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Post by dan1 on Nov 12, 2018 10:53:19 GMT
Dan1 - fantastic work - wonder if FS will be sending you and Xmas card? To me all these renewals are really clouding the issue - this is OK if they all come good but they won't! Like a lot of us I have cleared out my portfolio but have about 1/3 left as late loans and it looks 50-50 to me as to whether interest to date is going to exceed my bad debts and that is not including cash drag. Answers on a digital postcard It's worth repeating that it is to fundingsecure 's credit that they provide access to the loan book to be able to produce analysis such as this. I genuinely like their model of 6 month pawn style loans but it's hampered by troublesome recoveries. This in itself is to be expected, bridging and development loans where the borrower is racking up 20%+ rarely run to plan. However, where FS fall down is their inflexible SM which provides a false sense of security that you may exit your loan if someone is willing to take on the risk. It's inflexible for two reasons, firstly discounts are capped at 1% which is insufficient in the current environment, and secondly loans may only be sold until >30 days prior to the end date, so when your loan overruns you're effectively stuck but not only that the impetus on FS to provide timely, accurate and meaningful updates is reduced because someones purchase no longer depend on the information. I'm struggling to see where the growth that FS require to move forward is going to come from on the "retail" side. Perhaps they'll restrict access to HNW/sophisticated investors in future to minimise the effects of the current dissatisfaction voiced on forums and rely on institutional investment to grow? If they do want to ramp up their offering to "retail" clients then they will have to adapt their current model to allow trading beyond term, and it goes without saying that they need to get a tighter hold on the recovery situation, >35% of loans by value are overdue by 3+ months, >25% by 6+ months, and >10% by 12+ months - it's getting out of control if not there already. Incoherent ramble over
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bg
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Post by bg on Nov 12, 2018 11:13:43 GMT
I don't understand the logic that renewals should somehow be ignored or that they cloud anything. Some seems to think that there has to be some sort of 'clean exit' or the loan has failed, even if investors get their money back. That's great but we are investing to make money and get our capital back, not in some sort of charitable organisation. For example, a loan I am invested in being renewed as opposed to being refinanced by HSBC really makes no odds to me. That another set of FS investors decide to fund the loan once I am out or the shareholders of HSBC do, why should I care? It doesn't mean I am wishing ill on either group. I have invested on a 6 month term and all I care about is that I got my money back. What happens, 6 months, 6 years or 60 years down the line really isn't my concern. dan1, I don't quite agree your figures. I have (loans by value of ):- 34.05% late > 3 months (up from 31% 3 months ago) 21.72% late > 6 months (up from 15% 3 months ago) 5.87% late > 12 months (unchanged in 3 months) I don't think i'ts a massive change on 3 months (loans 6 months late maybe) but they definitely need some decent repayments very soon to keep on top of things.
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coop
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Post by coop on Nov 12, 2018 11:24:13 GMT
Dan1 - fantastic work - wonder if FS will be sending you and Xmas card? To me all these renewals are really clouding the issue - this is OK if they all come good but they won't! Like a lot of us I have cleared out my portfolio but have about 1/3 left as late loans and it looks 50-50 to me as to whether interest to date is going to exceed my bad debts and that is not including cash drag. Answers on a digital postcard It's worth repeating that it is to fundingsecure 's credit that they provide access to the loan book to be able to produce analysis such as this. I genuinely like their model of 6 month pawn style loans but it's hampered by troublesome recoveries. This in itself is to be expected, bridging and development loans where the borrower is racking up 20%+ rarely run to plan. However, where FS fall down is their inflexible SM which provides a false sense of security that you may exit your loan if someone is willing to take on the risk. It's inflexible for two reasons, firstly discounts are capped at 1% which is insufficient in the current environment, and secondly loans may only be sold until >30 days prior to the end date, so when your loan overruns you're effectively stuck but not only that the impetus on FS to provide timely, accurate and meaningful updates is reduced because someones purchase no longer depend on the information. I'm struggling to see where the growth that FS require to move forward is going to come from on the "retail" side. Perhaps they'll restrict access to HNW/sophisticated investors in future to minimise the effects of the current dissatisfaction voiced on forums and rely on institutional investment to grow? If they do want to ramp up their offering to "retail" clients then they will have to adapt their current model to allow trading beyond term, and it goes without saying that they need to get a tighter hold on the recovery situation, >35% of loans by value are overdue by 3+ months, >25% by 6+ months, and >10% by 12+ months - it's getting out of control if not there already. Incoherent ramble over Not incoherent at all! Very balanced post which I wholeheartedly concur with. I agree that in principle it's not a bad offering but the >35% by value being over 3 months late is an untenable situation if it doesn't improve.
