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Post by david111 on Jan 4, 2020 11:03:53 GMT
I am trying to compute what my actual portfolio return is. I should set my expected recovery on defaulted loans to 0 no ? That's the way they should be computed people returns no ?
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Post by david111 on Jan 4, 2020 11:07:12 GMT
Also planned principal total in the cashflow keeps going up. Do you see the same ?
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Post by coolrunning on Jan 6, 2020 11:12:24 GMT
I am trying to compute what my actual portfolio return is. I should set my expected recovery on defaulted loans to 0 no ? That's the way they should be computed people returns no ? A simple rule, I suggest a valuation of 20%. This seems to be the value on the 2nd market.
Being more precise, if it is a write-off (death, no money, criminal proceedings etc) then 0%.
Finnish and Spanish, a bit lower : 18% Estonian maybe 22%
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Post by wiseclerk on Jan 6, 2020 16:36:01 GMT
I use these forecast values in the cashflow view and they work well (that is forecast matches actual very good over past years) for my mainly Estonian portfolio
Principal from current and overdue loans
97%
Principal from loans in default
54%
Interest from current and overdue loans
82%
Interest from loans in default
6%
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Post by coolrunning on Jan 6, 2020 16:52:45 GMT
I use these forecast values in the cashflow view and they work well (that is forecast matches actual very good over past years) for my mainly Estonian portfolio
Principal from current and overdue loans
97%
Principal from loans in default
54%
Interest from current and overdue loans
82%
Interest from loans in default
6%
54% for defaulted loans?
Has the 2nd market got the valuation so wrong?
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Post by wiseclerk on Jan 6, 2020 17:27:16 GMT
as I said, it is for MY portfolio. My portfolio consists 95% of Estonian loans and A+B+C combined are 70%. The remaining higher risk grade loans are older loans (pre 2017)
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Post by david111 on Jan 7, 2020 7:07:16 GMT
coolrunning these numbers look high but may be it is because you have high ratings for your loans. Me I am trying to tweak the statistics every day but the portfolio keeps bleeding. Right now I am using 100% for current and overdue principal and 0% for all other stats and still it bleeds.
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Post by rahafoorum on Jan 25, 2020 16:06:44 GMT
coolrunning these numbers look high but may be it is because you have high ratings for your loans. Me I am trying to tweak the statistics every day but the portfolio keeps bleeding. Right now I am using 100% for current and overdue principal and 0% for all other stats and still it bleeds. If you only stick with Estonians, the 54% recovery doesn't seem too optimistic. They're the ones subsidizing the other countries. Of course, if majority of your defaults are old loans, then it probably will start skewing towards optimistic at one point, because most of recovery has already happened (not sure whether that calculation estimates recovery from EAD figure or from current outstanding principal...would guess the latter).
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Post by wiseclerk on Jan 27, 2020 12:12:46 GMT
. Of course, if majority of your defaults are old loans, then it probably will start skewing towards optimistic at one point, because most of recovery has already happened ( I have multiple loans from 2013 in my portfolio that are long defaulted but where Bondora collects principal payments EVERY month. Of course these payments are small. But considering these loans were meant to end regulary in 2016-2018, I find it astonishing to see incoming monthly payments for much time extending. And there is no sign (to me) that this lets up. Again this is for Estonian loans.
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323 
Likes: 897
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Post by JamesFrance on Jan 27, 2020 16:14:21 GMT
Yes, there is hardly any recovery from Slovakian loans and very little from 2014 Spanish. No wonder Bondora never tried to expand to other countries after such dismal failures. It seems that aggressive marketing produces lots of new investors with the increase of invested funds pouring into their Go & Grow, but what will happen once withdrawals increase by more than new money entering?
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fric
Member of DD Central
Posts: 200
Likes: 80
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Post by fric on Jan 28, 2020 7:14:22 GMT
I think they pretty much hit the wall in other countries due to not having set up a proper loan issuance and recovery system. Did they even had local branches with a proper legal entity set up in Slovakia, Finland, Spain? Or did they just give out loans to people remotely?
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Post by rahafoorum on Jan 28, 2020 7:39:57 GMT
. Of course, if majority of your defaults are old loans, then it probably will start skewing towards optimistic at one point, because most of recovery has already happened ( I have multiple loans from 2013 in my portfolio that are long defaulted but where Bondora collects principal payments EVERY month. Of course these payments are small. But considering these loans were meant to end regulary in 2016-2018, I find it astonishing to see incoming monthly payments for much time extending. And there is no sign (to me) that this lets up. Again this is for Estonian loans.
Yes, but for those 2013 Estonian loans you could've used a 100%+ recovery estimate initially instead. And that also would be overly optimistic today.
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Post by rahafoorum on Jan 28, 2020 7:40:58 GMT
Yes, there is hardly any recovery from Slovakian loans and very little from 2014 Spanish. No wonder Bondora never tried to expand to other countries after such dismal failures. It seems that aggressive marketing produces lots of new investors with the increase of invested funds pouring into their Go & Grow, but what will happen once withdrawals increase by more than new money entering? Then Bondora will decide whether they'll make partial withdrawals daily or make you wait until your full requested amount is available.
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Post by rahafoorum on Jan 28, 2020 7:55:38 GMT
I think they pretty much hit the wall in other countries due to not having set up a proper loan issuance and recovery system. Did they even had local branches with a proper legal entity set up in Slovakia, Finland, Spain? Or did they just give out loans to people remotely? In Slovakia they didn't get access to proper credit info (local experian type of scoring) and tried to scrape info together from other sources (Pärtel mentioned it in one public debate). In other words, they probably lent money to people who never should have gotten a loan and never even planned to repay that. As evidenced by a very rapid 70%-ish default rate. (Note that they all were presented as score 1000 back then, which meant they had no previous troubles with any payments. Although Bondora possibly didn't always have that info.)
In Spain they did have issues with collection. Legally they needed to have some local representative in court or something, which they did not. So first claims were sent back and then it took something like 6 months before they even started processing the defaults for legal action. They waited until new process was implemented where investors will pay for this. During that time period pretty much nothing was done in terms of legal action (At one point you could see pretty specific descriptions under defaulted loans.).
For Slovakians to be sent to court, the delay was even longer. They stopped issuing slovakian loans in 2015 and 96% of all the defaults there had happened before 2017. However, in October 2017, almost all of the cases were still being prepared for court (232/260 at the time). In September 2018 237/261 cases were still being prepared for court and finally at that time 195 of them were sent to court. So roughly 2+ years to reach court. Not sure what the results have been there. (This info is available in their blog updates about debt collection processes.)
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323
Likes: 897
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Post by JamesFrance on Jan 28, 2020 8:59:55 GMT
Yes, there is hardly any recovery from Slovakian loans and very little from 2014 Spanish. No wonder Bondora never tried to expand to other countries after such dismal failures. It seems that aggressive marketing produces lots of new investors with the increase of invested funds pouring into their Go & Grow, but what will happen once withdrawals increase by more than new money entering? Then Bondora will decide whether they'll make partial withdrawals daily or make you wait until your full requested amount is available. It seems that many Go & Grow investors see it as an instant access account so if a withdrawal fails I would expect to see a run on the account which would surely be widely reported in the press. Could they survive that?
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