capucino
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Post by capucino on Jul 12, 2018 12:09:30 GMT
Now that Lendy is fully authorized, can we get a guide on how the secondary market works?
I can see that we still have to forfeit interest on loan parts which are up for sale. really disappointed that the FCA has allowed this to continue.
But does Lendy still have priority with selling on the SM?
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MONEY
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Post by MONEY on Jul 12, 2018 12:30:08 GMT
... But does Lendy still have priority with selling on the SM?
They do, but Lendy's MO of late is to create a new tranche with the excess/unsubscribed funds from the current/previous tranche, instead of adding the amount to the front of the main loan's availability queue. Which, at least in this respect, works and could be said is the lesser of two evils.
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Post by charliebrown on Jul 12, 2018 13:02:49 GMT
Q. How does the secondary market work?
A. It doesn’t work.
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capucino
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Post by capucino on Jul 13, 2018 14:30:10 GMT
Lendy, can we have an official update on this? or maybe update the Support/FAQ page?
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Post by picanto on Jul 13, 2018 14:42:27 GMT
Lendy, can we have an official update on this? or maybe update the Support/FAQ page? I don't think it will be any different to how it was pre-FCA authorisation.
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capucino
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Post by capucino on Jul 13, 2018 15:10:46 GMT
Lendy, can we have an official update on this? or maybe update the Support/FAQ page? I don't think it will be any different to how it was pre-FCA authorisation. I have spoken to Assetz recently and they told me that since they became fully authorized, they were not allowed to give underwriters or any of their automated accounts priority when it comes to selling, So i am really surprised to hear that Lendy could get away with it.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 13, 2018 15:27:49 GMT
I don't think it will be any different to how it was pre-FCA authorisation. It's not unusual nor unknown for The FCA to foist one set of rule/s on one Provider, and different rule/s on another Provider in exactly the same industry. I'm really glad they have their act SO together, I am very comforted by their consistency. 
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star dust
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Post by star dust on Jul 13, 2018 15:35:33 GMT
I don't think it will be any different to how it was pre-FCA authorisation. I have spoken to Assetz recently and they told me that since they became fully authorized, they were not allowed to give underwriters or any of their automated accounts priority when it comes to selling, So i am really surprised to hear that Lendy could get away with it.I'm not sure they do any more. They didn't used to have underwriting on many loans, and when they did underwriters parts went to the back of the queue. With regard to unsold tranches that used to queue jump (not strictly underwritten loan parts) on merger with the original loan, for some time now they have been cutting up the unfilled tranches, adding the filled bit to the existing loan and then issuing a new tranche for the unfilled bit. So anyone in the SM sales queue for the 'original' loan does not lose their place. That's what I have observed with a number of loans but I don't think this has been stated officially anywhere, and others may have experienced something different.
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iainf
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Post by iainf on Jul 15, 2018 12:19:53 GMT
Really surprised to hear the FCA thing does not mean an ask for greater transparency.
I've been tracking three loan parts in the sale queue since the end of May and cannot figure out how the algorithm works. This is my number 1 beef with Lendy. I'm happy to acknowledge risk, understand buyer beware, and can live with my investment mistakes, but being prevented fair access to the secondary market simply feels like a failure of duty of care.
Imagine we had bought vehicle leases and the only way to cancel them was to sell the leases on autotraderloans.com
Three of us have bought cars, a BMW, a Skoda and a Citroen.
Three of us list our vehicles on the autotraderloans secondary market and wait for our cars to sell.
As the market is flooded with sales, autotraderloans chokes access and makes our cars wait.
So far so good. You could argue the market maker has a duty to protect the trust, stability and liquidity of the market. Because of this they take some actions that are a little 'central bank' like. Not ideal for these three sellers, but they would agree the system was 'firm but fair'
Now, market conditions change. A number of external factors come into play. Regulatory changes in France, change in demand patterns in the market, supply of second hand Skoda leases changes. A number of things are tracked by the market maker.
These factors are hidden from those waiting to sell.
Now, based on the changes, an algorithm shifts the behaviour of the queue. At this point, the BMW lease begins to speed up in the queue, jumping ahead of the other two loans.
Why? autotraderloans will not say. They say they algorithm is intellectual property and they don't have to be transparent when it comes to the behaviour of the loan queue.
This is where I lose my rag. We've now gone from "firm but fair" management of a market by a market-maker, to a completely non-transparent manipulation of the market. Participants (the three car-loan sellers) now have no idea why one of their cars is getting put on sale faster than the others.
Even assuming Lendy is not in foul play territory here with their dodgy market management, the result of this lack of transparency is terrible. This completely erodes trust in the system.
I would have thought this was EXACTLY the sort of thing the FCA was supposed to regulate?
