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Post by kissmyjazz on Aug 10, 2016 2:11:07 GMT
6% origination fee is very high for quality borrowers. If Bondora wants to attract more quality borrowers it has to use lower origination fees for prime market segment. I also think that marketing expenses are disproportionately high in comparison to the achieved growth of the company, which is quite meager. When I receive another marketing email from Bondora, in many cases I think "darn, they have wasted the money again". There is no need, for example, to task your marketing team with writing the weekly "industry updates". I think it adds nothing to Bondora's bottom line.
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Post by kissmyjazz on Aug 5, 2016 22:58:57 GMT
I agree, I still do not understand it either, especially the part that Bondora was not able to write off anything in May when according to my datasets Bondora started to apply write-offs from April.
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Post by kissmyjazz on Jul 27, 2016 11:14:49 GMT
Rahafoorum, in light of the newly introduced "write-offs" that are preferentially taken out of the "interest and late fees" portion of the loan, do you think it is also done primarily with the aim to boost the immediate XIRR, as principal repayments are counted "in full" now, whereas the "write-offs" are pushed into the future of the cashflow? Do I understand the situation correctly?
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Post by kissmyjazz on Jul 27, 2016 9:51:10 GMT
I think as principal's share in the scheduled loan repayment increases with the loan maturity, the loss becomes bigger. Which is quite stupid methodology to account for the missing cashflow, as no investor invests simply to get the loan principal back. Scheduled and accrued loan interests are equally part of the investor's expected cashflow.
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Post by kissmyjazz on Jul 27, 2016 7:35:50 GMT
To Bondora's credit the company does not hide the negative returns on early Spanish and Slovakian loans. See their latest blog post for example hereTwo things bother me greatly though: 1. Despite the obvious fact that such poor loan portfolio performance means that many loans were given to individuals that were not eligible borrowers under the normal loan issuance standards (ie loans were given without the proper risk assessment and background check procedures in place that were rectified later, as loan portfolio performance has improved significantly, at least in Spain), Bondora treats the situation as some kind of bad luck outside of their control and says that collection will rectify everything (which is obviously bollocks). I want for Bondora to admit and analyze what went wrong and why such situation will not be repeated in the future in case they would want to expand to some other market. 2. Most of the changes that Bondora implements, be they in the loan issuance, collection, communication with investors or website upgrades, etc. go live pretty much immediately full scale for all users. How about the concept of beta testing and pilot studies? Constantly throwing some half-baked innovations out there and looking at what will stick later damages greatly the Bondora's reputation and wears thin any investors' goodwill toward the company. Sometimes Bondora's decision making looks downright stupid, as recent examples of closing down its own active forum and then starting to post here, or claiming that DCAs will improve the net loan repayments and already backing out of the DCA route for Finland indicate.
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Post by kissmyjazz on Jul 26, 2016 1:59:15 GMT
8. Are the collection fees new business model for Bondora? No. I understand that this is really emotional topic for you but I can’t stress this enough – we as a company are dependent on our recovery process, we do have a stake in most of the loans issued in 2016 and management fee is accounted for every loan we have issued and that is still active. If the collection process does not work (yes, deductions are made from our management fee and our part of loans the same way as from your investments) we do not receive our income. This should be surety for you that we are here to improve the collection and recover as much of the funds as we can, meanwhile keeping the costs as low as possible. To my knowledge Bondora has never disclosed how it structures its investments, how it picks the loans to invest into and how it decides how much to invest in each loan. Without such disclosure your assurances that Bondora is in the same position with its investors are quite meaningless.
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Post by kissmyjazz on Jul 25, 2016 23:04:45 GMT
7. Recovery in Slovakia Same process is applied for recovering the funds from this market. We have local lawyer there who is helping us in legal recovery and we currently have two DCA-s who are trying to recover the funds The average collection fees are not higher there than in other markets. "Collection fees" are no higher but for some reason "write-offs" are significantly higher. I think it is the last chance for Bondora to stop inventing confusing and contradictory terminology for its recovery process, as well as outright lying to investors. When will Bondora take responsibility for its failure to manage investor's money with the due diligence in loan issuance in Slovakia and in 2014 - early 2015 in Spain?
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Post by kissmyjazz on Jun 11, 2016 7:12:22 GMT
The main danger with the reduced "skin in the game" the loan underwriting standards will seriously deteriorate. If the loan origination fee is say 2% and the "skin in the game" is now also 2%, then Hipocredit is already break even after loan origination and can shovel all kinds of bullcrap to investors. It seems already becoming the case, as such loans are underwritten and sold off: www.mintos.com/en/90493-01 LTV68%, loan purpose is debt restructuring, interest rate is obvioulsy too low for the risk class of the loan, borrower is late on the first repayment already. Mintos team, how your 'high' standards square off with such underwriting practices?
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Post by kissmyjazz on Jun 9, 2016 13:27:49 GMT
All this commotion is to give out additional 75 000 Euros in loans. What is the loan origination fee at Hipocredit? I guess something like 2-3% at most. Hipocredit wants to make quick 2 000 Euros and thought it is enough money to test the investors' confidence. This is simply not how businesses that want to last for a long time should behave.
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Post by kissmyjazz on Jun 9, 2016 8:39:44 GMT
Martin, when you yourself write that "will retain at least 5% of every loan on their books" it means will retain in the future. So how I am supposed to interpret anything you say here from now on? Unless you say: "I promise it will be so always and forever" at the end of each sentence, what would your normal sentence mean? How is trust possible in such situations. What would be the next thing that Mintos will tell that they have never promised or guaranteed?
I still also do not understand why Hipocredit asked Mintos to lower their skin in the game. Those loans are profitable and Hipocredit has no problems funding the origination of new loans on the marketplace. You also said that "Hipocredit business model is loan origination, not lending from their own balance sheet." They would have to keep those 2% on their own balance sheet though, so what does it matter if it is 2% or 5% that they need to keep on their books? We all know how securitisation and not keeping mortgages on the books of originators was an important factor in the last major US economic crisis.
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Post by kissmyjazz on Jun 9, 2016 1:02:45 GMT
Martins himself had confirmed the 5% requirement on this forum as recently as in March.
This decision is also rather curious because not only it erodes the investor confidence, but also makes little business sense, 16% annualised ROI with little risk are very solid numbers for any lender, so why would they want to give that income away? Raising the capital for further expansion should not be a problem, as Mintos is growing fast and Hipocredit is one of the more popular lenders on the marketplace.
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Post by kissmyjazz on Jun 1, 2016 23:32:48 GMT
Yeah, bots has become a serious problem and the primary reason I think of stopping reinvesting in Bondora now. There are bots that buy the loan on discount and immediately list it on SM by upping the price 2-3% higher.
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Post by kissmyjazz on May 31, 2016 1:06:05 GMT
I think someone has snatched that loan before you and it no longer exists. At least I had similar experience with no longer existent offers.
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Post by kissmyjazz on May 25, 2016 12:00:32 GMT
There are plenty of good mortgage loans without any premiums on SM currently
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Post by kissmyjazz on Mar 23, 2016 9:03:48 GMT
Yes, I do agree with that proposal.
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