P2P: Saving Stream (AKA SavingStream)

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  • jamesd
    jamesd Posts: 26,103 Forumite
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    edited 6 April 2017 at 3:17AM
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    Malthusian wrote: »
    Traditionally, people making these types of loans would have done due diligence up the wazoo to prevent such things occurring. I worked very briefly in due diligence and the idea that a corporate finance deal could have gone ahead without somebody noticing that the director was banned from acting as one is simply inconceivable. Same with the first one.
    It's hard for me to think that they just didn't notice they were one of the part owners of the borrowing limited liability company in another case.

    I hope the banned director was borrowing in a personal capacity.
    Malthusian wrote: »
    The great selling point of P2P seems to be its ability to bring people together who are happy to chuck money at things for 12% interest without doing due diligence, and enough of them that you can get a worthwhile sum of money off them.
    Fortunately not all P2P is like this one and I use and recommend ones which seem to be doing a better job of verifying and telling lenders about the things which could influence a decision to lend.
  • masonic
    masonic Posts: 23,279 Forumite
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    economic wrote: »
    i also wrote something on SS about the more unforseen risks with SS in terms of their balance sheet. essentially you are not secured, just an unsecured lender. im pulling my money out as i wouldnt want to have much with them anyay (max i have and willing to have is 10k), and just not worth worrying about so will just withdraw.

    http://forums.moneysavingexpert.com/showthread.php?t=5607991
    Your information that lenders loan money to SS is true for some loans, but apparently not others. Those in which the legal charge is registered to Lendy Ltd involve an unsecured loan, whereas those where it is registered to SSSH Ltd involve secured loan contracts directly between lender and borrower with recourse to the ring-fenced holding company... but of course lenders cannot verify the details of their own loan contracts, so this is based only on what SS tells us.

    There are at least half a dozen loans I am aware of that have been promoted with inaccurate information. I expect there are more that I am unaware of. Since I cannot trust the information provided by SS is clear and not misleading, I cannot invest with them and liquidated all of my existing loans a few weeks ago.
  • economic
    economic Posts: 3,002 Forumite
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    masonic wrote: »
    Your information that lenders loan money to SS is true for some loans, but apparently not others. Those in which the legal charge is registered to Lendy Ltd involve an unsecured loan, whereas those where it is registered to SSSH Ltd involve secured loan contracts directly between lender and borrower with recourse to the ring-fenced holding company... but of course lenders cannot verify the details of their own loan contracts, so this is based only on what SS tells us.

    There are at least half a dozen loans I am aware of that have been promoted with inaccurate information. I expect there are more that I am unaware of. Since I cannot trust the information provided by SS is clear and not misleading, I cannot invest with them and liquidated all of my existing loans a few weeks ago.

    thanks. i have done the same. wont be investing with them anymore.
  • masonic
    masonic Posts: 23,279 Forumite
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    masonic wrote: »
    They have not been forthcoming with lenders about a group of 6 loans that appear to be on the brink of default and SS is currently negotiating a recovery. Another loan, where the borrower is in administration and SS has appointed receivers, has just been updated with no mention of these important events.

    There are a significant number of other loans that are not being serviced by the borrowers and could also soon be in default - instead SS are paying interest out of their own pocket to hide this fact from lenders (a recent change of policy since previously they would only allow loans to continue if the borrower serviced any additional interest payments).
    It's been a month since I wrote the above and earlier this week 3 more loans were officially put in default. It is predicted that this number will increase to 10 over the next two weeks. Things are certainly not looking good at SavingStream, but at least lenders are no longer being misled about some of these zombie loans.
  • economic
    economic Posts: 3,002 Forumite
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    masonic wrote: »
    It's been a month since I wrote the above and earlier this week 3 more loans were officially put in default. It is predicted that this number will increase to 10 over the next two weeks. Things are certainly not looking good at SavingStream, but at least lenders are no longer being misled about some of these zombie loans.

    thanks for the colour. i have sold all my loans apart from one. PBL081. this one seems to be taking some time. do you know if this has defaulted?

