gustapher
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Post by gustapher on Aug 11, 2017 11:24:01 GMT
"To adhere to our regulatory responsibilities in not providing credit to cover shortfalls, Lendy will be introducing a new process within Available Loans (the secondary market), whereby unfunded loan availability will appear above loans parts that have been put up for sale by investors. This is to ensure loans are completely funded, prior to sales occurring.
For example, DFLXXX has been funded 95% on a £250,000 loan leaving £12,500 unfunded. Lendy would place this unfunded £12,500 on the Available Loans in order to fulfill the loan ahead of any ‘For Sale’ loan parts. As soon as the loan is 100% filled, loan parts owned by investors that are 'For sale' will then be eligible to be sold."
Really really don't like this change. If they flood the market with DFL loans like before you're stuffed.
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jcb208
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Post by jcb208 on Aug 11, 2017 11:24:21 GMT
Lendy are going to start queue jumping,another reason to be careful of multi tranche loans
To adhere to our regulatory responsibilities in not providing credit to cover shortfalls, Lendy will be introducing a new process within Available Loans (the secondary market), whereby unfunded loan availability will appear above loans parts that have been put up for sale by investors. This is to ensure loans are completely funded, prior to sales occurring.
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Jeepers
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Post by Jeepers on Aug 11, 2017 11:31:41 GMT
So if they're going to jump the queue, interest should be paid on those loan parts waiting in the queue.
Lendy always said interest wasn't paid when selling because it was paid on loans bought with INPL, now that's gone, it should be paid especially in light of today's update.
Lendy has a vested interest in leaving investors loan parts on the SM as long as possible to pocket the interest. Why not just say 'this is to ensure we can steal some more of your interest' ?.
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Post by GSV3MIaC on Aug 11, 2017 11:32:04 GMT
Especially since your 'for sale' parts, pushed down the queue, are costing you interest (i.e. you don't get any) while they are stuck there .. and Ly can now keep them stuck as long as they like.
Yet Another Good Deal ... not.
/mod hat on
I combined two threads (with identical titles) which may look a little confusing, but hopefully will reduce future crosstalk!
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gustapher
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Post by gustapher on Aug 11, 2017 11:42:29 GMT
This is a real deal breaker for me for two reasons:
1) Lendy have already demonstrated a poor ability to match supply and demand
2) There is no line of sight of when future funding tranches will be launched
This ramps up the risk to investors significantly.
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dovap
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Post by dovap on Aug 11, 2017 11:43:18 GMT
we'll prob be getting much higher rates for big early stage DFLs to cover this load of old nonsense
no ?
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Post by portlandbill on Aug 11, 2017 12:06:41 GMT
Just when it was looking like Lendy were getting their act together again....
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lofty
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Post by lofty on Aug 11, 2017 12:17:25 GMT
"not providing credit to cover shortfalls". Pardon my ignorance, but if a new tranche is started and the money given to the borrower before sufficient funds have been raised by us lenders then Lendy will still be covering a shortfall? Sure, it'll disappear quicker now that they've queue jumped, but does this address the "regulatory responsibilities"? I'd have thought that the tranche wouldn't be able to go live until enough money is pledged/collected - in which case Lendy wouldn't need to have anything in the queue at all.
Anyway that's my two-penneth.
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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 Aug 11, 2017 12:28:39 GMT
Just when it was looking like Lendy were getting their act together again.... Surely this change is Lendy getting their act together in making sure they comply with FCA rules so they can get the full authorisation done & dusted. Im amazed INPL is still going. Dont like it but thats the way it has to be ... we've had a good run but reality has caught up ... Lendy now in line with other platforms Col, MT, Abl on SM operation.
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southport
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Post by southport on Aug 11, 2017 12:34:42 GMT
I think Lendy may find it very dificult to get funding for large DFL's after 1st september. Even if they pay interest on loan parts which are for sale to me the risk seems to have increased beyond my comfort zone.
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warn
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Post by warn on Aug 11, 2017 12:50:34 GMT
I think Lendy may find it very dificult to get funding for large DFL's after 1st september. Even if they pay interest on loan parts which are for sale to me the risk seems to have increased beyond my comfort zone. Possibly the risk of not being able to operate a 100-day rule and safely sell out to a patsy may have increased, but I personally buy those loans I do buy with every intention of holding them right the way through to whatever form their consummation takes, so will continue to invest quite cheerfully. The change doesn't seem at all unfair to me. Indeed, Lendy have made quite a few changes since the start of the year, and I confess that I'm finding it hard to curl my lip at any of them
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SteveT
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Post by SteveT on Aug 11, 2017 13:20:02 GMT
They'll soon find it's a case of swings and roundabouts. In the past, Lendy used underwriters to take up the slack in larger loans until retail lender demand caught up, which cost them additional margin. If the plan now instead is to block SM sales until new tranches have filled, then:
a) DFLs are going to fill much more slowly in the first place, since "hold to term" has to be the default assumption, and
b) it's going to cost Lendy more in other ways (cashback, etc.) to fill the later tranches, just like Funding Circle circa 2015.
And if they continue the policy of paying no interest on loan parts offered for sale, the above effects will be even more pronounced.
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registerme
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Post by registerme on Aug 11, 2017 13:30:54 GMT
"not providing credit to cover shortfalls". Pardon my ignorance, but if a new tranche is started and the money given to the borrower before sufficient funds have been raised by us lenders then Lendy will still be covering a shortfall? Sure, it'll disappear quicker now that they've queue jumped, but does this address the "regulatory responsibilities"? I'd have thought that the tranche wouldn't be able to go live until enough money is pledged/collected - in which case Lendy wouldn't need to have anything in the queue at all. Anyway that's my two-penneth. What lofty said. Somebody is funding it.
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southport
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Post by southport on Aug 11, 2017 13:48:10 GMT
I think Lendy may find it very dificult to get funding for large DFL's after 1st september. Even if they pay interest on loan parts which are for sale to me the risk seems to have increased beyond my comfort zone. , but I personally buy those loans I do buy with every intention of holding them right the way through to whatever form their consummation takes, so will continue to invest quite cheerfully. The change doesn't seem at all unfair to me. Indeed, Lendy have made quite a few changes since the start of the year, and I confess that I'm finding it hard to curl my lip at any of them Exactly, although I wouldn't call anyone who buys short dated loans a 'patsy', just someone who is more comfortable with the risk than I am. We all have our own comfort zones.
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Post by GSV3MIaC on Aug 11, 2017 14:12:40 GMT
I think they SHOULD reconsider paying interest on parts on the SM.
Two reasons .. firstly the current system is so complex nobody really understands it properly (and Ly have demonstrated they can't even code it right). KISS .. and 'your loan part has been on sale for a total of 12 days 14 hours and 22 minutes (but don't ask us when that was) so we're deducting 14p interest (don't ask us which month, and how much of that is bonus) doesn't qualify as KISS.
Secondly the 'pay no interest while the SM is glued up' puts Ly's interests directly in opposition to those of the lenders who are trying to sell .. Ly benefit from a stalled SM (which they said was there to supply liquidity). FHS, just charge sellers 0.25 or 0.5 or whatever % at the point of sale and be done with it. Especially now Ly are going to shoehorn THEIR unsaleable parts in ahead of everyone else's. Fine, they can do that, but should not benefit financially from screwing the SM for everyone else.
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