WOUND-DOWN peer-to-peer lender Lovefruitful is aiming to repay investors the remainder of their money by the second quarter of this year.
The platform closed its P2P mortgage platform to new investors in November 2015, which is said was because the business model “wasn’t sustainable to scale”.
A spokesperson from Lovefruitful told Peer-to-Peer Finance News via email that the platform could have handed over the mortgages to a third-party servicer, which would have meant that investors would not have had access to their capital until the end of the loan duration, which could be up to 15 years.
However, it decided that it would be in the best interest of lenders to work to return their capital ahead of the loan durations.
“During this process we worked with the Financial Conduct Authority and Financial Ombudsman on the most reasonable and fair way to close down the business with investors’ money still on loan,” said Lovefruitful. “We agreed that all investors would have capital returned in their proportionate amounts opposed to a first-come-first-serve withdrawal basis.”
Like all P2P platforms, Lovefruitful is not under obligation to return lenders’ capital straight away like a bank account.
The platform said it has returned 82 per cent of investor capital and is working with the remaining borrowers to return the last 18 per cent.
It had aimed to have all the money repaid by the end of 2016, but this has now been pushed back to the second quarter of 2017.
“Whilst we aimed to have this completed by the end of 2016, the mortgages were for terms of up to 15 years and the borrowers don’t have any obligation to repay their loans early,” said Lovefruitful in an emailed statement. “However, Lovefruitful is continuing to work with the remaining borrowers in order to return the remaining capital ahead of the loan duration periods.”
The remaining borrowers have now either agreed terms with new lenders for a remortgage or intend to sell their properties, the platform said.
Read more: A look back – the key P2P events of 2016