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Post by mrwilliams on Nov 9, 2017 12:00:41 GMT
For a couple of months now I have had a woeful time with defaults. Often 3 a week and early in the repayment schedule too...
At my peak, I was lending to 530 businesses although since AutoBid became compulsory I have been withdrawing funds rather than re-investing... and I plan to have sold all I can by Christmas (ie those non-downgraded)
My strategy was to "cherry pick" C, D and E rated loans. I grew my portfolio from early 2014 until August 2016.
Things seem to have got worse recently. Have others had similar experiences or am I unable to tell a cherry from a lemon? (If so, I'll blame the lack of info provided by FC!)
Could this be the beginning of a Brexit recession? Are the predicted defaults in consumer credit impacting on SMEs?
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Post by munchydave on Nov 9, 2017 13:08:59 GMT
For a couple of months now I have had a woeful time with defaults. Often 3 a week and early in the repayment schedule too... At my peak, I was lending to 530 businesses although since AutoBid became compulsory I have been withdrawing funds rather than re-investing... and I plan to have sold all I can by Christmas (ie those non-downgraded) My strategy was to "cherry pick" C, D and E rated loans. I grew my portfolio from early 2014 until August 2016. Things seem to have got worse recently. Have others had similar experiences or am I unable to tell a cherry from a lemon? (If so, I'll blame the lack of info provided by FC!) Could this be the beginning of a Brexit recession? Are the predicted defaults in consumer credit impacting on SMEs? Hi mrwilliams, and a warm welcome to this site from another relative newcomer. I started with FC some years ago when they still had an auction style platform. It was possible then to take time to read the information given by FC on the borrower and decide when and how much to invest. Interest rates were much higher and it was good fun trying to beat the auction and get the best rate of all bidders. For a start defaults were low and not an issue as rates were high enough to offset the losses, however it soon became obvious that the guarantee offered by guarantors was in many cases worthless. When the auction model was abandoned for the fixed rate one interest rates went down and like you I started to see an increase in defaults though I was still around the 7% mark according to FC. It became difficult to invest in anything other than A* or A loans which often looked to me as not that secure. At this time I had over 20K in the site spread over hundreds of loans. I continued to see a slow but stead decline in returns and when the latest model of GIVE US YOUR MONEY AND WE WILL INVEST IT FOR YOU was introduced I decided to get out. I put the lot up for sale and am now left with around 1K of defaulted loans which I cannot sell. I may return to FC in the future as it can be a good investment but like you I have lost confidence in the quality of the loans and the information given by FC.
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adrian77
Member of DD Central
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Post by adrian77 on Nov 9, 2017 13:24:09 GMT
quite possibly in my opinion - not that any of it will have anything to do with the quality of the FC DD! Like many others I simply sold-up once FC took total control of our money. Property loans seems problematic on the other platforms I invest in but no regrets for leaving FC or
Flipping Clueless as I call them.
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dandy
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Post by dandy on Nov 9, 2017 13:29:26 GMT
quite possibly in my opinion - not that any of it will have anything to do with the quality of the FC DD! Like many others I simply sold-up once FC took total control of our money. Property loans seems problematic on the other platforms I invest in but no regrets for leaving FC or Flipping Clueless as I call them. wish I was so clueless to be worth over £1B 
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Post by GSV3MIaC on Nov 9, 2017 15:56:43 GMT
It's worth what someone will pay for it, and I personally wouldn't give them a fraction of £1B and, if some vulture capitalist chooses to, then I'll make sure not to hold any of that in my funds either. Having said that, FC have managed to secure by far the largest slice of the 'dodgy SME loans' marketplace .. but whether that's something to applaud or not ..
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rogerthat
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Post by rogerthat on Nov 10, 2017 23:12:39 GMT
Still...look on the bright side...with all those skipping ropes there wont be a shortage when its time for the big drop..like other pilgrims to pastures new, I jumped ship awhile back, bloodied and bruised but not holed below the waterline.
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fasty
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Post by fasty on Nov 11, 2017 12:44:07 GMT
In recent times, my investment strategy in FC has been similar to the OP. I kept a few old A+, A and B originally purchased in auction days at high rates, but the majority are selected C, D and E.
