Liz
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Post by Liz on Mar 16, 2018 18:34:02 GMT
And very few buyers -- because of the first four points noted above. True - but for those who want to take a risk there are some stonking good returns to be had for buyers (so long as default rates aren't much higher than anticipated and/or the discounted loans are renewed) Not stonking when half of them default!
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hendragon
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Post by hendragon on Mar 16, 2018 19:21:48 GMT
Perhaps people want to ditch loans due to a lack of faith in FS's ability to resolve loans that default?
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Post by brightspark on Mar 16, 2018 22:13:12 GMT
I am not in the least bit surprised at the weak secondary market. For committed investors the Irish Wind Turbine fiasco was a salutary message, Whitehaven shenanigans has ticked all the wrong boxes, powerboat is a dirty word. The list goes on. I gave up on FS quite a while ago. Investment is a form of gambling but FS is Russian Roulette. For the risks to which capital is exposed with complete wipeout on individual loans a real possibility, or, even worse, platform failure, the rates on offer are nowhere near enough. Just dear old Rishton and one or two other minor odds and sods to resolve and I am out.
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Liz
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Post by Liz on Mar 16, 2018 23:40:54 GMT
I am not in the least bit surprised at the weak secondary market. For committed investors the Irish Wind Turbine fiasco was a salutary message, Whitehaven shenanigans has ticked all the wrong boxes, powerboat is a dirty word. The list goes on. I gave up on FS quite a while ago. Investment is a form of gambling but FS is Russian Roulette. For the risks to which capital is exposed with complete wipeout on individual loans a real possibility, or, even worse, platform failure, the rates on offer are nowhere near enough. Just dear old Rishton and one or two other minor odds and sods to resolve and I am out. I think you should stay in, you just need to a lot more selective. Resedential, 1st charge, decent LTV loans should be OK.
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IFISAcava
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Post by IFISAcava on Mar 17, 2018 9:06:21 GMT
True - but for those who want to take a risk there are some stonking good returns to be had for buyers (so long as default rates aren't much higher than anticipated and/or the discounted loans are renewed) Not stonking when half of them default! that's the "take a risk" part I was talking about!
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Post by brightspark on Mar 17, 2018 9:15:28 GMT
If my experience had been a flash in the pan I might be swayed. FS invite investment with the pitch that borrowers include those who "may have a bad credit score, or an outstanding county court judgement, or previously been declared bankrupt." FS argue that "so long as the collateral on which the loan is secured is sufficient to cover the loan, and there is a convincing reason why the borrower is in the position they are, we will offer the loan to our investors." The weakness of this argumentation is that their due diligence findings are not made available to lenders and that frequently the collateral has not or will not cover the loan leaving lenders with substantial losses. When things go wrong FS can be very slow to act effectively against recalcitrant borrowers as exemplified by the powerboat loans and Whitehaven. Fundamentally I don't believe that the rates on offer are at all commensurate with these high risk loans. Hence my abandonment of the platform. Others seem to share my view - hence the saturated secondary market.
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upland
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Post by upland on Mar 17, 2018 10:30:33 GMT
I am not in the least bit surprised at the weak secondary market. For committed investors the Irish Wind Turbine fiasco was a salutary message, Whitehaven shenanigans has ticked all the wrong boxes, powerboat is a dirty word. The list goes on. I gave up on FS quite a while ago. Investment is a form of gambling but FS is Russian Roulette. For the risks to which capital is exposed with complete wipeout on individual loans a real possibility, or, even worse, platform failure, the rates on offer are nowhere near enough. Just dear old Rishton and one or two other minor odds and sods to resolve and I am out. I think you should stay in, you just need to a lot more selective. Resedential, 1st charge, decent LTV loans should be OK. Not everyone will / can do that and funds must drift away unless FS can find a stream of fresh punters. I know that "caveat emptor" applies here but it goes both ways and unless they improve their game then I feel that it will lead to additional difficulties in funding new and renewed loans. I recall that some platforms removed their renew control on property loans thus locking people in. Being more selective may well just " kick the can down the road a bit ".
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bg
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Post by bg on Mar 17, 2018 12:53:04 GMT
If my experience had been a flash in the pan I might be swayed. FS invite investment with the pitch that borrowers include those who "may have a bad credit score, or an outstanding county court judgement, or previously been declared bankrupt." FS argue that "so long as the collateral on which the loan is secured is sufficient to cover the loan, and there is a convincing reason why the borrower is in the position they are, we will offer the loan to our investors." The weakness of this argumentation is that their due diligence findings are not made available to lenders and that frequently the collateral has not or will not cover the loan leaving lenders with substantial losses. When things go wrong FS can be very slow to act effectively against recalcitrant borrowers as exemplified by the powerboat loans and Whitehaven. Fundamentally I don't believe that the rates on offer are at all commensurate with these high risk loans. Hence my abandonment of the platform. Others seem to share my view - hence the saturated secondary market. The saturated SM is due to the panic over the Collateral situation, not people being spooked by a sudden surge of defaults (as there hasn't been such a surge). Added to that FS limiting the maximum discount to 1% has lead to people thinking 'oh hang on I could be stuck in this loan now' so they think they may as well join the queue. At some point this selling flow will abate and the buyers will steam back in. Having not sold anything for days I have sold about £30k in the last 48 hours so perhaps signs that things are starting to shift.
