bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 12, 2017 12:02:03 GMT
Some people have too much time on their hands coming up with polls like this. What is the point ? Agreed. It's asking people to pick a percentage out of thin air and the percentage they pick may well influence whether other people buy or sell.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 10, 2017 19:37:55 GMT
I'm in the unfortunate position of being a purchaser of one of the flats in this development (as apparently my deposit is likely to fall behind the Broadoak loan in ranking).
As a creditor I received this report on 4th August (and a report prior to that on 1 August) so I am really surprised it has taken MT this long to release it.
Here's hoping for a positive resolution for all.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 10, 2017 18:43:06 GMT
Security backed loans defaulting leave the lender with the security. It takes a bit of time (generally around 12 months, but in some cases even just few weeks) to sell the asset. All the cases concluded at Lendy have brought in 100% capital recovery for lenders (and the net recovery according to the data I gathered from Lendy comments are over 80% of the lent capital on average). I don't have a precise count with me, but I believe Lendy closed (finished recovery) about 10 loans. They have other loans which have been defaulted in the last 3-4 months (new default definition) and these will need to get to a sale. Wait before commenting on those. Only after the recovery you will judge the company (and the asset of course). Yes but the point is you can't say you have to give a secured lender time to make a recovery but then not say the same for an unsecured lender. It's not fair to say a loan that has just defaulted on FC has and will make zero recovery when recovery payments are coming in every month. You can't say you won't bring in individual cases when you are also saying people get "70+% MINIMUM RECOVERIES you are getting on secured backed assets". You do not get 70% minimum recovery on asset backed loans. There is no miniumum and there are numerous loans that have recovered less than 70%. Given time there will be loans that recover zero. I am giving an example of where I received <50% recovery on a secured first charge asset that disproves your assertion.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 10, 2017 18:08:11 GMT
You lost the plot totally. The initial discussion on which you wrongly commented was about a comparison between the potential recovery of an asset-backed loan against a personal guarantee loan. You can call whoever you want and read the FC recovery stats as you like: - recovery of 26% (only official FC overall number today) - recovery of 30% (filtering off some data) - recovery of 40% (filtering off some more data) The point you fail to understand and I repeat once again to advantage of poor potential new FC lenders (that should be warned) is: - 26% OR 30% OR even 40% ARE RUBBISH RECOVERY rates compared to 70+% MINIMUM RECOVERIES you are getting on secured backed assets (just as an example over 80% net on Lendy, over 85% on FS etc). You do seem to be very happy to regularly openly contradict yourself. Maybe you do not even realise you are doing it. If you want to say that FC only make 26% recovery on defaults how can you ignore the current defaulted loans on Lendy (as an example)? Lendy currently have £23m in loans that are defualted with zero recovery so far. You can't just take the loans where a recovery has occured but not do the same for FC. Thats £23m out of a total loan book of £186m and theres another £25m of that that has not yet been defaulted but is not paying any interest. It is also nonesense to say you get a minimum 70%+ recovery with a secured asset. There are plenty of people on FS and L who would snap your hand off for a 70% recovery on a number of loans they are holding. I personally have lost 50%+ on secured loans that have defaulted.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 9, 2017 15:38:53 GMT
Etc? Who else offers 12+ secure lending? What is current loss rate on FS and L? FC recovers about 40%, what is their recovery rate? Do you know what loss and recovery rate is going to be on MT? Do you think that doing all lending relying on a property is the right thing ? operating 6 platforms is more time consuming than operating 3, how practical would it be? Are you ready to take a bet? I would be ready to put a 5 figure sum that FC IS NOT RECOVERING 40% out of defaults. And I would surely win as I have a large number of defaults and the recovery rate FC achieved for me is only about 21%. I am ready to bet that any security asset (first charge) recovery will always beat hands down any personal guarantee recovery. I operate daily on 5 p2p platforms and have done so for 7+ years and have securities spread in property, cars, jewels, art, coins and a lot more. I have no problems at all with that. (and most of my time is anyway spent doing DD, all the rest is almost automated after my investment...) I would take both bets as well. FC clearly publish their recovery figures, do you have evidence to support that they are maing these numbers up as you seem to be suggesting? You can't take one persons recovery rate and say that that proves the rule (clearly some people will do better and some worse than the 45%). Also that 21% will gradually improve over time as recoveries roll in. Your second bet, i can already win. I had a loan through FC that stopped paying in Dec 2014. Then out of the blue in March this year it repaid in full with interest from a