ashtondav
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Post by ashtondav on Jun 5, 2019 14:14:30 GMT
With mortgage lenders only able to get 2% on their money there is no shortage of institutional investors willing to hoover up 3% - 4%.
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criston
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Post by criston on Jun 5, 2019 14:46:14 GMT
Waterfall Asset management are pumping in £40 million a month on average.
Will be interesting to see if 'corto' sells today at 55 days; or will it continue to extend.
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corto
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Post by corto on Jun 5, 2019 17:25:50 GMT
Yes, the sell order from 11/4 went through this afternoon This was the second attempt: the majority went through in the first attempt (5/3 sell, 11/4 sold); so it wasn't much this time. This time 1 out of 7 loans made it through; 17% of the total value at start; 1 loan turned bad; the others are still drawing circles in the sky I have setup a new order and expect a selling time of around 100 days (if the trend stays) I'd be surprised if any of the 3 loans makes it through, so I may just transfer the final liquid assets out and then seal the tomb.
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criston
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Post by criston on Jun 5, 2019 17:43:14 GMT
See FC have updated to 54 days delay. Their learning how to follow us here.
Your turn next 'Ace'. Will it be Friday ?
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Stonk
Stonking
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Post by Stonk on Jun 5, 2019 18:32:43 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
There are 2 types of "processing" state:
(1) where the borrower's payment has genuinely failed to arrive on the day it should have done; and
(2) where FC's systems have failed to allow for the fact that there's a holiday, and have consequently treated a normal situation as a failed payment.
Type (1) is what FC originally intended "processing" to mean. Type (2) is due to shoddy programming, and should have been eradicated years ago, but they continue to pretend that it's normal, intentional, and beyond their control. Direct Debits are requested a certain number of business days in advance of the expected payment date, and when there's a bank holiday FC's system is incorrectly calculating either or both of the request date and the expected payment date. They're either requesting it too late, or expecting it to arrive on a non-banking day.
The majority of loans that are falling off sell lists are doing so because of type (2).
If FC would correct this fundamental flaw in their programming, then type (2) "processing" would no longer happen and the situation -- while still not perfect -- would be very much improved. There's no need to remember states or sweeping or anything: just calculate the request and expected payment dates right!
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Post by GSV3MIaC on Jun 5, 2019 18:53:46 GMT
As I've probably said before, Fortran Coders' ability to fix their IT systems is third to none .. they prefer to redefine reality rather than attempting to unpick the patches on the hacks on the kludges on the coding errors.
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Stonk
Stonking
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Post by Stonk on Jun 5, 2019 19:34:07 GMT
As I've probably said before, Fortran Coders' ability to fix their IT systems is third to none .. they prefer to redefine reality rather than attempting to unpick the patches on the hacks on the kludges on the coding errors.
I really wish they were Fortran Coders -- they'd be better for it. Back in the day, programs had to be efficient. These days, a lot of coders just write the first thing they think of that does the job, and then move on. If it takes too much memory, the solution is to pop another few gigs in. If it's too slow, run it on a faster machine.
Many are the times that I have made code changes alone that improve performance by factors of 10, or 100, or 1000, or occasionally even more. You'd have to wait a very long time for a 1000-fold increase in CPU speed!
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Stonk
Stonking
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Post by Stonk on Jun 5, 2019 19:44:01 GMT
I have setup a new order and expect a selling time of around 100 days (if the trend stays)
Ah yes, that should comfortably take you to the August Bank Holiday, and scupper a few more of your loans from selling.
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ashtondav
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Post by ashtondav on Jun 5, 2019 19:53:02 GMT
A lot better than being in a five year contract, which is what you signed up to as there was never a commitment to sell out within a few days - as there is at some AC access accounts - “under normal conditions, of course”. Unfortunately you signed up for a high risk product, which anything offering 6%+ when BS 5 year risk free rates are 2% clearly were. Sad that the FCA has been so slow to step in for these unsophisticated souls.
Look on the bright side - you’ve probably lost less than those in the Woodford income fund who can’t get their money out at all.
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blender
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Post by blender on Jun 5, 2019 20:22:45 GMT
How do they square their statements about risk with the notice about 'processing' on the site: ...