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pence
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Post by pence on Jul 16, 2018 15:48:08 GMT
Really surprised to hear the FCA thing does not mean an ask for greater transparency. I've been tracking three loan parts in the sale queue since the end of May and cannot figure out how the algorithm works. This is my number 1 beef with Lendy. I'm happy to acknowledge risk, understand buyer beware, and can live with my investment mistakes, but being prevented fair access to the secondary market simply feels like a failure of duty of care. Imagine we had bought vehicle leases and the only way to cancel them was to sell the leases on autotraderloans.com Three of us have bought cars, a BMW, a Skoda and a Citroen. Three of us list our vehicles on the autotraderloans secondary market and wait for our cars to sell. As the market is flooded with sales, autotraderloans chokes access and makes our cars wait. So far so good. You could argue the market maker has a duty to protect the trust, stability and liquidity of the market. Because of this they take some actions that are a little 'central bank' like. Not ideal for these three sellers, but they would agree the system was 'firm but fair' Now, market conditions change. A number of external factors come into play. Regulatory changes in France, change in demand patterns in the market, supply of second hand Skoda leases changes. A number of things are tracked by the market maker. These factors are hidden from those waiting to sell. Now, based on the changes, an algorithm shifts the behaviour of the queue. At this point, the BMW lease begins to speed up in the queue, jumping ahead of the other two loans. Why? autotraderloans will not say. They say they algorithm is intellectual property and they don't have to be transparent when it comes to the behaviour of the loan queue. This is where I lose my rag. We've now gone from "firm but fair" management of a market by a market-maker, to a completely non-transparent manipulation of the market. Participants (the three car-loan sellers) now have no idea why one of their cars is getting put on sale faster than the others. Even assuming Lendy is not in foul play territory here with their dodgy market management, the result of this lack of transparency is terrible. This completely erodes trust in the system. I would have thought this was EXACTLY the sort of thing the FCA was supposed to regulate? I was selling 3 loans and monitored them over the last couple months making their way slowly to the front of the queue. I did not spot anything unusual. If you are sure that loan queue jumping is still happening these days, it would be good if you could make some screenshots. So that we have a concrete case to ask Lendy.
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Post by patright on Jul 17, 2018 6:21:06 GMT
well let's see
on May 1st (two and a half month ago) I put a lot of parts on the secondary market
Anything at that time with a queue of less than 50 thousands has sold as of now
several loans that started at around 300 are still seeing no mouvement (DFL019 for exemple)
overall, it's totally broken, no money coming in the platform and very very slow moving
and then you have all the loans that you can't even sell as trading has been suspended (I have many of that)
with the upcoming crisis, the QE being done with in the EU and the QT+raising rates in the US, most of it all will go bad, , the housing bubble is about to pop along with many other bubble (stock market bubble, credit card bubble, car and student loans bubble)
just my humble opinion
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webwizard
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Post by webwizard on Jul 31, 2018 5:28:13 GMT
Interesting that there are now only 4 loans with more than £100k on the SM. Two months ago there were 17.
Some loans were suspended and therefore moved out of the SM but it looks like a gradual reduction despite that, and an interest run tomorrow.
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Post by p2plender on Jul 31, 2018 7:22:00 GMT
maybe the widows and orphans have been cleared out?
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sj
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Post by sj on Jul 31, 2018 9:54:56 GMT
It's because everything is bloody suspended/non-performing/*insert excuse here*
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iainf
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Post by iainf on Aug 1, 2018 14:33:52 GMT
Hi, adding a little clarification about these numbers. I clicked "sell loan" on three loans (I haven't included the loan IDs as I understand that's a forum nono). The loans where then moved to the sale queue. Every few days I would log on to my "selling loans" page and grab the queue size. My assumption was that whether the queue was fast or slow, the queue would move at the same speed for all my loan parts (imagine a river carrying big boats and little boats downstream at the same speed). My understanding of the system was that market forces would apply once the loans were listed on the secondary market. In any case, I expected the numbers to reduce and expected that all loan parts in the queue would move at roughly the same speed. Below is a summary of the values tracking the percentage change between each measurement point. You'd expect the numbers to jump around because of external factors and also as my date points are uneven, with some gaps bigger than others. BUT the thing that I find wrong and that relates to "duty of care"; transparency; and FCA approval is that the percentage change is different between the three loan parts: | 31-May | 04-Jun | 08-Jun | 12-Jun | 13-Jun | 24-Jun | 28-Jun | 11-Jul | 12-Jul | 15-Jul | | DFL019 | 0.26 | 2.79 | 6.52 | 1.91 | 1.94 | 5.73 | 0.96 | 8.03 | 0.25 | 9.31 | | PBL178 | 4.25 | -1.68 | 2.24 | 0.06 | 0.06 | 1.29 | 0.09 | 0.56 | 0.00 | 8.79 | | PBL179 | 24.59 | 0.58 | 1.59 | 0.00 | 0.00 | 23.08 | 11.18 | 75.19 | 10.19 | 5.47 |
So my problem or challenge, is that I don't know how the sale queue works. There is no explanation from Lendy, this is completely opaque. The above doesn't prove anything, it's just my attempt to understand what is actually going on. It may have been wrong to convert these to percentages, I was trying to normalise the performance, I can share the raw queue size figures if that helps. Long story short, loans don't all seem to move at the same speed. If that is true, I'd like to know why, according to what criteria. Remeber, this isn't the marketplace, this is internal to Lendy. We need greater transparency on this. If the system were fair and transparent, it ought to work like this: 1) All loan parts are added to the sale queue when customers click "sell loan part". At that point, all loan parts are treated equally, that is, they all join the queue and enter the market in a first-come-first-served sequence. 2) Once the loan parts are on the secondary market, then normal supply/demand rules apply. Some parts may sell very quickly. Some others may never sell at all. In my opinion, this would be a fair system. What my numbers show, is that the sale queue is not neutral. Some loan parts do better than others, essentially jockeying for position to enter the market. I can't say if this is handled manually by Lendy, or if it is done with algorithms, but either way it is NOT FAIR and NOT TRANSPARENT (sorry)... I mean look at those figures, PBL178 actually went backwards at one point (the queue increased instead of reduced) This is just not right and Lendy needs to explain. |
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