hazellend
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Post by hazellend on Feb 3, 2018 17:52:10 GMT
Sometimes you need to make decisions even if the majority don’t want it. I can’t see any reason people would want to drop SM discounting once they understand it
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dovap
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Post by dovap on Feb 4, 2018 0:10:04 GMT
yep sounds good - discounting should be available only on those loans which are running to time, have made interest payments and are in good order
seems fair enough if the more sophisticated 'investor' wants out to let them I guess
suspend trading on any problematic loans ?
win win
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jlend
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Post by jlend on Feb 4, 2018 8:45:08 GMT
Out of interest I am curious to know if many posters on here would buy the Bol and Liverpool loans at a discount? I wouldn't but I may be in the minority I'd likely buy more of the Liverpool loan at a decent discount (2% perhaps). Demolition has been completed since the loan drew down, commensurately reducing the remaining project costs and improving our security. £8k per planning-approved unit is about as low as any comparable loan I've seen. Looked at another way, at 0.29 hectares, the VR figure of £4m equates to £13.8m per hectare. Certainly considerable, but much less than the £20-30m per hectare the student accommodation block loans on Lendy run at. Thanks That is a useful insight into the sort of discounts and rationale lenders apply. Would you invest in the BOL loan for a discount?
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SteveT
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Post by SteveT on Feb 4, 2018 8:49:47 GMT
yep sounds good - discounting should be available only on those loans which are running to time, have made interest payments and are in good orderseems fair enough if the more sophisticated 'investor' wants out to let them I guess I can't think of any P2P platform that permits trading in Defaulted loans; I guess maybe the FCA has a hang-up about this. Some (AC, Lendy, etc) suspend SM trading, temporarily or permanently, in "Live" loans when significant events cause uncertainty or require investigation before sharing an update with lenders and reactivating SM trading (at least, in AC's case). Basic common sense, applied consistently, covers most eventualities. Personally, I suspect it's "sophisticated" investors that will often be happy to buy discounted parts when general sentiment turns against a loan, for some reason. Certainly that is the case on AC, which is why very few discounted parts hang around on their SM.
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SteveT
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Post by SteveT on Feb 4, 2018 8:52:50 GMT
Would you invest in the BOL loan for a discount? Very possibly, but I'd really want a clearer understanding of the current progress and why timelines seem to keep slipping. Without that, I'd be looking for a somewhat larger discount (not least because I already hold a fair chunk).
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johni
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Post by johni on Feb 4, 2018 11:01:18 GMT
Alot of AC loans on secondary market are taken up by black box accounts. So no real comparrison. Suspending loans should always happen when new information comes to light ie non/late payments, work falling behind, sales fall through etc.
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SteveT
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Post by SteveT on Feb 4, 2018 11:36:49 GMT
Alot of AC loans on secondary market are taken up by black box accounts. So no real comparrison. Suspending loans should always happen when new information comes to light ie non/late payments, work falling behind, sales fall through etc. Actually it's the other way around since, by definition, when a new loan draws down on AC it has already been filled by the QAA/30DAA (AC's defacto underwriter). Much of the ongoing SM availability in AC loans is the QAA/30DAA looking to sell down its holdings to GBBA/MLIA lenders. I agree that you cannot compare AC and MT directly, but the point still stands that manual lenders on AC face very few issues selling out of loans if they wish to. And, should the need arise, a small discount usually shifts parts within hours (some MLIA lenders set open orders to buy into a loan as soon as something gets listed at a discount). The option to discount is only one part of it, however. Unlike MT/Lendy/Col/etc, AC doesn't have "first in, first out" selling queues. Instead, all loan availability is "pooled" and someone who creates a Sell order this morning has as much chance of selling some of it as someone who created their order a week ago. Because there's nothing to be gained by rushing to join the queue, only those who genuinely wish to reduce their holdings offer them for sale. Arguably, MT's current SM structure almost guarantees the log-jam we see currently: there's a tangible upside to joining a queue as soon as it becomes significant (else you find yourself waiting behind everyone else, with no way to offer a discount even if you'd be happy to) and no downside in terms of fee and/or lost interest. Something's going to have to change and I'd rather it NOT be the imposition of a SM listing fee.
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Post by GSV3MIaC on Feb 4, 2018 12:34:56 GMT
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SteveT
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Post by SteveT on Oct 30, 2018 13:01:50 GMT
Well done MoneyThing for asking your lenders formally for their views on this (via a SurveyMoney survey, just received by email). An immediate vote for me for "Allow discounting only".
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archie
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Post by archie on Oct 30, 2018 13:06:20 GMT
I'm sure you can guess how I voted.
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Post by df on Oct 30, 2018 13:34:31 GMT
Well done MoneyThing for asking your lenders formally for their views on this (via a SurveyMoney survey, just received by email). An immediate vote for me for "Allow discounting only". The same vote from me.
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IFISAcava
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Post by IFISAcava on Oct 30, 2018 13:55:08 GMT
ABL has the best SM by far - and a true market would allow both premiums and discounting - accordingly I voted for that option. The only downside is flipping, but that is best is minimised by bid limits, and anyway flipping is part of a market and has its own risks.
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SteveT
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Post by SteveT on Oct 30, 2018 14:07:15 GMT
Discounting would kill MT. They're struggling to fund new loans as it is. If investors have the choice of buying discounted SM parts or new loans at par, the new loans just wouldn't fill. I’d argue the exact opposite. The only way to breathe life into the moribund MT SM, giving lenders the confidence to invest in new loans without being locked in to term, is to allow market demand determine the correct price for a loan as it moves towards (and even beyond) its term. Insisting that Par is the correct price for, say, a 12 months loan with just 1 month remaining before repayment is financially nonsensical.
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Post by Butch Cassidy on Oct 30, 2018 14:19:32 GMT
Discounting would kill MT. They're struggling to fund new loans as it is. If investors have the choice of buying discounted SM parts or new loans at par, the new loans just wouldn't fill. I think you'll find proposed discounting isn't the reason why they struggle to fill new loans; the real problem has been the inconsistent repayments from existing loans & many defaulted loans that have not repaid in full or at all - which all equates to a destruction in investor confidence. If they can't safely loan out their hard earned funds with a reasonable expectation of being repaid on time or realising any recovery from the associated (inaccurate?) RICS professional valuation of those assets then new loans will not fill. Discounting would allow lenders to encourage the sale of any distressed or unwanted loans so is a no brainer IMO, unlike premiums which just benefit those with deep pockets, bots or multiple accounts.
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mary
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Post by mary on Oct 30, 2018 14:40:05 GMT
Quality loans fill (or are only attracted to platforms offering lower interest rates).
Poor quality, high LTV and questionable Borrowers make 12% insufficient for the risks involved.
Changing the SM does not change this.
IMHO MT should reposition themselves to offer higher quality loans in the 8-10% range, rather than attempting to copy others.
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