kaya
Member of DD Central
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Post by kaya on Sept 9, 2016 9:55:47 GMT
With the clutter of new and regurgitated loans showing no signs of abating, the contrast with the famine at SS is startling. Is it time for a complete revamp of FS to mirror that of SS, with monthly interest, a par-only secondary market, et al?
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on Sept 9, 2016 10:04:37 GMT
With the clutter of new and regurgitated loans showing no signs of abating, the contrast with the famine at SS is startling. Is it time for a complete revamp of FS to mirror that of SS, with monthly interest, a par-only secondary market, et al? To be honest, I think that time came (and apparently went) about 12 months ago 
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Neil_P2PBlog
P2P Blogger
Use @p2pblog to tag me :-)
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Post by Neil_P2PBlog on Sept 9, 2016 10:08:55 GMT
I think a form of autobid/ prebids would really help FS.
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stevio
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Post by stevio on Sept 9, 2016 10:35:40 GMT
Better quality loans, too many defaults - or lower LTV to compensate for additional risk
Monthly interest to reduce risk
Provision fund
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Post by mrclondon on Sept 9, 2016 10:39:54 GMT
If monthly interest was introduced, where would the borrowers who like the concept of a 6 month bullet loan go ? Possibly one of the new startup platforms whose full FCA authorisations are now being received would step into the gap vacated by FS.
Whilst we lenders like to think we are king, a p2p platform's customers are actually the borrowers (we are the supplier of raw material, money, to create the product, loans). FS's strong supply in loans is due in part to its USP (unique selling point) of 6 month bullet loans that are renewable. That is the product FS is selling.
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hendragon
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Post by hendragon on Sept 9, 2016 10:50:05 GMT
FS will only revamp if they are unable to provide or fill loans. They seem to have decided that bonus rates and occasional cashback is the best strategy for many loans on offer. Only if this fails and a loan is pulled because of lack of lenders are we likely to see a rethink. (imho)
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mikes1531
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Post by mikes1531 on Sept 9, 2016 10:53:27 GMT
Whilst we lenders like to think we are king, a p2p platform's customers are actually the borrowers (we are the raw material money to enable the product loans). FS's strong supply in loans is due in part to its USP (unique selling point) of 6 month bullet loans that are renewable. Looking at the time it has taken for some recent renewals to become fully funded -- the Rishton renewal has been open for at least two weeks and still is only 23% funded -- FS could find themselves in an awkward situation if they're promising borrowers that they can renew.
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Post by mrclondon on Sept 9, 2016 11:10:36 GMT
Whilst we lenders like to think we are king, a p2p platform's customers are actually the borrowers (we are the raw material money to enable the product loans). FS's strong supply in loans is due in part to its USP (unique selling point) of 6 month bullet loans that are renewable. Looking at the time it has taken for some recent renewals to become fully funded -- the Rishton renewal has been open for at least two weeks and still is only 23% funded -- FS could find themselves in an awkward situation if they're promising borrowers that they can renew. Agreed. That is my greatest concern about the FS model as it currently is. A majority of the FS property loans can be clearly seen from the outset as being required for longer than 6 months and hence renewal is going to be required, yet the official position is that renewals are subject to further due dilligence and the avaiallbility of funds. As a potential borrower I would be uneasy at not knowing for sure that I was going to be able to renew at 6 , 12 and possibly 18 months, but that said, those borrowing at FS type rates are probably of the mindset that this gives them the flexibility to refinance to a cheaper provider at the 6, 12 or 18 month mark without realising that refinancing mid project is not that easy.
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SteveT
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Post by SteveT on Sept 9, 2016 11:21:53 GMT
I don't think a complete revamp is necessary but I do think the current situation highlights the need to manage the balance of supply and demand. An overhang of unfilled loans inevitably causes many to think twice and some of the Big Hitters who have piled in to fill big loans in the past (at high bonus rates) seem to be holding off recently. This isn't much different to the Feast / Famine flip-flop we regularly see on SavingStream, but the rate of new loan origination on FS seems relentless.
Perhaps time to consider some "renewal incentives" for lenders in existing loans (eg. 1% cashback but only available to those already invested, with lenders who opted out given the chance to opt back in)
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Post by polonius on Sept 9, 2016 11:39:30 GMT
Whilst we lenders like to think we are king, a p2p platform's customers are actually the borrowers (we are the raw material money to enable the product loans). FS's strong supply in loans is due in part to its USP (unique selling point) of 6 month bullet loans that are renewable. Looking at the time it has taken for some recent renewals to become fully funded -- the Rishton renewal has been open for at least two weeks and still is only 23% funded -- FS could find themselves in an awkward situation if they're promising borrowers that they can renew. It is lenders who are in the awkward situation. I don't think either FS or the borrower have a problem - the borrower pays the renewal interest and the loan simply continues with the current lenders locked in. Eventually once the renewal is fully funded, lenders who opted out of renewal get their investment returned and new investors start to accrue interest. That's OK where renewal fills in hours but for protracted periods means perversely that reluctant lenders are holding loans they do not want at the same time as would-be investors have cash tied up in the same loan without benefit. FS could remedy this (if they see it as a concern at all) simply by allowing SM trading to continue throughout, just as SS and MT do.
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Sept 9, 2016 11:54:07 GMT
FS will only revamp if they are unable to provide or fill loans. They seem to have decided that bonus rates and occasional cashback is the best strategy for many loans on offer. Only if this fails and a loan is pulled because of lack of lenders are we likely to see a rethink. (imho) Is it really a case of lack of lenders or is it perhaps the quality of the loans? IMHO the loans now on offer are looking more and more risky by the week. Add to this the increasing number of loans running late and there are some serious questions to ask about the running of FS. Not overall a good recipe for pulling in new punters I would think!
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SteveT
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Post by SteveT on Sept 9, 2016 11:55:58 GMT
Hardly "without benefit". Since the recent policy change by FS, new lenders in partially filled renewal loans are earning interest without their capital yet being at risk.
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Post by polonius on Sept 9, 2016 12:01:28 GMT
I missed that - are original investors left 'holding the baby' also accruing further interest as well?
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SteveT
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Post by SteveT on Sept 9, 2016 12:03:38 GMT
I missed that - are original investors left 'holding the baby' also accruing further interest as well? Yes, so it's costing FS double
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mikes1531
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Post by mikes1531 on Sept 9, 2016 17:51:05 GMT
I missed that - are original investors left 'holding the baby' also accruing further interest as well? Yes, so it's costing FS double And that's why FS can't afford to let renewals take forever to fill -- a large renewal stuck at 50+% funded would make a big dent in their profitability.
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