Peer-to-peer lending sites: MSE guide discussion

nxdmsandkaskdjaqd

I see on Assetz Capital in their New Loans section a comment which says "Underwriting Called". What does that mean?

takesyourchances

Getting some fresh new loans on Collateral and Moneything topped up today and getting my loans slowly built up on these two platforms, so far so good with them and keeping an eye out for fresh loans on both of these.

agent69

nxdmsandkaskdjaqd wrote: »

I see on Assetz Capital in their New Loans section a comment which says "Underwriting Called". What does that mean?

It's a throwback to the old times when there was insufficient liquidity from ordinary investors to fill loans, so they paid high net worth individuals (the underwriters) to buy up whatever was left.Underwriting called meant that the underwriters had been asked to supply the readies as the loan was about to draw down.

The underwriting is now done by the surplus cash slopping around the packaged accounts, so there aren't ant underwriters any more. However, the term is still used to let investors know that the loan will be going live shortly (provided it's not a wind turbine).

elephantrosie

jamesd wrote: »

I have previously mentioned SavingStream as a P2P platform to consider. I withdraw any implied or actual recommendation to use this platform until it is clear why in relation to their loan PBL20:

1. the ultimate borrower was described as an individual when it was in fact a limited company with the platform itself apparently acquiring a 10% ownership interest as part of the deal.
2. the value used for calculation loan to value was significantly greater than the recent purchase price paid by the borrower.
3. planning permission was described as granted when it had not been and the applicant was in an apparently acrimonious discussion with planners that ultimately resulted in the application being withdrawn after it became clear that it would not be granted.
4. the platform was offering its own corporate guarantee in relation to capital and interest payments but is now citing terms and conditions denying those guarantees.
5. the extent to which similar issues may exist for other loans.

None of this should be taken as an accusation, they are simply things that appear to be inconsistencies which have caused me to be concerned about the degree to which it is wise to trust the platform.

For the moment my view remains that this loan and interest on it will be paid but I have greater reservations beyond just this one loan. Though I do think that it would be very foolish to buy this loan.

I was personally planning to invest many tens of thousands of Pounds via this platform. That is no longer my intent.

which platform do you recommend then?

jamesd

Ablrate, MoneyThing as first two choices. Both have broadly reliable loan descriptions and handle any mistakes rapidly, seldom if ever offering a loan I wouldn't be content to buy some of and have reasonable to good loan interest rates for the risks involved.

Collateral in some respects, Funding Secure has interesting secondary market properties but a lot of loans are not good buys. Bond Mason pays less but does a lot of the loan selection for their cut and has a pension SIPP option.

nxdmsandkaskdjaqd

agent69 wrote: »

It's a throwback to the old times when there was insufficient liquidity from ordinary investors to fill loans, so they paid high net worth individuals (the underwriters) to buy up whatever was left.Underwriting called meant that the underwriters had been asked to supply the readies as the loan was about to draw down.

The underwriting is now done by the surplus cash slopping around the packaged accounts, so there aren't ant underwriters any more. However, the term is still used to let investors know that the loan will be going live shortly (provided it's not a wind turbine).

I assume there is no difference in the risk profile of loans from Assetz Capital with the term "Underwriting Called". Is that correct?

agent69

nxdmsandkaskdjaqd wrote: »

I assume there is no difference in the risk profile of loans from Assetz Capital with the term "Underwriting Called". Is that correct?

All loans start off on the upcoming loan tab, and then go through the 'underwriting called' phase before it draws down. The only significance of UC is to notify people that AC think drawdown is imminent (or possibly a couple of months away if it's a wind turbine).

elephantrosie

hey guys.. I want to join ratesetter for the 5 year term. I see the rate advertised on website fluctuates everyday. would I be trapped at the rate on the day I joined or does the rate I receive fluctuate everyday?

jamesd

You get the rate at the time each piece of your money is invested until the end of the term of the loan in which that piece is invested. There are significant charges to you if you try to exit earlier than that and you don't get to choose which loans to leave. In effect a soft trap, though it could become a hard one if replacement buyers for your loan pieces couldn't be found.

Most places let you sell out of loans at any time for no or low cost if a buyer is available. Substantially higher expected rates after allowing for bad debt are also available elsewhere with me normally expecting ten percent or higher after allowing a couple of percent for bad debt. Before compounding and allowing for bad debt my raw mean interest rate averages at the moment are about 12.8% at Ablrate and 11.7% at MoneyThing.

elephantrosie

just signed up to collateral UK. how often do they put up new loan?