mary
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Post by mary on Apr 24, 2017 12:19:53 GMT
As it appears that Lendy do not wish to disclose the size of the Provision Fund, I've done a (very) rough calculation.
2% of Live Loans (inc Defaulted) £3.7m Less loss against the Garden C -0.45m (wild guess based on interest owed +75% recovery and costs) SBL interest paid out -1.2m
In the Fund (estimate) £2.05m
Outstanding Interest Accrued £1m
Available Provision Fund £1.05m To cover losses/further interest on Defaulted £11m
Please don't shoot me down, this is a quick back of the envelope thing.
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r1200gs
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Post by r1200gs on Apr 24, 2017 12:35:29 GMT
As it appears that Lendy do not wish to disclose the size of the Provision Fund, I've done a (very) rough calculation.
2% of Live Loans (inc Defaulted) £3.7m Less loss against the Garden C -0.45m (wild guess based on interest owed +75% recovery and costs) SBL interest paid out -1.2m
In the Fund (estimate) £2.05m
Outstanding Interest Accrued £1m
Available Provision Fund £1.05m To cover losses/further interest on Defaulted £11m
Please don't shoot me down, this is a quick back of the envelope thing.
There are probably some people who still factor the PF in to their investment decisions, but not many who use the forum. I don't know if it even features on Lendy advertising any more, but it shouldn't. Don't worry, we can't shoot you. It's in the forum users rules. 
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ilmoro
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'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 Apr 24, 2017 12:39:32 GMT
As it appears that Lendy do not wish to disclose the size of the Provision Fund, I've done a (very) rough calculation.
2% of Live Loans (inc Defaulted) £3.7m Less loss against the Garden C -0.45m (wild guess based on interest owed +75% recovery and costs) SBL interest paid out -1.2m
In the Fund (estimate) £2.05m
Outstanding Interest Accrued £1m
Available Provision Fund £1.05m To cover losses/further interest on Defaulted £11m
Please don't shoot me down, this is a quick back of the envelope thing.
Interest for PBL020 didnt come from PF and I suspect the SBL interest isnt coming from there either.
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ilmoro
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Post by ilmoro on Apr 24, 2017 15:54:57 GMT
Interest for PBL020 didnt come from PF and I suspect the SBL interest isnt coming from there either. There was no confirmation that the PF was not used for the interest, and we can only assume that the PF is not used for SBL. In both cases, we simply don't know, because there is no indicated amount I find it a tad coincidental that after PBL020 was resolved and the new rules were approaching, that the PF amount suddenly disappeared. There was a clear statement in the email I received (since deleted) that Lendy had covered the interest. The PF was only mentioned in relation to the capital shortfall. Everything is based on assumptions and always has been as the PF was never corrected displayed on site. I suspect it has been removed at FCA request as it indicates a level of 'insurance' to investors that is reliable. There is a provision fund, it may cover some losses of capital, but dont make any assumptions and factor that into risk calculations.
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mary
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Post by mary on Apr 24, 2017 16:18:08 GMT
As it appears that Lendy do not wish to disclose the size of the Provision Fund, I've done a (very) rough calculation.
2% of Live Loans (inc Defaulted) £3.7m Less loss against the Garden C -0.45m (wild guess based on interest owed +75% recovery and costs) SBL interest paid out -1.2m
In the Fund (estimate) £2.05m
Outstanding Interest Accrued £1m
Available Provision Fund £1.05m To cover losses/further interest on Defaulted £11m
Please don't shoot me down, this is a quick back of the envelope thing.
Interest for PBL020 didnt come from PF and I suspect the SBL interest isnt coming from there either. Unfortunately we just don't know, just as we don't know where lenders stand vs Lendy's overdue interest and fees, i.e. are Lendy in front, behind or equal to lenders when losses are apportioned? Lendy are not a charity hence I assumed that potentially the fund could cover their losses as well, which may not be true. I find the lack of transparency regarding the Provision Fund disappointing as it was one of the attractions to me. At at some point it seems that there will be losses to share out and it would be best practice to document the process and rank of how lenders will be treated, rather than relying on "discretionary" and making it up on the hoof. If Lendy wish to clarify the situation that would halt the speculation.
