mikes1531
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Post by mikes1531 on Oct 22, 2014 19:35:03 GMT
... and the [n?] use the new shiny "turn off MAI for this loan" button. : Pardon my being thick, but was the above a bit of humour that went over my head? Or has a change been made in response to forum users' requests and I just haven't found the new button yet?
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oldgrumpy
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Post by oldgrumpy on Oct 22, 2014 21:45:57 GMT
batchoy "so here is a scenario for the doubters............"
I started one of those stories earlier but got bogged down in my own rhetoric....so had a fry-up instead. Well done for expressing it better.
I think we'll have the facility to manually avoid this added soon ... (or I become ultra cautious on this type of loan).
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oldgrumpy
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Post by oldgrumpy on Oct 22, 2014 21:46:42 GMT
... and the [n?] use the new shiny "turn off MAI for this loan" button. : Pardon my being thick, but was the above a bit of humour that went over my head? Or has a change been made in response to forum users' requests and I just haven't found the new button yet? I searched for it too. 
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jo
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Post by jo on Oct 22, 2014 22:02:24 GMT
On further though, the best solution seems to me to have "null" as a valid target value at database level, and interpreted as "no target has been set". The system would then neither buy nor sell any units of that loan. This would correspond to a checkbox in the UI for whether the system should attempt to maintain the specified target. (or depending on the database schema, it could be done equivalently by having the database entry for the target simply absent). Oh, and also, please return to specifying the target rather than how much the target needs to change by... to fill in the form as it is, I'm forced to do mental arithmetic (or open the windows calculator) - if the current target was, say, £150 and I want it to be £200, I need to subtract £150 from £200 to figure out I need a £50 increase - fine for nice round numbers like this, but a bit awkward if one or other number is non-round. What he(?) said.
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Post by planetx on Oct 23, 2014 7:09:26 GMT
So here is a scenario for the doubters, there is an amortising loan that is backed by PGs and Stock, you have set your MAI to £5000 but over time your holding has decreased down to a few hundred pounds due to amortising and because there is little by way of sales. Come Easter you go off on holiday and have no internet access. On Good Friday morning rumors surface on the forum that this company has done a moonlight flit and before AC are able to block transactions a large number lenders zero their MAI targets and but your's has a field day due to various payments that came in on Thursday afternoon. Come Tuesday you return to find that AC have got people out trying to locate non-existent stock, the provider of the PG has declared himself bankrupt and you are the proud owner of not a few hundred pounds of now worthless loan units but £5000 worth for which you might get a few pence in the pound if the stock can be located and the forensic accountant's fees don't take up all the funds when the stock is recovered and sold. Worth noting though that this scenario would have played out exactly the same with the old site, or with an interest-only loan. It's not specific to an amortising loan with the new system; if you leave autoinvest with a buy mandate you run the risk of picking the loan up when there's bad news and selling begins. There are actually very few situations where the non-amortisation of the target will cause significant trading immediately; there will have to be some for sale already (otherwise everyone will be trying to buy extra after the amortisation and any sales will be distributed among many buyers), and the amortisation will have to be reasonably big as a percentage of the principal outstanding (relatively few payments left on a loan that is fully amortising, or a partial repayment). Nonetheless, I'd still favour being able to turn the MAI off per loan to avoid that risk, the more gradual topping up of the loan over time, and probably for other reasons as well.
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Post by batchoy on Oct 23, 2014 7:51:50 GMT
So here is a scenario for the doubters, there is an amortising loan that is backed by PGs and Stock, you have set your MAI to £5000 but over time your holding has decreased down to a few hundred pounds due to amortising and because there is little by way of sales. Come Easter you go off on holiday and have no internet access. On Good Friday morning rumors surface on the forum that this company has done a moonlight flit and before AC are able to block transactions a large number lenders zero their MAI targets and but your's has a field day due to various payments that came in on Thursday afternoon. Come Tuesday you return to find that AC have got people out trying to locate non-existent stock, the provider of the PG has declared himself bankrupt and you are the proud owner of not a few hundred pounds of now worthless loan units but £5000 worth for which you might get a few pence in the pound if the stock can be located and the forensic accountant's fees don't take up all the funds when the stock is recovered and sold. Worth noting though that this scenario would have played out exactly the same with the old site, or with an interest-only loan. It's not specific to an amortising loan with the new system; if you leave autoinvest with a buy mandate you run the risk of picking the loan up when there's bad news and selling begins. Not necessarily, and it is BIG not necessarily, the default situation pre-upgrade was that there was no AI, and if you used the AI to make the initial purchase you could turn it off which is how I operated it. The situation now is that the MAI runs as default, and in order to prevent the MAI making further investments into loans you have to re-set the MAI target every time a repayment of capital is made. The worst thing about the current situation is that AC have unilaterally without notification, consultation and my express consent reversed my instructions to the platform both implicit and explicit with the result that the platform purchased loan units which I did not instruct it to purchase and which I have not as yet been able to sell in totality.
