blender
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Post by blender on Jan 9, 2015 13:07:09 GMT
It is very dubious on the communications front, in that there was nothing in the pitch to tell you that the first two loans to the same borrower for the same project had been downgraded just before this new request was listed. Nothing in the Q&A, where I would expect it. You had to follow a link before being aware of anything. It was noted in the forum, but the forum is not the place to inform bidders of the conditions of particular loans. Personally, I was so late on it that I bought mine before knowing of the downgrades.
Curious to have two tranches downgraded before the third is listed, but the adjustment is in the extra time for the extra funds to repay. Principles of equal treatment, as on multiple loans to other businesses, do not apply anyway because the earlier loans are to be repaid first. Apparently FC believe that the anticipated late repayments of the first two tranches, will not affect the subsequent payment of this third tranche beyond two months, and it still justifies an A+ rating and 8% interest. One wonders what other option they had, considering that this borrower requires the cash to complete. Some moral hazard evident, but I believe them. (Up for sale at par though, and going quite well.)
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wysiati
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Post by wysiati on Jan 9, 2015 13:08:07 GMT
but a shame that the owners of the previous tranches cannot. (I had some of the second tranche but sold them long ago). <waves> Still, bought used (at a discount almost splashback) to keep, so it's not the end of the world. It does seem a bit rude to permading the first two tranches at the same time as selling the third, though. If there's an unwarranted risk to the third sufficient to protect unaware secondary buyers from, why on earth is the third being listed? If the third is good, why RBR the first two? <shrug> FC's logic is that there have been fundamental changes since the first 2 tranches of funding were listed, namely the project overrun and related issues. The third tranche is being treated differently on the basis that the current (unanticipated in the sense of not being the default scenario) circumstances are being disclosed in the new loan auction listing information so the loan parts should be eligible for the secondary market.
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Post by GSV3MIaC on Jan 9, 2015 13:39:30 GMT
If you think this 325k might struggle, the next 325k which will be hot on it's heels ain't gotta chance. 1% cb isn't enough to tempt me into more of this one, 2% might have though. It didn't struggle much at all did it - fair flew off the shelves!! Either there was a lot of pent-up autobid money from people with no prior exposure, or (more likely, given the fill up profile) a lot of manual bidders saw it as the only game in town. Some more biggies filling fast evenb as I type. Would be interesting to do the FC number/amount of loans listed by week WITHOUT the property / whole loans included. If I get bored maybe I'll have a go, I probably have data back about a year now (more for ACCEPTED loans, because those show up on the loanbook, whereas 'loans listed' is really a different animal).
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blender
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Post by blender on Jan 9, 2015 13:49:54 GMT
Wysiati, Our posts were posted about the same time. When you say 'circumstances are being disclosed in the new loan auction listing information' you are being rather generous in that nowhere in the listing, afaics, including all the reports, are we told that the first two tranches have been downgraded. You have to actually follow the links to the previous listing before you discover the downgrades. FC and you may not consider that information relevant, but it is to me. Presumably those who already held a previous tranche had the usual flag - so there must be some relevant connexion. I would have expected that in the Q&A where it speaks of the third of three loans, the new total requirement and the project delays, we should have been told. Or failing that in the investors' report. They have no risk band - it has been removed - is that not relevant to a bidding decision? How is it A+? I am not saying it should not be A+, but the fact that the previous tranches are not is relevant.
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adrianc
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Post by adrianc on Jan 9, 2015 13:53:24 GMT
FC's logic is that there have been fundamental changes since the first 2 tranches of funding were listed, namely the project overrun and related issues. Seriously, whichever tranche it is I've got a chunk of (6762 - first?) isn't due to be repaid until early April, yet today's note on the loan says 5 of 7 flats have exchanged and will complete early Feb and the loan will be repaid then... but, if it isn't, interest will be covered until it is. Which, surely, questions why a third tranche is even needed now... <scratches head> Oh, and... forum.fundingcircle.com/forum/talk-to-fellow-members/all-about-lending/9849-property-development-in-harrogate-%7C-loan-6762-and-loan-7419As for "usual flag" - today I have one more loan with a comment than I did yesterday, and one more "downgraded". It's this. The RBR perma-ding is the first notice.
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sl75
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Post by sl75 on Jan 9, 2015 13:59:21 GMT
It didn't struggle much at all did it - fair flew off the shelves!! Either there was a lot of pent-up autobid money from people with no prior exposure, ... Autobid appears to remain on an extreme go-slow. For example, for auction 9956, a bid that it should have made (for an account for which I am not in a position to manually intervene at this time) was not made within 20 hours of the auction going live (approximately the time at which the rate it should have bid became unavailable). For a previous auction, the same FC account had its autobid occur around 6am the following morning, and on almost any recent auction you can see a continual influx of autobid activity at all hours, but only at a slow-drip pace. This does largely defeat the purpose of my own usage of autobid (intended to get an initial bid in on auctions that end before I'm able to bid manually), but for these property auctions that are finishing within 24 hours, it seems entirely possible that many autobid users who *could* have bid on them were not given the opportunity to do so! Previously, autobid would complete a cycle within a couple of hours or so. It still remains unclear to me whether the slow-acting autobid was a deliberate design decision by FC (e.g. in order to smooth the flow of money over several auctions rather than "pouncing" on the first few), or simply a side-effect of an inefficient implementation... however I'd anticipate the end result as a buffer of a couple of days' worth of money waiting to be allocated to any new auction.
