benaj
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Post by benaj on Apr 30, 2018 10:44:45 GMT
I received my first ever bad debt repayment in March 2018 Account summaryCategory Amount Interest earned from borrowers: 0.97% of current "investment" total Fees: Fee for selling loans - 1.43% of current "investment" total Bad debt: New defaults - 1.91% of current "investment" total Bad debt: Repayments from defaults 0.49% of current "investment" total Net earning in March: -1.91% of current "investment" total
My remain portfolio in Zopa plus are the underperformed loans that I could not have sold 5 months ago, these loans do to pay up on time, which represent 1.37% of the total amount invested in my all time Zopa plus loan book. According to Zopa, I am supposed to earn 20+% with the projected rate of 8.9% per year It's too early to tell whether Zopa bad debt repayment is inconsistent. Repayment in March is 0.49% while repayment in April is 0.09%!!!! Any thoughts? This is my account summary in April below: Account summary
Category Amount Interest earned from borrowers: 1.41% of current "investment" total Fees: Fee for selling loans - 0% of current "investment" total Bad debt: New defaults -18.16% of current "investment" total Bad debt: Repayments from defaults 0.09% of current "investment" total Net earning in April: -16.6% of current "investment" total Now, I only have 5 loans left in Zopa plus.
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Post by wyndstryke on May 25, 2018 14:32:06 GMT
Bad debt repayments are invariably fairly erratic. Some of the time the person has paid off some creditors and can't afford the rest, other times the person has had decent money come into their account and pays off extra.
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aju
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Post by aju on May 25, 2018 15:40:58 GMT
One other problem is that sometimes payments for all loans, in particular for defaulting ones due to the nature of the lower payments, there is not always enough to go round all lenders on a given month as well.
In these instances one may get payments every 2-3 months rather than monthly. Of course this can also materialise towards the end of some loans too. But if one is monitoring monthly payments for a given defaults - bit a*n*a*l I know - it can look like they are paying erratically but this may not be the case due to the above effect.
After i noticed this and asked questions I the wondered if zopa removed the old statement part of loanbook as a result of this effect amongst other things that is. Its only more obvious if one sees the full payments details now.
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benaj
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Post by benaj on May 25, 2018 22:02:21 GMT
I am monitoring the bad debt repayment in my loan book. I will post an update in the beginning of June.
To be honest, those bad debt repayment are similar to those in arrangements and collections. Not always on time, but every little helps.
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benaj
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Post by benaj on Jun 1, 2018 12:57:35 GMT
Since I started selling off my entire portfolio after investing 8 months back in Nov 17, the current amount of default today is 4.19%. The positive, it seems I am able to build a better picture of bad debt repayment and I am receiving more each month, at this rate, may be able to recoup 5% the total loans in default per year. Only time will tell. | Month | New default (of all time investment) | All time default (of all time investment) | Bad Debt repayment (of total default amount) |
| | Feb 18 | 0.55% | 3.41% | 0% |
| | Mar 18 | 0.03% | 3.96% | 0.17% |
| | Apr 18 | 0.21% | 3.99% | 0.15% |
| | May 18 | 0% | 4.19% | 0.36% |
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benaj
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Post by benaj on Jun 1, 2018 23:01:23 GMT
That’s no guarantee. Judging from aju post, it might be possible. I understand it is unlikely to recover the full amount, but every little helps. Thanks for Aju, now i understand more about these unsecured loans. those outstanding loans prior 2013 are £5 on average to be repaid. Now i can assume those loans will never be repaid 100% within 10 years, as you still have 7 outstanding loans from 2009. By definition, those loans in default are not included in % of loans to be repaid. I’m pretty those defaulted loans are not included the projected return as well. I didn't think of it that way but I guess some of us already knew that defaults over time will return 50% of the money lent. I can say this as all those loans detailed as still outstanding are £10 loans - for me that is. Whilst I think you may be right its not very helpful to have a table defining defaults in this way as it gives false impression that defaults will be completed quicker than they maybe. I'm not at home at the moment and I don;t have a copy of the public loan book but I wonder if interrogating that might give a better idea of the defaults levels. Just using my experience may not be a good indicator of the overall default level. I would say that defaults will start to become more obvious to lenders now that SG has been closed for recent loans. The only way to pick up more accurate default rates is to consider the numbers of defaults in SG using the default date field in the SG data. I think seeing this is one of the reasons I'm uncomfortable of the true default levels. Having siad that using the 50% rule still gives me the confidence to stick with it, that and the facft that I am still in profit at the moment for this year. My main reason for sticking sith it is that the default rate always seems worse until the lending on a given product starts to mature (Assuming relend set to same product that is). |
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aju
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Post by aju on Jun 2, 2018 0:04:42 GMT
I decided to go back and check all my "Invest" defaults, ISA ones are not mature enough yet. Interestingly I have £224 defaulted, lost by Zopa definition in summary, at the moment.