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Post by geoffrey on Oct 23, 2014 7:57:21 GMT
Worth noting though that this scenario would have played out exactly the same with the old site, or with an interest-only loan. It's not specific to an amortising loan with the new system; if you leave autoinvest with a buy mandate you run the risk of picking the loan up when there's bad news and selling begins. Some of us never used AI on the old site. As far as I am concerned, this *never* could have happened to me with the old system, either on an interest-only loan or an amortizing loan. I would be extremely upset if it happened to me unwittingly with the new system. For those of you saying "well, I would have no problem with this or that scenario", or "the risk doesn't actually increase", that's really not the point. The point is that no lender should be exposed to purchasing more of a loan after their initial investment unless they have asked for this to happen. The default must be that this does not happen automatically, in the background, unless I specifically and clearly authorize it. Withdrawing all money to the cash account and fixing loan targets manually is only a temporary solution, especially if I have dozens or even hundreds of loan parts. Sl75's checkbox solution for each loan seems the most obvious to me. It would have to apply to all loans, because I presume interest-only borrowers may under some scenarios repay some capital early. It would be unacceptable for the system to repurchase such capital from other lenders who want out, unless I have specifically allowed this, for exactly the same reasons as with amortizing loans.
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mikeb
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Post by mikeb on Oct 23, 2014 8:31:41 GMT
... and the [n?] use the new shiny "turn off MAI for this loan" button. : Pardon my being thick, but was the above a bit of humour that went over my head? Or has a change been made in response to forum users' requests and I just haven't found the new button yet? It was a joke. (although, based on the polling so far .... ) oldgrumpy: Made you look 
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Post by geoffrey on Oct 23, 2014 8:36:03 GMT
I've been thinking more about this, and it seems we may be dealing with a clash of "philosophies" here. It seems AC wants to move towards aggregating loans into specific "funds", that we choose to participate in or not, with an "opt out" for certain loans we really don't want to be a part of. The overall philosophy is then "Do you want to invest in the Green Fund?" (say). If yes, "Do you want to reinvest all interest and/or capital repaid?", or "Do you prefer all repayments to go into the cash account?" I can see the appeal of such a system, but I think most lenders are still scrutinizing each individual loan and deciding whether or not they want to be a part of it, asking questions via Q&A, looking at security documents, etc. The two philosophies don't really sit well together, do they? It's a bit like choosing your own shares in an SS ISA, or investing only in funds and letting the fund managers take the decisions.
I'm sure the flexibility exists in AC to allow both philosophies to co-exist, but a default "don't reinvest" set on each loan would not work well with the "fund" philosophy. Therefore, on reflection, I think the solution would be to have a checkbox in the "On repayment" dialogue box, something like "On capital repayment, reinvest in existing loans if possible". This should be off by default, and it should be independent of the other options. If a lender selects the checkbox, a warning should pop up saying that this may increase their exposure, or somesuch (can't think of a good wording right now).
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Post by bracknellboy on Oct 23, 2014 9:18:00 GMT
i had not been keeping up with this thread, but now I have, if I have understood the new system, then I am definitely not happy. I do not want the system automatically topping up (where it can) my exposure to amortising loans unless its as a result of my express instructions to do so. And if that is now the effect on loans on which I did not previously have AI setup (because my target amount has been set at current holding at point of switchover) then I will be mighty unhappy should it do so. I've now set my reinvestment to direct cash back to my cash account until I know this has been sorted, but of course that also now excludes me from having the system automatically buy up stuff I am interested in.
