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  1. #441
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    I see that the Squirrel Reserve Fund has dropped since I last looked about a month ago. If it continues to drop, can Squirrel increase the proportion of interest that is credited to the reserve fund, or do thy have to wait until such time that 100% of the interest is needed to be diverted to the reserve fund to cover defaults?

    With Corona Virus already causing economic issues, there could be borrowers under stress.
    Last edited by Bjauck; 08-03-2020 at 08:11 AM.

  2. #442
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    Quote Originally Posted by Bjauck View Post
    I see that the Squirrel Reserve Fund has dropped since I last looked about a month ago. If it continues to drop, can Squirrel increase the proportion of interest that is credited to the reserve fund, or do thy have to wait until such time that 100% of the interest is needed to be diverted to the reserve fund to cover defaults?

    With Corona Virus already causing economic issues, there could be borrowers under stress.

    Squirrel alter the % rate payable, often.

    However I doubt that they will change it enough to keep up, if Bad Loans come in faster than in the past.

    It must be expected that Bad Loans will come in fast from now on, as Forestry, Hospitality, Travel and Hotel Industries all start to take a Hit!!


    I personally took a decision 2 weeks ago not to invest any more in to P2P Loans at this time.

  3. #443
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    Quote Originally Posted by Saamee View Post
    Squirrel alter the % rate payable, often...
    I personally took a decision 2 weeks ago not to invest any more in to P2P Loans at this time.
    Thanks. There is a lot of uncertainty around at the moment. With interest rates falling and bad debts increasing, there is the prospect for a big squeeze.

    Aussie Bank shares & HGH have been hard hit too. The market is probably expecting a tough time for borrowers.
    Last edited by Bjauck; 08-03-2020 at 08:55 AM.

  4. #444
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    I suspect the Squirrel Reserve Fund is going to come under a real stress test this year if the predicated recession occurs.

  5. #445
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    @morphs - Yes, for sure it will.


    Below is the reserve fund figures as of this morning.


    So just $485,958 of Bad loans......... and the Reserve Fund is at ZERO!!



    SM RES FUND.jpg


    SM RES FUND 1.PNG
    Last edited by Saamee; 12-03-2020 at 12:08 PM.

  6. #446
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    2020 RWT Certificares already available for member download.....

  7. #447
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    Some defensive PR from Squirrel in the mailbox this arvo ... must be feeling the pinch!

    Case study 1
    Investing class: Home Loans


    A mortgage for an experienced property investor


    The first loan on our platform is for $1.4m and is secured over two properties in Point Chevalier, Auckland with $1.1m in security over each. It has a 70% loan to value ratio.


    Our credit policy:


    Maximum loan to value ratio of 80%
    Maximum loan of $1m per property and a total limit of $2m
    With our first Home Loan on the platform, the borrower owns $31m in property and has $12m in lending.


    The funds borrowed from Squirrel are for working capital and the client is holding $3m in cash. The customer’s property portfolio is diversified and generates over $1m p.a. of income. He has also provided a personal guarantee on the loan. This means that there is someone standing behind the loan who can guarantee the payments at a personal level, similar to when a parent acts as a guarantor on a home loan for their children.


    The reason the client borrowed from Squirrel is that banks treat them as a commercial client and will only lend against the income of the property they have security over and with too many covenants. He was prepared to pay a bit more for a simpler borrowing solution.


    We felt this mortgage was low risk because:


    The client has strong underlying income from a diversified property portfolio
    They are carrying a low level of gearing (low LVR)
    The security is a first residential mortgage with a loan to value ratio on the properties of 70% and a personal guarantee from the borrower
    The borrower holds significant working capital and undrawn revolving credits (meaning he has cash available to him)


    You can invest into this mortgage now. The investor return is 4.0% p.a. variable, and you can find out lots more about this investment class from our investor handbook here.


    This loan is also protected by our Home Loan Reserve Fund, which protects investors from loan arrears and loan defaults.
    "The market can stay irrational longer than you can stay solvent." – John Maynard Keynes

  8. #448
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    Currently the situation must be very toght for Suirrel Money, I have never before heard them advertising on the radio in NZ.

    However over the last month they are pushing loans and webinars to learn more.

    They have that massive $1.3M house loan at 4%..... and it looks like the majority of would be investros are NOT interested in taking a slice of it!!

  9. #449
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    Quote Originally Posted by Saamee View Post
    Currently the situation must be very toght for Suirrel Money, I have never before heard them advertising on the radio in NZ.

    However over the last month they are pushing loans and webinars to learn more.

    They have that massive $1.3M house loan at 4%..... and it looks like the majority of would be investros are NOT interested in taking a slice of it!!
    At only 4% the risk-reward balance looks tipped more towards risk at the moment. The interest rate would need to be higher to tempt more investors?

  10. #450
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    Today received an Email from Squirrel Offering TO PAY us Investors $500 to $1,000 to get into Property \ Business Loans....

    Wow they are getting very very Deperate now...

    Even more reason to stay away!!!!

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