mary
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Post by mary on Aug 24, 2017 16:23:22 GMT
I'm a NO.
I may change to a yes, provided its via a separate Default tab AND there is something similar to Lendy's Bonus if held to resolution.
I particularly like the Lendy solution as it is simple and elegant and provides a significant incentive to buy and hold if you think there is a good chance of a positive resolution, without the complexity of the discount/premium issue.
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star dust
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Post by star dust on Aug 24, 2017 16:30:33 GMT
I'm a NO. I may change to a yes, provided its via a separate Default tab AND there is something similar to Lendy's Bonus if held to resolution. I particularly like the Lendy solution as it is simple and elegant and provides a significant incentive to buy and hold if you think there is a good chance of a positive resolution, without the complexity of the discount/premium issue. The interest rate on the defaulted loan has risen 2% to 14%, which accrues and would only be paid at term if enough is recovered I assume. Haven't rechecked MT's default terms for payment priorities.
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Post by MoneyThing on Aug 24, 2017 16:34:51 GMT
Afternoon,
I have just taken legal advice and it has been recommended that we do stick to our Ts&Cs in this instance. The error was mine personally as I had not appreciated when I sent the email to say that SM would be suspended for 48hrs that we had said that this would not be permitted in our Ts&Cs - my apologies.
Our lawyer is just drafting up some wording for me to communicate this later this evening.
We may however look to change this clause in the Ts&Cs in due course, perhaps at the time when we incorporate the IF ISA bits.
To this end, please could people revisit their votes on the poll on the basis that it is a question for future defaults (and not this one). It would be useful to gauge lenders opinion on this topic.
I would also make the point that we do plan to maintain a separate tab for defaulted loans.
Apologies again and thank you.
Regards,
Ed
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Post by beeje13 on Aug 24, 2017 16:38:29 GMT
Nope. And I hold some.
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Post by geraldine1210 on Aug 24, 2017 16:39:30 GMT
MoneyThing, would it be worthwhile scrapping this poll and doing on purely for potential future defaults?
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SteveT
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Post by SteveT on Aug 24, 2017 16:44:53 GMT
If defaulted loans are to be segregated on a separate tab then I see no reason why future trading in such loans (subject to a notified T&Cs change) shouldn't incorporate trading at a discount. By all means, add a confirmation tick box if it's felt that buyers must be asked to confirm they understand what they are buying, but there is little point enabling trading in defaulted loans unless discounting is permitted; they simply won't sell otherwise.
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Post by bracknellboy on Aug 24, 2017 16:46:52 GMT
while I can fully understand why the legal advise would be to not change Ts&Cs mid term, I struggle to see why lenders would get worked up about the principle involved in changing this particular aspect of the Ts&Cs.
For a current holder of the loan its entirely a 'beneficial' change; for someone who then bought it as a consequence, they would be buying it under a new and known at the time set of Ts and Cs.
Whether defaulted loans should be tradeable is another matter, but I cannot see how/why MT lenders could object on the basis that it required a beneficial Ts and Cs change.
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theshape
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Post by theshape on Aug 24, 2017 16:47:44 GMT
I voted no despite being in the loan. I'm not comfortable with terms and conditions being changed 'after the fact'.
And I'd rather not have premiums/discounts. I much prefer the simplicity of trading at par.
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dovap
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Post by dovap on Aug 24, 2017 16:48:39 GMT
some seem desperate to get discounts/premiums snuck onto the platform
anyway surely we need a poll to see if we need a new poll innit
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Post by bracknellboy on Aug 24, 2017 16:49:08 GMT
If defaulted loans are to be segregated on a separate tab then I see no reason why future trading in such loans (subject to a notified T&Cs change) shouldn't incorporate trading at a discount. By all means, add a confirmation tick box if it's felt that buyers must be asked to confirm they understand what they are buying, but there is little point enabling trading in defaulted loans unless discounting is permitted; they simply won't sell otherwise. OR AS someone has noted, retention bonus instead.
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mary
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Post by mary on Aug 24, 2017 16:53:39 GMT
I'm a NO. I may change to a yes, provided its via a separate Default tab AND there is something similar to Lendy's Bonus if held to resolution. I particularly like the Lendy solution as it is simple and elegant and provides a significant incentive to buy and hold if you think there is a good chance of a positive resolution, without the complexity of the discount/premium issue. The interest rate on the defaulted loan has risen 2% to 14%, which accrues and would only be paid at term if enough is recovered I assume. Haven't rechecked MT's default terms for payment priorities. Agreed.
However, this is not an incentive to buy and hold, as I could buy and then (try) to resell later (or list back on SM immediately and collect IA while listed). With Lendy its a 50% uplift to interest (IA) - but only paid to the final holder of the loan part as a bonus on recovery, even if that person only had it for the final day.
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registerme
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Post by registerme on Aug 24, 2017 16:53:56 GMT
You may think you agree with me, but I very much disagree with you! I have no problem with AC's funds, but I have a major problem with saying that people who don't meet the FCA's criteria of a high net worth individual or a sophisticated investor shouldn't be allowed to invest in loans directly, which appears to be what you are suggesting (disclaimer: I meet those requirements). The kind of solutions I was thinking about was: 1) Create a new tab for "Defaulted Loans" next to "Live Loans" and don't list defaulted loans on the summary page (following Lendy). 2) Create a quiz that must be passed before a user is allowed to invest in a defaulted loan for the first time, triggered by clicking "Invest" (following Blend's quiz on joining the platform). Proviso - I am not claiming to be an expert in this, or to be a renowned P2P investor. I am likely to be better equipped than some, and certainly worse equipped than others. That out of the way, I didn't say that they should not be allowed to invest in loans directly, I suggested that there be an alternative available to them should they not feel that direct investment is suitable for them. However, if the counter-argument against allowing discounts / premiums on a secondary market is "because people won't understand it" then yes, I am concerned that such people are not equipped to invest directly in specific loans. It's rare, but occasionally on this forum we see examples of people who evidently don't understand what they are doing, for example getting very simple maths wrong, or confusing LTV with GDV. Is that the mark of a "sophisticated investor"? Hardly. I suspect that the wider non-forum member population would see a higher proportion of such people. Certainly there is the risk of miss-selling claims here, and if I ran a platform I would be concerned about it no matter what my Ts&Cs said. There are additional considerations, for instance how to scale a platform, or how to prevent flipping, but the flipside of not allowing selling at premiums / discounts on a secondary market is that I have less tools available to me to to manager my risk. That's unfair too, right? As I said in my initial comment I don't claim to have the answer, and any direction a platform chooses to go in will likely annoy some proportion of its lender base. The answer has to be fair, it has to avoid miss-selling risk, and it has to be able to scale.
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Post by GSV3MIaC on Aug 24, 2017 17:37:15 GMT
I don't have a problem with allowing it .. a beneficial change to the T&Cs as far as I can see, although I expect buyers would be thin on the ground at 14% I did buy some slightly dented loans on AC at penalty interest rates and the results were not too bad overall. Obviously the buyer needs to understand what they are buying .. maybe 14% interest, maybe some capital loss, you pays your money and takes your pick. Not sure ther'd be a lot of takers at 14% .. make it 24%, and I'll have some. 8>.
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sirius
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Post by sirius on Aug 24, 2017 17:41:39 GMT
applets
With regard to an ongoing loan, the T&C's can be changed, but only on an indivdual basis and by mutual consent.
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Post by elephantrosie on Aug 24, 2017 17:59:29 GMT
a defaulted loan should not be on SM.
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