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Post by dan1 on Jul 3, 2018 11:59:59 GMT
This post won't be popular - apologies.
Loans on the primary market seem to be filling more slowly and SM sales volume has decreased (reduced in April according to the May newsletter). If these trends continue then at some stage I would expect lenders funds to be automatically rolled over in the event of a renewal mirroring the recent change on MT.
Is there a fundamental reason why FS wouldn't make such a change at some stage? The FS model differs to MT in that instead of monthly or retained interest they offer bullet loans.
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rogerthat
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Post by rogerthat on Jul 3, 2018 12:09:31 GMT
This post won't be popular - apologies. Loans on the primary market seem to be filling more slowly and SM sales volume has decreased (reduced in April according to the May newsletter). If these trends continue then at some stage I would expect lenders funds to be automatically rolled over in the event of a renewal mirroring the recent change on MT. Is there a fundamental reason why FS wouldn't make such a change at some stage? The FS model differs to MT in that instead of monthly or retained interest they offer bullet loans. You're right dan1 its not. But if they head in that direction will it occur to them to ask first and offer a choice ?..they can have my answer now, if it helps
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michaelc
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Post by michaelc on Jul 3, 2018 12:26:29 GMT
I'm assuming the difference is default not-renew (current situation) vs default renew.
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aj
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Post by aj on Jul 3, 2018 12:32:42 GMT
IMHO the secondary market looks a lot healthier than it did earlier in the year. At one point there were over 100 loans at -1% on the secondary market. As of today, there are only 2.
I don't think FS would have any reason for automatic renewal; a renewal that fails to fill is a vote of no confidence by lenders. If nobody new wants to take on a loan and the original lenders want out, it's time to start recovery proceedings.
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Post by dan1 on Jul 3, 2018 12:37:59 GMT
IMHO the secondary market looks a lot healthier than it did earlier in the year. At one point there were over 100 loans at -1% on the secondary market. As of today, there are only 2. I don't think FS would have any reason for automatic renewal; a renewal that fails to fill is a vote of no confidence by lenders. If nobody new wants to take on a loan and the original lenders want out, it's time to start recovery proceedings. Ahhh but was that not in the lead up to the end of the tax year? That kind of behaviour on the SM is to be expected at such times and to a lesser extent the SA payment on account deadlines of 31 Jan & 31 Jul. Automatic renewals would aid can kicking, essential to keep your default rate as low as possible. But, yes, I agree if it won't be renewed then it's time to ask the borrower to refinance.
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Post by dan1 on Jul 3, 2018 12:40:55 GMT
I'm assuming the difference is default not-renew (current situation) vs default renew. Yes, and without the option to opt-out of the renewal. rogerthat - I would expect the change to be implemented with very little notice (the change from +/- 4% to +/-1% limits on the SM was implemented the following day if memory serves me correctly)
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SteveT
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Post by SteveT on Jul 3, 2018 12:44:26 GMT
It will happen if / when the patience and pockets of their underwriter(s) run out. Renewals were last seriously struggling in the weeks before the underwriting process was introduced; IIRC, Rishton just preceded this and never filled. In effect, Rishton lenders were then auto-renewed into the current zombie loan (ie. the renewal was cancelled).
Such a move would naturally stuff SM liquidity too.
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rogerthat
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Post by rogerthat on Jul 3, 2018 12:50:40 GMT
I'm assuming the difference is default not-renew (current situation) vs default renew. Yes, and without the option to opt-out of the renewal. rogerthat - I would expect the change to be implemented with very little notice (the change from +/- 4% to +/-1% limits on the SM was implemented the following day if memory serves me correctly) Ah..ok ...before I enlisted to FS..in that case I would cease all new lending and withdraw what I could. How would that affect existing loans which are already technically in default and investors were last told "At the moment we expect all loans to be fully repaid within the next 3 months with some partial repayments starting next month" and what incentive is there for FS to do nothing more than continually kick that pesky can down the road forever ?
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archie
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Post by archie on Jul 3, 2018 12:55:07 GMT
This post won't be popular - apologies. Loans on the primary market seem to be filling more slowly and SM sales volume has decreased (reduced in April according to the May newsletter). If these trends continue then at some stage I would expect lenders funds to be automatically rolled over in the event of a renewal mirroring the recent change on MT. Is there a fundamental reason why FS wouldn't make such a change at some stage? The FS model differs to MT in that instead of monthly or retained interest they offer bullet loans. On FS don't the existing loans have to wait for the new loans to fill before they are repaid? The change MT made was so the platform doesn't take on the risk during the renewal. FS already avoid the risk.
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r00lish67
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Post by r00lish67 on Jul 3, 2018 14:46:36 GMT
Judging by the updates filtering through in the last hour, Fundingsecure have a different idea - just default every loan. Seriously, this afternoon's updates are as cheery as Mark "Can I go home yet?" Lawrenson is in commentating. But yes, I agree, change is needed in some form, and they know we think it is needed. All that is required from us is to demonstrate that it is needed by not filling the new loans that they will be disinterested in in 6 months time. Edit: fundingsecure , you neglected to mark the disturbing statue as unredeemed. |
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Post by dan1 on Jul 12, 2018 15:44:22 GMT
It will happen if / when the patience and pockets of their underwriter(s) run out. Renewals were last seriously struggling in the weeks before the underwriting process was introduced; IIRC, Rishton just preceded this and never filled. In effect, Rishton lenders were then auto-renewed into the current zombie loan (ie. the renewal was cancelled). Such a move would naturally stuff SM liquidity too. Forgot to reply in a timely fashion! Excellent point regarding underwriters, I'd forgotten how important they are in filling new, and sometimes unloved, loans. It would seem to me that other things being equal (loan, size, rate, term, retained/serviced/bullet interest) I'd much rather be an underwriter on a platform with a flexible secondary market (ABL and HC come to mind) where I would be almost guaranteed an exit in normal market conditions rather than one with a par only secondary market. Or, to put it another way, the incentive to underwrite a par-only platform would need to be greater, and likewise costs to underwrite FS will be greater than ABL, is that fair to say? Such a move would naturally stuff SM liquidity too.
It would also stuff the platform!
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