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Post by coolrunning on Nov 4, 2014 15:37:02 GMT
Could I ask you guys what assumptions you make re bad debt in coming to your XIRRs? I assume total loss on 50% of the '60+ days overdue' number. I assume 100% loss of the '60+ days overdue' number. But I allow all the overdues. Makes the calculation simple.
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Post by coolrunning on Nov 4, 2014 15:38:57 GMT
Until I see any recovery of my own defaulted loans I certainly assume 100% loss for those, as many of the less overdue ones will likely default soon anyway. I made a lot of 10€ loans to the Bondora+ borrowers and now wish I had not done so as there are too many of them to watch and manage, so my default rates have soared since they started in April. My 60+ overdue totals at month end are as follows: April 524 May 572 Jun 666 Jul 776 Aug 949 Sep 1260 Oct 1761 For 2 months now I have only reinvested repayments instead of adding more money and then only in the safest loans. I am hoping that this will lower the increase in the level of defaults so that it again is less than my interest payments. The Bondora return figure is still about 22% which seems less and less likely each month now. Everything depends on the recovery success for the defaulted loans, which seems to have been excellent in the past in Estonia. Wow, this is very scary.
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duck
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Post by duck on Nov 4, 2014 17:14:18 GMT
Can I ask jamesfrance, the numbers you gave are they Euro, Pound or actual numbers?
I continue to invest 10's in B+ but currently my highest rate of defaults are in the rescheduled B loans.
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JamesFrance
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Post by JamesFrance on Nov 5, 2014 8:47:03 GMT
Duck they are euros, with a total on the platform of 15000€. The big increases recently are from Spanish B+ loans.
. but some older Est also.
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james
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Post by james on Nov 11, 2014 13:31:19 GMT
Could I ask you guys what assumptions you make re bad debt in coming to your XIRRs? I assume total loss on 50% of the '60+ days overdue' number. I assume 100% loss for those which reach that state, actual loss for ones that I sell before they get there.
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Post by coolrunning on Nov 11, 2014 20:35:46 GMT
Could I ask you guys what assumptions you make re bad debt in coming to your XIRRs? I assume total loss on 50% of the '60+ days overdue' number. I assume 100% loss for those which reach that state, actual loss for ones that I sell before they get there. Hi James As I understand it, you should not take "actual loss for ones that I sell before they get there" into account for XIRR. This is a loss that already appears in the valuation of your portfolio.
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james
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Post by james on Nov 11, 2014 23:02:31 GMT
I don't do anything extra for the sold ones. As you say, they just show up in the value of investments and cash, decreasing the value by whatever the loss was.
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Post by wiseclerk on Nov 12, 2014 16:14:28 GMT
From the official Bondora forum.
A user reported that the court action led to first payment from a defaulted Spanish loan
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JamesFrance
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Post by JamesFrance on Jan 19, 2015 8:17:37 GMT
Until I see any recovery of my own defaulted loans I certainly assume 100% loss for those, as many of the less overdue ones will likely default soon anyway. I made a lot of 10€ loans to the Bondora+ borrowers and now wish I had not done so as there are too many of them to watch and manage, so my default rates have soared since they started in April. My 60+ overdue totals at month end are as follows: April 524 May 572 Jun 666 Jul 776 Aug 949 Sep 1260 Oct 1761 For 2 months now I have only reinvested repayments instead of adding more money and then only in the safest loans. I am hoping that this will lower the increase in the level of defaults so that it again is less than my interest payments. The Bondora return figure is still about 22% which seems less and less likely each month now. Everything depends on the recovery success for the defaulted loans, which seems to have been excellent in the past in Estonia. Having had a big increase in defaulted loans today I thought it was time to post an update to the above monthly totals. Nov 2225 Dec 2763 Jan 3223 so far, half the increase occurred today. Many of these new defaults are older Estonian loans which initially paid well. The increase in defaults continues to be much greater than the interest payments, so I hope this slows soon. Still hardly any recovery.
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duck
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Post by duck on Jan 20, 2015 6:03:23 GMT
jamesfrance I too picked up a few more defaults yesterday (9) so not a good, but not unexpected, day.
Throwing out a few figures for my current default position (based on number of current loans - so excluding solds, defaults and fully paids)
Est 5.83% Fin 10.10% Spn 18.05 Slo 79.19% (!)
These figures are currently slightly distorted by the number (359) of new loans that I have that are not yet due a first repayment.
30.1% of my 60 day defaults made no repayments, not a single cent.
Taking the defaults in £'s and taking into account the exchange rate changes that have taken place over the near 2 years that I have been investing, the outstanding principal on the +60 day loans stands at 14.09% of original cash invested.
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JamesFrance
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Post by JamesFrance on Jan 20, 2015 9:03:01 GMT
Rather oddly my default figure dropped by nearly 100 later yesterday, presumably because of rescheduling although I have been unable to identify the loans concerned. Whilst looking I found many loans that were rescheduled in December but none this month, although I have too many loans to be sure I didn't miss them when looking through my list.
What a pity that Bondora stopped the emails telling us that a loan had defaulted, presumably hoping we wouldn't notice the rapid rise in defaulters which has been happening lately. They have also been asked to email when a loan is rescheduled but no response to that either, which is such a pity.
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Post by valueinvestor123 on Jan 23, 2015 0:25:29 GMT
I can't quite work out: if the defaults/overdue are higher than interest payments, how come people are still investing with Bondora?
(guilty myself) I have put in a modest amount to see how it works out but am wondering if the return of 15%pa or whatever is advertised is at all realistic anymore from now on?
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duck
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Post by duck on Jan 23, 2015 15:57:32 GMT
..... with QE now taking place in the Eurozone you need to keep an eagle eye on the exchange rate as well as the defaults.
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JamesFrance
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Post by JamesFrance on Jan 31, 2015 11:19:26 GMT
My month end defaults now look like this:
April 524
May 572
Jun 666
Jul 776
Aug 949
Sep 1260
Oct 1761
Nov 2225
Dec 2763
Jan 3062
January ended better than I expected, owing to a 93€ recovery at the end of the month together with 32€ interest, that being for one of my earliest loans to Finland which quickly defaulted, was later rescheduled but defaulted again but has finally paid in full. I stopped lending to Spain and Slovakia in September when the defaults there became apparent, so I am hoping that the increased default total stops rising so much soon.
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duck
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Post by duck on Feb 22, 2015 8:00:18 GMT
Another bad month for defaults for me.
Whilst I'm hanging in there to see what effect the changes have made things are not looking good. For the third month running I'm seeing a Capital loss (not helped by the exchange rate). In the UK we have to deduct tax on all interest received so the effect of '+60 dayers' is large.
Taking the basic calc Interest - (tax +60 day losses) = my losses.
OK that assumes 100% loss but recoveries this month (OK we are only 2/3 of the way through) amount to 21 Euro or 0.47% of total capital losses (I exclude interest which would make the recovery rate even lower).
For me the secondary market doesn't seem to be working well, my sales are now down to 4 or 5 a week (+100 on offer) 'lates' with decent discounts don't appear to be shifting as they did in the past.
My new 'strategy' which includes 5 Euro max per loan has made Bondora even more time consumptive (over 2500 loans) so my next task of checking 'lates' might take some time ......
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