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Post by dan1 on Nov 12, 2018 11:40:19 GMT
... dan1 , I don't quite agree your figures. I have (loans by value of ):- 34.05% late > 3 months (up from 31% 3 months ago) 21.72% late > 6 months (up from 15% 3 months ago) 5.87% late > 12 months (unchanged in 3 months) I don't think i'ts a massive change on 3 months (loans 6 months late maybe) but they definitely need some decent repayments very soon to keep on top of things. bg - my snapshot of the All active and past loans was taken on 10 Nov - see below. There has been a small increase in the rate of loans overdue by more than 12+ months but the rise in those overdue by 3+ and 6+ months appears unrelenting. The figures incorporate all loans on the All active and past loans page plus 2675937069 and 6569367423 which I have historical note of but are missing from the list. Please can you provide me with any other missing loan references, you may have missed my request back in August... Please could you pull out the loan numbers (mainly 10 digits, a few old loans represented by alpha-numerics) and let me know those missing from the All active and past loans page or PM the list and I'll work out the missing loan numbers? ... Until then I'll stand by my figures
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SteveT
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Post by SteveT on Nov 12, 2018 11:40:55 GMT
I don't understand the logic that renewals should somehow be ignored or that they cloud anything. It's not that they should be ignored, it's just that publishing charts that combine new loans with renewals shows very little about where the business is going. To illustrate, imagine FS suddenly switched to renewing their existing loans every 3 months rather than 6. Their "all in" monthly loan charts would then show an impressive growth spurt that was totally illusory.
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bg
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Post by bg on Nov 12, 2018 11:48:00 GMT
I don't understand the logic that renewals should somehow be ignored or that they cloud anything. It's not that they should be ignored, it's just that publishing charts that combine new loans with renewals shows very little about where the business is going. To illustrate, imagine FS suddenly switched to renewing their existing loans every 3 months rather than 6. Their "all in" monthly loan charts would then show an impressive growth spurt that was totally illusory. I disagree. Lets say a loan was refinanced with another platform instead of being renewed. For me that is a loss of business and so not including it would misrepresent where the business is going. Agree that if they switched their loan term the graphs would indicate an illusionary growth spurt...but FS loans have always been 6 month loans. I think that for a lot of the loans 6 months is wholly inappropriate and that's a big part of the problem. If a development is going to take 12 months then why not have a 12 month loan...makes much more sense.
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bg
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Post by bg on Nov 12, 2018 11:50:13 GMT
... dan1 , I don't quite agree your figures. I have (loans by value of ):- 34.05% late > 3 months (up from 31% 3 months ago) 21.72% late > 6 months (up from 15% 3 months ago) 5.87% late > 12 months (unchanged in 3 months) I don't think i'ts a massive change on 3 months (loans 6 months late maybe) but they definitely need some decent repayments very soon to keep on top of things. bg - my snapshot of the All active and past loans was taken on 10 Nov - see below. There has been a small increase in the rate of loans overdue by more than 12+ months but the rise in those overdue by 3+ and 6+ months appears unrelenting. The figures incorporate all loans on the All active and past loans page plus 2675937069 and 6569367423 which I have historical note of but are missing from the list. Please can you provide me with any other missing loan references, you may have missed my request back in August... Please could you pull out the loan numbers (mainly 10 digits, a few old loans represented by alpha-numerics) and let me know those missing from the All active and past loans page or PM the list and I'll work out the missing loan numbers? ... Until then I'll stand by my figures Apologies, i must have missed that post. The problem could be at my end, it's all automated and I will try and dig into it in the next few days and get back to you to resolve the difference.
