SteveT
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Post by SteveT on Jun 2, 2019 15:48:58 GMT
Is that factually correct? In other words when I deposit £1,000 there is a FC geek who decides whether 10% or 90% is allocated to new loans first, or buying second hand loans. HTF does that work? I’m guessing you think/know that FC allocate new funds to new loans they need to fill first, rather than second hand loans their dissatisfied lenders are ditching and where there is no financial advantage for FC. Correct? Even before Faintly Comical went fully black box, it was clear they had a big lever that could divert Autobiddy cash into filling new loans as opposed to buying SM parts. Some weekends there’d be just a handful of new loans by Saturday morning and I’d flip several hundred £20 parts by Monday lunchtime. Other weekends, the new loans list would be onto Page 2 and I’d sell maybe half a dozen parts. Go figure!
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Post by GSV3MIaC on Jun 2, 2019 21:50:47 GMT
There is indeed no geek, there is a rather variable "constant" which sets % into new loans vs % into SM repurchases. Over the last couple of months it has been increased a lot. FC even boasted about doing so, if you read their blogs etc.
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criston
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Post by criston on Jun 3, 2019 6:38:01 GMT
A relative (T) sale went through today after 55 days, with just 60% of requested amount sold.
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Post by johnr on Jun 3, 2019 8:18:59 GMT
Is that factually correct? In other words when I deposit £1,000 there is a FC geek who decides whether 10% or 90% is allocated to new loans first, or buying second hand loans. HTF does that work? It's self-evident. They control everything, somebody decides the allocation ratios and nobody else is in a position to do so. Investors have no control other than to say they want to invest in a conservative (medium risk) or balanced (high risk) portfolio. I’m guessing you think/know that FC allocate new funds to new loans they need to fill first, rather than second hand loans their dissatisfied lenders are ditching and where there is no financial advantage for FC. Correct? New lending by FC is up 25% since the decline in selling time started. It's no coincidence. We might also worry where all these new credit worthy borrowers are coming from. The economy is hardly booming and the outlook is not good. Anyway 60 days selling time would be fine. If 1) They had forewarned everyone. Choosing to go from near immediate sales to taking months to sell with no prior notice indicates a serious lack of respect for investors. 2) All loans put up for sale were actually sold provided they were still in good standing after the waiting time. It seems like we're down to only 50% to 60% of requested sales making it to the end. I personally wasn't dissatisified until this all started. I was just looking to go from balanced to conservative. But I don't trust this company anymore. Why should I. I hope they have more respect for their institutional investors otherwise they're finished.
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Post by marlin on Jun 3, 2019 22:04:33 GMT
I'm also waiting on Funding Circle.
I invested around 8 months or so ago, but was concerned that some loans began to default/late within the first month or two. Return rates then fell and I put my loans up for sale on 04/05/19 as I no longer viewed it as a worthwhile in terms of risk/reward.
They are still waiting to be sold.
I called FS. To be honest, I was expecting to face a lengthy automated answer queue but got through quite quickly. Although polite they were unable to tell me anything useful. Nor could they give a satisfactory explanation as to why some of my loan parts are in a "live" or "processing" state. I suspect that if/when they do sell, only 50% - 60% of them will get sold, but have little choice other than to wait and see.
At the last check, waiting time is 53 days. It is concerning that the time is increasing almost at the same rate I am waiting. This does not feel good.
>New lending by FC is up 25% since the decline in selling time started.
It would seem that FC's interest is now focused elsewhere?
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SteveT
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Post by SteveT on Jun 3, 2019 22:29:38 GMT
It would seem that FC's interest is now focused elsewhere?
It has been for years, ever since variable-rate auction bidding was withdrawn. Retail lenders are just a PITA, expecting to lend to honest borrowers at a fair rate for the risk and to get their money repaid.
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Post by marlin on Jun 3, 2019 22:58:58 GMT
It would seem that FC's interest is now focused elsewhere?
It has been for years, ever since variable-rate auction bidding was withdrawn. Retail lenders are just a PITA, expecting to lend to honest borrowers at a fair rate for the risk and to get their money repaid.
Thanks for the reply.
So, would it be correct to surmise that FC have a new business model focused on institutional lenders?
If this is true, individual lenders may be left to fight for their money the best they can, but at least FC is not necessarily haemorrhaging. This may, perhaps, explain their apparent indifference to the situation.
