dorset
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Post by dorset on Mar 23, 2018 10:18:15 GMT
I've had 15 defaults so far in 2018 as against 12 at this point in 2017 and 7 in 2016. Total loans at 1600+ about the same over the three year period. Total defaults since starting with FC stand at 189 with recovery to date at 37.36%. Net returns fairly constant at about 8.25%. Diversification the only way to manage risk given lamentable FC DD. Currently running out FC investment. 8.25% seems pretty good to me - surely this suggests FC's DD is 'appropriate' ie screening out enough to avoid the uber-dross but not screening out so many that investors can't earn 8.25%? Any due diligence policy that delivered minimal defaults would probably mean minimal %. Jack P Yes but this is all on loans where I did my own (limited) DD and in fact rejected about 40% of the loans on offer. Which is why, having seen the 40% I rejected, I stopped investing in September 2017. Simply not happy at the loss on control and am now running out by FC loan book. As an aside had three defaults yesterday which makes my total for 2018 to 18 defaults so far - way higher than in 2017 and 2016 with a similar loan book. What's going on? Anything we should be worrying about?
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blender
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Post by blender on Mar 23, 2018 10:36:14 GMT
Not being fattened-up for market! Surely not?
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Post by df on Mar 23, 2018 10:42:30 GMT
There are more defaults than a year ago, but I'm still earning some interest. In the past 4 months my annualised return varies between 7.1% and 7.4%. Is that what you have worked out or the stated interest. Mine appears to be lower than the declared It is what stated on the summary page. I didn't attempt to work it out myself - too much work. If it's inaccurate I hope it is not far off from what is stated.
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Post by jackpease on Mar 23, 2018 10:49:44 GMT
8.25% seems pretty good to me - surely this suggests FC's DD is 'appropriate' ie screening out enough to avoid the uber-dross but not screening out so many that investors can't earn 8.25%? Any due diligence policy that delivered minimal defaults would probably mean minimal %. Jack P Yes but this is all on loans where I did my own (limited) DD and in fact rejected about 40% of the loans on offer. Which is why, having seen the 40% I rejected, I stopped investing in September 2017. Simply not happy at the loss on control and am now running out by FC loan book. As an aside had three defaults yesterday which makes my total for 2018 to 18 defaults so far - way higher than in 2017 and 2016 with a similar loan book. What's going on? Anything we should be worrying about? On another thread some time ago i did my 'three months on' from the big change where we 'lost control' and found i was bumping along at 7% - FC is still working for me in that profits exceed the defaults pretty well exactly as the stats would predict. I learned the hard way that an illusion of control did little to avoid the lemons. Jack P
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Post by Butch Cassidy on Mar 23, 2018 11:14:34 GMT
There is no doubt that the quality of loans over the last 12 months has plummeted & consequently defaults are increasing rapidly, as blender points out this is surely coincidence & not related to the upcoming IPO driven volume growth! Having been with FC for over 5 years my SME only portfolio was yielding over 11% but that has now dropped to just above 10% over just the last 6 months. I significantly increased my investment prior to the Sept changes & have not invested since the manual choice option was removed but my portfolio is now valued at just below that Sept level, so has not grown at all in 6 months worth of repayments, which equates to a low 4 figure loss to default. I accept that this high risk strategy has not worked out but am still hopeful that some recovery over the next few years will push my return into positive territory but previously having a long term recovery rate in the mid 40% range I fear that the lower quality of the recent defaults will also drag down this respectable ambition. Overall I am still well into profit & am happy that FC have about the best recovery procedures within the whole P2P marketplace but hands off investing just isn't for me so I will continue my slow drawdown. |
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p2pmark
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Post by p2pmark on Mar 23, 2018 13:00:32 GMT
I have 2 downgraded due CCJ in my ISA one of which hit before the first payment occurred. If this includes 51890, note that they made their payment on time today.
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coogaruk
Hello everyone! Anyone remember me?
Posts: 706
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Post by coogaruk on Mar 23, 2018 14:46:12 GMT
How on earth can a borrower get a loan without having the funds to make the first payment -ridiculous! If this were not about lenders' money it would be funny! At least one loan in my FC portfolio was *defaulted* before the first payment was made!
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ashtondav
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Post by ashtondav on Mar 23, 2018 17:14:03 GMT
How on earth can a borrower get a loan without having the funds to make the first payment -ridiculous! If this were not about lenders' money it would be funny! At least one loan in my FC portfolio was *defaulted* before the first payment was made! Quite a few ZOPA+ loans went this way. p2p is a risky busines. Luckily for us FC operate 0.5% diversification, but with the chance of bad debt i will not be comfortable until i have 800 loans. Rates on ZOPA+ are incredibly unreliable/variable in the £1K to £10K range.
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invester
P2P Blogger
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Post by invester on Mar 23, 2018 17:44:25 GMT
Always strange how people end up with the brown end of the stick variance wise.
For example I don't see anyone writing about Z+/FC that they are way ahead of the curve, but you see plenty on the other side, even allowing for the fact that people that are doing well out of it would be less likely to moan.
I am down to 0.5% diversification - is that the minimum then? Is there some setting that I can keep on loaning my money in £20 chunks?
