bugs4me
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Post by bugs4me on Feb 1, 2018 22:30:30 GMT
(Hopefully I'm not getting my platforms confused.) I had been looking at MoneyThing as an alternative platform to my current selection (three - probably too few, I know) and was initially attracted by how interest was still paid on SM listings, but then read some comments saying that the SM is suffering because of the lack of any penalty. I then read that a move to end the option of saying 'no thank you' to renewal / extensions. Put the two together and the simplistic impression I get is that MoneyThing investors were expecting a fixed term, 'guaranteed' exit paying around 12% per annum, and if the loan isn't bought on the SM or there aren't enough investors to take on the renewal / extension, then the original investor is 'trapped'. This sounds like investors were assessing the risk based on the popularity of the platform (a proxy for the popularity of P2P?) and the willingness of new blood to take over loans rather than the viability of the individual loan itself. I guess that comes over as a bit judgemental, and my apologies if it does, but they say first impressions count and is it very wide of the mark? Personally I do expect defaults in P2P - that is the nature of the animal and I've been investing long enough to take defaults on the chin. Finishing up with 8-9% is where I see it so no, I've never expected a 12% guarantee so respectfully your simplistic impression is incorrect IMO.
The popularity of any platform is based upon several factors but one of them is not tipping the scales once a loan has commenced. With new loans, where the no option to opt out of any future extensions is made clear then I suppose fair enough. But to apply this to existing contracts is totally unreasonable.
I (think) I can understand why MT have adopted this policy but that is zero justification in my book. IMO, this will potentially backfire on them. Future offerings will definitely be put under a more powerful microscope.
I've always intended holding loans to term but what is that term now? Now it may be when the loan is launched but the new policy indicates it could be several years further on and I've experienced where the lack of swift meaningful action by a platform has resulted in the asset depreciating more and more by the day.
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elliotn
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Post by elliotn on Feb 2, 2018 2:07:33 GMT
(Hopefully I'm not getting my platforms confused.) I had been looking at MoneyThing as an alternative platform to my current selection (three - probably too few, I know) and was initially attracted by how interest was still paid on SM listings, but then read some comments saying that the SM is suffering because of the lack of any penalty. I then read that a move to end the option of saying 'no thank you' to renewal / extensions. Put the two together and the simplistic impression I get is that MoneyThing investors were expecting a fixed term, 'guaranteed' exit paying around 12% per annum, and if the loan isn't bought on the SM or there aren't enough investors to take on the renewal / extension, then the original investor is 'trapped'. This sounds like investors were assessing the risk based on the popularity of the platform (a proxy for the popularity of P2P?) and the willingness of new blood to take over loans rather than the viability of the individual loan itself. I guess that comes over as a bit judgemental, and my apologies if it does, but they say first impressions count and is it very wide of the mark? The Default page has disabused any investors of a 'guaranteed' exit, these have happened intra-term and at the end of their current terms.
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mouse
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Post by mouse on Feb 2, 2018 8:11:42 GMT
Looks to me like a 200 day flippers charter.
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Post by Deleted on Feb 2, 2018 8:29:14 GMT
I think MT has put this problem into their own backpack and hoisted it onto their own shoulders.
They decided property loans is where they wanted to focus
They have had some worrying loans (all property)
They have done a few loans that are dodgy (though to be fair, "dodgy" for MT is the same as very good for other portals) and encouraged the flippers leading to larger SM
They are now focused on managing the worrying property loans to minimise actual loses so they don't want any more problems like those as it consumes management time of which they don't have enough.
Choices for MT, 1) do less property, in which case they will have to manage a smaller loan book 2) remove the timing control that was a key to the quality of their original loan book (kick the can down the road) 3) up the managment resources to control the problems that come with a largely property loan book
Now (1) will not feel like an option, growth is the key to P2P, (2) they follow COL and up the supply of SM loans and so deal with concerns of lack of opportunity to invest and (3) is already consuming a scarce resource, they have had a board "issue" in this area and getting really good people is really hard probably not a route they want to go down again.
So it is (2). However I concerned by the "kick the can down the road" concept.
For me the key error was the strategic one of upping the property volumes in the first place, but I understand the pressure to do so. I note that FC decided to move out of property.
Do I still have confidence in Ed? Yes.
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archie
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Post by archie on Feb 2, 2018 8:42:46 GMT
I'm surprised they didn't do this before.
