SteveT
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Post by SteveT on Jun 6, 2015 10:15:50 GMT
My vote would definitely be for the current month's interest to be divided equitably between buyer and seller (payable when the next payment is made) based on the number of days accrued and remaining. Why should SM activity hinge on where we are in the loan's monthly repayment cycle? It simply rewards those with the time to trawl the market regularly and "game the system" whilst discouraging normal investors from listing and buying with confidence on the SM.
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nick
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Post by nick on Jun 6, 2015 17:57:54 GMT
I agree - interest should be accrued to the seller up to the date of sale. This by far the fairest way to treat interest, ie you are earning a set rate of interest for the duration that you hold the loan. Under the current system, the effective rate you are selling the loan changes every day! If you wanted to sell a loan piece for a fixed effective rate, then you would need to constantly relist the loan part at a different premium/discount - crazy! The credit risk attached to the accrued interest should also stay with the seller, ie if the interest is not paid, the accrued interest will not be paid to the seller. This is how FC operate the SM. I suspect the only reason REBS do not use an accruals basis is the greater complexity which thier back systems may struggle to cope with.
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markr
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Post by markr on Jun 7, 2015 17:35:31 GMT
The credit risk attached to the accrued interest should also stay with the seller, ie if the interest is not paid, the accrued interest will not be paid to the seller. This is how FC operate the SM. On FC the buyer pays the seller the accrued interest at the time of purchase, so risk entirely transfers to the buyer.
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Post by sceptic on Jun 14, 2015 12:12:48 GMT
My vote would definitely be for the current month's interest to be divided equitably between buyer and seller (payable when the next payment is made) based on the number of days accrued and remaining. Why should SM activity hinge on where we are in the loan's monthly repayment cycle? It simply rewards those with the time to trawl the market regularly and "game the system" whilst discouraging normal investors from listing and buying with confidence on the SM. Why not go all the way and just divvy up all the deposits between all the various contractors and investors so that everyone gets exactly the same amount?
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nick
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Post by nick on Jun 14, 2015 18:19:03 GMT
Anyone have any further insight to why liquidity in the SM has dried up? My rate of selling and churn have fallen off a cliff. I've noticed issues on the webpage freezing when buying loan parts (the selected loans are purchased, but no confirmation pops-up, or it does if you are patient enough to wait several minutes) - maybe that's contributing to the fall off in liquidity. I hope the issue is addressed as I believe a healthy SM is a precursor to the success of any platform, otherwise potential investors (including myself) are going to be a lot more cautious about deploying funds or scale back and redeploy elsewhere.
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SteveT
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Post by SteveT on Jun 14, 2015 20:17:44 GMT
I presume the recent number and size of new loan listings may also have something to do with the current lack of SM activity. Classic signs of supply exceeding demand on the PM (auctions needing extensions to fill and closing with highest rate bids still in) so I guess fewer people are needing to purchase SM loans at a premium. Basically ReBS needs more investors, or else fewer new loans (which it sounds like FC are planning to help with...)
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jun 14, 2015 20:25:50 GMT
I think the problem is not enough new lenders joining. I joined in May 2014 and needed to diversify quickly, so bought loans on the SM.
At the time there were about 3000 lenders. The number of lenders is up about 1300 (average 100 per month), but the number who joined this week is only 5.
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baldpate
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Post by baldpate on Jun 15, 2015 18:53:06 GMT
The number of lenders .... who joined this week is only 5. Where did you get the figure '5' from? I wonder if you used the "Applications this week" figure, because I believe that means the number of Loan applications. I think the membershiip is growing by something like 50/week (just by tracking the "Registered users" figure). And I'm noticing an increasing number of lenders willing to make larger bids (I mean £1K or more).
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jun 15, 2015 19:33:43 GMT
The number of lenders .... who joined this week is only 5. Where did you get the figure '5' from? I wonder if you used the "Applications this week" figure, because I believe that means the number of Loan applications. I think the membershiip is growing by something like 50/week (just by tracking the "Registered users" figure). And I'm noticing an increasing number of lenders willing to make larger bids (I mean £1K or more). Ah, that makes sense. So I'm going with stevet view, more new loans with higher final rates make the SM less appealing.
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Post by betterthanworking on Jun 17, 2015 14:50:13 GMT
There's lots and lots of par Be***y Recr******* @19% available at the moment if anyone is interested. Very tempting, but I've got plenty of that one.
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SteveT
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Post by SteveT on Jun 17, 2015 14:57:00 GMT
There's lots and lots of par Be***y Recr******* @19% available at the moment if anyone is interested. Very tempting, but I've got plenty of that one. Haven't we all?
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nick
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Post by nick on Jun 21, 2015 9:25:49 GMT
I wouldn't have expected the increase in the PM offerings to have much impact on the liquidity of the SM market, just on the rates offered. Rates in the SM have reacted to lower liquidity and often offer a better return than the PM given the dead time during the auction, waiting for acceptance and contracting (assuming the loan does get accepted). The number of new PM listings is still nowhere high enough to invest in a diversified portfolio quickly (100+ lenders). If anything, a healthy PM should spur a more liquid SM. The rate of fill of some of the PM loans indicates there is a fair bit of money waiting to deploy on the platform. So I'm still scratching my head on the fall off in activity. The poor website performance certainly must be a factor, it like watching paint dry trying to manage my current portfolio............
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nick
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Post by nick on Jul 5, 2015 17:56:31 GMT
The secondary market seems to have come alive again and with a flurry of sales. The market does seem granular with just a few buyers buying significant volumes. Maybe this was always the case I hadn't noticed.
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Post by betterthanworking on Jul 6, 2015 8:45:03 GMT
Yup, I've had a few carefully-priced parts up for sale, and they went within a couple of days.
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Post by Financial Thing on Jul 6, 2015 11:22:01 GMT
REBS chose poorly with their website interface. They use Wordpress to run a financial system. No wonder it doesn't work efficiently and the SM market is poor.
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