personal guarantee (they sold the guys house). Loan 8122 if you do not believe this. So that's a full recovery from a personal guarantee, albeit it took a couple of years to come through. I have however had 50% losses from secured loans with first charges I do find it amusing so many people think that having security automatically makes a loan way better than an unsecured business loan. Commercial property valuations in particular can be highly subjective and can often be out by multiples (as can remote country houses). Add in mounting interest costs and professional fees you can be looking at losing the majority of your money. Development loans can be even worse as GDV can be meanigless if the development fails and the money has been wasted. It's no surprise to see some of the platforms mentioned in this thread going through big difficulties at the moment while just a few months ago they could do no wrong in many peoples eyes.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 9, 2017 11:09:15 GMT
Great news??? Daisy says the loan is expected to be activated on Friday. I really do hope that this information is more reliable than the information we receive in the loan updates, but I have no reason to believe it is. Does it matter? You are accruing interest either way.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 8, 2017 9:10:48 GMT
As can any registered lender on FC. No, lenders can't review the details of defaulted FC loans unless they have money in them (unless FC have recently changed this, which I doubt). They can only download summary loan book figures. On FC any lender can download the entire loan book history - so you can see every loan that has been defaulted, is late etc.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 7, 2017 15:34:15 GMT
One distinct advantage of FS over FC is that any registered lender can see the entire FS loan book history. Go to "All active and past loans" and sort by the "Defaulted" column. As can any registered lender on FC.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 3, 2017 9:12:53 GMT
'when is peak risk' .. if you look at the slope of the graphs on FCs statistics page (assuming they are still there) you can see .. or analyse the loan book, which I quit doing some time ago. Definitely an inverted bathtub curve though. 6 month old loans are more likely to go bad than fresh ones (and ones in their last months are safer again) .. plus, with amortising loans, you are more likely to lose 100% of the amount you have left (the 'only 40-50% loss' was based on buying new loans, which have usually repaid something before they go bad .. and if they die very early, FC has sometimes repaid all the capital.). As I said up-thread, sellers usually sell for a reason, even if the reason is just better understanding of the default risk curve. But yes, it is statistics, and there is considerable variation (again, FCs graphs show what the spread can be, even for someone in 100 separate loans). Graphs gone I think (and the scale was always too narrow for me to draw any conclusions) but I have looked at the loan book and I haven't seen any real pattern to it. I think many sellers sell to try and make premium and if its not selling they dump at par to reduce any outsize risk to that particular loan.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 3, 2017 8:14:29 GMT
Could it be that there was higher chance of loans defaulting straight after you bought them because someone knew there will be an issue with loans they sold and it will be better from now on? There seems to be a presumtion that with any loan that is bought on the SM that defaults/goes late, the seller knew the company was running into issues. Not everything is a conspiracy! For a band D loan, FC estimate the ANNUAL bad debt rate is 5% and for band E its 8%. That means with 45% expected recovery rate that every year you would expect 9% of D banded loans to default and 14.5% of E banded loans to default. That is every year. So in a 2 month period on a portfolio of 100 D's you would expect 1.5 defaults.....so 2 is hardly out the ball park. I would expect on a number of portfolio's of 100 random loans that there would be a distribution of defaults between 0 and about 6 or 7 (for very unlucky people) in a 2 month period. Your performance is roughly around expectations. I have been running a large FC portfolio since 2012. I have 35 loans that have defaulted/downgraded. Yesterday I went through all of them and googled the company name as well as looking up looking them up in public records. For my 35 loans there was only that recent £250k D (god knows why that wasn't downgraded earlier) that I could possibly have found out any information that would have let me sell the loan before it was downgraded. On top of that its just not practical to do this for all the loans in my portfolio everyday. It would take hours of boring work for a minimal saving (as people have said before it would be like working for way under the minimum wage). You just have to accept that there are risks...returns are not smooth but if you run your portfolio for a long time (3 years+) then general downturn aside you will on balance get the returns FC advertise as average (but there will be a distribution around this, some will do worse, some better - the more loans in your book the closer you will be to average). It's never nice to lose money on a loan and you always think, ah i wish i had never bought that, what could I have done to avoid it but you can't think that way. Look at the broad performance over a long period of time (just like any long term investment).
