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Post by GSV3MIaC on Jan 2, 2015 16:31:28 GMT
Yep, my property loan parts have been shifting like hot cakes. So much so that I've been accumulating excessive available funds - because there's nothing I want to bid on at the moment. I've even temporarily taken some of the more desirable ones off sale.
Is that at par or at a discount? As far as I can see there are still thousands of property loan parts available on the SM .. they are selling faster than usual (at par, in my case to autobid newcomers with nothing else to bid on), but not really 'like hot cakes'. All the 1.5% and 1% discounted ones did sell out, seemingly. Yep nothing to bid on.. not unexpected yesterday, but today is a bit disappointing .. it seems the pipeline takes a while to refill.
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fasty
Member of DD Central
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Post by fasty on Jan 2, 2015 17:42:51 GMT
Yep, my property loan parts have been shifting like hot cakes. So much so that I've been accumulating excessive available funds - because there's nothing I want to bid on at the moment. I've even temporarily taken some of the more desirable ones off sale.
Is that at par or at a discount? As far as I can see there are still thousands of property loan parts available on the SM .. they are selling faster than usual (at par, in my case to autobid newcomers with nothing else to bid on), but not really 'like hot cakes'. All the 1.5% and 1% discounted ones did sell out, seemingly. Yep nothing to bid on.. not unexpected yesterday, but today is a bit disappointing .. it seems the pipeline takes a while to refill. All sold at par. OK, perhaps the term "like hot cakes" might be a bit excessive, but certainly twice the usual rate... Some time ago I tried selling property loan parts at a small discount but they actually seemed to shift slower than at par (presumably due to lack of autobid). My philosophy with property loans is that I'd rather wait than discount heavily, although I want all parts of any interest-only loan to be gone before it reaches "crunch time".
Bearing in mind the state of the market, I've also just nudged up my "minimum retention rates" a couple of points across the board. Non-property loan parts at quite low rates seem to be shifting quickly.
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Post by loanstar on Jan 2, 2015 21:16:12 GMT
I'm interested in the concept of "minimum retention rate". Does this take into account the age of the loan and the number of repayments remaining? Or is it a blanket number?
I am aware of "sell after six", but the default rate begins to level out after about the three year mark. Is there any merit in holding loans for the last year or so with a lower rate, but also a likely lower default rate? I would concur, the SM is very liquid at present.
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fasty
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Post by fasty on Jan 2, 2015 22:45:04 GMT
I'm interested in the concept of "minimum retention rate". Does this take into account the age of the loan and the number of repayments remaining? Or is it a blanket number? I am aware of "sell after six", but the default rate begins to level out after about the three year mark. Is there any merit in holding loans for the last year or so with a lower rate, but also a likely lower default rate? I would concur, the SM is very liquid at present. Unfortunately my "minimum retention rate" is merely a simple guide rate for each risk band, loosely based on experience of how fast loan parts sell on the SM and taking into account MBR for each band. It could be a lot more sophisticated if I was prepared to write some code to crunch data, but that's not really worth it for me. The general idea is to keep my entire portfolio in a state that could sell reasonably quickly at par in emergency. I am becoming increasingly convinced by the "sell after six" concept, although in my case I don't yet make a hard and fast rule, but rather use it as a guide for C-, C or anything that looks a bit dodgy. Oh, and I use 8 not 6...
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