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Post by df on Nov 12, 2018 18:25:24 GMT
Dan1 - fantastic work - wonder if FS will be sending you and Xmas card? To me all these renewals are really clouding the issue - this is OK if they all come good but they won't! Like a lot of us I have cleared out my portfolio but have about 1/3 left as late loans and it looks 50-50 to me as to whether interest to date is going to exceed my bad debts and that is not including cash drag. I'm yet to have a thorough review of how much of my funds in both, IFISA and Main, are stuck in waiting for their fate and compare this to what I've earned since signed up for FS. Probably delaying it to avoid disappointment I know that the picture is's going to be nice. I'm still investing in some "new" loans, but less and less. Mainly making withdrawals as soon as something is sold or occasional repayments. In my case repaid completed loans are bling/pawn, can't recall any property repayments recently.
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Post by df on Nov 12, 2018 22:05:34 GMT
Dan1 - fantastic work - wonder if FS will be sending you and Xmas card? To me all these renewals are really clouding the issue - this is OK if they all come good but they won't! Like a lot of us I have cleared out my portfolio but have about 1/3 left as late loans and it looks 50-50 to me as to whether interest to date is going to exceed my bad debts and that is not including cash drag. Answers on a digital postcard It's worth repeating that it is to fundingsecure 's credit that they provide access to the loan book to be able to produce analysis such as this. I genuinely like their model of 6 month pawn style loans but it's hampered by troublesome recoveries. This in itself is to be expected, bridging and development loans where the borrower is racking up 20%+ rarely run to plan. However, where FS fall down is their inflexible SM which provides a false sense of security that you may exit your loan if someone is willing to take on the risk. It's inflexible for two reasons, firstly discounts are capped at 1% which is insufficient in the current environment, and secondly loans may only be sold until >30 days prior to the end date, so when your loan overruns you're effectively stuck but not only that the impetus on FS to provide timely, accurate and meaningful updates is reduced because someones purchase no longer depend on the information. I'm struggling to see where the growth that FS require to move forward is going to come from on the "retail" side. Perhaps they'll restrict access to HNW/sophisticated investors in future to minimise the effects of the current dissatisfaction voiced on forums and rely on institutional investment to grow? If they do want to ramp up their offering to "retail" clients then they will have to adapt their current model to allow trading beyond term, and it goes without saying that they need to get a tighter hold on the recovery situation, >35% of loans by value are overdue by 3+ months, >25% by 6+ months, and >10% by 12+ months - it's getting out of control if not there already. Incoherent ramble over If not 6 month pawn style my investment on FS would've been significantly lower than it is. I didn't mind FS capping SM to +/-1% at the time, but I agree that they should be fleet of foot. Currently 1% discount is not enough to keep SM liquid. I do agree with >30 days policy, it can help less informed investors to reduce the amount of mistakes. I might be mistaken, but I recall the move to shrink the limit had the same objective. Your "ramble" is coherent. I don't see how FS is going to survive without significant shift in recovery and arguably it is already out of control.
