gustapher
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Post by gustapher on Jul 14, 2017 13:22:57 GMT
So basically the cashback works exactly as they described it - what a surprise... Ah, but "as they described it" 'when' exactly? .. the description of how it works is now on release 5, rev 3.0b, issue 2 (some edits may have escaped notice). Fair play. I commented on another thread (probably after some of their initial revisions) that I thought it was how you described it, and people were still running around claiming the sky was falling in. Even before the revision I thought it was fairly obvious it wouldn't be paid monthly as that's not how cashback schemes work anywhere else - either in P2P or retail. Reading the comments it feels like a few people are looking for problems and then revelling in whipping up the hysteria. I know Lendy have made mistakes, particularly flooding the SM with lower rate loans, but I also think we now have an echo chamber on this forum where people jump to conclusions and over exaggerate the negatives without actually pausing and thinking rationally. I'm not saying things are perfect, but we could do with a bit more objectivity around here.
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mikes1531
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Post by mikes1531 on Jul 14, 2017 14:11:20 GMT
When did the Bonus Accrual column disappear (again) from the default loans? I don't know, but might it be related to the FAQ about the new bonus accrual... When I read that, I took it to mean that the bonus interest stopped accruing at the -180 day point. But that would be inconsistent with the data in the Bonus Accrual column of the Defaulted Loans table. Might that column have been removed so that it could be fixed -- and set at 3% for all DEF loans? Of course, that would make no sense to me. If a 12% loan accrues 18% interest from the date it goes overdue, surely that higher rate should apply until the loan is settled, shouldn't it? As with many other aspects of these changes, Lendy just haven't made things clear.
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mikes1531
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Post by mikes1531 on Jul 14, 2017 14:18:29 GMT
If cashback isn't a signing on bonus, but is actually paid over time to the owner of the loan part, doesn't that mean that when these special tranches appear on the SM they are more valuable than older tranches. : That would be true if the cashback payments continued after a part was sold on the SM. Have Lendy said that's the way the new cashback works?
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warn
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Post by warn on Jul 14, 2017 14:52:42 GMT
From "Keeping On Keeping On" by Alan Bennett:
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Post by Paul64 on Jul 14, 2017 15:38:03 GMT
Hi all, the new cash back pilot is actually very straightforward. It is a one off payment of 1/12th of the annual interest. I.e, a 12% loan will get a one off 1% cash back and it will be paid with the normal interest run for those holding the loan parts at that time.
With regard the announcement that we are changing the way interest is treated post term, this is a requirement of the FCA to meet regulatory requirements and has to be adhered to by all P2P firms.
Paul
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Post by Deleted on Jul 14, 2017 16:20:29 GMT
Hi all, the new cash back pilot is actually very straightforward. It is a one off payment of 1/12th of the annual interest. I.e, a 12% loan will get a one off 1% cash back and it will be paid with the normal interest run for those holding the loan parts at that time. With regard the announcement that we are changing the way interest is treated post term, this is a requirement of the FCA to meet regulatory requirements and has to be adhered to by all P2P firms. Paul  Well done that man!!! (Eventually) ..... A One Off Payment !!! Information I had searched high, low and in between for while everyone guessed and re-guessed. Paul64 perhaps you should have written the original explanation, keep the simple .... well simple.
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elliotn
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Post by elliotn on Jul 14, 2017 16:38:55 GMT
Your sarcy-ness is a prime fit for the weekend sailors (who share deplorable communication skills).
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Post by robberbaron on Jul 14, 2017 16:42:03 GMT
So presumably there will be a very high demand for new loans on the 29th? Say if a 12% loan became available on the primary market on the 25th of July and I, one way or another, obtained some and held it at midnight at the end of 31st of July I'd get a cashback payment on 1st August of 1% of that holding. After that, there will never be any further cashback payments on that loan at any time. I assume I wouldn't get that cashback payment if it was up for sale at that time. If that's the case that's a very shortsighted play by Lendy encouraging reckless behaviour. A lot of people would be trying to pass the parcel on the 1st of August. If they can't and get burned they won't bid the next time. There is a need to fund the DFL last tranches but surely this could be achieve with some long term incentives rather than by bloating the SM even more with loan parts that nobody wants.
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fp
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Post by fp on Jul 14, 2017 17:38:07 GMT
On this matter then, as the cash back tranche will be kept separate until after interest run, if there is 200k for sale on the original loan, and for whatever reason there is 10k for sale on the cash back tranche, where do the loan sales fall in the queue when it is amalgamated Paul64? |
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Post by Paul64 on Jul 14, 2017 18:02:14 GMT
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pom
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Post by pom on Jul 14, 2017 18:07:21 GMT
I must be more drunk than I thought, that doesn't seem to answer the question at all.