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Post by mikeyp on Mar 24, 2018 6:00:32 GMT
New loans on the primary market always come at the 0.5% level now except as a result of the rule that they don't do loan parts less than £20 nor more than £100. So, if you grow your portfolio past £20,000, you'll still get £100 in each new loan until you reach £24,000 when you'll get £120. £100 is 0.417% of £23,999. Your average level will be less than the 0.5% because of secondary market purchases which can be any odd amount up to the 0.5% limit and older amortising loans which will have repaid some of their capital.
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blender
Member of DD Central
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Post by blender on Mar 24, 2018 8:03:27 GMT
You can create holdings with less than 0.5% in two ways. First, but putting the cash in in chunks of £4k - which reduces the average size but not the max. Secondly by having multiple accounts of £4k and filling them sequentially, which limits size to £20.
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Post by vaelin on Mar 25, 2018 12:08:22 GMT
I can't find any evidence to support this notion that defaults are more common or have increased rapidly. In fact, what I can find suggests business as usual.
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blender
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Post by blender on Mar 25, 2018 13:24:35 GMT
I can't find any evidence to support this notion that defaults are more common or have increased rapidly. In fact, what I can find suggests business as usual. Hmmm. I always picked my own loans and moved almost exclusively to property a few years back. So at the start of this year I had comments on six loans on an account five and a half years old - and excellent recoveries. In Jan I sold all and started a 'balanced account'. In two months my comments have gone from six to twenty, with downgrades, lates and processing all very numerous. I am now trusting in diversity, from being a diversity criminal. We shall see. I can see why people get nervous. One piece of poetic justice. My property was always sold before it could fail to be repaid on time. FC has bought me some property loans and I hear that one of those is not going to repay on time. I am stuck with it. But I still have £10k on a property in Cumbria, in the other account, which is definitely going in April, even if I have to sell the whole account.
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Post by vaelin on Mar 25, 2018 14:34:33 GMT
I can't find any evidence to support this notion that defaults are more common or have increased rapidly. In fact, what I can find suggests business as usual. Hmmm. I always picked my own loans and moved almost exclusively to property a few years back. So at the start of this year I had comments on six loans on an account five and a half years old - and excellent recoveries. In Jan I sold all and started a 'balanced account'. In two months my comments have gone from six to twenty, with downgrades, lates and processing all very numerous. I am now trusting in diversity, from being a diversity criminal. We shall see. I can see why people get nervous. One piece of poetic justice. My property was always sold before it could fail to be repaid on time. FC has bought me some property loans and I hear that one of those is not going to repay on time. I am stuck with it. But I still have £10k on a property in Cumbria, in the other account, which is definitely going in April, even if I have to sell the whole account.
This sounds like you were perhaps particularly good at picking loans, which is something that has now been taken away from you. I'm not saying that the loan book hasn't deteriorated in quality - it absolutely could have. I am just trying to disentangle whether these anecdotes are indicative of a wider problem or if they are justifiably disgruntled cries of people who happened to pick up more than their fair share of under-performers. The size of the loan book makes it difficult to draw conclusions from individual experiences. I am on the verge of putting more money in FC, so this is relevant to my interests. I have done some basic analysis of the current loan book, which suggests nothing untoward happening: >95% of 2017 loans are repaying or repaid, compared to ~90% for previous years. You would expect 2017 to be higher due to the relative immaturity of the loans. Even so, there is still a very healthy margin before the class of 2017 falls below past performance. What we really need is older copies of the loan book, which I have made requests for in another thread. If we can compare the state of recently accepted loans at different points in time, it should give us an idea of whether or not new loans are defaulting at a higher rate than they have in the past. If anyone is interested, defaults for loans originated during the previous 12 months up until today (25/03/2018) is 0.77% while late loans during the same period stand at 2.25%. As I said, old loan books are needed to see if this presents a change on past performance. I'm thinking about writing a script to regularly scrape the loan book so we can plot trailing 12-18 month defaults on a chart. I can handle the code, but I am not certain about the best statistical methods, so if anyone has any input on that I would love to hear it. Doesn't help us much right now though as it would take time to build up enough history.
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coogaruk
Hello everyone! Anyone remember me?
Posts: 706
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Post by coogaruk on Mar 26, 2018 15:54:01 GMT
At least one loan in my FC portfolio was *defaulted* before the first payment was made! Quite a few ZOPA+ loans went this way. p2p is a risky busines. Luckily for us FC operate 0.5% diversification, but with the chance of bad debt i will not be comfortable until i have 800 loans. Rates on ZOPA+ are incredibly unreliable/variable in the £1K to £10K range. I haven't found p2p to be particularly risky, as long as you go at it reasonably sensibly. I've managed to steer clear of most of the really nasty stuff and enjoyed good returns along the way (since 2006). I more or less told FC to stick their 0.5% diversificaton last September and nothing has come along since to make me change my mind. And as for Zopa+, I was out of that platform long before that market came about. Have always been happy to take the rough with the smooth but for loans that default before they even get off the ground (and one or two others) it's pretty clear to me where some of the blame lies and it ain't with this investor!
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