|
Post by WestonKevTMP on Jun 12, 2017 8:22:41 GMT
Shame really, my favourite thing about RateSetter was the markets. I was looking forward to the day when lenders had to pay RateSetter for the pleasure of looking after their money, like a Japanese central bank!
|
|
|
Post by WestonKevTMP on Jun 12, 2017 8:20:44 GMT
Unless there is some statistical freak, it looks like the lowest the rates can go is 2% (Market Rate, excluding manually placed orders). It appears RateSetter have put a floor on the Market Rate calculation;
|
|
|
Post by WestonKevTMP on Jun 3, 2017 6:20:03 GMT
I'm starting to lose confidence in p2p in general, which is a shame. I think this deserves a new general thread, but this is exactly how I feel, about the P2P sector (not all platforms). I've been lending for 10 years, and professionally worked with three platforms. My expertise is in retail consumer lending, not wholesale, business, SME or property. I'm especially impressed that RateSetter have returned ~£70m in interest to lenders, that might otherwise have been only ~£1m if the same money has been in a savings account. That's a fantastic reflection on what P2P should be aspiring to deliver. But some of the lending occuring on some platforms is mired in incompetence, ignorance of traditional risk management principles to access the borrower and security, and ultimately poor treatment of the customer. Some loans can clearly be defined as irresponsible lending. And don't get me started on the transfer of P2P to Bank.... I still love a couple of platforms, but I'm falling out of love with the sector. The drunks have turned up at the party, maybe it's time to go home. Kevin.
|
|
|
Post by WestonKevTMP on Jun 2, 2017 19:42:51 GMT
As I understand it RS PF would not be able to cope with the bad debt Zopa experienced in 2008.... Not quite true. The Provision Fund coverage is to cover capital and expected interest. If bad debt increased to levels of 2008, the the first line of defence is a reduction of interest with capital intact. This is what happened with Zopa's in 2008/2009, and is probably what would happen with RateSetter. Bad debts would have to deteriorate hugely for the Provision Fund to be depleted, interest to be lost, and capital lost. I think this unlikely, although admittedly possible. Kevin
|
|
|
Post by WestonKevTMP on May 30, 2017 12:47:15 GMT
I'm waiting in anticipation to get at least 1p back from my defaults. How much effort are they going to put into recovering a defaulted loan of £5k for wedding expenses that made no payments? £5k for wedding expenses and no payments.... Sorry, but this has made me chuckle. Without giving industry secrets away, but this will look somewhat familiar to those of us that have worked in lending a for a number of decades. I suspect this could be classic "flight risk" or "social suicide" fraud, and I'll be amazed if we see a penny of it again! Kevin.
|
|
|
Post by WestonKevTMP on May 29, 2017 8:33:34 GMT
I have £2.5 Million invested in Saving Stream... Oh man, I do hope this is part of a much larger diversified investment portfolio.
|
|
|
Post by WestonKevTMP on May 27, 2017 10:19:26 GMT
Simple economics of supply vs demand says rates probably will go lower still until this gets back into balance. Exactly. RateSetter lending volumes reduced considerably in April to ~£40m, from ~£60m the month before. Although these numbers are clouded by some refinancing in March and a seasonal low in April. And I suspect May will also be a reduced month of lending. So with this imbalance, the rates can only be pushed down. They are a market after all, and with ~£700m in outstanding balances paying back ~£40m per month, after this is reinvested there isn't anywhere for new money to go. I also think RateSetter will get FCA approved before end of June '17, with the IF ISA by end of summer. And that will also push down rates. I understand from another P2P platform that their ISA income has not only been this year's cash allowances, but many people transferring their previous years - sums of £100k plus.... Its gonna get tough for lenders that want safe P2P returns... Kevin.
|
|
|
Post by WestonKevTMP on May 26, 2017 11:34:11 GMT
.... Unless the PF is funded perfectly, it is BAD for lenders. This seems to be a common current thought process, in that any surplus could have been given back in increased interest. However in my experience, lenders are happy to have reduced interest if they have the comfort of a fund to cover unknown bad debt, and the known AER return without vagaries. This knowledge and comfort comes at a price, like insurance, and I'm happy to pay it. Kevin.
|
|
|
Post by WestonKevTMP on May 26, 2017 7:57:15 GMT
Yes ... interesting that my email says "The (Safeguard) fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers.... Absolute c*** I had just joined RateSetter when Zopa introduced the SafeGuard. It was a direct copy (immigration, flattery, etc.) because they saw it was popular with lenders. It gave confidence and the ability to provide specific returns without the vagaries of forecasted bad debt. Institutional lenders don't take SafeGuard protection as they prefer to boost returns by taking the risk.
