P2P Money Blog

eMoneyUnion has become the first peer-to-peer company to offer secured personal loans.  These loans of between £5000 and £500,000 will be secured as a first or second charge on residential properties.

These loans are now show on the P2P money comparison tables.

Here is the full statement from eMoneyUnion:

We believe this to be a worldwide first for consumer loans.

Following the great feedback received during our secured loans consultation, we are pleased to introduce the Risk Grades for Peer to Peer secured loans.

A number of lenders stated they are happy to receive a lower rate of return for lower risk 1st Charge Loans and would like a wider choice of lending opportunities than the 3 we initially proposed.

I hope you agree with me that the variation of yields and security offered are extremely attractive. We have put the first loan live on the eMarketPlace for your consideration this afternoon.

Loan To Value Calculations (LTV).

S1 Example:

Property Valuation £200,000
Mortgage Outstanding £100,000

Pre- Loan = 50% LTV

 eMoneyUnion Gross 2nd Charge Loan £20,000

+ Mortgage Outstanding £100,000

Total Post Loan Secured Borrowings £120,000

£120,000 Divided by House Value £200,000 = 60% LTV

F1 Example:

Property Valuation £250,000
No Mortgage on Property.

Loan To Value Pre-Loan = 0% LTV

eMoneyUnion Gross 1st Charge Loan £115,000

No Mortgage Outstanding

Total Post Loan Secured Borrowings £115,000

£115,000 Divided by House Value £250,000 = 46% LTV

Valuations.

For S1,2, 3 and F3 loans we will be utilising a great online valuation service Hometrack. Hometrack is widely used by the UK’s leading banks and buildings societies for residential property valuation purposes.

For F2 and F3 Loans an Independent Chartered Surveyors valuation report will be instructed.

We will only produce secured Peer to Peer lending opportunities that are to be secured against residential property assets. We will not be delivering commercial property assets for Peer to Peer secured loans as we deem these to be high risk. You can visit their website by clicking on the link below for further information. 

Legal Charges.

After consultation with a number of legal firms, we have decided to appoint Metis Law to perfect the security of the Peer to Peer secured loans. A loan will not complete and fund without conveyancing approval and confirmation of title and security.

Metis Law are very experienced of the unique Peer to Peer legislation, having met with the Partners I can confirm that we are in safe hands. 

Underwriting.

All borrowers will be credit scored and underwritten in the same manner as the current unsecured and personal guarantor loans.

As a responsible lending platform, no loan will be listed without a credit check, full income and expenditure assessment to prove affordability.

Loans will be introduced from other FCA Authorised Loan Brokers and Packagers, in some instances the Loan Broker and or Packager will have carried out valuations and credit referenced the borrowers themselves, we will accept these loans onto the platform if they meet our underwriting criteria, however all elements will be verified by the eMoneyUnion underwriting team and we will carry out our own credit checking for added security.

eMicroLoans

You are able to trade your Peer to Peer secured loan parts in the same manner as the other unsecured and personal guarantor loans without any platform charges being applied. We are seeing increased activity in this area and we expect the trend to continue.

eProvison Fund

Due to the robust nature of secured loans, the property is the security backstop in the event of non-payment. eMoneyUnion Peer to Peer Secured Loan Interest and Capital Repayments to lenders will not receive financial support from the eProvision fund.