Discussion
Deesee said:
You need to have a look at the t&cs and get a copy of the loan agreement/s.
Most of these lenders will provide a list of investors to the borrower, so that’s not unusual, however if this is not in t&cs then they have possibly breached data protection laws.
The loan agreement should also state the solicitors used in the transaction if they are the same be concerned.
If a lender has lent funds without relevant quoted security in place they will be liable.
If a solicitor has made a mistake their PI will take a hammering, likewise with the valuer.
If your going to make investments like this ensure you are well spread say .5% of what you’ve got in each project. So 50p for every £100 in P 2 P, but TBH, they have no balance sheet to absorb losses/adjustments/fluctuations or even natural disasters, so it’s all your cash at risk.
That's the best bit. Lendy never made the loan agreement available to lenders. Despite many requests they refused to provide a copy. As it happens, this will likely work in lenders favour.Most of these lenders will provide a list of investors to the borrower, so that’s not unusual, however if this is not in t&cs then they have possibly breached data protection laws.
The loan agreement should also state the solicitors used in the transaction if they are the same be concerned.
If a lender has lent funds without relevant quoted security in place they will be liable.
If a solicitor has made a mistake their PI will take a hammering, likewise with the valuer.
If your going to make investments like this ensure you are well spread say .5% of what you’ve got in each project. So 50p for every £100 in P 2 P, but TBH, they have no balance sheet to absorb losses/adjustments/fluctuations or even natural disasters, so it’s all your cash at risk.
cashmax said:
Deesee said:
You need to have a look at the t&cs and get a copy of the loan agreement/s.
Most of these lenders will provide a list of investors to the borrower, so that’s not unusual, however if this is not in t&cs then they have possibly breached data protection laws.
The loan agreement should also state the solicitors used in the transaction if they are the same be concerned.
If a lender has lent funds without relevant quoted security in place they will be liable.
If a solicitor has made a mistake their PI will take a hammering, likewise with the valuer.
If your going to make investments like this ensure you are well spread say .5% of what you’ve got in each project. So 50p for every £100 in P 2 P, but TBH, they have no balance sheet to absorb losses/adjustments/fluctuations or even natural disasters, so it’s all your cash at risk.
That's the best bit. Lendy never made the loan agreement available to lenders. Despite many requests they refused to provide a copy. As it happens, this will likely work in lenders favour.Most of these lenders will provide a list of investors to the borrower, so that’s not unusual, however if this is not in t&cs then they have possibly breached data protection laws.
The loan agreement should also state the solicitors used in the transaction if they are the same be concerned.
If a lender has lent funds without relevant quoted security in place they will be liable.
If a solicitor has made a mistake their PI will take a hammering, likewise with the valuer.
If your going to make investments like this ensure you are well spread say .5% of what you’ve got in each project. So 50p for every £100 in P 2 P, but TBH, they have no balance sheet to absorb losses/adjustments/fluctuations or even natural disasters, so it’s all your cash at risk.
& Land Reg should have the name of the solicitors used (by client, and lender & perhaps vendor) by submission of legal charges.
If they have not offered the loan investors (you) a copy of the agreement, do you have a advert or a profile as such that they produce to generate interest of the loan to the investors. Something that states basic information for what they and the borrower were looking to do?
In the days before everybody me had the internet there was an fx broker called IFX that was raised at least twice by the SFO and I seem to recall the homes of the officers were also. Much later on it appeared that some of the same people were trying to obtain a banking license but had as much joy as Fayed did obtaining a British passport for the same sort of reasons. They discovered the joys of minibonds and are on TV quite a bit seemingly giving the impression that they are a traditional cooperative building society.
The P2P market space is jammed full of pirates that many of us are well aware of from past escapades in more regulated markets. At the same time I simply dread to think just what sort of percentage of borrowers are frauds. We did an investment survey a few years back and not one of the property deals we were handed to look over were kosher. They all resembled East End and Brick Lane scams and not one of the P2P agents had carried out any form of credible due diligence. Their interest was in securing the agent fees not in really establishing whether borrowers that no bank or credible fund would back were legit.
