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Terrifying Ponzi scheme

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Constantly coming up with new ways to keep the bubble inflated...

This just came up on fb feed:

https://joinstepladder.com/how-it-works.php

Seems like a bizarre co-op type saving scheme.  However by pooling everyone's default risk it seems Ponzi esque.  If your the last one to get a deposit your potentially left holding the baby! 

Suprised it got FCA approval...

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That's brilliant.

Some people will wait less time, some MUCH more.

Then they'll keep all the money, till you need it.

I  guess you cant get your money back if you change you mind and what will the Nigerian bloke running the scheme be getting ?

 

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Quote

StepLadder is a “peer-to-peer” (“P2P”) lending platform which intends to apply for FCA (the Financial Conduct Authority) authorisation in the foreseeable future. Prior to obtaining FCA authorisation StepLadder will launch its P2P lending platform and operate as an Appointed Representative of an FCA authorised firm.

 

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I don't get it...?  Why is this any better than a regular P2P saving scheme?  do they magic extra money up...?

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5 minutes ago, Wayward said:

I don't get it...?  Why is this any better than a regular P2P saving scheme?  do they magic extra money up...?

It's targeted at home buyers idiots 

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5 minutes ago, Wayward said:

  Why is this any better than a regular P2P saving scheme?  

so, It isn't :lol: 

 

You'd need to be kind of crazy to help some random dude buy a house

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My initial thought was also that some will get their deposit later than if they saved on their own, but it does actually work out as they say. The luckiest will get their deposit immediately and the unluckiest will get their deposit no later than if they had saved on their own.

It does actually work if you think about it. First month, one person gets selected by the "allocation algorithm" and gets to use everyone else's "fixed monthly commitment" to have their deposit immediately, first month they start saving. Next month everyone makes their monthly saving commitment again, including the person who has already had their deposit, and someone else gets their deposit after two months of saving. The process goes on.

The last person still gets their deposit in the time it would have taken them anyway because "savers" are matched together according to the amount they are looking to save for a deposit, and the amount they can afford to save each month. This group is called a "StepLadder Circle."

If 10 people want to save £20k at £2000 a month, it would take each person 10 months individually. But, by engaging in a StepLadder Circle Jerk, if you will, they will receive a deposit *on average* in half the time. (They get to choose where they receive the deposit.) Month 1, first person gets 10 x £2k. Month 2, second person gets 10 x £2k. Month 10, 10th person receives the 10 "contributions", has a shower, then goes and buys his house. You can even tell them you want to be in a StepLadder Circle jerk with your friends, but they cannot guarantee you will be part of the same Circle. You may have different jerk criteria.

That does not mean that it is not indicative of where we are with things in general. It is just a relaxation of lending standards! The site describes it as P2P lending. First person is receiving a loan to have their deposit immediately! If they go and buy a property right away they are effectively at 100% LTV. They are paying off the loan on their deposit, and they are paying off their mortgage. But you see, they "created StepLadder to OVERCOME these CHALLENGES, REVOLUTIONISING first-time property buying by EMPOWERING individuals to WORK TOGETHER." (Emphasis mine but I just wanted to help them make sure you caught all the buzz words.) You see "as part of the StepLadder COMMUNITY, you will be CONNECTED with an online forum of LIKE-MINDED first-time buyers, providing a NETWORK for SHARING INSIGHTS and RESOLVING questions about the ins and outs of property-buying". Think of it as a... social network, if you will.

I wonder if the Circle jerk scheme will have the same oversight and regulation in terms of income verification, affordability tests, stress tests etc.. Could an enterprising young whipper snapper somehow over commit themselves on this to "level up" in the shoebox department? Or somehow end up with 125% LTV etc. Reminds me of what Michael Burry says at the beginning of The Big Short where "one of the hallmarks of mania is the rapid rise of complexity and rates of fraud." Or where Steve Carell is in the VIP stripper room in Vegas and she is talking about how she gets a second loan because "that way you only have to put down like 5%." (They say "all details [like affordability] are verified with the same processes that a bank or mortgage broker would use.") One thing to note though is that no interest is due on this P2P lending, just an admin fee.