FCA rules prevent them from pre-funding the new loans as they used too. There isn't any real difference between that and promising to buy a loan back when it rolls over.
Platform risk of taking back a loan is too high. If several loans needed to renew at once, there's only so much money they could cover.
Up until now most people have chosen to rollover their loans, so very little is available, but times have changed.
Although it's unpopular it makes business sense.
Like others I'd like more non-property loans, such as wine and CSP.
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dovap
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Post by dovap on Feb 2, 2018 9:27:05 GMT
They have done a few loans that are dodgy (though to be fair, "dodgy" for MT is the same as very good for other portals) and encouraged the flippers leading to larger SMWhilst I largely agree with your post I think some of the MT loans (and some they tried to foist on us) are every bit as dodgy as the other portals. I suspect it's the residual goodwill from the early days which limits more critical comment which for example Lendy would receive for similar loans. I see little difference these days tbh just that MT are a little behind Lendy on the downward spiral and prob Coll will be following behind them. It'll be interesting to see how the P2P sector shapes up but I suspect there will be a number of platform failures/rationalisation along the way. Can't say I'm hugely bothered about rollovers although it's another backward step - least of the current problems tbh
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pom
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Post by pom on Feb 2, 2018 18:00:27 GMT
I think anyone that was relying on rollovers was lulling themselves into a false sense of security anyway, as if loans default you're locked in anyway....and it could never continue with larger loans. 12% and getting your money (all) back at a predictable time was just never going to be guaranteed. If losing the rollovers makes a few more people think twice about risking their cash in p2p then that can only be a good thing.
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empirica
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Post by empirica on Feb 4, 2018 14:25:49 GMT
(Hopefully I'm not getting my platforms confused.) I had been looking at MoneyThing as an alternative platform to my current selection (three - probably too few, I know) and was initially attracted by how interest was still paid on SM listings, but then read some comments saying that the SM is suffering because of the lack of any penalty. I then read that a move to end the option of saying 'no thank you' to renewal / extensions. Put the two together and the simplistic impression I get is that MoneyThing investors were expecting a fixed term, 'guaranteed' exit paying around 12% per annum, and if the loan isn't bought on the SM or there aren't enough investors to take on the renewal / extension, then the original investor is 'trapped'. This sounds like investors were assessing the risk based on the popularity of the platform (a proxy for the popularity of P2P?) and the willingness of new blood to take over loans rather than the viability of the individual loan itself. I guess that comes over as a bit judgemental, and my apologies if it does, but they say first impressions count and is it very wide of the mark? Personally I do expect defaults in P2P - that is the nature of the animal and I've been investing long enough to take defaults on the chin. Finishing up with 8-9% is where I see it so no, I've never expected a 12% guarantee so respectfully your simplistic impression is incorrect IMO.
The popularity of any platform is based upon several factors but one of them is not tipping the scales once a loan has commenced. With new loans, where the no option to opt out of any future extensions is made clear then I suppose fair enough. But to apply this to existing contracts is totally unreasonable.
I (think) I can understand why MT have adopted this policy but that is zero justification in my book. IMO, this will potentially backfire on them. Future offerings will definitely be put under a more powerful microscope.
I've always intended holding loans to term but what is that term now? Now it may be when the loan is launched but the new policy indicates it could be several years further on and I've experienced where the lack of swift meaningful action by a platform has resulted in the asset depreciating more and more by the day.
OK, it is differing opinions which generate a market, but whilst my generalisation doesn't fit your personal expectations / rules of engagement, do you think those (yours) are representative of the average investor?
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empirica
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Post by empirica on Feb 4, 2018 14:30:35 GMT
I think MT has put this problem into their own backpack and hoisted it onto their own shoulders. They decided property loans is where they wanted to focus They have had some worrying loans (all property) They have done a few loans that are dodgy (though to be fair, "dodgy" for MT is the same as very good for other portals) and encouraged the flippers leading to larger SM They are now focused on managing the worrying property loans to minimise actual loses so they don't want any more problems like those as it consumes management time of which they don't have enough. Choices for MT, 1) do less property, in which case they will have to manage a smaller loan book 2) remove the timing control that was a key to the quality of their original loan book (kick the can down the road) 3) up the managment resources to control the problems that come with a largely property loan book Now (1) will not feel like an option, growth is the key to P2P, (2) they follow COL and up the supply of SM loans and so deal with concerns of lack of opportunity to invest and (3) is already consuming a scarce resource, they have had a board "issue" in this area and getting really good people is really hard probably not a route they want to go down again. So it is (2). However I concerned by the "kick the can down the road" concept. For me the key error was the strategic one of upping the property volumes in the first place, but I understand the pressure to do so. I note that FC decided to move out of property. Do I still have confidence in Ed? Yes. Interesting, re point 1. As mentioned before, I was (maybe still am, but will delay) looking at MoneyThing with a view to investing. However, given Collateral's email today, it could be that 'small is beautiful', although that may mean less tastiness to go around.
