upland
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Post by upland on Jun 20, 2015 11:28:42 GMT
Many thanks lynnanthony , bigfoot12 and il Moro. So I take it that the loans that are available in significant amount are not so sought after ? I thought that all newly available loans would be available for a while , clearly not.
I took a tip from these boards and set targets on loans with no available units and I have accumulated some holdings. I sense that supply and demand may be well out of kilter with risk and reward.
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upland
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Post by upland on Jun 20, 2015 8:53:26 GMT
Forgive me I am a bit new to AC , I am just playing with the account in order to learn how it works. As I understand it the indeterminate draw down date means that you need to keep some capital ready earning nothing and that time can be actually quite long ?
Does that mean that when these loans become available that they can 'sell out' very quickly ?
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upland
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Post by upland on Jun 17, 2015 18:12:29 GMT
I think AC will achieve much higher recovery rates than FC on those loans that default. However, 10 of my 50 loans on AC (coincidentally also 20% by value) are currently suspended. This is too many. Of these I expect a significant loss on 2, a smaller loss on 4 more, and full recovery on 4. I agree , I am impressed and very interested to watch the way that a bad debt is being handled by AC. I imagine that FC must do something sort of similar but without the detail and encumberance of the loan charges. We do not see that really. I think that with 50 loans that one may (this is very hand waving) imagine that one deviation is about 7 looking at it as a probability exercise. 10 loans gone bad is not even two deviations. It sounds like the loans are not equal in value and you have been unlucky (I have done that in equities). I think that even with FC that the numbers are small and I notice that the losses and recoveries quoted by others are quite different to mine. I have lost about £112 and had £57 recovered which I make about 50%. FC are hoping to eventually get 40% eventually so I have been lucky. That is over a period of 3-4 years. I had not really appreciated how slow this recovery process actually is. I am not sure how my results will change as with FC I have bought into a lot of the secured property loans so my 'risk' profile must have changed.
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upland
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Post by upland on Jun 17, 2015 13:00:03 GMT
I have just joined AC and was hoping for a better return than about 6% , do you think that your result due to a smaller portfolio size than say FC ? Lack of diversification probably is an issue. I may have been unlucky in my portfolio and/or conservative in the level of bad debt provisions I have chosen to apply, but time will tell. My overall return from FC for the period that I was on it (Apr 13 - Feb 14) was rather less than 6%. It was not worth the effort for me, though my impression is that market conditions on FC may be more benign now. My initial impressions of AC were that it was interesting and quite different to FC but its just the numbers of loans that are so small. I have 300+ loans on FC but I doubt whether I am going to get that with AC. Its been interesting learning about the disaster scenarios awaiting and I am starting to appreciate how some loan structures may fail in some cases.
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upland
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Post by upland on Jun 17, 2015 7:52:04 GMT
Further update to my cumulative XIRRs on the platforms where I am active. The figures include accrued interest (estimated in the case of TC), and I've now added a provision for bad debts where I think it is appropriate: AC (Joined July 2013) 10.03% before provision for bad debts 5.57% after provision for bad debts I have allowed a 1% general provision, plus specific provisions in those cases where I expect a significant shortfall. Open forum so no details here, but the largest single provision is for the plumber. I'm a bit disappointed by my AC experience to date. I think I've relied too much on the stated security. I'm being more selective now. TC (joined April 2013) 11.53% before provision for bad debts 9.53% after provision for bad debts The XIRR on TC benefits significantly from cashbacks. I have allowed a 1.5% general provision, plus specific provisions in those cases where I expect a significant shortfall. So far I have been much better at avoiding problem loans on TC than on AC. Hoping it continues! RS (joined April 2013) 5.54% All in 5 year market. A lot of money in spring/summer 2013 went on at about 5%, which depresses the average. I have just joined AC and was hoping for a better return than about 6% , do you think that your result due to a smaller portfolio size than say FC ?
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upland
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Post by upland on Jun 15, 2015 19:07:22 GMT
There's been no stopping them this afternoon (Monday) either; 87 loan requests active at the time of writing Lots of today's additions are only tiddlers. Nothing that is going to drive the rates up. Quite so , I dont even bother even looking unless they are very large now.
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upland
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Post by upland on Jun 15, 2015 19:04:06 GMT
I am a new convert here from FC , I like the website . I like what I am learning but there is just not enough of it.
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upland
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Post by upland on Jun 9, 2015 12:50:09 GMT
I thought it badly proportioned. When you consider all the exciting possibilities in p2p lending it mentioned little of that and a lot about some scrap yard. I could not believe it when the chap said 'horrified' , he could not have read any of the warnings or had not thought about the wisedom putting a lot of money into badly rated investments. It was just supposed to get audience reaction.