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Post by dan1 on Nov 18, 2018 21:10:25 GMT
As previously indicated (see here) I've generated charts of days overdue vs cumulative percentage of loans overdue. I'm not convinced about the merits of sharing these because it takes time to get your head around what they show but, as ever, I'm sure you'll let me know Two charts by value £ and two by number, one with the days overdue on a linear scale the other on a log scale. By value £... By number... The All Years by value reaches the maximum at 79.7%, which is consistent with the figure quoted by FS on their statistics page of 80.1%. The difference can be explained by the slightly different time period (the data above was gathered on 10 Nov) and the fact that FS include loans redeemed before their end date but which are excluded from the Loans due by end of Month figure (e.g. several of the Holland Park tranches have completed when their end dates were in 2019). The All Years by number reaches the maximum at 87.8%. Loans overdue by at least one day, 28.0% by value and 40.8% by number of loans. [I'd previously posted (see here) the figures as 51.9% by value and 56.3% by number - I can't recreate these and I appear to have been mistaken.] The figures improve dramatically at 90 days overdue to 70.7% by value and 80.4% by number. The overdue trends are easier to discern in log-linear scale. The 2013 cohort has comparatively little data but is broadly consistent with those of 2014 and 2015 when traditional pawn loans were the majority. The transition to property lending results in the to be expected poorer performance seen in 2016 and 2017 but there is a marked degradation in the 2018 cohort. The figures will be revised as further loans are Made Live and Redeemed and will potentially improve the performance seen in later cohorts.
Notes for nerds [and so I can remember what the **** I've done!] - Cohorts derived from Made Live date - Excludes cancelled loans - Includes all completed loans even if their end date is in the future (e.g. Holland Park, see above) - Excludes all active loans with an Expected End date in the future - Days overdue = Completed - Expected End - Traces fall to 0% when no data is available (e.g. a loan Made Live in 2018 can be no more than 138 days overdue)
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technik
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Post by technik on Nov 19, 2018 10:27:28 GMT
Running out of superlatives to say how well you are doing this stuff dan1 , really thorough and useful! And as you say, the significant drop for 2018 is indeed a worry. I also noted the increasing value%/number(/whatever measure you like!) of loans failing to be concluded in a given timeframe. The traditional pawn style loans for 2013/14 giving full conclusions within 180 days overdue, but the trend for more loans and higher values being 360days+ overdue is also clear, with the timeframes also increasing too, with bad loans held longer and longer.
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arby
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Post by arby on Nov 19, 2018 12:43:45 GMT
Thank you for the data. It's a worrying trend for 2018, but it's worth pointing out that despite it being November, there is only a quarter of the year's data available so still a lot of uncertainty. I've come to that figure by choosing the 30 day overdue point where things really start to go haywire- that would be any loan that originated Jan-March 2018 (based on your early November data date), while 2017 benefits from the full year of data.
Going further, the chart at 90 days overdue for 2018 only has 1 month of loan data in it; this is why the 2018 line appears to plateau at the end as there are so few loans in the analysis at that point.
I'm not trying to dismiss your work at all, will certainly be good to track, just not wanting anyone to jump to any 'conclusive' judgement as the 2018 line still has a lot of development to it.
I'm wondering what 2017 would look like if the as at date was set as November 2017?
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huxs
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Post by huxs on Nov 19, 2018 12:59:29 GMT
This is great data but one question on 18's data is this based on all 2018 loans or just the ones that should have completed by today if the former then that would explain the difference in the graph if the later then we have a problem brewing?
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technik
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Post by technik on Nov 19, 2018 13:13:30 GMT
Good point arby, I was trying to work out how the lines will evolve with time and what you've said seems right. That as more loans complete (at whatever stage of their process), the cumulative line will move up at the specific point in the -180 days to infinite days that that happens. So in effect the 2018 line will only start becoming fixed from Jan 1st 2019, at the -180 day point, then -179 day point fixed on Jan 2nd. So would be 180 days into 2019 before we get to the interesting point where the line becomes finalised from the overdue point onwards. Would still be possible to tell if things aren't looking good earlier than that, as the majority of loans will already have been appearing in the data, but nothing final.
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technik
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Post by technik on Nov 19, 2018 13:23:47 GMT
This is great data but one question on 18's data is this based on all 2018 loans or just the ones that should have completed by today if the former then that would explain the difference in the graph if the later then we have a problem brewing? I know what you are asking but think the 'should have completed' wording is partially where the problem lies. dan1 can probably confirm all the bits asked above, but think these graphs are to be read as all loans which have been concluded - so completions of any kind, whether paid back or defaulted and closed. If a loan hasn't been completed, it won't appear on this graph until it has. Anything showing before the 0 days point are completed loans that were repaid early from how I would read this.
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