michaelc
Member of DD Central
Posts: 4,920
Likes: 2,774
|
Post by michaelc on Nov 3, 2017 21:00:43 GMT
MT gets such a good press here I decided some time ago to join the fun. Well, most of the time I found it difficult to remember when to log in to get a loan part but I did manage to buy a few loans. Anyway, I just looked at my account and I can see that I have seven loans. Three of those have defaulted !!! Ok, I guess a few have repaid and they aren't obviously one of the seven but I only really had a handful of loans and yet I managed to hit 75% of the total default loan jackpot. My DD hasn't always been that great but I wonder if a secondary reason is that the loans I managed to get to were typically those left by others.
Should there be a warning that buying a loan other than at the minute the loan goes live could be dangerous to your wealth?
Maybe I was just incredibly unlucky (and stupid for not doing much DD). Even so I'm obviously not going to buy anymore after this.
Finally should I assume a zero recovery rate?
|
|
stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
Posts: 1,442
Likes: 945
|
Post by stub8535 on Nov 3, 2017 22:27:41 GMT
All platforms carry the risk warning that you have a high chance of losing money and that your capital is not protected by the government's scheme.
Due dilligence at loan start would probably not have protected you. Regular monitoring of the loan could lead to you avoiding defaults but that is down to the time and skills you have.
Give MT a chance to recover the loans. Keep following the updates and answer any options you are given on recoveries.
This could be the biggest test of MT and how they handle a tough situation on behalf of lenders. Time will, I think, tell.
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Nov 3, 2017 22:46:02 GMT
MT gets such a good press here I decided some time ago to join the fun. Well, most of the time I found it difficult to remember when to log in to get a loan part but I did manage to buy a few loans. Anyway, I just looked at my account and I can see that I have seven loans. Three of those have defaulted !!! Ok, I guess a few have repaid and they aren't obviously one of the seven but I only really had a handful of loans and yet I managed to hit 75% of the total default loan jackpot. My DD hasn't always been that great but I wonder if a secondary reason is that the loans I managed to get to were typically those left by others. Should there be a warning that buying a loan other than at the minute the loan goes live could be dangerous to your wealth? Maybe I was just incredibly unlucky (and stupid for not doing much DD). Even so I'm obviously not going to buy anymore after this. Finally should I assume a zero recovery rate? Why would you assume zero recovery? This ain’t REBS
|
|
michaelc
Member of DD Central
Posts: 4,920
Likes: 2,774
|
Post by michaelc on Nov 3, 2017 23:06:31 GMT
Why would you assume zero recovery? This ain’t. REBS Apologies for being pedantic but my understanding of this language is that asking "should I assume...." doesn't imply I am making that assumption.
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Nov 3, 2017 23:17:18 GMT
Why would you assume zero recovery? This ain’t. REBS Apologies for being pedantic but my understanding of this language is that asking "should I assume...." doesn't imply I am making that assumption. That is what it implies. Your English is good though.
|
|
marka
Member of DD Central
Posts: 224
Likes: 175
|
Post by marka on Nov 4, 2017 1:09:14 GMT
Should there be a warning that buying a loan other than at the minute the loan goes live could be dangerous to your wealth? Do you think that the people who bought into these defaulted loans when they went live have been repaid while you haven't? You don't say which loans you were in so all people can do is either generalise or talk about their own specific loans. Personally I am in MTAI837 (Prestbury) and BPF808 (Birkenhead tranche A) and I have expectations of getting all my capital back in these, but maybe not ongoing interest, especially in Birkenhead or if recovery takes a long time for Prestbury.
|
|
elliotn
Member of DD Central
Posts: 3,063
Likes: 2,681
|
Post by elliotn on Nov 4, 2017 4:26:42 GMT
That's a high strike rate. If you don't have too much time for DD then diversification is your best friend, 7 seems a bit light; even after selling off 2/3 I was still in over 20 loans.
If time constrained and holding to term then make sure you only invest what you can afford to have tied up during any recovery.
Security should mean there is residual value and MTs pro-active actions will hopefully help arrest developments before they get too out of hand.
If you can, try to keep up to date with loan updates (requires logging in unless it's a significant update notified by email by which time it's probably too late!).
Birkenhead was overdue and being closely monitored by BPF and Prestbury borrower hadn't been executing their exit plans.
Whilst everyone will react to the same news you'll at least have a chance to exit by SM should you think there are any warning signs to worry about (and still receive any interest payments).
Don't worry about StLA, no-one knew the borrower hadn't been making payments (MT typically avoid retained interest to keep the ltv down) so we're all in the same boat on that one!
|
|
archie
Posts: 1,839
Likes: 1,842
|
Post by archie on Nov 4, 2017 7:56:11 GMT
The only loan I would worry about is the 'B' tranche of Birkenhead.
The rest will hopefully achieve good recovery.
|
|
|
Post by bracknellboy on Nov 4, 2017 8:47:21 GMT
I'm in 3 out of the 4 defaults. The one I'm not in is B'Head Tranche B. Total loss ? Difficult to see how. Am I as sanguine as archie ? Probably not: Is the security anywhere near the value originally assigned to it ? What are the recovery costs going to be ? Not sure there are any particular lessons to learn, apart from one we all know, which is the first 12-24 months of a platforms life is one where it is a land of sunlit hilltops and beautiful vistas. The view will never get better than that: ultimately clouds will roll in, precipitation will happen, and some b*****y developer will come in and bulldoze part of the landscape, probably funded by a DFL loan from somewhere. Its just a question of how thick, black and persistent those clouds are that ends up mattering.
|
|
shimself
Member of DD Central
Posts: 2,561
Likes: 1,170
|
Post by shimself on Nov 4, 2017 10:49:59 GMT
.... Finally should I assume a zero recovery rate? If you could list the loans you are in (inc tranche) you would get a better answer. Certainly on Bir****** - the top tranche whatever it's called I am assuming full recovery
|
|
michaelc
Member of DD Central
Posts: 4,920
Likes: 2,774
|
Post by michaelc on Nov 4, 2017 14:53:22 GMT
Thanks for the replies.
I'm in the Prestbury, A and B of Birkenhead. I normally only consider the top rank but for some reason in this loan I went in to B although thankfully I put half the investment that I put in the A.
Good to hear there is some prospect of the upper ranked loans (for want of a better phrase) paying out at some point.
|
|
|
Post by elephantrosie on Nov 4, 2017 20:34:37 GMT
i have significantly reduced my MT holdings since the last default.
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Nov 4, 2017 20:40:34 GMT
i have significantly reduced my MT holdings since the last default. oops, my holding keeps going up!
|
|
|
Post by GSV3MIaC on Nov 4, 2017 21:48:45 GMT
Not really 'oops' .. unless =someone= increased their holding, elephantrosie would not have been able to reduce!
|
|
hazellend
Member of DD Central
Posts: 2,361
Likes: 2,179
|
Post by hazellend on Nov 4, 2017 22:42:35 GMT
Not really 'oops' .. unless =someone= increased their holding, elephantrosie would not have been able to reduce! Okay you got me, it was indeed completely intentional!
|
|