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Post by transo on May 23, 2014 11:29:37 GMT
Looks like the website has fallen over again. My bid at 13.1% on 6182 is still in "safe" by about £2000, except that I've watched nearly £15,000 get bid at 13.0% without any impact. FC still hasn't released my money so I can't bid at a rate that might actually win, but I'm sure a few minutes after it closes I'll discover I didn't get a slice.
Will be interesting to see how their complaints stuff works now they are FCA regulated...
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Post by transo on May 19, 2014 23:12:29 GMT
I know at various points people have cast doubts on the value of these, which I tend to share. However I thought I should share some perspective with newcomers nervously looking at downgrades, and thank the (separate) guarantors of loans 136 and 213. These two recently completed repaying their loans in full, despite the (much, in one case at least two years ago) earlier failure of the business. One of them had a few payment wobbles on the way, but the other pretty much moved directly to direct debits being paid by the guarantor and never suffered a delay in payment that I actually noticed.
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Post by transo on May 9, 2014 12:56:09 GMT
You will not be able to see any whole loans yet (if indeed any have completed) as the loan book download has not been updated since the end of April. The last completed loan showing is 5974. Thanks for pointing that out. Spent a while the other evening trying to work out what had gone wrong with my code that reads through it to check for any changes in loans I had or sold - it said there were no changes despite knowing quite a few new loans had gone out. To save me asking a third query of FC in a week, has anyone else queried this with them yet?
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Post by transo on May 6, 2014 17:34:23 GMT
I've now had a reply from FC to my enquiry about this sudden change. They assure me (I wouldn't say reassure!) that this was due to a "technical error", "causing an incorrect figure to be displayed". Apparently their credit analysis team retain their lifetime bad debt estimate for A+ debt at 1.2%.
No answer on my secondary query of how the lifetime bad debt estimate has increased from 0.9% to 1.2% without any change in the expected annualised rate, although that level of increase is I guess plausible given an increasing trend in the average loan period of FC loans (as 48 and 60 month loans weren't originally available) and some fiddling with assumptions on how far through loans losses will occur.
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Post by transo on Apr 29, 2014 19:48:20 GMT
Well tonight it looks like A+ loans have magically become less risky, their lifetime risk is now back at 1.2%. I sent a query to FC yesterday to enquire what had changed and will report back if/when I get an answer.
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Post by transo on Apr 28, 2014 22:53:12 GMT
I know many of us here think FC's bad debt record on A+ loans is worse than their estimated bad debt rate implies. However it appears FC may have changed their estimate. Looking at the stats page tonight I noticed: % | A+ | A | B | C | C- | Total | Current bad debt | 0.9% | 0.9% | 2.2% | 1.4% | 1.7% | 1.4% | Estimated lifetime bad debt | 3.3% | 3.0% | 4.6% | 6.6% | 10.6% | 4.8% |
That estimated lifetime bad debt figure on A+ loans looks to be a huge jump. I last noticed it when I ran my stochastic projection of my returns in in early March, when the estimated lifetime bad debt of A+ loans was only 1.2%, having gradually crept up from 1% in November 2012. The other rates don't appear to have changed much. Interestingly the explanatory text states that the table shows that "for every £1000 of A+ loans we estimate that there will be about £30 of bad debts over the life of the loans", which is much higher than previous estimates but very approximate maths. However further down the page the estimated annual bad debt rates haven't changed at all from their original values, still 0.6% for A+. I can't believe that the estimated lifetime bad debt rate on A+ loans can almost triple without any impact on the annualised rate, despite the (well document on another thread) difficulties in working out how FC got from one to the other. Meanwhile I'm upping my minimum bid rate on A+, again.
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Post by transo on Apr 27, 2014 19:50:59 GMT
I'm not sure that "peer to peer" lending for FC has to be between "individuals" and "businesses". I'm quite happy if FC want to allow businesses to lend money to other businesses, I'm even quite happy if they let banks do so. What I want is that they lend as "peers" of the rest of us, i.e. via the same processes and systems. If they want to bid for loan parts (and if they want to bid for 25% of a loan or whatever the upper limit on loan part size is) I've got no problem, and I've got no problem if I lose out because they're prepared enough to bid at lower rates. I _am_ bothered if on some random selection of loans these other "peers" get to run the rule book over it and then decide to either take it (a cherry) or leave it to the rest of us (who are no longer "peers" but second class citizens) to see if we want to pick up. I think in the other place FC said it would be made clear if a loan had previously been offered as a whole loan but not taken up by one of these anonymous bidders. I would need a lot convincing to bid on any such loan, maybe if we stage a buyers strike FC will reconsider what "peer to peer" lending means.