And given how filthy this all is then it really wouldn’t surprise me if there were prior connections between owners of various P2P platforms and the borrowing clients.
The P2P market space is jammed full of pirates that many of us are well aware of from past escapades in more regulated markets. At the same time I simply dread to think just what sort of percentage of borrowers are frauds. We did an investment survey a few years back and not one of the property deals we were handed to look over were kosher. They all resembled East End and Brick Lane scams and not one of the P2P agents had carried out any form of credible due diligence. Their interest was in securing the agent fees not in really establishing whether borrowers that no bank or credible fund would back were legit.
And given how filthy this all is then it really wouldn’t surprise me if there were prior connections between owners of various P2P platforms and the borrowing clients.
From the FT today.
A British peer-to-peer property lender has taken the unusual step of appealing to its regulators for help after one of its biggest borrowers threatened to sue the company and many of its investors.
Retail investors in Lendy are already facing tens of millions of pounds in potential losses after almost two-thirds of borrowers failed to repay their loans on time, according to a Financial Times analysis of its loanbook.
The developments threaten to trigger the first big crisis in Europe’s rapidly expanding peer-to-peer industry, at a time when the sector is fighting to convince regulators it does not need stricter regulation.
In a letter to the Financial Conduct Authority seen by the FT, Lendy said a borrower had accused it of unfairly giving notice on its loans and failing to arrange for it to receive further funds in line with its contract and threatened to pursue a £10m damages claim. Lendy indicated that it considered the threatened claim to be vexatious.
The case affects about 5,000 investors, who lent a combined £8.2m to a number of offshore companies linked to a family trust in the British Virgin Islands, mainly to develop a residential project in Marylebone, west London.
Lendy told the FT that all investors in the loan had been informed and that “this type of dispute is fairly common between lenders and borrowers” but it had a “skilled recoveries team acting in lenders’ interests”. In its letter to the FCA, the company noted that “the situation is novel and is unfolding on a day-to-day basis, hence our urgent request” for a meeting to enlist the regulator’s “support”.
The FCA declined to comment, but a person briefed on its position said the regulator was aware of the legal issue and monitoring the situation.
Portsmouth-based Lendy was founded six years ago and initially specialised in lending against marine assets like boats. It moved into property lending because “the marine asset market could not keep up with the demand” from investors.
As well as sponsoring the annual Cowes Week regatta, Lendy advertises returns of up to 12 per cent for investors who fund its loans. But the legal dispute adds to its problems as it fights rising bad loans and falling profits.
Lendy reports a non-performing loan rate of 12.3 per cent, but an FT analysis of its loanbook showed that £112m of its £180m of outstanding loans were outside their terms — meaning payments were at least one day overdue.
Lendy says it waits 180 days after a missed payment before formally considering a loan to be non-performing.
The company added that the higher proportion of loans past due was because it had become “more cautious” about issuing new loans, and “as loans have been repaid, this has meant that loans within term have become a smaller percentage of the ‘live loan book’”.
Its loans under management have shrunk 3 per cent since the start of 2018. The proportion of loans past due has more than doubled compared to a year ago, and risen from 50 per cent to more than 60 per cent in the past month alone.
The Marylebone development that is the subject of the threatened legal action was not considered non-performing as of last week, despite the fact that Lendy issued a formal demand for repayment more than a year ago.
An £11m loan to finance a residential tower in Liverpool will not be considered “non-performing” until this week, although the developer behind the project entered administration in June.
A report by the administrators of the Liverpool project’s developer earlier this month estimated that Lendy would only receive around 62 per cent of the money it was owed on the project. The administrators valued the development at £8m, compared to the £17.9m listed as security when Lendy extended the loan.
The company said: “All Lendy loans are secured on UK property at conservative LTVs [loan to value]. As with any form of lending, there is a possibility of loans defaulting. However, the possibility of losses to Lendy investors from those defaults is lower, due to the value of the security held.”
