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Post by stanyko on Oct 8, 2014 9:51:41 GMT
Are you selling all your overdue investments? Do you have any criteria? Or do you alway keep it?
Also is not clear to me, if I can get my money back (anytime in the future) if the investments seems to be absolutelly corrupted. Any idea?
Thx.
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Post by batchoy on Oct 8, 2014 10:54:09 GMT
I attempt to sell overdue loans as soon as they become overdue, however the SM is pretty much broke at the moment and whilst I am listing every overdue not many actually sell. As a result I have become a lot more selective in what I buy.
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Post by reeknralf on Oct 9, 2014 17:29:58 GMT
I agree with the principle of selling overdue loans. I don't agree that the SM is broken because loans aren't selling at a given discount. You calculate the highest sale discount that would still increase ROI. If loans aren't selling at this discount, it just means the market views the loans to be worth less than you do.
Looking at the SM I see a lot of optimists offering loans which have gone overdue at premiums. Given that historically ~50% of loans don't go overdue at any point, any loan that has gone overdue is, by definition, a worse than average loan, and thus worth less than it's book value.
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Post by wiseclerk on Oct 9, 2014 22:40:05 GMT
I don't agree that the SM is broken because loans aren't selling at a given discount. You calculate the highest sale discount that would still increase ROI. If loans aren't selling at this discount, it just means the market views the loans to be worth less than you do. I agree with that I think this is much too simple, as there are more points to consider: + Assuming I agree that "any loan that has gone overdue is, by definition, a worse than average loan" this still does not lead to the conclusion "thus worth less than it's book value". What if the average loan is priced at say x% premium. Then an worse than average loan would be worth less but it might still be a premium. + I have sold overdue loans at (small) premiums + If you offer an overdue loan at a small discount, two things will happen a) the better ones, that is those that turn current again, will be snatched up minutes after they turned current b) you only keep the not so good ones, that is those heading for default On the general question: Selling them off fast at a discount will allow better planning, but depending on the discount and the recovery rates keeping them might be the better strategy in the long run, as you have to remember that you sell those overdues too, that do make it without going from overdue in 60+ days overdue. There are investor examples (e.g. Bandit55555) that the sell fast strategy allows extraordinary ROIs. For the keep and wait strategy it is much harder to find examples. I am currently mostly keeping them. I sell at discount only the non EE loans and in those few cases where I have multiple loan parts in an overdue loan. Otherwise I list them at premium, which means I sell a few and keep most. But with more and more data available I might convert to the sell fast fraction.
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debeast
(o)(o)
Posts: 238 
Likes: 44
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Post by debeast on Oct 10, 2014 8:02:26 GMT
Just My 2C - I sell overdue loans at a discount.
- I relist them every week if they didn't sell
- I only sell an overdue loan if its missed a payment in the past
- I'm probably doing it wrong
/beastie
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james
Posts: 2,205
Likes: 955
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Post by james on Oct 11, 2014 9:35:26 GMT
I don't sell within the first few weeks unless there is previous bad history. Too many loans catch up during that time. I do try to sell at some point before a loan becomes 60 days overdue.
You have a good chance of getting something back from a loan that becomes 60 days overdue. Many of them will be rescheduled within a few weeks and many more after a court decision and bailiff visit. Sometimes I will sell these, sometimes I will keep them. I've recently sold some loan pieces of one of these at 40% premium with an estimated return for the buyer of about 98%. If the borrower repays including all of the penalties those will be good deals for the buyer. I'm selling the pieces to reduce my exposure to the borrower.
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Post by stanyko on Oct 12, 2014 9:54:50 GMT
I am currently mostly keeping them. I sell at discount only the non EE loans and in those few cases where I have multiple loan parts in an overdue loan. Otherwise I list them at premium, which means I sell a few and keep most. But with more and more data available I might convert to the sell fast fraction. I like your strategy wiseclerk. But don't understnd, which are "EE loans"? If I get it, from long term period is better to sell overdue loans with premiem and for the rest going into status "60+ overdue" wait what happen? What's your current statistic about "60+ overdue" loans? Are there any public stats? As this is the first time I have "60+ overdue" investment (before I was selling overdue loans always with discount), and I see that Bondora raised "Expedited court order application" against a borrower. So I am really curious what's the probability of getting money back. Guys, your experience would really help me to clarify this grey side of bondora  Many thanks!
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Post by wiseclerk on Oct 12, 2014 10:12:05 GMT
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Post by analitikas on Oct 12, 2014 16:06:39 GMT
Hi,
I invest only into ABC 600-1000 grades Estonian loans through Bondora. Based on the historical data, recovery rate in Estonia is solid thus I don't sell overdue or pre-default loans. Short-term overdue, which is around 1-20 days is rather usual in consumer loan business, and thus I don't want to lose accrued interest and discounted principal value. At the same time, I am not keen on selling pre-default loan as it takes much time to actively monitor these overdue days and also to compete with active sellers, who would lower their discount if you put your loan for larger than his discount. Also, I am active purchaser of discounted short-term overdue loans as you gain accrued interest and discounted value of principal.
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Post by stanyko on Oct 12, 2014 18:29:02 GMT
Many thanks wiseclerk. It's good to have figures about overdue loans. BTW - good blog about p2p. I should read it more often |
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