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Post by jackpease on Nov 25, 2013 16:21:06 GMT
I have had a quick look at this - prompted by the quick filling of current bridging loans - wondered whether the aftermarket allows the big boys to sell on their loans? Presumably the fact that these bridging loans are flying out so quick suggests they are a good bet.
Help me by worked example. Eg if someone had won £10k at the quoted 1.25% for the latest one could they now split up the loan into £1k x 10 loans and then sell them at a premium - what is the sellers fee - who prices them up - assetz or the person who is selling?
thanks
jack
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Post by bengilbert on Nov 25, 2013 16:36:47 GMT
At the moment, the aftermarket only allows you to sell at par (ie the buyer pays however much is left to be repaid on the loan). The seller gets interest up to the day they sell, the buyer starts earning interest from the day they buy it. There's a fee of 0.35% for the seller.
The system automatically splits any bids over £100 into parts of £100 each.
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Post by bengilbert on Nov 25, 2013 16:43:03 GMT
I think it's an interesting question whether they should allow people to sell at a premium. In a way, not allowing it interferes with the working of the market - there might be people wanting to sell at a premium, others willing to buy at a premium, but they aren't allowed to. But I think I like it as it works now. It's very clear and simple, and there won't be people bidding just because they think they'll be able to sell at a premium later.
I also think earning interest up to the day you sell / from the day you buy is sensible, better than some other platforms where the holder gets all the interest even if they only bought it a few days before.
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TFTO
Member of DD Central
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Post by TFTO on Nov 25, 2013 16:45:48 GMT
At the moment, the aftermarket only allows you to sell at par (ie the buyer pays however much is left to be repaid on the loan). The seller gets interest up to the day they sell, the buyer starts earning interest from the day they buy it. There's a fee of 0.35% for the seller. The system automatically splits any bids over £100 into parts of £100 each. Where is this 0.35% fee shown on the website, I can't find it anywhere? Chris
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Post by bengilbert on Nov 25, 2013 16:47:55 GMT
I'm not sure where it's written. It isn't made clear - I remember someone complaining about that on the old forum. It should really be made more obvious.
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Post by brummiefred on Nov 25, 2013 17:06:13 GMT
At the moment, the aftermarket only allows you to sell at par (ie the buyer pays however much is left to be repaid on the loan). The seller gets interest up to the day they sell, the buyer starts earning interest from the day they buy it. There's a fee of 0.35% for the seller. The system automatically splits any bids over £100 into parts of £100 each. Which makes me wonder why multiple bids of £100 are made !!!
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oldgrumpy
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Post by oldgrumpy on Nov 25, 2013 17:09:27 GMT
larkincj...
It's buried in Terms and Conditions. 0.35% is not excessive IMHO.
It probably flags up when you try to sell some units.
13.5 Any transfer of a Loan Unit will be subject to an administration fee of 0.35% of the principal value of each Loan Unit transferred (subject to a minimum fee of 10p), payable to the Assetz Agent on the date of transfer by way of deduction from the transfer price.
brummiefred...
"Which makes me wonder why multiple bids of £100 are made !!!"
I only found out by accident. I was bidding loads of little lumps just in case selling would be easier in future. Assetz should make it clear somewhere that is what happens - quite useful really.
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Post by jackpease on Nov 25, 2013 17:22:37 GMT
OP here. Thanks guys - understand more now - not being able to sell at a premium should discourage flipping i suppose.
Also i realise i have totally misunderstood the system as i've been breaking up my bids into £40 chunks which now looks a bit silly
J
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Post by brummiefred on Nov 25, 2013 17:34:16 GMT
I found out when looking at my loan book which shows number of units 'owned'
All platforms ars different but none that I use allow bids without sufficient funds in holding account.
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Post by chris on Nov 25, 2013 17:47:13 GMT
I think it's an interesting question whether they should allow people to sell at a premium. In a way, not allowing it interferes with the working of the market - there might be people wanting to sell at a premium, others willing to buy at a premium, but they aren't allowed to. But I think I like it as it works now. It's very clear and simple, and there won't be people bidding just because they think they'll be able to sell at a premium later. I also think earning interest up to the day you sell / from the day you buy is sensible, better than some other platforms where the holder gets all the interest even if they only bought it a few days before. The site technically supports it but we have some compliance questions that we're currently working to resolve. I don't think there's anything that will stop us launching the feature but I need to get the all clear before we do so. It's important to note that you also don't get paid the interest at point of sale, forcing the new lender to take the risk. You get the principal immediately (hopefully soon including a premium or discount) but the interest is paid to you at the point the lender next makes a payment. There are arguments for both styles of handling this but we felt that this was the fairest of the approaches. With regard to the bridging loans - currently you can only sell loan units once a loan has been drawn down. Until that point in time the funds remain associated with a bid rather than a loan unit. This may change further down the road, and there may be further compliance issues to resolve, but it is a current limitation of the system that is worth mentioning. Someone else mentioned that large bids are automatically broken up into smaller loan units. This is correct but the size of those loan units is determined on a per loan basis and can vary. Typically it's set to £100 but this is sometimes raised on larger loans. We've got some changes planned for the bid screen which will include showing the loan unit size for that particular auction.
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Post by chris on Nov 25, 2013 17:51:28 GMT
All platforms ars different but none that I use allow bids without sufficient funds in holding account. For most lenders this is the case but our platform does support bidding without cleared funds for certain trusted HNW lenders. We tend to use this facility very selectively though. For the majority of lenders it is a case of £1 deposited is £1 that can be bid (subject to a minimum amount of course).
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agent69
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Post by agent69 on Nov 25, 2013 18:59:00 GMT
I think it's an interesting question whether they should allow people to sell at a premium. I'm not a fan of allowing sales at a premium. You end up with the FC system where people who have the time can buy up large sections of the best loans and then sell immediately at a premium.
We should be supporting those that are in it for the long term, not those out to make a quick buck.
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Post by batchoy on Nov 25, 2013 19:23:29 GMT
In the light of today's fast filling bridging loans, the issue of pre-bidding and pre-filling needs to be sorted out before people are allowed to charge a premium on the aftermarket, otherwise we could end up with a situation where smaller lenders are never able to get auction rate on good loans as they are fulfilled prior to the auction officially opening, only to then end up on the aftermarket at a lesser rate due to an added premium. That said I'm not against being able to charge a premium/give a discount on the aftermarket in general.
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Post by brummiefred on Nov 25, 2013 19:47:16 GMT
I fully support agent69 and like the way AC's aftermarket works now.
The fact that there are no loan parts for sale at the present time speaks for itself.
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Post by mrclondon on Nov 25, 2013 20:18:50 GMT
You can add my name to the list of those that prefer secondary market transactions at par. I hate the distortion it causes to the primary market on FC, and secondary market auctions on Thincats (aka SM3 to thincat users) are pretty close to dysfunctional.
I'm concerned that after a while all the P2x platforms seem to morph into looking like each other. Secondary market transactions at par is currently a USP of Assetz, please think very carefully before you move away from this.
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