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empirica
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Post by empirica on Feb 4, 2018 14:33:26 GMT
Personally I do expect defaults in P2P - that is the nature of the animal and I've been investing long enough to take defaults on the chin. Finishing up with 8-9% is where I see it so no, I've never expected a 12% guarantee so respectfully your simplistic impression is incorrect IMO.
The popularity of any platform is based upon several factors but one of them is not tipping the scales once a loan has commenced. With new loans, where the no option to opt out of any future extensions is made clear then I suppose fair enough. But to apply this to existing contracts is totally unreasonable.
I (think) I can understand why MT have adopted this policy but that is zero justification in my book. IMO, this will potentially backfire on them. Future offerings will definitely be put under a more powerful microscope.
I've always intended holding loans to term but what is that term now? Now it may be when the loan is launched but the new policy indicates it could be several years further on and I've experienced where the lack of swift meaningful action by a platform has resulted in the asset depreciating more and more by the day.
OK, it is differing opinions which generate a market, but whilst my generalisation doesn't fit your personal expectations / rules of engagement, do you think those (yours) are representative of the average investor? PS: Meant to add, I do agree that changing terms and conditions midway through a loan isn't on. If MoneyThing are still learning how they need to run their platform, I see that as another reason for me to stay on the sidelines a while longer.
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hendragon
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Post by hendragon on Feb 4, 2018 18:37:05 GMT
I wonder if an auto-rollover will keep its place in the sales queue on the SM. I have just got to the front to sell part of one particular loan. I don't want to have an auto rollover and have the part takem off sale as well.
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archie
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Post by archie on Feb 4, 2018 18:48:46 GMT
I wonder if an auto-rollover will keep its place in the sales queue on the SM. I have just got to the front to sell part of one particular loan. I don't want to have an auto rollover and have the part taken off sale as well. There is no rollover, the end date will change. Sales queue should be unaffected.
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dermot
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Post by dermot on Feb 4, 2018 18:59:01 GMT
It is explicitly stated that the new policy Loan End Dates will be applied to new loans - fair enough, I can decide to invest, or not, as my free choice.
It is not clear regarding the rollover changes - "From now on" could mean anything. I'm not wildly enthusiastic about common practice up to now being changed for existing loans - that scarcely seems fair.
If it applies to new loans then, again, I can decide to invest - or not - but I would have likely made different choices in my loan selection given the new arrangement.
Sure, I know that a fixed term for the loan is not guaranteed, but this change seems weighted in favour of the platform and the borrower - offering nothing to the lender; it makes loan periods effectively open-ended for the borrower, so long as they are not in arrears. I think I'd want to vote on that as AC allow.
Will interest continue to be paid when a loan is extended in this way, if I've decided to sell after the nominal "rollover" date passes?
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elliotn
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Post by elliotn on Feb 5, 2018 2:06:45 GMT
Will interest continue to be paid when a loan is extended in this way, if I've decided to sell after the nominal "rollover" date passes? Most loans are serviced by borrower (or MT) and all loan parts up for sale continue to earn interest so you shouldn’t see any change if MT allow a borrower to formally extend their loan.
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keith
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Post by keith on Feb 5, 2018 6:22:52 GMT
I see little difference these days tbh just that MT are a little behind Lendy on the downward spiral and prob Coll will be following behind them. It'll be interesting to see how the P2P sector shapes up but I suspect there will be a number of platform failures/rationalisation along the way. Can't say I'm hugely bothered about rollovers although it's another backward step - least of the current problems tbh My first thoughts when I read this thread - here comes a new Lendy. Enforced Rollovers - check Clogged SM - check Dodgy valuations - check (but not really on the same scale as Lendy to be fair) Rising defaults - check Clearly a rationalisation is coming to this sector
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