dandy
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Post by dandy on Apr 27, 2017 10:36:32 GMT
dandy . If someone purchases a loan in a company, that is a wholesale lender, on the secondary matket they see an interest rate based on the loan running to term. If they have purchased at a premium and the loan repays before the premium is covered by interest then tue loss is made. If platforms choose to ask borrowers to find finance elsewhere, as a result of the letter, without indicating this to lenders, or stopping trading for anything but par on those loans, then they are creating the loss by their actions. You can probably bet a sizeable chunk of your resources thay the platforms won't lose money and will not compensate for losses incurred. I was just raising awareness to encourage investors to consider the borrowers activity when doing due dilligence. If in doubt then investors can ask the platform and get the response in writing before buying. Ok I see what you mean but its quite a hard argument to press as loans can be repaid at anytime anyway - I assume that would be quite rare as hardly any platforms allow trading at premiums. some wholesale finance is allowed also depending on how it is structured
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stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
Posts: 1,447
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Post by stub8535 on Apr 27, 2017 11:08:59 GMT
dandy , whilst I agree that loans can repay early, and the platforms are usually unaware, and this can create a losd. However, where a platform knows they have told a borrower to refinance elsewhere they would be on thin ice to rely on syating that loans can repay at any time to defend themselves. Far more equitable for platforms to stop trading at other than par on loans that they KNOW are going to repay before term. I am not so certain of your comments about few sites allowing trading at other than par. Nor do I agree that the number of loans being affected makes any difference at all as to how the platforms should behave to protect investors. As pointed out many times on boards, it is the lenders choice where they lend their money. Platforms must provide information in accordance with FCA rules to lenders. The platforms involved are not doing so currently.
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