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p2p2p
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Post by p2p2p on Jul 14, 2017 18:29:59 GMT
Can I suggest the cashback wording is changed to "one off payment at the end of the first month" and a rider added "If a loan part is put up for sale within the first month, it will not be labelled as a casbhback part. If sold the buyer will not be told they have a cashback part, but will get the extra interest and the end of the month"
or, and much simpler, say that if a loan part is sold within the first month, then the cashback is forfeited.
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fp
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Post by fp on Jul 14, 2017 18:40:46 GMT
Actually, no it isn't, clarity is all we are asking for, all the "i's" should have been dotted long before this was rolled out, with a full and transparent system in place which is clearly explained for all to understand, I don't want to email and ask the questions, I have better things to do with my time, as i'm sure you have. Lendy could do themselves a lot of favours and save a lot of time and hassle by clearly explaining how all aspects of these changes work, my question about amalgamation of sales queues has not been answered, and i've no doubt it was probably not thought about, no doubt you're all huddled around a table in the pub wondering how the bell you'll work around this one..... From your link: We are piloting a new cash back offer to reward lenders who fund selected tranches of qualifying property development loans, by providing a greater share of the margin distributed to lenders.
What is the cash back offer?
As part of this offer lenders who fund tranches of a qualifying development loan will receive cash back worth 1/12th of the annual interest earned, (i.e. equivalent to one extra month’s interest per annum), payable at the same time as their monthly interest payment. For example, a 12% loan would earn an extra 1% cash back for each qualifying tranche of a Development Finance Loan (DFL) loan.
How does the offer work?
A cash back qualifying loan tranche will be treated by Lendy as a separate loan for the purposes of calculating cash back. Note, all tranches however continue to rank equally in all other aspects.
At the end of the month cash back will be paid along with interest to whoever is holding the fully paid for loan part at the time. This is to ensure that all allocations in cash back tranches are fully paid for before cash back is credited.
Why has the offer been launched?
The scheme is being launched to help ensure all stages of a new property development receive the funding they require, and to reward those lenders who can help developers bring projects to completion.
This reward is allied with our rigorous due diligence process. We have recently added new resources to our credit and compliance functions. For due diligence, we also use a panel of Top 100 law firms and specialist RICS-registered valuers to support our own internal expertise.
We look forward to expanding the development loans we offer to our lenders over the coming months, and rewarding investors for funding those loans that require more of a guarantee of continuous access to on-going funding.
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dovap
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Post by dovap on Jul 14, 2017 19:47:55 GMT
so is this worth a tenner per grand @12% ?
(and then you'll have to wait a bit for your default 'bonus' as selling after a month might be a stretch)
or is it summat else completely depending on the phase of the moon, high tide and inside leg measurement
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mikes1531
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Post by mikes1531 on Jul 14, 2017 22:26:20 GMT
Can I suggest the cashback wording is changed to "one off payment at the end of the first month" and a rider added "If a loan part is put up for sale within the first month, it will not be labelled as a casbhback part. If sold the buyer will not be told they have a cashback part, but will get the extra interest and the end of the month" or, and much simpler, say that if a loan part is sold within the first month, then the cashback is forfeited. : Are you trying to clarify how you think it works? Or are you deliberately trying to water down the current offer and reduce the amount of cashback Lendy will pay out? If the former, that isn't how I understand it will work. There are parts of DFL024 T4 for sale now that clearly indicate they qualify for cashback, creating a good incentive to buy them. I suspect those parts are leftovers that weren't taken up via pre-funding, so Lendy really do appear to need to offer people an inducement to invest in that tranche. There are no parts of DFL019 for sale at the moment. On this matter then, as the cash back tranche will be kept separate until after interest run, if there is 200k for sale on the original loan, and for whatever reason there is 10k for sale on the cash back tranche, where do the loan sales fall in the queue when it is amalgamated Paul64 ? I thought we have been told that parts for sale at the end of the month would not be paid cashback.* If that's the case, I'd expect any parts for sale on the penultimate day of the month to be withdrawn from sale so that the investor does receive the cashback -- and then be put back up for sale as soon as the cashback is received. If that's what actually happens, the question asked by fp would become moot. * Is this the case? Or am I getting cashback payouts confused with bonus interest payouts?
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