF. It's done its job.
The only reason to be wary of showing it is, surely, if LfSS know that it won't get back to strength particularly quickly. There are more defaults coming, without a doubt. Will the PF be able to stand them?
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ben
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Post by ben on Apr 6, 2017 9:42:58 GMT
We know the target for the PF. 2%. We know the PF has been heavily depleted recently. We know the PF hasn't had time to get back to strength. That is all a PLUS for showing the PF. It's done its job. The only reason to be wary of showing it is, surely, if LfSS know that it won't get back to strength particularly quickly. There are more defaults coming, without a doubt. Will the PF be able to stand them? I never expected the PF to be able to take all the hits on Lendy, to many dodgy borrowers and dubious security. I invested fully expecting that, as with many on here and who invest on Lendy I am interested in the numbers. Lendy were previously happy to display the numbers with regards to the provision but now they are not and avoid answering the questions, so I can only guess that is because the numnbers do not add up anymore for whatever reason. Also I have still not had an answer about what happened to the part of the Garden Centre that Lendy had.
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Post by Paul64 on Apr 6, 2017 13:31:06 GMT
Lendy's policies and positions
All,
Thanks for your DMs, and for the recent exchange regarding defaults and the Provision Fund.
I'd like to summarise Lendy's policy and positions in a number of areas, which I hope you will find helpful.
The Forum
Most companies in our sector choose not to engage with the forum, largely because most members are anonymous and therefore a company is unable to know whom it is communicating with.
Lendy's view is that the forum is a beneficial platform for investors, and on occasions we do engage, particularly when there has been a service glitch or we have made an error. Members however should use our Contact service (https://lendy.co.uk/contact) as it is monitored for quality, training and regulatory purposes. Please do not rely on a response from me via the forum just because you have tagged me, as they can get missed.
Most companies provide a 'Contact us' service. Some companies also, like us, provide an extensive FAQ and Glossary to help customers get the answers they need quickly and efficiently, without the need to speak with someone.
To manage expectations, Lendy is a small but fast-growing operating on very tight budgets. During busy times, which are most days now, our support team service level agreement (SLA) is five working days and sooner if we can (but not guaranteed) or if a request is clearly urgent.
Opening times
:
9am-5-30pm Monday to Friday.
We are not open Saturdays, Sundays or bank holidays.
Most general answers can be found however in our FAQs (https://support.lendy.co.uk/hc/en-us), which we keep regularly updated.
Credit assessments
All information that we have on an investment opportunity is published in our Loans section (https://lendy.co.uk/loans/available). This section contains a summary of our extensive and detailed due diligence undertaken by our in-house credit team and external partners.
The solicitors we use are specialist in the real estate market. For larger loans we only use Top 100 law firms. Our current panel is DAC Beachcroft, Clarke Willmott, and Shakespeare Martineau. We employ independent specialist firms for our valuations who use RICS registered valuers to carry out a RICS Red Book valuation.
All credit checks are undertaken by independent external agencies, with our own credit team undertaking their own checks. Only once our Credit Committee is satisfied that all searches, checks, valuations, legals etc. are complete and have met our strict lending criteria will a loan go live on a platform. It is for this reason that sometimes Advance Notice Go-Lives are delayed if we have identified a late issue that causes us concern.
The Provision Fund
While we do our best to mitigate investment risk, and have a discretionary provision fund in place to help protect investors from shortfalls, no-one should be investing on the basis that we have one. Capital is at risk, as we say in all of our marketing. Investors should be investing on the basis of the opportunity and the information provided about that opportunity, which is available in Loans (https://lendy.co.uk/loans/available) then Asset Details. Here you will find all the information we have on an investment opportunity, which we keep updated.
If an investor has any concerns about an opportunity based on the information provided then they should not invest.
A provision fund is one way of mitigating risk but there are many others. For example we are well-capitalised and profitable, which is rare in our sector. We also have a good track record of looking after our customers.
The Provision Fund is discretionary, i.e. it is not guaranteed. However, at the current time our policy states that ''the Fund will aim to have a minimum balance of 2% of the total live loan amount at any time,” and it will.
Our platform model
Our platform is simple, intuitive and responsive, but like all systems, it does suffer service glitches from time to time due to the technology, partner issues, and, occasionally, human error. We always try and notify our clients when we are aware of an issue and correct it as soon as we can. But we do, at times, get it wrong, and I am sorry if you feel that we have given you reason to be frustrated.
