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Post by nesako on Jul 27, 2017 14:46:37 GMT
How you guys feel about it? For me, that is the end of lending to Lendo since if Lendo goes bust, good luck getting anything back at all... while having rights to individual loans you at least get a chance to get some of the repayments back.
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Post by nellerdk on Jul 27, 2017 16:01:29 GMT
I agree. No more lendo loans for me.
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Post by nellerdk on Jul 27, 2017 16:05:50 GMT
I would, however, like to know how Lendo is doing financially?
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gunther
New Member
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Post by gunther on Jul 27, 2017 17:56:12 GMT
After this change in terms it's more like investing in a junk bond, without even knowing how bad the company is doing. In my mind, what's the point of covering up the "product" behind that individual loan curtain, as after this it would be the same as they issuing a 100.000 euro bond every day on Mintos. The only thing what you get with this arrangement is that Lendo is entitled to extend the repayment of the Loan until the underlying loan is repaid to them. Or is there something I'm not getting here?
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Post by extremis on Jul 27, 2017 19:16:30 GMT
This is certainly not good news as the new loan structure is more risky for investors. Moreover, Lendo is currently the largest loan originator on Mintos (29% by volume). According to Mintos:
"The new structure stems from new regulations imposed by the local supervisory authorities in Georgia, where Lendo operates".
Does this mean that other loan originators with operations in Georgia (e.g. Creamfinance) will also adopt the new structure?
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fric
Member of DD Central
Posts: 199
Likes: 79
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Post by fric on Jul 27, 2017 20:06:18 GMT
This is not the first originator that got a system like this. Anyone remember all of them who they are?
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Post by extremis on Jul 27, 2017 21:09:44 GMT
Of course not. Regulation changes in Latvia about a year ago made the new structure necessary for loan originators with local operations, like Hipocredit, Banknote and Nord Lizings. Despite issuing loans in Latvia (also), Mogo has not adopted the new structure to day, which is a mystery to me.
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Post by gmaxkenny on Jul 27, 2017 21:35:34 GMT
When P2P lending started first you loaned your money to an individual or company and decided if the rate offered justified the risk you were taking. With the advent of buyback guarantee this changed as now the loan originator or platform were now acting like a bank. You deposited your money for a fixed rate and they lent it out to whoever they liked at whatever rate they could get. In a way the regulation in Latvia and now Georgia are just a reflection of this reality that is that we are lending our money to the loan originators not the borrowers.
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Post by yoica on Jul 28, 2017 7:25:06 GMT
I agree gmaxkenny . While it is a different structure in the end the risks are fairly close together. Sure before we claim directly to the borrower, but it is an unsecured loan. The BuyBack was guaranteed by Lendo not the Borrower. Now we'll have an unsecured loan directly with Lendo and the BB remains with Lendo. In the end people are buying the loans due to the BB guarantee and that doesn't change.
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Post by nesako on Jul 28, 2017 7:57:44 GMT
I agree gmaxkenny . While it is a different structure in the end the risks are fairly close together. Sure before we claim directly to the borrower, but it is an unsecured loan. The BuyBack was guaranteed by Lendo not the Borrower. Now we'll have an unsecured loan directly with Lendo and the BB remains with Lendo. In the end people are buying the loans due to the BB guarantee and that doesn't change. Unsecured loans still have a chance of being repaid by borrowers. But company which enters liquidation may or may not return anything at all. Remove the BB guarantee from the equation and it becomes clear that the new structure is way riskier.
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Post by nellerdk on Jul 28, 2017 9:22:40 GMT
if Lendo goes bust, Mintos is going to have a lot of angry customers. Let us hope it does not happen.
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Post by nesako on Jul 28, 2017 10:27:32 GMT
Let's just see what happens to Eurocent first....
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Post by sebulon on Jul 28, 2017 10:43:36 GMT
if Lendo goes bust, Mintos is going to have a lot of angry customers. Let us hope it does not happen. Let's hope. 2016 result was a heavy loss. Although direction was right.
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Post by yoica on Jul 28, 2017 12:49:11 GMT
I agree gmaxkenny . While it is a different structure in the end the risks are fairly close together. Sure before we claim directly to the borrower, but it is an unsecured loan. The BuyBack was guaranteed by Lendo not the Borrower. Now we'll have an unsecured loan directly with Lendo and the BB remains with Lendo. In the end people are buying the loans due to the BB guarantee and that doesn't change. Unsecured loans still have a chance of being repaid by borrowers. But company which enters liquidation may or may not return anything at all. Remove the BB guarantee from the equation and it becomes clear that the new structure is way riskier. Ofcourse it is riskier if you take away the BB guarantee, but without the BB I'm fairly certain none of us would even be investing in these loans.
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Post by nesako on Jul 28, 2017 15:03:15 GMT
Unsecured loans still have a chance of being repaid by borrowers. But company which enters liquidation may or may not return anything at all. Remove the BB guarantee from the equation and it becomes clear that the new structure is way riskier. Ofcourse it is riskier if you take away the BB guarantee, but without the BB I'm fairly certain none of us would even be investing in these loans. As soon as Eurocent got in trouble, BB stopped. So my comment was addressing this statement "While it is a different structure in the end the risks are fairly close together." which I do not really agree on - risks have increased...
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