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Post by lendinglawyer on Apr 24, 2017 16:42:06 GMT
I hate to say "it shouldn't be", but honestly mary the PF should be 100% disregarded in decision-making. At the moment, given the defaults tab, I would assume there'll be nothing left in the PF soon if there's anything there today. I can't believe Lendy's own costs and amounts advanced simply jump above lenders. Certain third party costs of course have seniority in the insolvency waterfall, which is the same for all insolvent businesses. |
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mary
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Post by mary on Apr 24, 2017 16:53:50 GMT
I hate to say "it shouldn't be", but honestly mary the PF should be 100% disregarded in decision-making. At the moment, given the defaults tab, I would assume there'll be nothing left in the PF soon if there's anything there today. I can't believe Lendy's own costs and amounts advanced simply jump above lenders. Certain third party costs of course have seniority in the insolvency waterfall, which is the same for all insolvent businesses. I take your point, and a PF is just one of my criteria, however if you are going to have a PF then make it transparent. I like the level of detail and statistics and stress testing that RateSetter provide, which is the best I've seen, obviously with much lower returns, but it shows what is possible.
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peteuk
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Post by peteuk on Apr 24, 2017 22:36:16 GMT
In my distant memory SS detailed how they would use the provision fund in the event of a default and it was not to cover all losses but to chip in a percentage under a formula of dropping the LTV by about 5% as far as i can recollect it was late 2015 did anyone keep a copy of it. As it seemed the plan was that it could be spread over multiple loans
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mikes1531
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Post by mikes1531 on Apr 24, 2017 23:52:10 GMT
Everything is based on assumptions and always has been as the PF was never corrected displayed on site. I suspect it has been removed at FCA request as it indicates a level of 'insurance' to investors that is reliable. I thought the PF had been correctly displayed on site in the past -- at exactly 2% of the capital outstanding on live loans. I haven't been watching the Z and RS websites lately, but they used to show the balance in their PFs. Has that now disappeared from their sites? If not, then I would suggest it wasn't an FCA request that prompted LfSS to remove theirs from view. IMHO, it was removed because it would have given a hint of the size of the PBL020 loss -- which probably would have been embarrassing -- and given an indication how slowly the PF was being replenished, presuming it was being replenished -- and that probably would have been embarrassing as well.
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brianlom1
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He's not the Messiah, he's a very naughty boy!
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Post by brianlom1 on May 4, 2017 10:36:33 GMT
I took the opportunity to write to Lendy on this subject, this was their response:
"The Lendy platform operates a discretionary Provision Fund, In the event of a default, if we are unable to recover sufficient funds through disposal of the security, lenders can apply to the provision fund for compensation for any losses to their capital.
The fund is maintained by Lendy, who owns and operates the platform. The Fund aims to have a minimum balance of 2% of the total live loan amount at any time, with the actual value tending to fluctuate as loans launch and repay. We are therefore not publishing its size at any given 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.
The provision fund is not obligated to pay out and may not be able to cover all losses. The Provision Fund does not guarantee loans or provide insurance against loss. In the event of a shortfall The Directors will consider any losses made by investors and may grant compensation at their discretion."
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Post by lendinglawyer on May 4, 2017 11:01:50 GMT
I hired a private detective to go undercover at Lendy. He discovered that the PF was used at the discretion of the directors to pay for the Lendy Summer party, which is a huge blowout taking place at an undisclosed Ibiza location in July. Which is the real reason the balance isn't published.
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Liz
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Post by Liz on May 4, 2017 11:08:09 GMT
PBL20 members have taken a picture of the PF and left a note. Attachments:
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oldgrumpy
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Post by oldgrumpy on May 4, 2017 11:09:53 GMT
Liz I tried to "like" that empty black screen to represent the actual PF, but it had gone!  Anyway, that bog (am I allowed to say bog?) standard reply is all we are going to get now. It's longspeak for "We're not going to tell you so "go away*". *euphemism  edit, ah! there's a picture now
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Steerpike
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Post by Steerpike on May 4, 2017 12:45:12 GMT
I'm sure that I heard somewhere that Liam had left a note saying "I'm afraid there is no money. Kind regards - and good luck!"
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Post by dualinvestor on May 5, 2017 5:46:43 GMT
I'm sure that I heard somewhere that Liam had left a note saying "I'm afraid there is no money. Kind regards - and good luck!" Who was the note addressed to? ............. the Administrators?
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