The top five improvements being explored at the current time are:
• Fix for stuck loan parts
• IT glitches such as transaction errors and duplicate deposits
• News alert on home page for systems or service issues
• Improving communications on services like Go-lives, and service/loan status changes
• Continuous improvement to the website site and account management functionality
Monitoring survey reports
We also get regular questions on publishing monitoring survey reports. Our policy position is still that they are not suitable for investors for reasons explained here. (https://support.lendy.co.uk/hc/en-us/articles/115002435269--Will-you-be-providing-Monitoring-Survey-Reports-on-the-platfrom-).
However, we understand that investors would find regular updates on an investment project helpful and reassuring, so we are exploring what other arrangements could be provided.
I will update you when I have news.
We have though made a lot of other improvements over recent months, which we hope people are beginning to see, including enhancements to banking transactions. We are working hard to improve and enhance a lot of our services, but it can't all happen overnight.
Finally, we want everyone to be happy and we always try to do our best to resolve problems. We have a particular model, which is simple and liked by a great many people. And, as I have said, we are profitable, which is hugely important for investors at the current time.
Of course there are other companies that will provide certain things that we don't and visa versa, so it is therefore down to investors to decide which platform they prefer.
Kind regards
Paul
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ozboy
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Post by ozboy on Apr 6, 2017 13:45:13 GMT
Thank you Paul.
I notice, conspicuous by its absence, any comment/s on the veracity of the Valuation Reports that Lendy commissions and then publishes, and upon which Investors make a large part of their investment decisions.
Again, I draw your attention to The C****t. This VR completely failed to comment on, let alone even mention, the myriad Planning Permission issues pertaining to this property. This was in direct violation of your specific request to The Valuer to specifically include and comment on any Planning Permission issues.
And yet Lendy then went ahead and published the VR as received, knowing that there were no PP comments.
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Liz
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Post by Liz on Apr 6, 2017 13:47:51 GMT
How does anyone feel about 9 million of investors money being in defaulted loans? Easy to ignore now its on a different page........ At least they are transparent, I don't have a clue how much is in default on other platforms. I don't mind, as I don't hold any of it.
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ben
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Post by ben on Apr 6, 2017 14:30:19 GMT
Thankyou for your reply Paul. As an investor I never used the Provision Fund in my calculation for investing it, it was always just an added bonus so it does not really matter to me the state of it, what it is used for etc.
However what does concern me is the complete change of tack about the provision fund. The message previously has basically been Lendy is great we have this brilliant provision fund, now the message appears to be ignore the provision fund. As an investor when someone tries to hide information I usually get pretty nervous and abadon ship. Especially when it was information that they used to shout from the hill top.
Although in this case I have changed my risk assememnt to only hold loans I am happy to be run down by a third party if the need arises, which is a shame as this time last year Lendy was one of my biggest p2p investments.
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adrianc
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Post by adrianc on Apr 6, 2017 14:51:49 GMT
I'd like to summarise Lendy's policy and positions in a number of areas, which I hope you will find helpful. The Forum
Most companies in our sector choose not to engage with the forum, largely because most members are anonymous and therefore a company is unable to know whom it is communicating with. Does it matter? Would the answer you give vary according to who's asking? But anyway, if it'd get more involvement, then I'd be MORE THAN happy to have an equivalent to the AC pink pages, where a user is verified by the platform before gaining access. But it doesn't at the moment? That's OK, we all know it's just been dipped hard into. We understand. But can you give any rough ballpark timeframe for when you aim to have it back up to that mark?
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GeorgeT
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Post by GeorgeT on Apr 6, 2017 15:47:29 GMT
CD - you won't get an answer. You're just wearing out the skin on your fingertips by typing the question repeatedly.
It's like if Andrew Marr asks a politician if they are going to raise taxes. Yes or No he asks. The politician replies with 2 minutes of waffle. So he asks again. Same result. And again, and again. It could be argued that the non answering of a question despite repeated requests for a straight answer, answers the question in itself ... but after the 2nd evasive answer, it's obvious the person isn't on the 4th or 5th attempt going to answer it with a clear Yes or No.
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registerme
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Post by registerme on Apr 6, 2017 15:59:26 GMT
If an investor has any concerns about an opportunity based on the information provided then they should not invest. That's a surprising statement.
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twoheads
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Post by twoheads on Apr 6, 2017 16:21:59 GMT
If an investor has any concerns about an opportunity based on the information provided then they should not invest. That's a surprising statement. Bright chap our Paul... good information to know.
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