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Peer2Peer Finance News | August 20, 2019

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Lendy unveils loan default numbers

Lendy unveils loan default numbers
Anna Brunetti

LENDY has published data on arrears showing that no investor has ever lost money on the platform to date, despite over half of the 98 closed loans having been repaid after the deadline and about 15 per cent having resulted in late interest payments to investors.

The peer-to-peer property platform, which recently took its lending arm Saving Stream under the unified brand, sent an update to investors that showed that out of the 56 loans that have been repaid late, 34 were repaid within 90 days,13 within 180 days and nine loans were paid more than 180 days late.

Payments delays under the 90-day period would be covered by the platform itself, meaning investors would continue to get their interest payments on time, while more pronounced arrears would see investors get interest accrued on their accounts but not paid until the asset is sold or refinanced.

The data unveiled on Thursday also showed that, based on the revised default policy introduced in March, 3.2 per cent of Lendy’s current live loan book is in default status as the borrower is over 180 days late on payments.

7.1 per cent of loans are between 90 to 180 days late, 6.2 per cent is being serviced by Lendy and 83.3 per cent are on track with payments.

The platform also confirmed that one loan that was 269 days overdue, funding a property in Great Bookham, Surrey, was repaid on Tuesday.

Bridging and development loans behave differently to residential mortgages, the firm argued, as they relate to commercial transactions where delays are a relatively standard occurrence and do not usually underpin a risk of default.

“Delays are a routine part of the process, and can often mean nothing at all as regards the final repayment of the loan,” Lendy said.

“Delays can be caused by slow completion of a property sale or a refinance with a bank, by complications with planning permission, or by any number of other minor issues. Both borrowers and lenders in the market understand that delays happen regularly, and price that in accordingly.

“We’re as transparent as possible when our borrowers are late in making a repayment. That means it can sometimes look a little worrying when a few loans are late.

“But in bridging and development lending, being late can simply be part of the process. And although we can’t make any guarantees, it is still rare for lenders to suffer losses.”

The chance that loans might fall into arrears is not putting off the platform’s investors, who are overbooking deals at an average 150-200 per cent rate, a spokesperson told Peer2Peer Finance News.

The platform is also close to hitting the 16,000 investors mark, having attracted about 10,000 investors over the last year, the spokesperson said.

Read more: GLI chief fears “car crash” of P2P defaults