    withrew most my money and now back in my bank account. will be shutting my SS account once i recovered rest of the money.
  • masonic
    masonic Posts: 23,279 Forumite
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    economic wrote: »
    thanks for the colour. i have sold all my loans apart from one. PBL081. this one seems to be taking some time. do you know if this has defaulted?
    Yes, PBL081 has defaulted. This loan had a very colourful past. It came to light last August that the developer breached the terms of the planning permission and was made to undo the unauthorised work. I was invested in the loan up to that point, but made a quick exit as soon as I saw the update from SS (who were tipped off by a P2P independent forum member who saw the objection letters from neighbours lodged on the local planning website - dated around May 2016).

    The borrower stopped paying the loan interest at that point (although SS kept this quiet until a few months ago), so 6 months of interest has been paid by SS to hide the fact that the borrower was defaulting on interest payments. SS is currently lending the borrower more money to fix the unauthorised work - about another £300k.

    Someone may yet throw you a lifeline - seems like there are people on SS who don't get put off investing even by the worst news - I think this one could be a real test for the provision fund.
  • economic
    economic Posts: 3,002 Forumite
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    masonic wrote: »
    Yes, PBL081 has defaulted. This loan had a very colourful past. It came to light last August that the developer breached the terms of the planning permission and was made to undo the unauthorised work. I was invested in the loan up to that point, but made a quick exit as soon as I saw the update from SS (who were tipped off by a P2P independent forum member who saw the objection letters from neighbours lodged on the local planning website - dated around May 2016).

    The borrower stopped paying the loan interest at that point (although SS kept this quiet until a few months ago), so 6 months of interest has been paid by SS to hide the fact that the borrower was defaulting on interest payments. SS is currently lending the borrower more money to fix the unauthorised work - about another £300k.

    Someone may yet throw you a lifeline - seems like there are people on SS who don't get put off investing even by the worst news - I think this one could be a real test for the provision fund.

    thanks a lot. its strange because you would have thought i would at least have got an email about this (i guess i should also look into it more detail however with so many loans its hard to keep tracks). anyway its only £100 (i only put £100 max in any single loan). so not a huge loss and i would recover some back at least.

    very scary SS tried to hide it for 6 months. also very scary they lent money (which i guess is out of the provision fund or from their profits?).

    definately lost all trust in the platform so glad to get out now, just wait for the £100 then shutting it down. made a decent return whilst with them but getting out before it gets worse.
  • masonic
    masonic Posts: 23,279 Forumite
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    economic wrote: »
    very scary SS tried to hide it for 6 months. also very scary they lent money (which i guess is out of the provision fund or from their profits?).
    If you think about it, they had no choice but to lend more money to have the property put right. The borrower has essentially walked away from the loan, leaving SS with a property that they would never be able to sell with planning violations hanging over it.

    But it was the dishonesty around who was paying interest on some of these loans that was the final straw for me.
  • economic
    economic Posts: 3,002 Forumite
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    masonic wrote: »
    If you think about it, they had no choice but to lend more money to have the property put right. The borrower has essentially walked away from the loan, leaving SS with a property that they would never be able to sell with planning violations hanging over it.

    But it was the dishonesty around who was paying interest on some of these loans that was the final straw for me.

    agree. is the interest out of the fund provision? imagine a large loan like this. can wipe out a lot of the provision fund. very risky platform. much better P2P platforms out there.
  • masonic
    masonic Posts: 23,279 Forumite
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    economic wrote: »
    agree. is the interest out of the fund provision? imagine a large loan like this. can wipe out a lot of the provision fund. very risky platform. much better P2P platforms out there.
    The information that I've seen is the interest payments have been funded out of working capital, not the provision fund.

    However, the provision fund has just paid out about £400k to compensate investors in PBL020 when the security valued at £2.4m sold for £1.3m and failed to cover the £1.7m loan. They also paid 9 months of interest, valued at £153k, presumably out of their own capital, and receiver/admin costs of £170k.
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