Peer-to-peer lenders have grown rapidly in recent years, helping to fill the gaps left by mainstream lenders that cut lending to certain sectors after the 2008 financial crisis.
However, the FCA is currently consulting on changes that would limit firms’ access to retail investors, after finding that some firms were encouraging users to take on more risk than they should.
Lendy’s pre-tax profits fell by three-quarters last year, according to documents filed with Companies House. The company said it “remains one of only a handful of profitable sector platforms in the UK.”
‘The case affects about 5,000 investors, who lent a combined £8.2m to a number of offshore companies linked to a family trust in the British Virgin Islands, mainly to develop a residential project in Marylebone, west London.’
This is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
All this P2P is total madness built by inexperienced people, marketed to greedy fools and built around the deliberate concept of manifestly underpricing risk.
The whole model is fundamentally flawed. The people who run them don’t want to foreclose because it looks bad and yet only attract scams and junk that all same lenders have rejected because the risk is too high. They then funnel that risk off to mug punters at shockingly low and underpriced rates and thousands of fools have rushed to throw money at this junk!!
This is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
All this P2P is total madness built by inexperienced people, marketed to greedy fools and built around the deliberate concept of manifestly underpricing risk.
The whole model is fundamentally flawed. The people who run them don’t want to foreclose because it looks bad and yet only attract scams and junk that all same lenders have rejected because the risk is too high. They then funnel that risk off to mug punters at shockingly low and underpriced rates and thousands of fools have rushed to throw money at this junk!!
DonkeyApple said:
‘The case affects about 5,000 investors, who lent a combined £8.2m to a number of offshore companies linked to a family trust in the British Virgin Islands, mainly to develop a residential project in Marylebone, west London.’
Anyone playing dodgy-financial-scheme-bingo? I think that's close to a full house
DonkeyApple said:
This is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
Agreed.
The UK FATCA legislation is an attempt to get more disclosure on these offshore
To be honest, it’s not the offshore investment vehicle that offends me. There are many good and valid reasons for running a project through an offshore SPV. What I find insane is that a ‘hub’ that has a moral responsibility to handle retail client funds responsibility would ever lend to one in the manner that these P2P entities do and that retail investors would ever contemplate risking 100% of their capital for such massively underpriced risk/reward.
DonkeyApple said:
To be honest, it’s not the offshore investment vehicle that offends me. There are many good and valid reasons for running a project through an offshore SPV. What I find insane is that a ‘hub’ that has a moral responsibility to handle retail client funds responsibility would ever lend to one in the manner that these P2P entities do and that retail investors would ever contemplate risking 100% of their capital for such massively underpriced risk/reward.
What we don’t know is what the security package was. If you have a properly registered English mortgage then you may be OK, if you are relying on share / floating charge security way up the chain you are an idiot and deserve what you get. DonkeyApple said:
‘The case affects about 5,000 investors, who lent a combined £8.2m to a number of offshore companies linked to a family trust in the British Virgin Islands, mainly to develop a residential project in Marylebone, west London.’
This is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
All this P2P is total madness built by inexperienced people, marketed to greedy fools and built around the deliberate concept of manifestly underpricing risk.
The whole model is fundamentally flawed. The people who run them don’t want to foreclose because it looks bad and yet only attract scams and junk that all same lenders have rejected because the risk is too high. They then funnel that risk off to mug punters at shockingly low and underpriced rates and thousands of fools have rushed to throw money at this junk!!
Totally agree, amazing how many people will throw money at a company with a fancy app and promises of get rich schemes. Seems they didn't really care that this company was completely unregulated.This is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
All this P2P is total madness built by inexperienced people, marketed to greedy fools and built around the deliberate concept of manifestly underpricing risk.
The whole model is fundamentally flawed. The people who run them don’t want to foreclose because it looks bad and yet only attract scams and junk that all same lenders have rejected because the risk is too high. They then funnel that risk off to mug punters at shockingly low and underpriced rates and thousands of fools have rushed to throw money at this junk!!
