Direct P2P Archives - Lend Academy

Investing in a Family Mortgage Can be a Win-Win

May 27, 2011 By Peter Renton 2 Comments

It is a familiar story, particularly these days. A young adult or couple wants to buy a home for the first time but they are rejected by the banks and mortgage companies. So they call on the ever popular Bank of Mom & Dad.

Now, mom and dad might have the money to fund a down payment or even the entire mortgage but they don’t want to just give the money away. Enter National Family Mortgage (NFM). They are what I call a direct p2p lender in that they help facilitate a direct loan between individuals.

This is the original peer to peer lending that has been happening for thousands of years. Since the invention of money people have been borrowing from family and friends. It happens every day in this country but most of the time it is very informal. But when it comes to buying a house, it pays to formalize the arrangements and it actually can be a win-win for both the investor and the borrower. [Read more…]

The Demise of Virgin Money US

November 24, 2010 By Peter Renton 3 Comments

It appears that earlier this month the Virgin Money US web site (www.virginmoneyus.com) shut down. It has been clear for some time that Virgin’s foray into peer to peer lending in the US was not working out the way it expected. But now it looks like they have completely pulled the plug in the US. Their web site has been down for several days now and a link to Virgin Money US has been deleted from the main Virgin Money site.

The consequences of this move for borrowers and lenders is minimal. Unlike leading peer to peer lenders such as Lending Club or Prosper, Virgin Money specialized in organizing loans between people who already had an existing relationship (such as friends or family). This is what I call direct peer to peer lending (direct p2p). You couldn’t apply for a loan with Virgin Money, they merely served as an intermediary between people who had already agreed to participate in a loan. These people can continue paying back the loans in the terms already agreed to in the Virgin Money paperwork. [Read more…]

Virgin Money Review

December 21, 2008 By Peter Renton Leave a Comment

Review Summary: Borrowers and Lenders already in agreement about lending money? Virgin Money is the place to neatly dot the i‘s and cross the t‘s. They provide everything you need to draft promissory notes, calculate payment schedules and even service the loans.
Pro: Slick Web site with very polished tools for putting a well-documented loan in place at a fraction of the cost a lawyer or escrow service may charge.
Con: You won’t find people looking for someone to lend to or borrow from you here.
Rating:

(4 out of 5 star)

Learn More About Virgin Money Now

UPDATE: 11/24/2010 – It appears that Virgin Money has shut down their US operations. Read this post for alternatives: The Demise of Virgin Money US

Quick Stats:

Best social lending community for	:	Borrowers and lenders that have already teamed up and want a third party to document and service their loan. Great for friends and family that are lending to each other.
Loan size	:	Any Amount – Determined by Borrowers and Lenders
Loan duration	:	Any Time – Determined by Borrowers and Lenders
Interest rates	:	Any Amount – Determined by Borrowers and Lenders, though site provides some guidance.
Fees	:	Start at $99 for a simple personal loan. Go as high as $2,299 for a full service mortgage closing with escrow.

Likes:

Virgin Money is a fantastic product for borrowers and lenders that have already decided to execute a loan. “For a fixed fee that is far less than most lawyers or escrow services will charge, you get everything you need to document and process your loan.” Virgin Money offers a nice range of options along the do-it-yourself to full-service spectrum and can go beyond personal loans to handle business loans, mortgages and student loans.

Friends and family members lending to each other can save themselves a lot of future discomfort by formally setting up their loan arrangement via Virgin Money. The site also provides an impressive array of free guides, calculators and proposal templates that are a great resource for any lending arrangement.

Dislikes:

Unlike many other social lending sites, you won’t find borrowers or lenders here. Virgin Money is mostly an execution tool for loans that have already been agreed to.

For larger and more complex lending agreements, Virgin could be a lower-cost option than retaining attorneys, but the Company does not provide customized legal or tax advice which some arrangements could substantially benefit from.