I don't care abvout the mechanism for correcting this provided it is simple to use and obvious. But in principle I do not want the system defaulting to 'topping up' on old or new loans I decide to participate in, unless my original holding is less than my target (availability on the market). I can see that allowing for the latter could mean that having an amortising target (from the each point/time it is user set) has attractions, but simplicity would suggest a simple check box of 'buy to my target/not buy for my target' option, providing one can easily filter for all loans which have the 'buy' option set so that an occasional review to pick up on those that have been running for a while and for which the original target may no longer be your desire would do the job.
I don't care about the discussions on more or less risk as the loan progresses: that is a judgement call, and not one AC should in effect have the only say on.
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Post by batchoy on Oct 23, 2014 9:42:32 GMT
batchoy "so here is a scenario for the doubters............"
I started one of those stories earlier but got bogged down in my own rhetoric....so had a fry-up instead. Well done for expressing it better.
I think we'll have the facility to manually avoid this added soon ... (or I become ultra cautious on this type of loan).
mmmmmm banana fritters. I hope they came with syrup and vanilla ice cream.
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niceguy37
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Post by niceguy37 on Oct 23, 2014 9:47:19 GMT
i had not been keeping up with this thread, but now I have, if I have understood the new system, then I am definitely not happy. I do not want the system automatically topping up (where it can) my exposure to amortising loans unless its as a result of my express instructions to do so. And if that is now the effect on loans on which I did not previously have AI setup (because my target amount has been set at current holding at point of switchover) then I will be mighty unhappy should it do so. I've now set my reinvestment to direct cash back to my cash account until I know this has been sorted, but of course that also now excludes me from having the system automatically buy up stuff I am interested in. I don't care abvout the mechanism for correcting this provided it is simple to use and obvious. But in principle I do not want the system defaulting to 'topping up' on old or new loans I decide to participate in, unless my original holding is less than my target (availability on the market). I can see that allowing for the latter could mean that having an amortising target (from the each point/time it is user set) has attractions, but simplicity would suggest a simple check box of 'buy to my target/not buy for my target' option, providing one can easily filter for all loans which have the 'buy' option set so that an occasional review to pick up on those that have been running for a while and for which the original target may no longer be your desire would do the job. I don't care about the discussions on more or less risk as the loan progresses: that is a judgement call, and not one AC should in effect have the only say on. I can see why some lenders wish to maintain their level of exposure on amortising loans, and I'll consider it if the option becomes available, but if the system buys loans on a lender's behalf without specific instructions and the loan went bad, then I would guess that the regulator's opinion might well be that the site is liable for any losses. This is the sort of thing that add to the risk of platform failure.
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oldgrumpy
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Post by oldgrumpy on Oct 23, 2014 9:48:00 GMT
batchoy "so here is a scenario for the doubters............"
I started one of those stories earlier but got bogged down in my own rhetoric....so had a fry-up instead. Well done for expressing it better.
I think we'll have the facility to manually avoid this added soon ... (or I become ultra cautious on this type of loan).
mmmmmm banana fritters. I hope they came with syrup and vanilla ice cream. Mmmmm! indeed! Prefer that ultra dollopy thick cream though (46% fat content!!!). 
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shimself
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Post by shimself on Nov 24, 2014 14:10:49 GMT
If I understand correctly (about 50/50 chance so far)
If I want my exposure to a loan to reduce as it amortises, what I have to do is to disable the target for that particular loan the green toggle). Well yes on first principles that is what I want.
It's rather a pain having to remember to disable manual investment ONCE I have obtained as much of the loan as I want.
Couldn't we automate that rather better please?
the setting is called
"do not automatically re-invest in amortising loans as repayments are received"
The effect could be either to Disable manual investment once the desired investment has been reached, or it could be ( much better) to reduce the target by the amount of the repayment
What are the settings on the overview of my manual investment account ?
Manual Loan Investments Account
Adjust Repayment Action
When repayments occur
Reinvest Repayments and Interest/Withdraw Interest/Withdraw Repayments and Interest
I think what they do (if withdraw is selected) is remove the payment into the cash account so they can't be invested, which isn't really the same thing
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