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Post by oppsididitagain on Aug 22, 2018 19:47:26 GMT
After seeing my average rate drop from 3.5 down to 3% in the rolling market, I decided to check the loans in my portfolio. I noticed most of my money was getting matched below 3%, some of it at 2.4/2.6% lots at 2.8% this was because of the 'new RS matching ' which happened in June. These loans had a lifetime of between 20-40 months, so therefore these loans will keep the same rate for the lifetime of the loan.
On Monday I decide to sell out of all of my rolling loans, and wait for the new model to come back into effect in Sept. RS have put all the cash in my holding account and I am now slowly reinvesting in the 1yr at +4.8% and 5Yr at 6%, - I know I can cancel these loans in the future with a penalty, but even so its still better than the money being lent at below 3%
Im interested how people think RS will fund the loans I had below 3% as rates are quite a bit higher now ?
The borrowers will pay the same % for the life of the loan, (2.4/2.6 etc) and the lenders will decide which level to lend, which at the moment is a lot higher than 2.4% .
The difference between what RS gives to the borrowers and where it gets its money from (US) is quite big now in %terms - The money has to come from somewhere ?
I had over 50K in the rolling , if most people decide to do what I have done, surely this is going to cause quite a big problem at RS ?
I hope you understand what Im trying to explain .
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Post by GSV3MIaC on Aug 22, 2018 20:01:49 GMT
I suspect the borrowers are paying rather more than the 2.x% you were getting, so if RS have to refill those loans at 3.x% (to the lender) it will just be eating into their margin, not losing them money. Remember you are not actually matching with a borrower, whatever it looks like on the screen - you are pouring money into RS coffers, which they are then lending out for whatever they can get for it.
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dorset
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Post by dorset on Aug 23, 2018 8:38:04 GMT
Exactly - they are borrowing short to lend long which is why rolling is high risk. If/when there is a run you will of find yourself locked into a 2.8% rate for up to five years. Stick to five year loans at 6%. I suspect rolling is where RS make up their margin.
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Post by oppsididitagain on Aug 23, 2018 10:13:13 GMT
2 good answers, i suspect the funding is just part of the big picture and they fund the total book. across rolling,1yr and 5yr
Im please all my money is out of the rolling now TBH
Personally I expect there to be a run in the rolling now until the new model starts, I wouldn't be surprised if rollings rates get up to 5% (maybe a bit optimistic) and I will try and get back in once my 14 day lock out expires. (Sept 2)
Then Mid sept when 'new money' is introduced rates will drop back to 3.2-3.5
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Stonk
Stonking
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Post by Stonk on Aug 23, 2018 13:41:07 GMT
Rolling does seem to have the potential to be a bit spiky at the moment.
It has been depressed so far this week by a huge load of automatic lender orders (from repayments) that didn't get filled for a couple of days, but last week it spiked up to 4.9% or 5.0% and I can envisage the same happening again soon. If it does, this is really rather valuable now that you lock into the rate for the life of the underlying loan, and still have (financial) penalty-free access . However, you may find such loans get repaid as soon as rates come back down, especially if they're all actually loans to RS rather than direct to borrowers as is suggested. It is for this reason that I'm not especially annoyed about having missed out on the 4.9%.
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Post by fiatlender on Aug 25, 2018 10:44:27 GMT
Personally I expect there to be a run in the rolling now until the new model starts, I wouldn't be surprised if rollings rates get up to 5% (maybe a bit optimistic) and I will try and get back in once my 14 day lock out expires. (Sept 2) Then Mid sept when 'new money' is introduced rates will drop back to 3.2-3.5 Good call. Rolling just matched at 5% with very little money available to lend, about £110k.
What a mess!
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Stonk
Stonking
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Post by Stonk on Aug 25, 2018 14:10:08 GMT
Personally I expect there to be a run in the rolling now until the new model starts, I wouldn't be surprised if rollings rates get up to 5% (maybe a bit optimistic) and I will try and get back in once my 14 day lock out expires. (Sept 2) Then Mid sept when 'new money' is introduced rates will drop back to 3.2-3.5 Good call. Rolling just matched at 5% with very little money available to lend, about £110k.
