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Post by zeverare on Feb 3, 2016 9:40:28 GMT
Sorry but I cannot see that there is any problem. I do not have a lot of cash invested but by using the auto invest facility I have no problem getting my money invested, including cream finance. Indeed, as I explained yesterday lots of loans from cream finance were late so people had less money to reinvest. This morning I noticed cream finance has done a lot of buybacks and at the same time all personal loans in primary market are gone. However the payments from cream finance were not complete, so I do not reinvest in their new loans at the moment.
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Post by falconet on Feb 3, 2016 11:58:43 GMT
Sorry but I cannot see that there is any problem. I do not have a lot of cash invested but by using the auto invest facility I have no problem getting my money invested, including cream finance. Indeed, as I explained yesterday lots of loans from cream finance were late so people had less money to reinvest. This morning I noticed cream finance has done a lot of buybacks and at the same time all personal loans in primary market are gone. However the payments from cream finance were not complete, so I do not reinvest in their new loans at the moment. True, I am owed 4 cents on 1 creamfinance loan that was late. Other investors are also owed 3 cents, 2 cents, etc
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Rob
Posts: 138
Likes: 36
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Post by Rob on Mar 22, 2016 9:30:34 GMT
I see mortgage loan 54024-01 for €10,000 was mostly gobbled up by one investor (€6,554.93) who has now placed his total holding on the SM for a quick profit. I had money waiting in my account and my Auto Invest bought nothing. I still think that it is unfair that one investor's Auto Invest should be able to take so much without sharing the available loan out amongst qualifying investors more evenly. Correction I did actually get some of this loan - I must have missed it in my statement
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Mar 22, 2016 10:14:22 GMT
Another one here 63506-01, one investor with 5000€ but recent so not yet on the secondary market. I did get a small piece of this one but would have liked more and it was fully funded by auto bids.
This still seems to be an unfair system of priority giving a huge advantage to someone manipulating the platform to the detriment of ordinary investors.
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lee
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Post by lee on Mar 22, 2016 13:38:14 GMT
i like how its on Twino that there is no secondary market and no fees for selling the loan. if mintos did the same then there wouldnt been so many sales on secondary market. I think the chance to earn more on selling loans ruins the system
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homes119
Member of DD Central
Posts: 93
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Post by homes119 on Mar 22, 2016 14:33:39 GMT
i like how its on Twino that there is no secondary market and no fees for selling the loan. if mintos did the same then there wouldnt been so many sales on secondary market. I think the chance to earn more on selling loans ruins the system I think a secondary market is required. However, I agree with you that I hate the flipping that is going on (same as when I was on Bondora).
My proposal would be to remove the possibility to profit from selling . But keep the ability to sell at a discount. So basically, no profit but keep liquidity. Mintos can keep their fee (if it strengthens their financial position which it probably does).
Also if interests trend lower, those with higher interest loans that are current will be able to exit their positions very quickly at par should they so wish.
I am sure there are people keeping a 20k-50k balance on their account just to jump the queue and reselling all interesting loans at 0.5-1% premiums every time they come up. Yes, they don't have 20k-50k fully invested but they get constant access to all the best loans and make a huge annual percentage on the small amount invested at any one time by constantly flipping. Once they sell, the profit increases the current account balance further, further enhancing their position in the queue.
It's practically risk free since the 20k-50k balance is in a segregated account and, barring serious fraud, will be returned in its entirety should the platform fail.
In fact, this is actually a sensible investing strategy from a risk return perspective imho. And Mintos love it because the constant churn generates extra fees.
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Post by reeknralf on Mar 22, 2016 19:28:46 GMT
I disagree about removing premiums. There are perfectly valid reasons why a loan might increase in value. If 12 months of repayments have been made, the default risk has decreased, and the loan is worth more. Similarly a 14% cream finance loan is presumably worth a 2% premium over the ~12% loans currently on offer. If you remove premiums, you are in effect forcing holders of loans with good repayments to sell out for less than the loans are worth, thus ripping off the holder, and reducing secondary market liquidity.
If premiums were prevented for the first 3 months after listing, this would prevent flippers, but would have little effect on second-market liquidity.
