|
|
Post by thunderchild on Jan 29, 2019 19:05:32 GMT
i have indeed started doing manual lending, worse case does not seem that bad with the security and spreading money around. i too have wondered at the falling rates and have taken to manual lending at 8+% and leaving money i want access to in other accounts.
|
|
|
|
Post by hammertime on Jan 30, 2019 15:29:48 GMT
I am taking money out as rates are no better really from the MLA and there other accounts.
|
|
trium
Member of DD Central
Posts: 384 
Likes: 304
|
Post by trium on Feb 14, 2019 10:06:55 GMT
Yet another 5% offering in my mail this morning. Average (simple, not weighted) of last 20 loans I make 6.025%, including a second 4.5% and only one at 8%. Getting harder to find availability at 8%+
|
|
|
|
Post by hammertime on Feb 14, 2019 11:37:08 GMT
Time to move on. There seems to be problems with all P2P sites now.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Feb 14, 2019 11:59:18 GMT
Yet another 5% offering in my mail this morning. Average (simple, not weighted) of last 20 loans I make 6.025%, including a second 4.5% and only one at 8%. Getting harder to find availability at 8%+ There should be an 8% loan going live tomorrow. It's actually a renewal of #407 which was a 7% loan, so it's an increase in rate.
|
|
ashtondav
Member of DD Central
Posts: 1,814
Likes: 1,092
|
Post by ashtondav on Feb 14, 2019 12:13:31 GMT
Someone on another forum thread claims to be getting 11% on AC  |
|
|
|
Post by hammertime on Feb 14, 2019 12:25:37 GMT
Some loans on the MLA you can or could.
|
|
tonyr
Member of DD Central
Posts: 477
Likes: 258
|
Post by tonyr on Feb 14, 2019 15:34:35 GMT
Time to move on. There seems to be problems with all P2P sites now. But move to where?
|
|
|
|
Post by hammertime on Feb 14, 2019 15:46:02 GMT
That is the thing just dont put all your eggs in one basket.But the baskets are getting smaller these days. Try wine investments stocks shares bonds.good luck .
|
|
|
|
Post by df on Feb 14, 2019 17:56:22 GMT
Yet another 5% offering in my mail this morning. Average (simple, not weighted) of last 20 loans I make 6.025%, including a second 4.5% and only one at 8%. Getting harder to find availability at 8%+ Yes, it's going that way. Consequently my funds slowly shifting from MLA to 30-day. MLA was meant to deliver higher interest with more risk attached, can't see much point using MLA for 5% loans.
|
|
lobster
Member of DD Central
Posts: 636
Likes: 467
|
Post by lobster on Mar 29, 2019 7:11:04 GMT
Yet another 5% offering in my mail this morning. Average (simple, not weighted) of last 20 loans I make 6.025%, including a second 4.5% and only one at 8%. Getting harder to find availability at 8%+ Yes, it's going that way. Consequently my funds slowly shifting from MLA to 30-day. MLA was meant to deliver higher interest with more risk attached, can't see much point using MLA for 5% loans. Currently 19 loans at 5% , and 3 loans at 4.5%. Yes, you read that correctly ...... 4.5%.Why on this earth would anybody buy these loans when higher rates are available on the access accounts, with the added bonus of the protection fund. They must understand this at AC towers ..... so why do it ?? Perhaps they don't care, just so long as the loans get underwritten. But AC need to be careful because if the access accounts get stuffed full of these low interest rate loans, the access accounts will become unsustainable at current levels. Mmm, could that what's coming our way soon.... reduced rates on the access accounts ?
|
|
sl75
Posts: 2,092
Likes: 1,245
|
Post by sl75 on Mar 29, 2019 7:57:44 GMT
Currently 19 loans at 5% , and 3 loans at 4.5%. Yes, you read that correctly ...... 4.5%.Why on this earth would anybody buy these loans when higher rates are available on the access accounts, with the added bonus of the protection fund. They must understand this at AC towers ..... so why do it ?? Perhaps they don't care, just so long as the loans get underwritten. But AC need to be careful because if the access accounts get stuffed full of these low interest rate loans, the access accounts will become unsustainable at current levels. Mmm, could that what's coming our way soon.... reduced rates on the access accounts ? ... and there's another 11 at 5% and 1 at 4.5% in the pipeline.