Doesn't sounds much different to the Crypto market to be honest.
I did look into this a few years ago, very glad I didn't put any money in.
DonkeyApple said:
‘The case affects about 5,000 investors, who lent a combined £8.2m to a number of offshore companies linked to a family trust in the British Virgin Islands, mainly to develop a residential project in Marylebone, west London.’
This is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
All this P2P is total madness built by inexperienced people, marketed to greedy fools and built around the deliberate concept of manifestly underpricing risk.
The whole model is fundamentally flawed. The people who run them don’t want to foreclose because it looks bad and yet only attract scams and junk that all same lenders have rejected because the risk is too high. They then funnel that risk off to mug punters at shockingly low and underpriced rates and thousands of fools have rushed to throw money at this junk!!
Presumably the investors saw the property as their securityThis is the absolute insanity of the P2P industry. 5000 fools, self duped by a fancy app and the greed of trying to achieve higher returns throwing my money into offshore, spvs that they have absolutely no control or information on.
All this P2P is total madness built by inexperienced people, marketed to greedy fools and built around the deliberate concept of manifestly underpricing risk.
The whole model is fundamentally flawed. The people who run them don’t want to foreclose because it looks bad and yet only attract scams and junk that all same lenders have rejected because the risk is too high. They then funnel that risk off to mug punters at shockingly low and underpriced rates and thousands of fools have rushed to throw money at this junk!!
NickCQ said:
DonkeyApple said:
To be honest, it’s not the offshore investment vehicle that offends me. There are many good and valid reasons for running a project through an offshore SPV. What I find insane is that a ‘hub’ that has a moral responsibility to handle retail client funds responsibility would ever lend to one in the manner that these P2P entities do and that retail investors would ever contemplate risking 100% of their capital for such massively underpriced risk/reward.
What we don’t know is what the security package was. If you have a properly registered English mortgage then you may be OK, if you are relying on share / floating charge security way up the chain you are an idiot and deserve what you get. 
The most ironic thing about all this, is that despite the loanbook approaching nearly £100M (yes you read that right) of loans in default for more than 180 days, some with the asset long since sold and the borrower in liquidation, Lendy still refuse to crystallise a single loss of capital. They are still happy to claim that no lender and ever lost a penny of capital.
DonkeyApple said:
The issue is that you would be reliant on Lendy to have anaylised the whole deal fully and not just take the security but ensured it was all viable. The reality is that we know these platforms are not much more than box ticking trust exercises and they certainly do not evaluate the deals in anywhere near the same professional capacity as a formal lender. It is afterall their main USP that attracts borrowers, a guaranteed lack of due diligence and access to mug money.
Agreed.. but in my professional life I have bought defaulted loans from 'formal lenders' that were originated with so little care that it would make your hair stand on end!
FundingSecure is an operation very similar to Lendy.
Nice months ago I invested £6000 across 60 loans. Each one was for £100 for six months.
After nine months I have 19 loans totalling £1900 that are overdue repayment.
£4100 has been repaid with interest.
FundingSecure seem very lax in chasing repayment and obtaining updates.
Of course all loans are secured on property so in theory our money is safe but that’s only assuming action is taken to recover debts.
I wouldn’t invest with them again.
Nice months ago I invested £6000 across 60 loans. Each one was for £100 for six months.
After nine months I have 19 loans totalling £1900 that are overdue repayment.
£4100 has been repaid with interest.
FundingSecure seem very lax in chasing repayment and obtaining updates.
Of course all loans are secured on property so in theory our money is safe but that’s only assuming action is taken to recover debts.
I wouldn’t invest with them again.
wilwak said:
FundingSecure is an operation very similar to Lendy.
Nice months ago I invested £6000 across 60 loans. Each one was for £100 for six months.
After nine months I have 19 loans totalling £1900 that are overdue repayment.
£4100 has been repaid with interest.