Out of £468 outlaid I have actually < 50% outstanding. I have 4 of those that are settled (£25 of £40 lost) as well so no chance of getting that back then.
I've not actually tried to determine what is returned year on year for each lender although its about a £1 for this year so far!. I do have 4 defaults from the preSG era that are now closed. 2 of them even seemed to pay more than they owed as well, although its probably rounding issues.
Now if I check out the older preSG ones, the newer ones, Plus and Core are not mature enough I feel yet and are only Plus anyway. I have £377 lent, Cap repaid of £229, Int £68. That's 60% recovered before interest. I long ago wrote them off but it means I've got nearly 80% of capital back with the interest on them.
Of course its not that simple, and to be fair i usually don't compare the losses in that way. Many of those defaults occur in different years so its not that easy to offset them. I usually just check the return on a fin year on year basis and if I beat the bank I am happy with returns.
That said the ISA defaults are mounting quite a bit but then I am investing much bigger sums too. I'll need at least a full years worth of just relending to gauge it fully but I believe it will settle down as each prospect matures.
Edit: Oops forgot to say I have everything I can crossed though ;-) Also my plus exposure is <20%. I could just be a lucky sod as wel there has to be someone losing when averages are used.
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Post by jcams11 on Jun 24, 2018 21:01:41 GMT
There is no question that the higher risk plus is not performing. All of last year I was getting between 5 and 6% now less than 3%. Time to get out for me. I can get better investments elsewhere. Any thoughts?
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benaj
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Post by benaj on Jan 31, 2019 6:52:29 GMT
Since I started selling off my entire portfolio after investing 8 months back in Nov 17, the current amount of default today is 4.19%. The positive, it seems I am able to build a better picture of bad debt repayment and I am receiving more each month, at this rate, may be able to recoup 5% the total loans in default per year. Only time will tell. | Month | New default (of all time investment) | All time default (of all time investment) | Bad Debt repayment (of total default amount) |
| | Feb 18 | 0.55% | 3.41% | 0% |
| | Mar 18 | 0.03% | 3.96% | 0.17% |
| | Apr 18 | 0.21% | 3.99% | 0.15% |
| | May 18 | 0% | 4.19% | 0.36% |
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Here's an update of my zopa recovery: | Month | Bad Debt repayment (of total default amount) | Cumulative recovery (of total default amount) | | Mar 18 | 0.14% | 0.14% | | Apr 18 | 0.12% | 0.26% | | May 18 | 0.32% | 0.58% | | Jun 18 | 0.11% | 0.71% | | Jul 18 | 1.14% | 1.84% | | Aug 18 | 1.88% | 3.73% | | Sep 18 | 0.16% | 3.89% | | Oct 18 | 0.55% | 4.44% | | Nov 18 | 6.32% | 10.76% | | Dec 18 | 0.27% | 11.04% |
In the space of 10 months, Zopa managed to recover a total 11% from bad debt, largely because of debt sale in Nov'18. The rate of recovery is probably the fastest among unsecured lending p2p platform. My zopa plus default started in Jul 17, my total default on plus is 4.63%
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aju
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Post by aju on Jan 31, 2019 11:31:45 GMT
I find your figures interesting benaj, i've been monitoring money returned on all our 4 accounts, 2 each. On the Invest side its harder to see which defaults are returning money although it is possible as I have all the data which needs analysing. I believe for us in invest most of the defaults are older ones - we had large swathes of our invest funding in SG so it was mostly earlier stuff that was default affecting - laterly we have some core and plus that does have defaults but at the statements screen it harder to judge old and new. On the ISA side, however, its more recent so its more obvious that in both our cases apart from SG none of our defaults have made any recovery except for the defaults sale at the end of November 2018. I have checked a number of defaults statements, a selection, that are still active and none seems to have made a payment since they defaulted. We both have a 5 figure sums in ISA now and have quite a few defaults on mostly £10 loans so that may be an issue. I have checked a few of these defaults statements data manually and have not found one default that is still active and has paid anything since the day they defaulted and as I say the monthly statements screen seems to corroborate this. I'm intrigued that you seem to be making recoveries every month on you defaults. That said I have recently found a default that paid a penny, I know its small, but it does not show up in the statements data. I've flagged it to Zopa in the last few days and they have their technical team checking it, hopefully as we speak.  |
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benaj
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Post by benaj on Jan 31, 2019 13:19:28 GMT
On the ISA side, however, its more recent so its more obvious that in both our cases apart from SG none of our defaults have made any recovery except for the defaults sale at the end of November 2018. That said I have recently found a default that paid a penny, I know its small, but it does not show up in the statements data. I've flagged it to Zopa in the last few days and they have their technical team checking it, hopefully as we speak. This could be the difference between Core and Plus. Core have less defaults compared to Plus. You have the 90C/10P right? Due the the nature of unsecured lending, it is impossible to get recovery from all borrowers, the Zopa loan sale did help me in recovery for those who never paid back a single penny. I did have a number of borrowers who never made recovery payment prior to debt sale.
