Peer-to-peer lending sites: MSE guide discussion

soulsaver

To be accurate - they don't pay the bonus; they lend it out in the Access account from whence you can withdraw it if conditions allow...to your holding ac and thence to your linked bank ac.

@gdreyer
If the RAF terms on their webby is up-to-date, you're not only late to the party, you're late to the referral which ran until Jan 22nd.. And was for £50.00?

Have you got different terms?

https://www.ratesetter.com/mgm-terms

gdreyer

soulsaver wrote: »

To be accurate - they don't pay the bonus; they lend it out in the Access account from whence you can withdraw it if conditions allow...to your holding ac and thence to your linked bank ac.

@gdreyer
If the RAF terms on their webby is up-to-date, you're not only late to the party, you're late to the referral which ran until Jan 22nd.. And was for £50.00?

Have you got different terms?

https://www.ratesetter.com/mgm-terms

The MSE ref link still offers £100, unless I'm mistaken

soulsaver

gdreyer wrote: »

The MSE ref link still offers £100, unless I'm mistaken

I must have missed where you said it was via the MSE link.

Rudyson

gdreyer wrote: »

The MSE ref link still offers £100, unless I'm mistaken

The bonuses were £50 for the referrer, and £100 for the new investor, the latter being paid when at least £1000 had been invested for 1 year.

colalba

Lendy went into administration earlier in the year. The Lendy Action Group is currently crowd funding ( crowdjustice.com ) to bring a legal action to ensure a higher proportion of any recovered funds finds its way to the lenders rather than the owners of the platform.

https://lendyactiongroup.co.uk/login/

Link to the crowdfunding page
https://www.crowdjustice.com/case/lendy-action-group-legal-fund/

I hope it is ok to have such a link, apologies if it isn't. I am not involved in the running of the LAG just a small lender.

masonic

Good luck to them, but this seems like throwing good money after bad.

bigadaj

masonic wrote: »

Good luck to them, but this seems like throwing good money after bad.

It may be but there's an important principle at play and one would think a good chance of success.

The specific point trying to be overturned is the 'waterfall' terms that were typically added after the investment had commenced. It appears a fairly obvious unfair contract term, creaming off excessive penalty interest for Lendy when they are generally only the agent in these loans.

The administrators have supposedly taken legal advice and don't want/ can't overturn it, so legal action appears the only way.

You have to hand it to the Lendy management they are the only one to have profited from this situation, though some borrowers appear to have bought back property loans for far less than they borrowed or the initial valuations as well.

masonic

bigadaj wrote: »

It may be but there's an important principle at play and one would think a good chance of success.

The specific point trying to be overturned is the 'waterfall' terms that were typically added after the investment had commenced. It appears a fairly obvious unfair contract term, creaming off excessive penalty interest for Lendy when they are generally only the agent in these loans.

The administrators have supposedly taken legal advice and don't want/ can't overturn it, so legal action appears the only way.

You have to hand it to the Lendy management they are the only one to have profited from this situation, though some borrowers appear to have bought back property loans for far less than they borrowed or the initial valuations as well.

I'm familiar with the situation of model 1 investors (who are unsecured creditors of Lendy, then SavingStream, in applicable loans) and model 2 investors (who are P2P lenders with loans to other borrowers secured on assets held by the Security Trustee) That's the pre-waterfall situation.

The stated purpose of the court action is for the benefit of the model 2 investors. So am I to gather those ring-fenced trust assets are to be treated as assets of Lendy itself and used to repay creditors rather than investors? That would be highly improper.

I had assumed it was the model 1 investors who were campaigning for their loans to be treated as if they were model 2 (i.e. secured), but it seems this is not the case.

Edit: missed this part: "creaming off excessive penalty interest for Lendy when they are generally only the agent in these loans". So it's the penalty interest paid by borrowers that they want. It's been a long time since I've invested in loans on the Lendy platform, but I don't recall lenders ever being entitled to penalty interest when loans were non-performing or in default. Perhaps I'm misremembering.

bigadaj

masonic wrote: »

I'm familiar with the situation of model 1 investors (who are unsecured creditors of Lendy, then SavingStream, in applicable loans) and model 2 investors (who are P2P lenders with loans to other borrowers secured on assets held by the Security Trustee) That's the pre-waterfall situation.

The stated purpose of the court action is for the benefit of the model 2 investors. So am I to gather those ring-fenced trust assets are to be treated as assets of Lendy itself and used to repay creditors rather than investors? That would be highly improper.

I had assumed it was the model 1 investors who were campaigning for their loans to be treated as if they were model 2 (i.e. secured), but it seems this is not the case.

Edit: missed this part: "creaming off excessive penalty interest for Lendy when they are generally only the agent in these loans". So it's the penalty interest paid by borrowers that they want. It's been a long time since I've invested in loans on the Lendy platform, but I don't recall lenders ever being entitled to penalty interest when loans were non-performing or in default. Perhaps I'm misremembering.

I pulled out of Lendy a couple of years ago, some of the issues were evident then but I was also lucky I suppose, and they are ironically my most profitable p2p investment.

My understanding is that Lendy unilaterally changed conditions such that upon default penalty interest was paid to Lendy in preference to lenders, and that the rate of that penalty interest was typically around 3% per month. So on large loans which aren't formally defaulted for a number of years the vast majority of returns would go to the waterfall in preference to interest and capital back to actual lenders.

The administrators have taken legal opinion but don't appear minded to overturn Lendy terms, they seem to be staying neutral in that they aren't paying out recoveries where the waterfall is significant.

The waterfall woud arguably make model 1 investors better off, in theory at least, as there would be a larger pool for them to be paid from, but in reality it's the Lendy directors who would probably come out best as they are also creditors.

Teh difficulty appears to be that oddly no ones primary responsibility is to look out for lenders, the administrators duty is to maximise returns to creditors, after their payments obviously, and the creditors committee, though formed largely from lenders, has a duty also to creditors, so lenders who should have the highest priority on assets that have lent on, have no one to act exclusively for them.

P2p may be the Wild West but Lendy appears to be dodge city!

masonic

bigadaj wrote: »

My understanding is that Lendy unilaterally changed conditions such that upon default penalty interest was paid to Lendy in preference to lenders, and that the rate of that penalty interest was typically around 3% per month. So on large loans which aren't formally defaulted for a number of years the vast majority of returns would go to the waterfall in preference to interest and capital back to actual lenders.

Like you, I left Lendy some years ago without having lost a penny. During the time I was there, there was nothing in the terms that would entitle investors to be paid any penalty interest. Perhaps the terms were changed after I left to allow investors to benefit from penalty interest and then changed again so that the interest was paid to Lendy. I wonder how many borrowers actually paid any penalty interest and how much was collected.