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upland
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Post by upland on Jun 9, 2015 5:53:36 GMT
I am not familiar with the Harrogate loan , I take it that it was one of the very early property loans ? I dont know much about how the industry works but its fascinating learning. I cannot imagine that FC would be happy about one of the early ones ending badly.
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upland
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Post by upland on Jun 7, 2015 18:39:19 GMT
The recovery rates from these asset backed property loans ought to be reported on their own too. When it eventually emerges it is going to be fascinating. My guess is that FC wished to trial the property loans with minimal change to the platform and to use Autobid money without further authority from lenders. Therefore they would have to fit with the existing banding and diversity rules, rather than optimise funding arrangements for a new class. It may be that there will be Further Change which will allow these secured loans to escape the existing Autobid limitations. You could be right. One of my observations is how little the FC platform has changed over the years , its much the same when I joined and they had a £30M loanbook. I think that it is a very active website and the consequence of a bad change would be awful. So only very safe structural improvement.....
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upland
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Post by upland on Jun 7, 2015 8:49:29 GMT
A further point loosely connected to point 4 above. This involves the suspended BL items and the time it might take to get your money back from one of these.
So far AC have been good at recovering the first defaulting loan, FF. However there are now a growing number of BL's getting into difficult territory and it is currently difficult to predict what the outcome from these will be. I made a personal decision to withdraw my holdings in AC back last autumn but at the time seven were in suspension. One (FF) has been partially recovered but the other six are still in various states of difficulty with no clear sign of resolution. The problem with these six is that the original LTV on average was 70% but now with our punitive rate of interest at 18% building up plus the costs of recovery this is rapidly being eroded. Worse still in a couple of cases and from the information available it looks like the original valuations may have been somewhat on the optimistic side. Further some of the borrowers seem to have been trained by the Awkward Brigade and are unlikely to yield without considerable and possibly expensive pressure.
In a nutshell from the current information available from AC and my own personal experience my guess is that I am going to have to wait a long while to get my money back and the longer it goes on the greater the chance of only a partial recovery of what is owed to me.
To any new entrant into P2P my advice would be to be aware that when things go wrong with a loan it can take a long while to get sorted. Secondly don't be hoodwinked into believing that because a loan is backed by property your money is safe because that is not always true! I have had losses with FC and did not appreciate the almost geological timespans involved in any sort of recovery. I suppose that AC will be no different , it must an industry norm sort of thing.
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upland
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Post by upland on Jun 7, 2015 8:45:25 GMT
I am thinking of joining, but what I find most confusing is I couldn't find reliable information on the defaults and losses of the current portfolio, including this for loan ranked by their duration bucket. For instance, how many loan have so far been reimbursed with full capital and interest repaiement in due time with no issues of out the total of loans that were due to date? Thanks to anyone who can help me clarify this point. There is supposed to be a loan statistics page for AC but I have never managed to find it - does anybody know where it resides ?
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upland
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Post by upland on Jun 7, 2015 7:21:35 GMT
Definitely, because the only definition of the bands on FC is the forecast average losses for the band. So if the band is doing better than the forecast, then it would make sense for FC to allow more risk into that band rather than redefine the band's loss performance. This can be done in two ways - by relaxing the criteria for accepting a borrower in the band, which will help sales, or by cost reducing the loan assessment process (being less thorough), which will help margins. I don't have any problem with this and like to see FC having the ability and confidence to tune their procedures to ensure that it works for all three parties as it scales up. Whether they are leaving slack in the loss rates to cater for the economic cycle I would not know - but I would think they might prefer to respond to a recession if and when it happens, say with tighter criteria. One thing which does trouble me is the fact that the A+ band will increasingly comprise two distinct loan groups, the unsecured business loans and the secured property loans. It's early days but you would think that the property loans would have lower losses, and this might allow the A+ business loans to become rather more lossy on average than the 0.6% pa.I'd prefer it if Funding Circle did what FundingKnight does and split its property loans into a different grading system from its other business loans. The recovery rates from these asset backed property loans ought to be reported on their own too. When it eventually emerges it is going to be fascinating.
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upland
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Post by upland on Jun 7, 2015 7:06:32 GMT
Too sexy at the moment. With the discount being negative (a rare premium) there is a good chance that it will be a zero sum game for a while. What would happen if we encounter our first serious p2p 'problem' . It may be a steady investment when nobody wants it - wait.
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upland
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Post by upland on Jun 1, 2015 20:42:27 GMT
Is there any news on how this is progressing ?
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