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 3, 2017 7:50:07 GMT
Newbie Report after *2* months D-class loanbook, diversified as requested (100 loans) - I went for yield, with risk. Manually selected (?!) based mostly on their financial account (allegedly profitable business, no one-man-bands, no obvious balance sheet lunacy) 2 in liquidation, one notified late payer two months late (downgraded). That's an annual default rate approx 15%, obviously unsustainable. The question I'd ask is - how old were the loans when you bought them? Getting into 100 D loans in 2 months sounds like you bought a lot of them on the SM, just as they are coming up to peak risk. I believe that FC's averages are based on an assumption of buying new and then holding: but the risk of failure for a given loan is clearly not constant, and if investor A is shifting his share of the risk downwards, there must be an investor B whose risk has been shifted upwards. Do you want to be A or B? When is peak risk?
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 1, 2017 13:21:07 GMT
Example from today - S******** House, Carlisle Date/Time: Tuesday 1st August 2017 at Midday Interest: 11% Loan amount: £60,000 LTV: 22.64% Email sent 11.30 The time seems fairly predetermined and exact to me.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Aug 1, 2017 13:16:58 GMT
i'm a newbie to fc 2mths in and doing ok, i have used autobid and bought parts occasionally to add interest, i'm dissapointed that autobid bought parts in loans that have now defaulted (3) within a week of buying, but when reading on here i have been duped into buying other investors bad loans, how naive of me to think i was investing in an honest platform where i would be at least be protected from the sharks, i know there are risks but i didnt expect to be ripped off by other investors.!! No, its almost certainly just bad luck. It often seems that way that you get a cluster of defaults very soon after each oither then nothing else for months (well for me at least). If ytou are diversified it shouldn't be an issue and will average out over time. If a loan runs into difficulties or misses a payment it is suspended by FC. Any loan you buy is 'good'. The only thing you could possibly be missing is a loan that has been late on a payment in the past that has been made upto date. You won't know that it has been late on a past payment - but that in itself is not necessarily an indicator of anything bad. It could just be that the company changed their bank accounts, or somebody forgot to do something.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Jul 30, 2017 8:16:10 GMT
What rates do banks give businesses on loans secured against property at 65% LTV? Do banks really manage to spend so much (and lose so much in other areas) that they make so little profit and pay so little in savings interest? Given the return seen by most P2P lenders over the last few years, even in mature loanbooks, the banking sector profits and interest rates don't seem to add up. Wheres all their profits gone? Well you can't just take P2P profits for the last few years as a benchmark. We have seen a period of consistent growth with low interest rates. Wait until we have a recession, your P2P gains won't be quite so impressive...banks have to set aside capital/preofits to build reserves for future recessions. Also the banks have come from a very weak position post the crisis. Their balance sheets took a big hit in this period and this has taken time to repair with lots of write offs since then. On top of this they have legacy issues like PPI compensation, fines to regulators (eg RBS agreeing to pay $5.5BN to the US for mortgage misselling just recently), the costs have been substantial and are still coming. Away from that banks have made big profits and will likely continue to do so - much of these profits are paid out to shareholders in the form of dividends. Lloyds paid a dividend of around 5% last year and some people think it could be closer to 10% for 2017 now they have dealt with many of their legacy issues. Other banks still dealing with issues mentioned are still taking hits and not reporting profits.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Jul 27, 2017 18:22:59 GMT
If FS is anything to go by then the IFISA launch will prompt all offers sub 100% on the SM to be lifted pretty sharpish.
|
|