pom
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Post by pom on Jul 10, 2017 10:41:05 GMT
Will be intriguing to see how it works, a bonus seems a bit academic if they don't recover enough cash at the end anyway...
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r00lish67
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Post by r00lish67 on Jul 10, 2017 10:45:17 GMT
So, it's a bit of a 'state controlled' faux variable pricing setup, presumably just due to it being too awkward to introduce actual variable pricing. Although we don't know the full ins and outs, do any of the additional rates potentially interest anyone? Also, for the brighter than me - I'm not clear how a bonus rate will help if the assets are typically overvalued and laden with due interest anyway? Edit - crossed with Pom  |
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copacetic
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Post by copacetic on Jul 10, 2017 11:02:02 GMT
It looks to me that the bonus rate is linked to term, and starts at SBL I'd guess in excel terms it's =floor(-x,30)/30 * y/12 * 0.5 where x is the remaining days (<0) and y is the %PA interest rate for the loan. This might change though as we get more information.
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geoff
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Post by geoff on Jul 10, 2017 11:13:40 GMT
None of my negative day loans have a bonus (all under 30 days) but I see that others at eg 33 days have a bonus. It looks to me that the bonus rate is linked to term, and starts at SBL As @leopardcat has observed, the bonus rate would appear to start at SBL+30
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twoheads
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Post by twoheads on Jul 10, 2017 11:34:34 GMT
It looks to me that the bonus rate is linked to term, and starts at SBL It appears that the bonus is 1/24 of the headline %PA for each whole month over term. This works for the current figures (see picture).
There is no 'bonus' (yet) for prefunding tranches which, I think, is definitely something they need.
EDIT - Crossed with copacetic - who also spotted this general rule.
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pom
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Post by pom on Jul 10, 2017 12:10:14 GMT
*cynic hat on* So it's probably just the overdue/default rates of interest we should probably have been getting in the first place that Lendy have probably already been benefiting from...
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twoheads
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Post by twoheads on Jul 10, 2017 12:16:03 GMT
Somewhat strangely (nothing new for Lendy) they've added bonuses to the repaid loans (which obviously never had them).
It looks like some automated process ran through all loans on ever on the book irrespective of their current status.
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nick
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Post by nick on Jul 10, 2017 12:31:18 GMT
*cynic hat on* So it's probably just the overdue/default rates of interest we should probably have been getting in the first place that Lendy have probably already been benefiting from... It would be good to understand whether the bonus rates on overdue/default loan is being funded out of Lendy's usual margin (6%pa? + arrangement fees) or from default rates already payable by the borrower to Lendy.
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registerme
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Post by registerme on Jul 10, 2017 13:02:33 GMT
hmmm I don't like the use of the term "bonus" for what seems to be a "penalty default interest rate". There's ambiguity there when it should be easy to be clearer. If Lendy are charging "penalty default interest rates" on overdue loans then lenders should receive all of it, we are the ones bearing the risk, not Lendy.
A "bonus" to hold to term in the event of loan overrun is not the right way to address the issues that we, Lendy, or the SM face at the moment. The way to do that is:-
a) pass on any and all default interest to lenders
b) allow variable pricing on the SM
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registerme
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Post by registerme on Jul 10, 2017 13:14:40 GMT
I probably should have sprinkled some "it seems to me" and IMHOs in there but I reckon the gist stands....
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Post by jackpease on Jul 10, 2017 13:36:08 GMT
aaaaaghhh kicking the issue of defaults into touch again. The longer Lendy leaves it, the worse it will get.
Other platforms survive after lenders lose money - no one likes to lose money but just at the moment I won't lend any more until I see the platform work through this pain barrier and we see what's on the other side.
Jack P
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mikes1531
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Post by mikes1531 on Jul 10, 2017 13:51:05 GMT
This hopefully might focus the borrower on making the loan current again (and dropping the accrual rate back to say 12%). : You seem to be making the assumption that this change in terms to investors is being accompanied by a change in terms to borrowers. As an underwriter, you may have access to loan agreements that 'ordinary' investors like me don't. But I've always assumed that -- like most loans -- the SS/Lendy contracts with borrowers always have had penalties built in for failure to repay on time. And the fact that investors didn't receive any compensation for overdue loans simply was the result of SS/Lendy choosing not to share any of what they received with us. I did not assume that the buyer could be non-performing' without penalty. If my assumption is wrong, and you have any evidence of this, I'd be pleased to learn about it.
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pom
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Post by pom on Jul 10, 2017 14:08:04 GMT
Am I the only one thinking that ..
"As part of this offer lenders who fund tranches of a qualifying development loan will receive cash back worth 1/12th of their investment in that loan (i.e. equivalent to one extra month's interest per annum) payable at the same time as their interest payment."
..really isn't what they meant?
*goes back to re-read it a few more times*
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moogman
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Post by moogman on Jul 10, 2017 14:20:30 GMT
Current SM is at £6,841,332.99 - It will be interesting if this affects liquidity positively (and if so, by how much).
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p2p2p
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Post by p2p2p on Jul 10, 2017 14:23:46 GMT
I was confused by the latest mailing.
"From August 1 2017, during the first 180 days of the Tolerance Period, interest will accrue as opposed to the current policy of Lendy paying interest due to investors out of our own funds."
Does it mean that if you held a loan that goes overdue the interest payments stop, but then you get back interest when its finally repaid? And anyone holding the loan at redemption gets a "pass the parcel" bonus.
What do I get if I sell a loan 2 months overdue that is redeemed after 4 months?
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