There are 2 types of "processing" state:
(1) where the borrower's payment has genuinely failed to arrive on the day it should have done; and
(2) where FC's systems have failed to allow for the fact that there's a holiday, and have consequently treated a normal situation as a failed payment.
Type (1) is what FC originally intended "processing" to mean. Type (2) is due to shoddy programming, and should have been eradicated years ago, but they continue to pretend that it's normal, intentional, and beyond their control. Direct Debits are requested a certain number of business days in advance of the expected payment date, and when there's a bank holiday FC's system is incorrectly calculating either or both of the request date and the expected payment date. They're either requesting it too late, or expecting it to arrive on a non-banking day.
The majority of loans that are falling off sell lists are doing so because of type (2).
If FC would correct this fundamental flaw in their programming, then type (2) "processing" would no longer happen and the situation -- while still not perfect -- would be very much improved. There's no need to remember states or sweeping or anything: just calculate the request and expected payment dates right!
It's not just bank holidays, it's also short months. Due to bad luck February turned out to be much shorter than they had expected, and this has been a problem for years. If your loan repayment date is 31st, then they often cannot pay it on 28th Feb. It's not only the collection, it is also the repayment run, which starts overnight and continues into the day - because the client accounts are on third party machines (as is right). I do not think they could do two or three days repayments run in one day, even if they had the cash.
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corto
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Post by corto on Jun 5, 2019 20:45:10 GMT
I have setup a new order and expect a selling time of around 100 days (if the trend stays)
Ah yes, that should comfortably take you to the August Bank Holiday, and scupper a few more of your loans from selling.
Doesn't matter much. Only few left. To put an end to FC I'll nail shut the coffin and let the recrements ferment on auto-invest such that perhaps the children of my children can have a curious surprise in some distant future?
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criston
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Post by criston on Jun 6, 2019 6:49:14 GMT
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corto
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Post by corto on Jun 6, 2019 7:26:56 GMT
Hi Criston
Yes, it's an ISA. The majority of the funds are already spread out to other providers for diversification. What you write is an option for dealing with the residuals, that I remember was discussed here without a conclusive answer. I'll give it a thought; currently too busy with other things.
Best C
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djay
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Post by djay on Jun 6, 2019 8:05:46 GMT
I put one accounts loans up for sale on 29th April, currently only 447 of 764 (or 58.5%) are still for sale. The loans from second account were put up for sale over a week later (sorry can't recall exact date) to miss the first bank holiday, currently 558 of 667 loan parts are still for sale.
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Post by jaycee on Jun 6, 2019 22:47:13 GMT
A lot better than being in a five year contract, which is what you signed up to as there was never a commitment to sell out within a few days - as there is at some AC access accounts - “under normal conditions, of course”. Unfortunately you signed up for a high risk product, which anything offering 6%+ when BS 5 year risk free rates are 2% clearly were. Sad that the FCA has been so slow to step in for these unsophisticated souls. Look on the bright side - you’ve probably lost less than those in the Woodford income fund who can’t get their money out at all. Prompted me to register. While there was never a commitment, it was the case - the principle of selling was established, and it was - when most of us went in - possible to accept a lower value to sell (by changing the effective interest rate) in order to attract a buyer. Then it was automated.
Now, that automation is taking so long that loans are falling off the sale table because of month-end. That's not the annoying bit. The annoying bit is, while not being in a position to meet redemptions in a timely manner through the automated process, perhaps as others have speculated because too large a proportion of inflowing funds are being directed to writing new loans...
...Funding Circle appear to be targeting all their online and media advertising on attracting borrowers. Surely, if things have got to such a pass that it takes 60 days to find a lender willing to replace a lender who wishes to exit, at least some of the marketing budget should be devoted to attracting new lenders (or, the pace of new loan origination should be reduced).
I accept the risk of loss, for those loans which genuinely default (though I have my doubts about the standard set for some loans, and the chasing process, but that's by the by). The risk of loss due to the borrower failing is quite different from the risk of having a stranded asset because the platform is de facto making it almost impossible to sell loans, including many where there is no real indication of a problem
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