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spyrogyra
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Post by spyrogyra on Mar 17, 2018 16:44:36 GMT
Now there is another reason. Don't buy at 1% discount because tomorrow FS might allow 2% discount. I wish soon we will be able to sell at whatever discount we would like to. If there are willing takers, why wouldn't I sell loan parts at -30% if I think that according to the latest info a loan is likely to default and I would have to wait years for my 50-60% recovery? And if someone is willing to gamble on a fuller recovery or the chances of a repayment, why stopping them? A warning in a large red font should be enough. People should be allowed to make all kinds of decisions for the use of their money. Currently, through the SM one can make more than 20%, borrowers are paying close to 30%, with the % of overdue and unredeemed loans, discounts up to 1% sounds inadequate.
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Post by charlata on Mar 17, 2018 16:56:57 GMT
Now there is another reason. Don't buy at 1% discount because tomorrow FS might allow 2% discount. I wish soon we will be able to sell at whatever discount we would like to. If there are willing takers, why wouldn't I sell loan parts at -30% if I think that according to the latest info a loan is likely to default and I would have to wait years for my 50-60% recovery? And if someone is willing to gamble on a fuller recovery or the chances of a repayment, why stopping them? A warning in a large red font should be enough. People should be allowed to make all kinds of decisions for the use of their money. Currently, through the SM one can make more than 20%, borrowers are paying close to 30%, with the % of overdue and unredeemed loans, discounts up to 1% sounds inadequate. If you look at the threads on discounting, you'll see that P2P is apparently a special case where the ability to buy and sell when you want to is less important than keeping the marketplace simple.
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spyrogyra
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Post by spyrogyra on Mar 17, 2018 18:56:55 GMT
I don't think platforms pay attention to the "special case" (sentiment?) so much. They evolve or try to be more profitable (or survive) by changing t&c, as well as their model all the time. Mintos, currently one of the fastest growing p2p sites offers the chance for 99% discounts. As far as I remember Ratesetter offers 5% premium/discounts.
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kaya
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Post by kaya on Mar 17, 2018 20:11:06 GMT
fundingsecure made a mistake when maximum discounts were limited to1%. This only works when most everyone is happy. Now it doesn't work.
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rogerthat
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Post by rogerthat on Mar 18, 2018 12:49:18 GMT
fundingsecure made a mistake when maximum discounts were limited to1%. This only works when most everyone is happy. Now it doesn't work. I have to say that even though I still have my water wings on, my experience to date on the SM is 100%..(ok I'll admit its only been 2 loans  don't larf ) but the second of those disappeared in full 14.52 yesterday. Naturally it had the 1% disc on but I was way down the list when I uploaded it so I didn't really expect to see it go so soon, if at all. Someone must be buying albeit the sheer numbers of 1%ters ( aside from the very cheeky chancers who have low single digit %age returns ) means there's a surfeit of loans probably not totally unconnected to the impending end of tax year looming and shockwaves still emanating from another P2P. Anyway, capital back + £16 interest (incl disc) seems a fair exchange to me  ..I really ought to spend more time looking at what I have already and utilising that better and reducing the risk element at the same time. What's not to like ? p.s. I do agree though that a little more flexibility on the 1% would probably help no end and reduce the risk of log jams
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Post by brummiefred on Mar 18, 2018 14:58:32 GMT
I bought a sizeable chunk on Friday, having transfered funds to the IFISA, and noted that loan parts were available, in the same loan, all the way from 1% discount through to 1% premium.
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Post by mrclondon on Mar 18, 2018 15:25:19 GMT
At the time the premium/discount range was tightened to +/- 1% many concluded it was, at least in part, a means to protect lenders from transferring parts to the IFISA at a level significantly adrift of the "open market" price. That concern still applies, but I think FS could legitimately argue (to HMRC) that discounts of upto 2% were still representative of open market pricing. I've quoted several times the rough rule of thumb that the inherited basic rate tax liability on a 12% loan part is very approximately equivalent to a 0.1% discount per 15 days age of the loan part. That means at the five month mark, a discount of c. 1% covers the basic rate tax liability being inherited, but for a higher rate tax payer a discount of c. 2% would be needed to cover the inherited tax liability. fundingsecure it would be good if you could give some further consideration to this, allowing discounts of up to 2% will open up a wider pool of potential SM purchasers. |
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don't larf ) but the second of those disappeared in full 14.52 yesterday. Naturally it had the 1% disc on but I was way down the list when I uploaded it so I didn't really expect to see it go so soon, if at all. Someone must be buying albeit the sheer numbers of 1%ters ( aside from the very cheeky chancers who have low single digit %age returns ) means there's a surfeit of loans probably not totally unconnected to the impending end of tax year looming and shockwaves still emanating from another P2P. Anyway, capital back + £16 interest (incl disc) seems a fair exchange to me 
..I really ought to spend more time looking at what I have already and utilising that better and reducing the risk element at the same time. What's not to like ? 