What a mess!
Clearly the amounts available on Rolling are far less than in the past. I would imagine this is largely to do with the new system of matching capital repayments back to the original borrower. There regularly used to be millions available on both sides every day -- that no longer happens -- and there's generally less money sloshing around in Rolling as a result. Granted, £110K (now even less!) does nevertheless seem very low.
I often wonder, and especially right now, to what extent it matters that there is not much lender supply on Rolling. If RS can repackage loans at will, as people say, then can they just shuffle any excess demand onto the 5 Year market? It wouldn't make sense to allow matches on Rolling at a higher rate than on 5 Year.
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Stonk
Stonking
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Post by Stonk on Aug 25, 2018 14:20:57 GMT
Personally I expect there to be a run in the rolling now until the new model starts, I wouldn't be surprised if rollings rates get up to 5% (maybe a bit optimistic) and I will try and get back in once my 14 day lock out expires. (Sept 2) Then Mid sept when 'new money' is introduced rates will drop back to 3.2-3.5 Good call. Rolling just matched at 5% with very little money available to lend, about £110k.
What a mess!
Another thing ... surely the 14-day re-investment ban is working against RS here. I can't be the only person who would be delighted to offer liquidity at 5.1%-plus on Rolling, but is presently prohibited from doing so.
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Post by fiatlender on Aug 25, 2018 14:33:35 GMT
Clearly the amounts available on Rolling are far less than in the past. I would imagine this is largely to do with the new system of matching capital repayments back to the original borrower. There regularly used to be millions available on both sides every day -- that no longer happens -- and there's generally less money sloshing around in Rolling as a result. Granted, £110K (now even less!) does nevertheless seem very low.
I often wonder, and especially right now, to what extent it matters that there is not much lender supply on Rolling. If RS can repackage loans at will, as people say, then can they just shuffle any excess demand onto the 5 Year market? It wouldn't make sense to allow matches on Rolling at a higher rate than on 5 Year.
Agreed, those millions were always going to be re-matched with the same borrowers anyway, but this money had the effect of holding rates down temporaraly for new money and affecting the MR for the following day. The recent changes also caused some people to pull money from RS completely in disgust. The 14 day ban has not helped either, as you have people like myself (currently banned) who would be investing more money, and supressing the higher rates.
Edit: Crossed with Stonk
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Post by fiatlender on Aug 26, 2018 12:54:14 GMT
6.1% match on rolling...wow!
Edit: 6.3% matched.
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Post by oppsididitagain on Aug 26, 2018 15:47:18 GMT
It was so predictable to rise however Im Surprised it got above 6% - I would be interested to know how long those loans were for.
Effectively the 'rolling market' is a penalty free (in terms of %) 1-5Yr market. I think RS did a good job of misleading us when they introduced the 'new rolling' in June which, as mentioned before by someone else, kept rates artificially low.
I urge everyone to check their portfolios and if you have any money lent below 3% pull it. Personally I would pull any money below 3.5% but do what ever is best for you.
IMHO no one should be lending money below 4% in any of these markets.
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sydb
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Post by sydb on Aug 27, 2018 0:56:08 GMT
How do you pull individual loans?
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ashtondav
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Post by ashtondav on Aug 27, 2018 10:10:58 GMT
You can’t. I presume he means sell the whole loan book if you’re below x%.
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Stonk
Stonking
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Post by Stonk on Aug 27, 2018 10:40:29 GMT
You can, with a couple of minor caveats.
Most of the information needed to deduce the technique is in RS's T&C's, with one final fact that can be determined by experimentation. However, it is clearly against the spirit of RS's rules, so I won't elaborate.
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lara
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Post by lara on Aug 27, 2018 10:55:43 GMT
Either way, they will punish you with a 14 day ban.
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