FundingSecure seem very lax in chasing repayment and obtaining updates.
Of course all loans are secured on property so in theory our money is safe but that’s only assuming action is taken to recover debts.
I wouldn’t invest with them again.
To be fair, they do state on there website they are pawnbrokers! & you've just funded them...Nice months ago I invested £6000 across 60 loans. Each one was for £100 for six months.
After nine months I have 19 loans totalling £1900 that are overdue repayment.
£4100 has been repaid with interest.
FundingSecure seem very lax in chasing repayment and obtaining updates.
Of course all loans are secured on property so in theory our money is safe but that’s only assuming action is taken to recover debts.
I wouldn’t invest with them again.
Have a look at the companies accounts filed at co house, (co number is on the website).
Also interesting of which this company is not alone, on the FCA website the permissions they have are some what limited to lend funds (ie they have no credit broking permissions etc),but they all have authority & are regulated to hold client funds....
I would not assume all loans are property based (even that is not 100% liquid or without hurdles) their website has a nice collection of french clocks & some kind of custom boat, that's pretty niche even in this market.
Deesee said:
wilwak said:
FundingSecure is an operation very similar to Lendy.
Nice months ago I invested £6000 across 60 loans. Each one was for £100 for six months.
After nine months I have 19 loans totalling £1900 that are overdue repayment.
£4100 has been repaid with interest.
FundingSecure seem very lax in chasing repayment and obtaining updates.
Of course all loans are secured on property so in theory our money is safe but that’s only assuming action is taken to recover debts.
I wouldn’t invest with them again.
To be fair, they do state on there website they are pawnbrokers! & you've just funded them...Nice months ago I invested £6000 across 60 loans. Each one was for £100 for six months.
After nine months I have 19 loans totalling £1900 that are overdue repayment.
£4100 has been repaid with interest.
FundingSecure seem very lax in chasing repayment and obtaining updates.
Of course all loans are secured on property so in theory our money is safe but that’s only assuming action is taken to recover debts.
I wouldn’t invest with them again.
Have a look at the companies accounts filed at co house, (co number is on the website).
Also interesting of which this company is not alone, on the FCA website the permissions they have are some what limited to lend funds (ie they have no credit broking permissions etc),but they all have authority & are regulated to hold client funds....
I would not assume all loans are property based (even that is not 100% liquid or without hurdles) their website has a nice collection of french clocks & some kind of custom boat, that's pretty niche even in this market.
They lend on a lot of dubious small resi schemes, and jewellery etc... they are a pawnbroker. Lots of loans appeared to be continually rolled over and, as has been pointed out before in this p2p sector, the returns are very low for the level of risk, <=12pc p.a. if I recall correctly.
None of them offer a level of return that is commensurate with the risk the investor is taking. And there is no incentive for the operator to put loans in default.
Personally, my issue with this concept is that they market as if they are comparable to a traditional savings account which to me is manifestly deceptive.
I would have far less of an issue if they were honest as to what their product is and that it is in no way, shape or means comparable to traditional savings.
Personally, my issue with this concept is that they market as if they are comparable to a traditional savings account which to me is manifestly deceptive.
I would have far less of an issue if they were honest as to what their product is and that it is in no way, shape or means comparable to traditional savings.
What about those with a provision fund such as RateSetter?
"Investments with RateSetter are protected by the Provision Fund which provides a buffer against poorly performing loans. The Provision Fund reimburses investors if a borrower misses a payment. If a borrower defaults, the Provision Fund takes over the loan, repaying any outstanding capital to RateSetter investors.
RateSetter aims to manage the size of the Provision Fund so that it covers all expected future loan defaults."
"Investments with RateSetter are protected by the Provision Fund which provides a buffer against poorly performing loans. The Provision Fund reimburses investors if a borrower misses a payment. If a borrower defaults, the Provision Fund takes over the loan, repaying any outstanding capital to RateSetter investors.
RateSetter aims to manage the size of the Provision Fund so that it covers all expected future loan defaults."
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