... and another 5% just about to draw down with "underwriting called".
I can understand that AC want to be as competitive as possible, and lower rates either increase the volume of business they can do or increase their margin on the same volumn of business.
However, I still don't get why underwriters commit to funding loans like this which they don't want to hold long-term, and also know they'll need to give away at least a 3% discount to avoid holding long-term.
|
|
bg
Member of DD Central
Posts: 1,368
Likes: 1,929
|
Post by bg on Mar 29, 2019 8:32:50 GMT
Yes, it's going that way. Consequently my funds slowly shifting from MLA to 30-day. MLA was meant to deliver higher interest with more risk attached, can't see much point using MLA for 5% loans. Currently 19 loans at 5% , and 3 loans at 4.5%. Yes, you read that correctly ...... 4.5%.Why on this earth would anybody buy these loans when higher rates are available on the access accounts, with the added bonus of the protection fund. They must understand this at AC towers ..... so why do it ?? Perhaps they don't care, just so long as the loans get underwritten. But AC need to be careful because if the access accounts get stuffed full of these low interest rate loans, the access accounts will become unsustainable at current levels. Mmm, could that what's coming our way soon.... reduced rates on the access accounts ? This has been discussed elsewhere, but: It's a completely different type of investment, you can't compare individual loans in the MLA with the access accounts. The risks are completely different. The 5% loans in question are typically BTL style loans - these are among the safest loans on the platform and very easy to understand. Any asset that pays a regular, consistent, decent level of income is easy to refinance and easy to sell (as demand will always be high). In the access accounts you actually buy a holding in virtually every loan in the loan book. This includes the low rate loans, high risk dev loans, loans that are suspended, distressed loans and loans that are going to be redeemed for a loss. This is all fine 'usually' but if there is demand to withdraw from these accounts that is greater than the (small) cash balances the accounts hold then the accounts will freeze and investors will be left with a portfolio of loans (some distressed) that they have no control over, no ability to sell, no ability to discount. Potentially they could be left with the entire portfolio until the loans themselves mature - and the provision fund may not cover any losses. Hopefully this won't happen but I fear some sort of unforeseen macro shock (economic, political, a bank getting into trouble) or some investors deciding to withdraw large sums (for whatever reason) which is very hard to predict (ie some other platform may run some fantastic offer). For these reasons I do not use the term access accounts and just keep a smallish amount in the QAA which I would be comfortable with if the account was frozen going forwards. In addition to this, investing in individual loans give control, you know exactly what your holdings are. You are not locked in for a minimum of 3 months (to get the 5.75%), if you need the cash you can put up for sale (at a high discount if necessary). Finally, the rate of return on these loans is actually higher than the 90DAA when you take into account the discounts. If you buy an amortising 5%, 60 month loan at a 4% discount its annual return is in excess of 6%.
|
|
lobster
Member of DD Central
Posts: 636
Likes: 467
|
Post by lobster on Mar 29, 2019 8:57:29 GMT
Thanks for that bg , very useful insights. |
|
sl75
Posts: 2,092
Likes: 1,245
|
Post by sl75 on Mar 29, 2019 9:03:43 GMT
Finally, the rate of return on these loans is actually higher than the 90DAA when you take into account the discounts. If you buy an amortising 5%, 60 month loan at a 4% discount its annual return is in excess of 6%. From a retail investor's perspective, that makes sense...
But what is the rate of return for the underwriters who appear to be routinely funding these loans and immediately selling on at 3%, 3.5% or 4% discounts?
Whilst not impossible, it seems highly implausible to me that AC underwriting fees are so generous as to make that activity profitable for those underwriters!
Edit: ... and in addition, if there are in fact investors on the underwriting panel willing to fund these loans at par and hold to term due to the high quality of those loans, why are those same investors not biting off the hands of the other underwriters who offer 3% and larger discounts on the very same loans they were willing to invest in at par! If they really were such good investments, the market would not be leaving those sale offers unmatched for more than a day or two!
|
|
