Peer-to-peer lending sites: MSE guide discussion

TheShape

At this rate the Moneything business will end up being property development rather than p2p lending.

fun4everyone

Sadly I am also in all of the MT defaults. Not really been paying attention .

masonic

Somerset_La_La_La wrote: »

As one in Birkenhead (but fairly low figures), a 70% capital recovery after today's developments wouldn't be the end of the world given all that's gone wrong with it IMO. Waiting a year for that isn't great, but I'd rather that than an instant 33%.

Remember that's a 70% recovery of loan capital, but as this is a recovery from sale of the completed development (valued at £3.1m) it represents just 44% recovery of the purported value of the asset, or 48% recovery of the value of the asset in its condition at last valuation.

Why are they only in the 'early stages' of enforcing the PG? Assuming the borrower actually has some net worth to make the guarantee worthwhile, surely they need to do it ASAP before he ships it all off to some far flung tax-haven? There will almost certainly be a shortfall even before today's update (if you take into account the default interest due to lenders) - so it's a bit concerning to see that they're not closer to realising some personal assets!

I've seen a quite a few loans backed by a PG end up in capital loss, but I've yet to see an example of any of those losses made good by the PG, even a small fraction of the loss. I normally attribute no value to them at all, especially in the case of property developers.

masonic

fun4everyone wrote: »

Sadly I am also in all of the MT defaults. Not really been paying attention .

Probably a sensible course of action. Liquidity in the SM is gone for obvious reasons, so there isn't anything you could do even if you wanted to.

fun4everyone

masonic wrote: »

Probably a sensible course of action. Liquidity in the SM is gone for obvious reasons, so there isn't anything you could do even if you wanted to.

Actually I have a reasonable chunk in these MT defaults so I am looking now. Compared to FS where I have only tiny pieces of everything yet I take more notice because some of the handling there is outrageous.

I had more faith in the people running MT than I do FS hence I just kind of trusted them to be handling it for me. I don't mind waiting a year for 80% if its a choice between that and 33% now. I agree that PG's should have been immediately enforced on default. They are never worth the paper they are written on though are they?

fun4everyone

masonic wrote: »

there does appear to be a more general issue with developers not doing what they should with the money advanced to them.

Is it a question of doing what they "should" or a doing what they stated they would with the money? The former is debateable but the second can be a misrepresentation.

masonic

fun4everyone wrote: »

Is it a question of doing what they "should" or a doing what they stated they would with the money? The former is debateable but the second can be a misrepresentation.

It's hard to say given the information we have. Reading between the lines, it would appear that some corners have been cut and presumably some costs reduced. To the extent that work will have to be re-done. It does make me wonder if all of the money was spent on the development or if some of it was trousered, but there's no evidence either way at this stage, AFAIK.

takesyourchances

TheShape wrote: »

At this rate the Moneything business will end up being property development rather than p2p lending.

Was thinking the same myself on that! I have £200 in that loan, it is certainly not the values and processes of recovery in which people would of hoped for. Hopefully a few of the other defaults solve that seem close.



My P2P is well run down now, it is like pulling teeth though waiting on Collateral to solve and MT to run down and defaults to solve one way or the other. Will just let it take it's course, what else :) I am hoping there will be no problems with the Liverpool loan on MT as I'd like to see this money out as well as it is my largest left with them and I will glady take that out.



I am concentrating on my S&S ISA etc finally broke 100K invested recently so first 6 figures broke into :) I have around £7000 left in P2P from around 17k and £4600 is in the Collateral mess, so getting there winding it down and feel the hassles is just not worth it for me and the recent MT default update reminded me of that.



Will keep on with my other goals while all these things sort out

[Deleted User]

masonic wrote: »

Remember that's a 70% recovery of loan capital, but as this is a recovery from sale of the completed development (valued at £3.1m) it represents just 44% recovery of the purported value of the asset, or 48% recovery of the value of the asset in its condition at last valuation.

I was looking at it as capital prevention (60%+ isn't as awful as it could be) - but yes you do raise a very interesting point. A secured loan going at just 44% of the value which has been endorsed several times or 48% of the latest so-called valuation.

Of course the sub-standard materials used in the latter stages would knock that valuation down, but not by some 50%?!?

Luckily I'm in P2P more for income generation (little of it mind!) than for saving my deposit. As soon as this defaulted (added to Plymouth which I was also in @ £1k ish) I promptly sold off the rest and moved it to Growthstreet. Half the return but a lot lower risk it seems!

I'm hoping Plymouth can be sold off soon (academic year 2018/19 starting!), even if I can get 70% back on that to use towards my deposit it'd be helpful!

masonic

Somerset_La_La_La wrote: »

Luckily I'm in P2P more for income generation (little of it mind!) than for saving my deposit. As soon as this defaulted (added to Plymouth which I was also in @ £1k ish) I promptly sold off the rest and moved it to Growthstreet. Half the return but a lot lower risk it seems!

The problem is appearances can be deceptive. I hold a few loans secured on business assets (as a diversifier), even though my most significant loss to date (100%) was in one such loan in which the business assets in question were secretly sold just prior to the loan expiring. So I do prefer loans in which the primary security is not something that can be spirited away, or if it can, it is physically secured out of reach of the borrower for the duration of the loan.

Only time will tell whether loans offered by some platforms are actually safer than loans offered by others - it takes time for big failures to materialise.

I'm hoping Plymouth can be sold off soon (academic year 2018/19 starting!), even if I can get 70% back on that to use towards my deposit it'd be helpful!

I'm optimistic about the outlook for Plymouth, much moreso than Bollington and Birkenhead. What has become clear across all platforms offering these types of development loans is that the methodology of starting from a GDV and subtracting remaining build costs in order to arrive at a present value is flawed and it is not appropriate to lend more than about 30% of towards the build costs of such a project, with the balance coming out of the developer's pockets.