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Post by kcrane on Jun 4, 2019 7:33:19 GMT
To add to the list, sell order placed 4th June for £2,500
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Post by Ace on Jun 4, 2019 17:18:06 GMT
I've asked FC why the ridiculous state change from "For sale" to "Processing" to "Live". Will report back if they answer. FC replied with a general stock answer related to selling loans that didn't address the question asked. I've asked them to try again. FC have replied again, and... surprise surprise, they failed to answer the question again. I've asked them to try yet again.
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Post by popeye on Jun 4, 2019 18:05:17 GMT
I got a reply from them that explained that a loan that has switched to Processing indicates a potential risk: "A loan will only change to a processing status when the monthly direct debit repayment from the borrower is awaiting clearance and hasn't successfully cleared on the first attempt." Hence, they remove it from sale as you might otherwise be selling a problem loan. Their systems haven't been been built to be able to put these back in the queue if the direct debit ultimately goes through successfully. Presumably, this wasn't designed for situations where queues were many weeks long. Instead, it was only ever expected to affect 1 or 2 loan parts which could easily be relisted when the sale completes a few days later.
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Post by kowalski on Jun 4, 2019 18:42:00 GMT
I had all 35 loans from one weekday go into processing then get removed from the sales queue.
I don't beleive that all 35 would have had a problem so I have asked FC to explain what happened.
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Post by dand3lions on Jun 5, 2019 7:06:15 GMT
Been with Feigning Composure (well I tried) for over 6 years, now (310519) gone all in to sell - well, as much as rules allow. Criston pls add to the list. Stupid Q (never sold in this market before and Far from Clear - does daily capital and interest still get repaid to me? And therefore the capital for sale is reduced over the +55 days or so.
PS Hope I am lucky enough to sell. Just got out (with a loss - of course) of Woodford last week.
Cheers and thanks to all contributors, an interesting and informative read to occasion readers.
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Post by Ace on Jun 5, 2019 7:20:19 GMT
Been with Feigning Composure (well I tried) for over 6 years, now (310519) gone all in to sell - well, as much as rules allow. Criston pls add to the list. Stupid Q (never sold in this market before and Far from Clear - does daily capital and interest still get repaid to me? And therefore the capital for sale is reduced over the +55 days or so. PS Hope I am lucky enough to sell. Just got out (with a loss - of course) of Woodford last week. Cheers and thanks to all contributors, an interesting and informative read to occasion readers. yes, interest and capital repayments are still made to you while your loans are in the sale queue.
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blender
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Post by blender on Jun 5, 2019 8:02:23 GMT
How do they square their statements about risk with the notice about 'processing' on the site:
'Processing Loan Parts Investors may notice an increase in the number of ‘Processing’ loan parts following the bank holiday weekend. Loan repayments are collected by direct debit 5 calendar days before the payment is due, and the bank holidays will cause a delay in us receiving repayments. These delays will resolve a few days after the payments are due, once funds have been received and distributed.'
Yes they have to remove 'processing' parts from sale with a daily sweep after the repayment run, because they do not know which will be collected from the borrower and which will not. Their problem is that they have no ability to reinstate a loan part to 'for sale' when the system takes and pays the cash. There is no memory of previous states of loan parts, and so they have no way of knowing which loan parts to place for sale, coming out of processing to live. They just cannot do it and cannot justify the result, so they make up stories to tell investors. It would be a large development job to fix, and they think it will go away when selling queues get down to the lengths of time they planned for - a few days. Will this happen?
If they could fix this immediately the result would be that sellers would receive all their cash in one go, but of course the time to sell would increase, because basically they are not getting enough cash in or repaid to meet the demand of new loans and sellers.
I'm nearly out - just a few hundred
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dorset
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Post by dorset on Jun 5, 2019 12:23:33 GMT
Days taken to sell is probably a reasonable metric of FC lender cash shortages. FC’s priority of course will be to fund new loans first – the sale of old loans will have low priority. When FC has difficulty funding new loans the days to sell on old loans lengths and will not shorten until an excess of new money comes in.
At 50 days plus looks as if FC have a significant loan funding problem which will only get worse as the wiser lenders recognise the problems of exiting and the risk of being locked in to completion when the penny finally drops about FC.
Most old timers on this forum have long since left FC or are running down their loan book.
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