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Post by kilozulu on Sept 28, 2017 15:17:20 GMT
We've published a short post on this situation following some discussions with Mintos. We think there are implications for purchasing any loans at a significant premium from any lender on the Mintos platform going forward, as many other lenders could benefit from reduced funding costs in the future. Hipocredit uses fine print to its advantageGood article. I can only second the point that there will be investors facing losses due to this. I know because, being early investor, had quite a few of those high interest rate loans and was conciously selling them off, not feeling comfortable with significant interest rate differential versus current market rates, and preffering to cash it in when possible. People were paying 5-10% premiums, up to 15% in exceptional cases. Fortunately for me I had largely sold off the best stuff, so now seeing Hipocredit behaviour is just irritating because I lost a few thousand euros of loans with interest rates 2-4% above my next best option. But for people who paid 15% premium to get a piece of high-rate loan to now see it bought back at book value must be more than irritating.
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Post by kilozulu on Sept 23, 2017 20:37:10 GMT
I dont think you can compare Eurocent and Mogo. In my instance Eurocent made up less than 1% of loans wheras Mogo makes up 40% and as Mogo has been with Mintos from almost the beginning I would say that it makes up a large part of the average investors loans on the Mintos platform. Were Mogo to fold it would have a catastrophic impact on the portfolios of most investors unlike Eurocent which was no more the a small inconvenience. I my opinion if Mogo collapsed so would Mintos as most investors would almost certainly desert the platform much like a bank run. I doubt if most people would care that Mogo and Mintos are different companies in this scenario. Looked at Mintos statistics page, Mogo makes 40% of the outstanding portfolio on Mintos. In Eurocent example about 1/3 of portfolio defaulted, the rest kept paying, if I correctly read info. Using it as proxy, if you had 40% Mogo from your portfolio, that would translate into 10-15% of total portfolio defaulted. Assuming that is sufficient to persuade average investor to abandon Mintos, the timing of reflows comes into play. In bank you can call money immediately, here you have to wait at least a month, typically longer whislt your loans mature and repay the money that can be withdrawn. With average investor having an attention span of a golden retriver, such delay could be sufficient to allow him to overcome the initial shock and reconsider withdrawal, once he slowly grasps that most other platforms are not really any safer.
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Post by kilozulu on Sept 23, 2017 17:08:00 GMT
One thing to consider: what would happen if Mogo went under? I think Mintos too would take a crushing blow, if not deadly. Honestly, how many investors care enough to not allocate at least 50% of their Mintos assets to Mogo? I'd say not that many. Why would Mintos really suffer if Mogo defaults? These are two separate independent companies, with possibly some partial overlap between ultimate owners, but independent businesses with independent managements. The only impact I can think of is - drop in Mintos business volume (Mintos gets paid to list Mogo loans, less loans means less income). But this would partially be compensated by the investors simply choosing non-Mogo loans, say Lendo, and creating the same fee income to Mintos. - damage to buyback guarantee concept credibility - but Eurocent already showed it is not German bunds:) - indirect effect of overlapping shareholders being less capable to provide additional support, if needed, by injecting extra equity. So adding this up, Mogo default would clearly be not nice, but definitely not deadly or crushing, and I would say not even significantly damaging. Any other thoughts?
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Post by kilozulu on Sept 22, 2017 19:02:04 GMT
Even more of a testament to the quality of data. A quick check in the dataset shows that there are literally thousands of loans with liabilities (LiabilitiesTotal) bigger than income (IncomeTotal). Majority of them still have a positive value in the FreeCash column for some reason. However, there are over 300 cases for 2017 where FreeCash is 0 and liabilities are higher than income. Even a funny case where income is €1200 and liabilities are over €9100. Go figure. Positive value in FreeCash column works only if you assume not all liabilities are honoured So Bondora already assumes rent and communals not paid by poor sould...
