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Post by GSV3MIaC on Sept 1, 2014 6:36:47 GMT
Looks to me that the large C and C- loans are going to struggle to get funded unless FC raises the MAXIMUM bid rate past 15%. The new loan page has that facility, it just isn't used yet (whether the back end systems can handle it is another matter). I guess plan b would be more splashback, either in general or just for large loiw grade loans.
With As and Be going for anything up to 14% plus, why would you want a C- at 15%, as I asked on the other place (answer came there none, but then I suppose it was a bit rhetorical, or maybe that should read heretical?). With C- rates going up again today, they are perilously close to fixed (lousy) rate.
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Post by yorkshireman on Sept 1, 2014 9:42:14 GMT
With C- rates going up again today, they are perilously close to fixed (lousy) rate. When was that advised?
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blender
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Post by blender on Sept 1, 2014 9:43:58 GMT
No reason why the maximum bid for the band should not be related to the minimum bid - simplest would be twice the minimum but that might be too crude. Then they would not have to justify and make future changes to the max, just the min.
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is
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Post by is on Sept 1, 2014 9:57:12 GMT
No reason why the maximum bid for the band should not be related to the minimum bid - simplest would be twice the minimum but that might be too crude. Then they would not have to justify and make future changes to the max, just the min. That would be a problem for A+, of which I have quite large amount at 14%+ in my portfolio...
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blender
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Post by blender on Sept 1, 2014 10:12:59 GMT
I said that twice was too crude but the principle was to be put forward rather than the detail - which would be for FC. But you could consider say three times at A+ falling to twice at C-. A lower limit than 15% at A+ might be fairer to borrowers if we are setting the max bid according to risk band. 15% is just an arbitrary figure for a 'one size fits all' limit, though when it was fixed there was no C or C-. Its partner, the 4%, was done away with for auctions in a way which could, and should IMO, be followed for the 15%.
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is
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Post by is on Sept 1, 2014 11:12:11 GMT
I said that twice was too crude but the principle was to be put forward rather than the detail - which would be for FC. But you could consider say three times at A+ falling to twice at C-. A lower limit than 15% at A+ might be fairer to borrowers if we are setting the max bid according to risk band. 15% is just an arbitrary figure for a 'one size fits all' limit, though when it was fixed there was no C or C-. Its partner, the 4%, was done away with for auctions in a way which could, and should IMO, be followed for the 15%. Agreed. Though in general any upper limit is pretty artificial and more of an issue as FC tries to place larger loans - it is clear that if a large proportion of investors is sticking to the diversification mantra (or autobid  ), larger loans will command disproportionately higher rates. I'd like to see how a £400k unsecured C would fare! (accepted top bids of 20% not out of the question after 50% autobid takeup, I would think).
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Post by GSV3MIaC on Sept 1, 2014 12:21:27 GMT
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Post by GSV3MIaC on Sept 1, 2014 12:29:07 GMT
I said that twice was too crude but the principle was to be put forward rather than the detail - which would be for FC. But you could consider say three times at A+ falling to twice at C-. A lower limit than 15% at A+ might be fairer to borrowers if we are setting the max bid according to risk band. 15% is just an arbitrary figure for a 'one size fits all' limit, though when it was fixed there was no C or C-. Its partner, the 4%, was done away with for auctions in a way which could, and should IMO, be followed for the 15%. Well yeah, but you'd still have bought it at 12% wouldn't you (tell the truth now!!). 2x the MBR is a bit crude (but not as crude as 15% fixed), but 1.5x MBR plus 5% might work? Or just jack it up to an overall 20%, and assume A+ borrowers won't bite above 15% anyway. As mentioned by someone else, the 15% was set back when all minima were 4%, and when the dodgiest loan on offer was a (fairly small, 3 year) B. Just doesn't work (at least not for me) on an unsecured £200k 5 year C-. No way, Jose. One problem for FC might be that the level of bid activity hitting the server might go up directly proportional to the number of bid steps that bids can ripple through, but probably not true for the higher rates (although there would be more buckets for the server to keep track of, and send out on loan pages). Just think how good the marketing blurb would be after someone got some 20% parts!!
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blender
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Post by blender on Sept 1, 2014 12:48:57 GMT
Agreed GSV. It was 'is' who had the 14% A+ loan parts and I would buy at 12% - I do. Your formula is a valid proposal. But FC has to make the move and make a proposal. One problem is the way that the mechanics of FC makes rates rise with loan size within a band, rather than with risk. But I cannot see that being sorted unless FC fix the rate, and FC have adapted by chopping up the property loans into bite sized pieces at fixed rates.
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Post by yorkshireman on Sept 1, 2014 12:55:08 GMT
I didn’t receive an email and I haven’t the patience to read through all the self promoting humbug on the FC site, I’m only there for the bids!
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wysiati
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Post by wysiati on Sept 1, 2014 16:47:48 GMT
Who needs increases in MBRs? Thanks to the magic of FC's chosen calculation (which includes the presumed benefits of reinvestment/compounding) I already have an official 'Gross yield' figure some way above 15%.
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Post by yorkshireman on Sept 2, 2014 13:47:26 GMT
Who needs increases in MBRs? Thanks to the magic of FC's chosen calculation (which includes the presumed benefits of reinvestment/compounding) I already have an official 'Gross yield' figure some way above 15%. I rest my case about humbug on the FC site.
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), larger loans will command disproportionately higher rates. I'd like to see how a £400k unsecured C would fare! (accepted top bids of 20% not out of the question after 50% autobid takeup, I would think).