They are launching this because "New buyers are struggling to get on the housing ladder, and house prices have been growing further and further out of reach." And they are launching in London first. So people are going to start borrowing even their deposit to buy in London, just as house prices are turning down in London. But they are basing the scheme "on widely used financial arrangements which operate in many countries, from Asia to Latin America". Because, you see, those... countries... like Asia and Latin America, never have financial crises, you see. They have gone all out to make it robust.

You may be thinking the Circle jerk feels indicative or symptomatic of bubble mania. That the people at the top of this are looking down on the little people having their little StepLadder Circle jerk. You would be wrong. The people at the top are just like you and me. The have their own little Circle jerk called MORE LENDING SOLUTIONS LIMITED. StepLadder is not regulated by the FCA (yet, they say) so it is an appointed representative of MLS Ltd. The founder of StepLadder, Matthew Addison, is of course linked to MLS as seen here at the FCA website.

Place of business is the tax haven of Belfast of course. Tax is for little Circle Jerkers, not big ones. Looking down at the "Individuals" section we see our saviour Mr Addison of Goldman Sachs and The Wharton School fame. (From LinkedIn.) Looking further down at "Appointed Representatives" we see that "HIP Interactive Property UK Limited" can flog financial stuff for MLS Ltd too. Individuals section shows... Tobias Andreas Straessle. Sounds familiar because you saw his name on the MLS Ltd page. Looking at "Principles" you can see that good old boy Tobias' company can also flog financial stuff for a company called Northern Provident Investments Limited of which Robert Cooper (of MLS Ltd, obviously) is involved with.

So be fair to them, Circle jerks are not just for the little people.

But listen, there is something Tobias Andreas Straessle wants to help you with. Something you don't understand. Something you are missing out on that when you "get it", it is going to change your life:

Property is wealth. Access it. Control it. Share it.

That's right, his great company is about to have a "Token Event" that is not indicative of a combined tech, finance, property bubble. What is going to happen is that "HiP Interactive Property … or otherwise, just HiP" is going to give you the ability to "Participate in the wealth cycle and earn from property". That's pretty HiP if you ask me.

The word "terrifying" is used in the tread title but you just don't understand "HiP’s financing creativity". You see "by delivering intuitive technology that simplifies the complex process of how property owners connect with money and the wider property community" Tobias is going to "create a more open, connected property economy".

I really feel HiP and StepLadder are going to achieve great synergies. HiP will be like the second rung of the StepLadder Circle jerk. Once you have received a deposit, you shower, get a house, and start trading tranches of it. Or just trade other property debt/equity. You, the little person. Right from your phone.

"HiP makes property investment more affordable, liquid and accessible with attractive returns for anyone." In fact, "HiP addresses all kinds of property related finance scenarios".

"First time buyers can now access properties previously too expensive"

"Owners can now buy and sell debt or equity stakes for the first time and in real-time"

"On HiP property is money, accessible just like a bank account, in real-time. All done via HiP’s unique trading exchange"

Mortgage company got the nerve to ask you for a monthly payment? Well "existing equity can even be used to pay down monthly loan interest repayments". I mean your property is only going to go up inn value anyway, so you will just have unlimited new equity to pay your mortgage with. You are not actually going to have to pay anything you see! That is how first time buyers can now access properties previously too expensive!

I am sitting here laughing at the thought of you little people trying to follow along and understand "HiP's financing creativity". Awww, little people just don't get it.

This is a residential property forum so to sum up let me quote the relevant page to help you understand:

"HiP thinks differently about property and finance... how?

We believe it's your choice how much you borrow... and...

We also believe it's your choice to access the money stored in your property, your equity… so you can...

Withdraw money from equity without moving, borrowing or losing ownership... and...

Trade your equity against your mortgage… reducing the amount you borrow... next...

Even use your equity to cover your monthly mortgage repayments... next...

It's your choice. At anytime. There are no penalties for what you decide."

And that's it. You heard it here first. Well, you heard it there first. There are no penalties for what you decide.

 

 

 

 

WHAT COULD GO WRONG?

 

You will be wanting to get started IMMEDIATELY so be sure to read the FAQ first to find answers to questions like what to do if you already have a mortgage but want to BENEFIT from HiP. (Hint: "You will need to switch your mortgage for a HiP loan. HiP will help in this process".)