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aju
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Post by aju on Jan 31, 2019 15:17:52 GMT
So my end of year loan splits in Invest were as follows by loan numbers(Total active loans are 1184, mostly £10 or less).
Totals 100%
Zopa Classic 51%
Zopa PreSafeguard 2% All are defaults now
Zopa Plus 13%
Zopa Core 34%
I generally would categorise this as 13%P/73%Other its reducing more now as I am running down Invest since start of the year and reinvesting into MrsAju'a RS account.
Only Plus and Pre-Safeguards are defaulted, some were settled both on the Nov sale and also previous and since core has not really been going long enough in my case on the invest side as I switched relend onto core in Dec 2017 when SG was closed.
So there are 31 active defaults in total of which 7 are Plus the rest (24) are pre-safeguards. Some of the loans have presumably been locked due to legalities and therefore cannot be sold externally. 21 loans have made payments in 2018 of one kind or another - my joins in this case only run to the last payment made.
In the ISA side my splits by loans are as follows, again mostly £10 loans.
Totals 100%
Zopa Core 71%
Zopa Plus 18%
Zopa Classic 11%
In this case its more 18%P/82%Other but due to relending its fluctuating @20%. I have 26 active defaults of which 14 are core and the rest (12) are Plus. Only 1 has made repayments since going into default but that was only a penny in Nov and a penny in Dec. Its that last one that is up for dispute as its not showing in online statements pages.
Not sure all that detail helps much though.
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benaj
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Post by benaj on Jan 31, 2019 15:53:34 GMT
aju, it could be rounding. You see, my all time default is 4.63% of my all time investment total. My first bad debt repayment is 0.14% of that 4.63%, that's equivalent 6.4p recovery after 12 months investing on the plus for every £1000 investment. Checking on my bad debt repayment history, the lowest is 0.11% of my total default amount. Assuming, this bad debt repayment can go below 0.11%, say 0.08%. Then a bad debt repayment of a £10 loan part can be less than 1p.
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aju
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Post by aju on Jan 31, 2019 16:27:20 GMT
aju , it could be rounding. You see, my all time default is 4.63% of my all time investment total. My first bad debt repayment is 0.14% of that 4.63%, that's equivalent 6.4p recovery after 12 months investing on the plus for every £1000 investment. Checking on my bad debt repayment history, the lowest is 0.11% of my total default amount. Assuming, this bad debt repayment can go below 0.11%, say 0.08%. Then a bad debt repayment of a £10 loan part can be less than 1p. Yeah benaj, initially I assumed that but the values when were rounded are 1p, I think the actual payment I received in both cases was something like £0.01424 which is a penny if rounded. The curious thing I have seen in the past is a payment of 0.00 which you would have thought might have resulted in no payment entry in my statements, in that case it was rounding up something like 0.00164. One of the other interesting things Zopa answered recently was that that assuming there were 3 lenders and the payments were 1p in total then Lender A would get something this month, B the next and C the following returning back to A in the fourth cycle. In the case I have zopa investigating, however, my entry is clearly 1p rounded and their view was it should show in the statements screen as a recovery of 1p at least. We'll see what comes back I guess - they do make some almighty blunders sometimes for which they always seem to be happy to pay me off too which is fine by me but I wonder how many people are unwittingly missing these things - that said I have a lot correlating procedures on my data each month wihih picks up the oddest things sometimes..
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