And my defaults have also increased considerably and it seems to be getting worse. Many are early failures (<6 months). My portfolio isn't huge enough to prove a statistically significant trend.
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c88dnf
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Post by c88dnf on Nov 11, 2017 14:48:50 GMT
It's worth what someone will pay for it, and I personally wouldn't give them a fraction of £1B and, if some vulture capitalist chooses to, then I'll make sure not to hold any of that in my funds either. Having said that, FC have managed to secure by far the largest slice of the 'dodgy SME loans' marketplace .. but whether that's something to applaud or not .. Quite so. FC as a company have racked up losses of £51million over the 7 trading years to December 2016. Announcements during 2017 have indicated that the UK arm of the overall FC operation was profitable in 4Q16, but no evidence of that has been presented yet to support that.
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al
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Post by al on Nov 14, 2017 18:06:03 GMT
Nothing much to compare it to, being a relative newcomer myself, but I'm not especially whelmed. Not complaining mind, I went in with my eyes open and can afford to lose a few quid. But with 180 businesses lent to, 2 have defaulted very early, 8 are late, 2 'processing' (which rarely seems to turn out well!), and 2 others risk band removed. That's just after 2 months, so I doubt I'm at anything like a steady state with the lemons.
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Post by df on Nov 14, 2017 20:26:00 GMT
Things seem to have got worse recently. Have others had similar experiences or am I unable to tell a cherry from a lemon? (If so, I'll blame the lack of info provided by FC!) Could this be the beginning of a Brexit recession? Are the predicted defaults in consumer credit impacting on SMEs? Yes, in my FC loan book the number of defaults has rapidly increased in past few months, but the return is still better than I initially expected. Since the change I've suspended any deposit/withdraw activities and will review it in Sept 2018. I don't think Brexit is the reason for increased FC defaults. It is more to do with "growth" - they grab as many loans as they can get.
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Post by mikeyp on Nov 15, 2017 8:40:45 GMT
The monthly NAV return on FCIF for October, published yesterday, was down to 0.4% from an average of 0.62% for the previous year. One of the comments given was 'Impairment charge – This is partly attributable to higher delinquency rates observed in areas affected by Hurricanes Harvey and Irma; the overall impact on the Company’s US book is expected
to be modest and contained.' You might hope that the hurricanes would not have had too much impact on the UK book. The trading price is down 3% in the last month and the premium has fallen from around 3% to less than 1%.
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Post by pmac67 on Nov 15, 2017 23:09:09 GMT
Working from the beginning of the Tax year my loanbook hit 7% bad debt by the end of August with a further 6% downgraded. If the the next 7 months performed at the same rate then I would be looking at serious capital losses. So with one fell swoop i sold everything i could and moved it elsewhere. For me yes defaults are on the rise and the official statistics on the website back it up also. In the 2016/17 Tax year i had 4.5% bad debt and made a 10% ROI so I don't think i'm that bad at picking. I think the quality of loans and due diligence just went out the window with this company, having a loan default without ever making a monthly payment and another default after 1 repayment is a joke and convinced me that unsecured loans is not where I want to invest my cash !
I'll be in FC for a few years yet with my legacy account of downgraded loans but in all honesty I've kinda written them off now... 48% recovery on bad debts ? Lolz... I think I'm on 5% atm.... long way to go to hit that figure
Good luck to the many who remain but I sleep better now that I only do secured loans in P2P
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ashtondav
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Post by ashtondav on Nov 16, 2017 8:53:38 GMT
So which platform have you migrated to. AC? FS?
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Post by pmac67 on Nov 16, 2017 14:30:20 GMT
So which platform have you migrated to. AC? FS? Opened a new account with FS yes. Also have existing accounts with L and MT so spread roughly equal across those 3 platforms...
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Post by skint4achange on Nov 19, 2017 11:15:30 GMT
It's worth what someone will pay for it, and I personally wouldn't give them a fraction of £1B and, if some vulture capitalist chooses to, then I'll make sure not to hold any of that in my funds either. Having said that, FC have managed to secure by far the largest slice of the 'dodgy SME loans' marketplace .. but whether that's something to applaud or not .. I assume by "Vulture Capitalist" you are referring to someone who wants to make money by investing in a business/asset for short/long term gain?? Well said......................... coming from a P2P investor that is!! 
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