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blender
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Post by blender on Jan 9, 2015 14:29:34 GMT
I believe you are right sl75. My experience is on the SM, where I have a large number of property parts at par and the reduction on Tuesday was dramatic, both in total and I believe in the scheduled frequency of runs. I had assumed this was a diversion to the PM (though this forum said otherwise), but noted on 9950 yesterday, the £120k property loan which filled in 90 mins or so, Autobidders were as rare as hens' teeth. I am sure this is deliberate management by FC, but am actually pleased to see FC having the ability to manage and optimise things at that level (assuming it's not just broken).
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wysiati
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Post by wysiati on Jan 9, 2015 14:35:47 GMT
Wysiati, Our posts were posted about the same time. When you say 'circumstances are being disclosed in the new loan auction listing information' you are being rather generous in that nowhere in the listing, afaics, including all the reports, are we told that the first two tranches have been downgraded. You have to actually follow the links to the previous listing before you discover the downgrades. FC and you may not consider that information relevant, but it is to me. Presumably those who already held a previous tranche had the usual flag - so there must be some relevant connexion. I would have expected that in the Q&A where it speaks of the third of three loans, the new total requirement and the project delays, we should have been told. Or failing that in the investors' report. They have no risk band - it has been removed - is that not relevant to a bidding decision? How is it A+? I am not saying it should not be A+, but the fact that the previous tranches are not is relevant. I think you are perhaps being a little rash(er?). My post here was simply straight reporting to address another user's query rather than any comment upon or endorsement of the platform's position. If that was not clear I hope it is now. I contacted FC at the start of the auction to query why the downgrades were not clearly referenced and why tranche 3 was apparently being treated differently in terms of risk band/secondary market eligibility and that was the response I received. I can but suggest to the platform what I think might be appropriate in such circumstances; from what I can see no changes were felt necessary. Beyond that it was just a matter of verifying whether tranche 3 would be eligible for the secondary market and deciding whether or not to bid.
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blender
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Post by blender on Jan 9, 2015 15:38:41 GMT
Wysiati, I did not realise that you had had a conversation with FC and were reporting their views rather than interpreting their actions and statements and seeming to support. Clearly the fact that you felt it necessary to contact them on the matters that concerned me (after I had bid) indicates that you must share those concerns to some extent. I had not intended the post to be critical, and will put away the bacon slicing machine.
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Post by GSV3MIaC on Jan 9, 2015 16:39:56 GMT
It didn't struggle much at all did it - fair flew off the shelves!! Either there was a lot of pent-up autobid money from people with no prior exposure, ... Autobid appears to remain on an extreme go-slow. For example, for auction 9956, a bid that it should have made (for an account for which I am not in a position to manually intervene at this time) was not made within 20 hours of the auction going live (approximately the time at which the rate it should have bid became unavailable). For a previous auction, the same FC account had its autobid occur around 6am the following morning, and on almost any recent auction you can see a continual influx of autobid activity at all hours, but only at a slow-drip pace. This does largely defeat the purpose of my own usage of autobid (intended to get an initial bid in on auctions that end before I'm able to bid manually), but for these property auctions that are finishing within 24 hours, it seems entirely possible that many autobid users who *could* have bid on them were not given the opportunity to do so! Previously, autobid would complete a cycle within a couple of hours or so. It still remains unclear to me whether the slow-acting autobid was a deliberate design decision by FC (e.g. in order to smooth the flow of money over several auctions rather than "pouncing" on the first few), or simply a side-effect of an inefficient implementation... however I'd anticipate the end result as a buffer of a couple of days' worth of money waiting to be allocated to any new auction. Interesting .. maybe FC have deliberately slugged autobid in order to reduce the server load, or maybe something has changed due to the Xmas backlog of repayments? Sounds like it currently doesn't even do what it says on the tin (and you know my opinion of =THAT=, even if it was working as advertised). Maybe FC figure autobid users don't even look at what is going on, so if there is a huge uninvested money pile, better them than the manual bidders? However, if it wasn't autobid, you have to wonder who's happy to manually chuck £1/3M into these later tranches of property loans at 1% cashback and fairly dodgy liquidity .. not only that one, but a couple more today. Not I!
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adrianc
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Post by adrianc on Jan 10, 2015 8:47:27 GMT
When I first joined FC, I had a go with AutoBid (with rates turned up quite a chunk from default).
The way it seemed to work when faced with a grand and a half of cash and nothing held was to (a few hours after being turned on) place 20 £20 bids on live auctions. Then, after about twelve hours, another 20 bids. Then another.
(Fortunately, the rates I'd chosen were high enough that most of the bids got knocked out, because it hadn't half picked some rubbish...)
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