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Post by kilozulu on Aug 19, 2017 20:02:36 GMT
Reviewing my portfolio on Thursday spotted that Hipocredit has bought back without a specified reason more than 10 pieces of seasoned 16%+ mortgage loans without material payment problems (mostly current, few 1-15 day delayed). With such loans being a treasured rarity from old good days of 2015 I was pissed but politely wrote to Mintos support asking . Support answered that Hipocredit has a right to buy back loans under the assignment agreement and that there would be no further comment on the issue. In the system these loans show still as current, not repaid, just fully owned by Hipocredit. Which probably means Hipocredit decided to buy-back and reissue them at lower yield, keeping the spread to themselves. Anybody observing the same?
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Post by rahafoorum on Aug 19, 2017 20:46:10 GMT
Wouldn't be the first time this sort of thing happens on the P2P platforms. Why would they want to give away free money if investors let them get away with giving a lot less?
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Post by extremis on Aug 19, 2017 22:16:46 GMT
In the system these loans show still as current, not repaid, just fully owned by Hipocredit. Which probably means Hipocredit decided to buy-back and reissue them at lower yield, keeping the spread to themselves. Probably. Or they could just keep those great performing loans for themselves (assuming they have the funds) and list on Mintos some newer, more risky loans, with much lower interest rates and under the new structure - until some of those loans prove solid performers and get bought back, and so on. Of course it's their right to do so, they are not breaking any rules (just like the support already said), but for me Hipocredit loans nowadays look a lot less attractive than the older ones. I have also noticed a recent surge on the number of these fine performing high interest loans sold on SM even at very low premium; might be a coincidence, but could also be an attempt to gain even a small amount of money before they actually get bought back by Hipocredit. Anyway, i doubt they will buy back all of them at once.
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yacop
Posts: 68
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Post by yacop on Aug 20, 2017 7:00:02 GMT
I think this behaviour is called a market.
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Post by kilozulu on Aug 20, 2017 7:44:41 GMT
Wouldn't be the first time this sort of thing happens on the P2P platforms. Why would they want to give away free money if investors let them get away with giving a lot less? I thought there is an implicit assumption/promise of intent that originators sell loans on the platform on certain terms and then service them until maturity. But indeed can not find such a thing written. The only hint in that direction is secondary market allowing pricing at premium. It makes completly no sense to buy at premium if any interest rate arbitrage can be wiped out later by originator wanting the same thing for free.
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Rob
Posts: 138
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Post by Rob on Aug 20, 2017 11:51:28 GMT
I had 10 loans bought back with interest rates ranging from 16.1% to 19%. While Hipocredit is entitled to do this, I think it is a shady practice and undermines the integrity of the Mintos platform. They are sending the message "If you have loans which are yielding more than new loans, we will buy them back with no compensation and pocket the difference". I notice that they are not buying back defaulted mortgage loans, which they did in the early days of the platform. I feel sorry for anyone who had just bought one of these loans for a premium on the SM as they have now lost this premium that they paid.
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Post by rahafoorum on Aug 20, 2017 13:04:46 GMT
I had 10 loans bought back with interest rates ranging from 16.1% to 19%. While Hipocredit is entitled to do this, I think it is a shady practice and undermines the integrity of the Mintos platform. They are sending the message "If you have loans which are yielding more than new loans, we will buy them back with no compensation and pocket the difference". I notice that they are not buying back defaulted mortgage loans, which they did in the early days of the platform. I feel sorry for anyone who had just bought one of these loans for a premium on the SM as they have now lost this premium that they paid. Somehow I can't imagine them doing this in environments where interest rates are rising. I could be mistaken, but I'd be willing to make a bet that an 8% loan won't be bought back and reissued to investors at 12%
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Post by kissmyjazz on Aug 21, 2017 5:31:20 GMT
I think it quite OK if they buy back the loans issued during a specific time period regardless of the performance. Buying back only the well-performing loans is super shady and probably even illegal for any properly regulated financial institution. I personally would stay clear from all Mintos group loans. In their bid to expand as soon as possible the Mintos marketplace started to host some very questionable companies. Mogo and Creamfinance loans are still fine I guess.
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fric
Member of DD Central
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Post by fric on Aug 21, 2017 6:12:09 GMT
Hipo's mortgage loans have gone down the hill over time. First the interest rates (might as well just pick Mogo loans with buyback with better interest) but also the quality of loans have gone down. There used to be quite a few mortgages with real estate in Riga (the capital) as well as houses in the regions. Nowadays its full of apartments from small cities/rural areas, which means the valuation and auctioning of the property in case of a default could not go as planned...
I'm not against a possibility like this per say, but on the other hand it really screws over people who bought stuff on the secondary market for extra costs...
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Rob
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Post by Rob on Sept 14, 2017 6:35:22 GMT
Hipocredit has done it again. They have bought back 4 mortgage loans from me with interest rates ranging from 15.3% to 15.7%. Total value 1447€. SHAME ON YOU. This is an appalling practise. The loans were bought in good faith with the expectation that a good yield would be received for the next few years. You have just ruined that through your greed.
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JamesFrance
Member of DD Central
Port Grimaud 1974
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Post by JamesFrance on Sept 14, 2017 7:04:44 GMT
Presumably these were original Mintos loans before they spun off the loan side of the business into Hipocredit their associated company. They do need to provide an explanation for this or will lose the trust of investors.
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Post by nesako on Sept 14, 2017 9:42:06 GMT
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fric
Member of DD Central
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Post by fric on Sept 14, 2017 12:00:16 GMT
To be fair, they are also buying back loans with 13%. Its not just those old very high interest loans.
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Rob
Posts: 138
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Post by Rob on Sept 15, 2017 6:28:16 GMT
To be fair, they are also buying back loans with 13%. Its not just those old very high interest loans. I stopped buying mortgage loans when the interest rate fell below 14%, so I have not seen this.
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Rob
Posts: 138
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Post by Rob on Sept 19, 2017 14:49:13 GMT
Three more mortgage loans bought back from my portfolio today by Hipocredit. The reason shown in the statement is "other". I think the reason they should show is "GREED". Mintos is supposed to be a platform to invest on, not to have your investments taken away from you for no good reason.
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