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Post by kilozulu on Sept 20, 2017 18:03:59 GMT
yep, now also 15%s and 14%s are disappearing to be noted that it seems only loans with perfect or almost perfect payment history are being bought back, thus loans which were clearly priced above current market risk/return premium levels, also loans which still have some duration left. I still have one 19.9% with just a few month payments left, and 17.5%, 16.9% etc with regular payment delays. Very dissapointing behaviour by Mintos/Hipo group.
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Post by kilozulu on Aug 28, 2017 12:20:42 GMT
How long you run the program, 6 months? Since February, but with occasional breaks when Mintos changed their format and I didn't notice it for a couple of weeks. Then we the regular guys still have a chance every once in a while for a few weeks:)
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Post by kilozulu on Aug 28, 2017 12:19:35 GMT
I thought that Payment Guarantee loans would run until maturity, even if they defaulted. But Twino is now buying back defaulted PG loans so that they can sell them e.g., loan number 04-680924002. You mean buying back and selling on primary market again? defaulted loans? Maybe Twino just have excess liquidity and they use it for buybacks. Or they sell new lower interest rate loans to investors and use the money to buyback higher interest rate defaults.
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Post by kilozulu on Aug 26, 2017 20:00:50 GMT
You have impressive SM returns, how much time do you spend monitoring SM for attractive deals? Well, this is probably disappointing to hear, but to be honest: I wrote a program that checks the secondary market once a minute for what I consider to be undervalued loans. It turns out there aren't that many of them. I reckon that the majority of undervalued loans transacted in the secondary market are bought by me, but the amount I have in Mintos is about the maximum I can keep invested this way. So I think that opportunity is pretty much tapped (except maybe for long durations; I only target < 12 months). If anyone gets it in their head to copy this idea: At least target a different platform like Viventor/Swaper/Viainvest so you won't have to compete with me. No competition here, coding is for smarter people. Still, to pick up the majority guess you have to keep a cash buffer at all times to allow exploiting opportunities whenever those arise, which is not the case in screenshot. How long you run the program, 6 months?
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Post by kilozulu on Aug 26, 2017 14:54:30 GMT
The misrepresentation can be material if you are active on the secondary market. I know because it affects me. I took this screenshot from my Mintos account just now: You have impressive SM returns, how much time do you spend monitoring SM for attractive deals?
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Post by kilozulu on Aug 25, 2017 12:52:22 GMT
I think that is mathematically impossible. The consensus is that Mintos calculates their loan % correctly, so the return from Mintos loans should be comparable to Twino's. I second this.
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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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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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General EUR P2x Discussion
Flender
Aug 12, 2017 13:20:22 GMT
Post by kilozulu on Aug 12, 2017 13:20:22 GMT
Cashback offer still valid through August, but minimun is 2.5k to get 10% cb My first project paid the first installement. Btw, they offer sepa since some weeks With 10% cashback they are more desparate for new money than Bondora, which give 5%. Wonder how sustainable the business model is.
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Post by kilozulu on Aug 10, 2017 14:55:16 GMT
Probably too late now, but I would like to know how a car can be "found and impounded at a secure location" and then be "sold/destroyed/lost" a few weeks later. For example: www.mintos.com/en/187151-01In this case seems pretty strightforward - 19.04.2017 Vehicle repossessed - 15.05.2017 Received Payments € 313.75 => actual income from sale transfered to Mintos - 16.05.2017 Unsecured Vehicle has been sold/destroyed/lost => sold=sale transaction reported to Mintos
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Post by kilozulu on Aug 10, 2017 5:54:50 GMT
Wait. Are you guys successfully unloading loans at a premium? I haven't seriously tried that as I assumed it's hopeless in the general case. Have I overlooked an opportunity? In old days, with 15%+ good LTV well-performing mortgage loans it was possible to do some flipping at premium. But those loans are exctinct now, Hipocredit probably concluded they can keep the extra spread themselves.
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