|
|
|
Post by WestonKevTMP on May 24, 2017 12:49:58 GMT
I agree entirely, it would be interesting to hear what WestonKevTMP as an ex RateSetter man has to say about these rates. Ha, as if I give in to goading..... Personally won't lend at these rates, although I won't say my minimum rate I'm under no illusions. Those halcyon days of 6% are long gone... (until we have a recession, or if there is a platform wobble causing nervousness) The issue is that the markets are not functioning as markets. On the lender side we control the term and rate we desire, and although we might quibble about naive lenders, it is essentially pure. On the borrower side, RateSetter control which market pot of money fills a loan. Kevin.
|
|
|
Post by WestonKevTMP on May 21, 2017 11:39:57 GMT
Good to hear there are plans for pooled investment. I wonder if there are any plans to adjust the current structure whereby TMT gets all of their interest/fee regardless of when the loan was repaid. In Reged's two day case, he got some pocket change for putting up all the money, but the platform got all of their fee as if the loan had run to term. Agreed, the issue now is where one person's loan is repaid early meaning the lender didn't get much interest, another lenders goes to term and they get the full interest. Or even defaults. Averages never tell the true story, and of course the half that have the negative experience tend to talk about it more... ...hence the plan for the pool product alongside what is now the pure 1-2-1 P2P product. Funnily enough perhaps the only pure P2P offering in this crowded market. The details of the pool are not finalised, so I'd be interested in people's thoughts (perhaps that's a separate thread) but the pooled product in development is a forecasted annualised return. So issues of time spent monies inactive or early repayment will not be an issue for the individual, as this will be shared across the pool. Kevin.
|
|
|
Post by WestonKevTMP on May 20, 2017 9:44:25 GMT
Seems to me the platform is struggling to gain traction with borrowers. I put in a trial £1k split into four at minimum rates and have had just one bite in three weeks, which lasted for all of three days earning me a little under £2. Given the relatively high risk of this kind of loan that is an abysmal return, given that the money could be getting me at least £10 a month interest on far safer platforms. I shall be withdrawing my funds at the end of the month if there is no improvement. The system needs changing too to some kind of pooled lending with random amounts. Agree on all fronts. There will eventually be a pooled lending system, but this will take time to develop. And when it is in place, I hope we will continue to offer the " roller coaster if P2P lending" product... Borrower demand has been very strong as on average we get ~2,000 applications per month. The " issue" has been our prudence and selectivity. In the first 6 months of any loan launch or switching on of new sources, the risk quality can be disproportionately poor. But we are now in a more stable position and expect loan volumes to grow from here... Kevin. P.S. apologies about the early repayment of the loan. This is a common occurrence in the short term lender market, especially when there are no financial penalties. However I think we've probably had more than our fair share, as customers have been testing the platform. Borrowers in this market tend to stick with one platform and multi-use, far more than traditional 3-5 year loan market.
|
|
|
Post by WestonKevTMP on May 20, 2017 9:36:45 GMT
I registered in the hope that WestonKevTMP might persuade TMP to move to a fractional lending model as Kev advocated on RS. Potential game changer on lender demand side although would need to be matched by borrower volumes. This is planned....
|
|
|
Post by WestonKevTMP on May 20, 2017 9:35:33 GMT
I have come to the sad conclusion that as things stand it is a complete waste of time and money and I'm pulling out. Will keep an eye on it in future to see if things improve, but these guys seriously need to raise their game. I appreciate lenders frustrations, because the volume of loans we're writing does mean a lot of financial inactivity reducing returns. We've been very prudent, preferring to get things right before opening the gates.... We just passed the £200,000 mark, that's around 300 loans. That said, the inactive time is built into the expected return calculations. We never said your money would be always be lent. Additionally the loan offers are a market, and some lender money isn't going out the door as other lenders have placed lower orders (I don't know your settings). The other thing is that I want to be patient in lending, as we iteratively improve credit policy, the borrower product, lender protection and account management processes. The foundations are in place but as a young platform we have much work to do. Not least in updating the web site with live loan performance statistics, which is in the pipeline. But all these tasks will take us through the summer. So we do appreciate lender support, and we do expect borrower volumes to increase as we now start to roll out source channels. Kevin.
|
|
|
Post by WestonKevTMP on May 18, 2017 14:45:06 GMT
Borrower must have a mixed relationship with the authorities. Found not guilty last year, who knows about the current "up the creek" case. But this link is amusing retort and sign of nuttiness (apologies if posted before); www.justanswer.co.uk
|
|