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Post by transo on Mar 25, 2014 22:35:09 GMT
Secondly will we be able to transfer in an existing portfolio or part of a portfolio? If not, and we have to set up an ISA account with FC and then buy loan parts into it, I cannot think of a more disastrous plan. We almost certainly won't be able to transfer an existing portfolio into an ISA. Under the current ISA rules subscriptions must be in cash, with the (very limited) exception of some shares and depository interests from Save as You Earn (SAYE) and Share Incentive Plans (SIPs, NB: not SIPPS). For shares that you hold outside an ISA the only way to get them into the ISA is to sell them [with the attendant CGT liability], subscribe the sale proceeds to the ISA, and then re-buy them in the ISA [with the attendant stamp duty liability]. Some providers will organise this for you (so called "bed & ISAing"), but there are rules on this - in particular that you can't buy the investment from yourself or your spouse and that they must be bought at the open market price. I've not read the budget documents yet, but I've not seen any suggestion of any changes to these rules.
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Post by transo on Mar 19, 2014 22:08:08 GMT
FC has had this arrangement from the start (well, a week in when I first looked), although I don't remember noticing the provision that the fees might increase. However at that point I was only putting in £500 to see what happened under the theory the whole lot might disappear. The rules the FCA implemented (in PS14/4, for the geeks following along in the front row) require all FCA regulated P2P lenders to have such arrangements, and the guidance is clear that the arrangements need to allow for the fact that the income from the loan pool will decrease as it is run off. Under the rules FC will have to inform us of any changes to these arrangements, and of the identity of any third party they've made the arrangements with.
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Post by transo on Feb 25, 2014 23:08:16 GMT
As an FC old-timer (I realised that my first loan part is within the first 500 loan parts ever issued on FC!) it's probably long overdue that I went through my statements and actually tallied them all up and worked out which of the loan parts earned me what. I've (with a lot of effort) parsed all of them apart from the cashbacks received on early loans when they were drawn down. The statement entry just reads "Lender promotional cashback" with no link to the loan request or the loan part that earned it.
From the Zopa forum I know the final 0.5% offer ran out at loan 576, but FC no longer seem to have the Ts&Cs for all these offers listed. Can anyone help me with the boundaries for the older offers (3% and 1% IIRC)?
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Post by transo on Feb 3, 2014 18:14:24 GMT
I e-mailed them on the 24th to query what on earth was going on, and why they didn't seem more bothered. I got the usual whimpy response about "... administrative processes involved ..." in setting up a direct debit, and FC "... do not anticipate any ongoing repayment issues ..." because the business "... has an excellent repayment record.".
However more interesting was the next paragraph where they noted:
Does anyone know who they have payment collection outsourced to at the moment? I don't remember seeing anything about this in the Ts&Cs. I also want to know why they don't insist on a CHAPS (or faster payments, though believe the banks don't make this available to corporate customers) payment when payments are late. That way FC should know that afternoon whether the company paid or not and not have to wait for "proof of payment". (Yes it would cost the borrower up to £25, but frankly they're late and in breach of their loan conditions.)
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Post by transo on Jan 21, 2014 0:14:48 GMT
New update on the statement........... They are experiencing problems generating tax statements and are apologising for inconvenience caused and hope to return functionality in the next 24 hours. Well they've been experiencing it for several weeks at least (since I did my tax return). When I messaged them they arranged uploaded a heavily anonymised/garbled version of mine but with the right figures to the support query. Then I realised I had actually downloaded it last April when it first became available. Guess they haven't fixed it in the interim :-(
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Post by transo on Dec 23, 2013 13:33:44 GMT
My view is that defaults are around 50% higher than FC suggested provision. We can not both be right. I will study your paper in more detail and see if I can work out whether there is something wrong in my view. One thing I spotted in chielamangus's paper is that he compares the actual default rate for the 2010/11 tranches against the 1.9% simple average annual default rate for A+ to C loans. However the oldest C loans were late 2011, and built up slowly at first, so it would be more accurate to use the 1.5% simple average default for for A+ to B loans. (We should also weight by loan value rather than take a simple average of rates). I don't think (unfortunately) there's evidence that FC's bad debt estimates are particularly conservative, although maybe the evidence doesn't back up my working assumption that they're significantly worse than estimated.
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