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Just wondering opinions on the above. Seem decent to me but almost zero disclosure and updates...
Also, just wondering how investors feel about Lendy given the news. People still investing or steering clear? I still think some decent loans on there.
I've got money in both, lendy 50% of my loans are now not performing and likely to be capital losses to at least a degree.
There have been a series of loans where the valuation when they came to enforce the loan has been about half the valuation the loan was based on.
DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.
Crikey Owen. That is shocking!
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Yes I'd expected some bad loans and losses in line with the headline rate of return - but at the moment I'm just hoping I come out the end after about 5 years having not lost anything (which seems like a vain hope at the moment) - so much for it being an investment plan to pay off the capital on some interest only mortages !
(and it's going to take another couple of years to unwind the various positions and bad loans)
Not shocking: Surely wherever the alleged returns are higher than normal (Lendy used to talk about 12%) then any half-rational punter would assume a much higher risk of problems.
I certainly did: Money in Lendy, Funding Circle, Zopa; Pensions; Stocks & Shares: B2L. In any one financial year some will do OK, some won't. (Ditto notes under the bed...)
From Lendy front web page ' RICS-accredited valuations with regular updates of each development's progress.' (emphasis mine) (https://lendy.co.uk/) If valuations are that far out then wouldn't there be a claim against the RICS provider's professional indemnity insurance? Otherwise, what's the point of RICS valuation?
'At Lendy, we take managing investor risk very seriously. This is why we have one of the most experienced and specialist credit assessment teams in the industry, who ensure each investment loan has met our rigorous and robust lending criteria. We only offer investors loans to invest in that have been through our rigorous and streamlined due diligence, credit and legal checking.
Our specialist team of lending professionals has over 100 years of mortgage underwriting experience between them. They are experts in the property market and understand how to assess and manage the risks involved.'
' * Loans do not exceed a maximum of 70% of the Open Market Value. This means that if the borrower cannot repay the loan it is highly likely that we will be able to recoup all funds from the sale of the security property, as there is a substantial amount of equity.
* In the unlikely event that we are unable to recoup all the funds from the sale of the security we maintain a discretionary Provision Fund to allow us to compensate investors should there be a shortfall in the capital.
We feel it is important to make you aware that with investing your capital is at risk and interest payments are not guaranteed if a loan becomes non-performing, however we feel confident that we have a thorough and robust system in place to protect all Lendy investors.'
This is why peer to peer is not only for sophisticated investors, but for investors who understand lending. One really needs to dig into it. 70% LTV can mean very different things. e.g. is the loan inclusive of accrued interest or not. Is the value property assuming completion, or the value of the land as it is? Over what sale period? Also, very difficult to know the value achieved at auction. 70% is not a huge buffer as it seems to be in the normal BTL world.
I would like to see more disclosure from lenders and education for investors.
That said, I've done extremely well on p2p, but invest very selectively. I encourage others to do so but only after researching risks of debt finance and property development finance.
Lendy has emailed an apology to its investors for the repayment process being “significantly behind expectation” on some loans.
The peer-to-peer lender admitted it can make “substantial improvements” to its recovery process, while it identified governance, financial controls, liquidity, collections and compliance as areas it’s looking at.Full/source article