Be sure to consider "What are my obligations towards investors?" Do not worry yourself about this. "HiP will monitor and interact if necessary to assure you meet your financial obligations as well as our property maintenance standards." That is right, we will HELP YOU ensure our... I mean YOUR property is maintained to the highest standards.

Wondering "What happens if my property devalues?" LOL, these little people. Duh, well obviously "Your overall property wealth will decrease and and consequently your tradable equity will be reduced. If you hold a loan, the underlying collateral will need to be increased further reducing your tradable equity."

 

 

One last thing, to paraphrase Peter Thiel:

"If you hear a concatenation of buzz words you should think fraud. You should run away as fast as you can."

Just read every page of StepLadder and HiP. I was going to quote some more but you just have to read to fully appreciate the hip, cool, buzzword laden, snazzy, late-trend BS. I mean they are even trying to make social networks sound cool again. So last decade.

Mark Baum: "Hey, there's a bubble...it's time to call bullsh*t."

Vinny Daniel: Bullsh*t on what?

Mark Baum: "Every f*cking thing."

 

If I am wrong, I am going to look very stupid and they are going to make lots of money. If I am right..... they are going to make lots of money.

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I see in that MSE thread they are concerned that getting the deposit this way will prevent you getting a mortgage. But the good people at MSE do not understand HiP's creative financing.

Relax, StepLadder are going to "introduce our members to high quality service providers." Do not worry because "we only select service providers who we believe offer an excellent standard of service, and at attractive prices."

This is where StepLadder's good friends (and business partners) at HiP come in with their creative financing.

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And in case you really have concerns:

"HiP also introduces its own Ethereum-based smart token which serves as a currency within the HiP Ecosystem, backed by real physical assets (properties), which makes it stand out from many other projects using crypto currency.

All this is done via HiP’s mobile app and HiP’s unique, IP-protected digital trading platform.

HiP makes use of blockchain technology by publishing all transactions to a public ledger. We manage the relationship between owners and investors by smart contracts in a highly cost effective and transparent way.

The world’s first stable and staking token backed by bricks and mortar."

 

Property is wealth. Access it. Control it. Share it.

 

See the website to get pre-approved to take part in the initial coin offering.

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22 minutes ago, AdamoMucci said:

It does actually work if you think about it. First month, one person gets selected by the "allocation algorithm" and gets to use everyone else's "fixed monthly commitment" to have their deposit immediately, first month they start saving. Next month everyone makes their monthly saving commitment again, including the person who has already had their deposit

The lucky first person to get their deposit - how likely is it that they will dutifully continue making their payments :rolleyes:

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I received a letter in the post...it gave ten addresses and said that I should send £10 to the first address and send the same letter on to the other nine addresses but adding my address to the back of the list....I claimed I would receive a lot of money in time as the chain growth exponentially....

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2 hours ago, Funn3r said:

The lucky first person to get their deposit - how likely is it that they will dutifully continue making their payments :rolleyes:

They will or they will lose their house.

Plus they will always lose at least 5% of their deposit to pay for the scheme.

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15 hours ago, AdamoMucci said:

 

The world’s first stable and staking token backed by bricks and mortar."

 

You can get these tokens down wickes for 48p  each.

 

shopping?q=tbn:ANd9GcQcAo2AzmOpLQgGhMZX-

 

 

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14 hours ago, Wayward said:

I received a letter in the post...it gave ten addresses and said that I should send £10 to the first address and send the same letter on to the other nine addresses but adding my address to the back of the list....I claimed I would receive a lot of money in time as the chain growth exponentially....

Was the first name on the list George or Gordon ?

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Sounds like old Farepak Hampers Christmas savings scheme. You make regular monthly payments until Christmas,  and then they send you a letter explaining that there's no money left.  I can't understand why people have a problem with this. 

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26 minutes ago, ingermany said:

Sounds like old Farepak Hampers Christmas savings scheme. You make regular monthly payments until Christmas,  and then they send you a letter explaining that there's no money left.  I can't understand why people have a problem with this. 

It's not really a new or untried concept. In the case of Farepak, Cristmas came before the end of September for some individuals connected to the scheme. 

Edited by ingermany

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