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Post by red_panda on Mar 22, 2016 21:00:18 GMT
this is actually a sound idea premium possible only if you've held the loan for at least 3 months
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Post by littleinvestor on Mar 22, 2016 21:48:10 GMT
I agree with this too; Premiums are a pain for the passive investors relying mainly on AI .. on the other hand, this is what also Mintos distinguishes from other P2P channels: it wants to be an open market(trade?)place.
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Post by kissmyjazz on Mar 23, 2016 6:57:50 GMT
Nobody has to buy from flippers, if there is no buying they will be stuck with their loans for 5 years. Let the market sort itself out, there is no need for any restrictions on selling or buying. There are enough primary market loans available for everybody.
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Post by kissmyjazz on Mar 23, 2016 7:07:02 GMT
I am sure there are people keeping a 20k-50k balance on their account just to jump the queue and reselling all interesting loans at 0.5-1% premiums every time they come up. Yes, they don't have 20k-50k fully invested but they get constant access to all the best loans and make a huge annual percentage on the small amount invested at any one time by constantly flipping. Once they sell, the profit increases the current account balance further, further enhancing their position in the queue.
What is this huge annual percentage they gain? If you have any facts, please share them. It is important to maintain liquidity in the SM and if some investors are buying from flippers, it is because they believe they are making a good investment despite the premium. Information costs money, so the loan with the good payment history is more valuable than the loan without any payment history. Initial investment therefore carries more risk than investment later in the loan cycle and it is only fair to ask some premium for that information.
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,317
Likes: 893
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Post by JamesFrance on Mar 23, 2016 8:57:03 GMT
For me the thing I am unhappy about is that a single investor is allowed to have first chance to bid on the best secured mortgage loans and then takes over half the loan. Most of us have to take a range of less desirable loans to keep our money invested so I see this is an unfair system.
If large investors are always allowed first choice of loans this is not a level playing field. I would like to see a limit on the percentage allocated to any investor as otherwise the platform will be biased towards institutional investors to the detriment of individuals and not in the spirit of P2P.
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Post by kissmyjazz on Mar 23, 2016 9:03:48 GMT
Yes, I do agree with that proposal.
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Post by extremis on May 2, 2016 14:34:49 GMT
I think that the real problem with giving priority to large investors is they could manipulate the market. Lets assume that someone with the necessary funds always takes priority on Autoinvest queue and takes all the highest interest (or lower risk, or best return to risk value) loans and then lists them on SM with a premium. If the loans with a premium are sold then he obviously makes a profit, while his funds are released and could be re-invested. If the loans are not sold on SM he still benefits from picking the cream of the cream. Most importantly, whatever the case, the returns will decrease (risk will increase) for all other investors since the best loans are already taken and resold, but usually with a high premium, on SM. For example, what stops a loan originator from "buying" his best loans and "resell" them on SM for lowering the interest rate? Small investors would then have to accept the lower interest - higher risk loans, or move to another platform.
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james
Posts: 2,205
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Post by james on May 12, 2016 6:48:37 GMT
What is this huge annual percentage they gain? If you have any facts, please share them. It is important to maintain liquidity in the SM and if some investors are buying from flippers, it is because they believe they are making a good investment despite the premium. I've seen more than 30% annualised rate from one platform where loans have base interest rates in the 10-12% range. That is low, not high, it is limited by new loan supply, To see the potential consider a person who buys then sells after two weeks at a 1% profit, ignoring interest. That person would make 26% a year if their money was always invested. If they can cut the resale time to one week they can make 52% a year. Make it 3.5 days and it's 104%. Information costs money, so the loan with the good payment history is more valuable than the loan without any payment history. Initial investment therefore carries more risk than investment later in the loan cycle and it is only fair to ask some premium for that information. That has value if the borrower has not paid all interest when they start the loan. What value does flipping have? That happens too quickly for there to be new information, before the first payment has been made. At Bondora it was very easy to manipulate the queue system. All you had to do was pick a popular target market and not accept any others. You would then get only the high demand loans. Someone else who accepted less desirable loans had their queue position reset each time they got one of the less desirable ones so they always ended up at the back of the queue. In experiments I went months not getting the most desired loans when I set things up to accept a range of loans including most and least desired. It was possible to solve this with queues for each subset of loans but Bondora only went part way in that direction and never solved the problem. I don't know whether this approach - only accept the high demand loans - will work at Mintos.
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