deltron
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Post by deltron on Nov 9, 2021 19:51:28 GMT
My Fundsmith account is down 1.2% after a month since I decided to dip my toe into equities for the first time in 8 years (coincidentally lost 1% immediately then too and scarpered). Those historical numbers looked FANTASTIC, but, everybody repeat after me, "past performance is not a guarantee of future returns". I'm just hoping that the brains behind Fundsmith can dig me out of a hole rather than bury me in it. How are you doing now? As of 5/11/21 19.5% on the calendar year. It went from bad to worse. Absolute low was -5% after about 6 weeks. Now I'm up 1.8%. Facebook took a big hit last month, but then rebounded strongly. I hate stocks. Every time I invest it immediately plummets. Or at least that's how it seems. I'll report back in 5 years - that's a more sensible time-frame.
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Post by overthehill on Nov 10, 2021 10:39:27 GMT
I'm getting out of AC, I will re-invest some repayments if there are units available in a decent loan, about as rare as a comet. Currently there are no units available in any loan.
High charges, dropping rates for riskier loans, constant threat of extra charges for non-performing loans, all AC charges paid first for defaulted loans pushing up LTV even more. The way investors in the closed accounts have been treated, funds locked in for years, impotent provision funds, slow recoveries, extra AC charges, certainty of lost accrued interest and likely prospect of lost capital. It makes a mockery of the headline advertised interest rates.
Currently 33% of the active loanbook by value is suspended, 27% of which are defaults.
And me, funds equivalent to 38% of my total earned interest over the last few years are currently default or accrued interest. Again don't get fixated on the headline interest rates, recovery acumen and capital preservation are more important.
Invest wisely.
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ton27
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Post by ton27 on Nov 10, 2021 14:19:13 GMT
I am also slowly removing my funds and am now at just 33% of the my peak. I particularly dislike the way AC charge and extract their somewhat exorbitant fees in preference to lenders. I know it is part of the T&Cs but vastly increases the lender risk whilst prioritising ACs interest.
My other dislike is that they do not handle problem loans well and their discourse with lenders through the Q&A is abysmal and never admits to any sort of error be it via poor valuations or lack of monitorring (in spite of often charging handsomely for it).
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 10, 2021 14:52:27 GMT
Daft question but has anyone actually looked at the level of fees/margin other platforms charge to be able to argue that AC charges are exhorbitant?
eg current favourite Loanpad which takes 35-45% of the borrower rate, CP c20%, compared to AC which takes around 15% on average.
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Post by Ace on Nov 10, 2021 15:22:59 GMT
Daft question but has anyone actually looked at the level of fees/margin other platforms charge to be able to argue that AC charges are exhorbitant? eg current favourite Loanpad which takes 35-45% of the borrower rate, CP c20%, compared to AC which takes around 15% on average. I think it's more that AC put lenders firmly at the back of the queue when loans are in trouble. Compare that with CP, who charge the borrower an extra 2% as soon as the borrower is a day late and pass the whole amount on to lenders.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 10, 2021 16:53:38 GMT
Daft question but has anyone actually looked at the level of fees/margin other platforms charge to be able to argue that AC charges are exhorbitant? eg current favourite Loanpad which takes 35-45% of the borrower rate, CP c20%, compared to AC which takes around 15% on average. I think it's more that AC put lenders firmly at the back of the queue when loans are in trouble. Compare that with CP, who charge the borrower an extra 2% as soon as the borrower is a day late and pass the whole amount on to lenders. But what do they charge to the borrower themselves? Disclosure of that is a regulatory requirement but I cant find it on the loan particulars. I cant see a default waterfall anywhere so how do you know lenders arent ranking behind CP? As we know in 'hindsight' ranking the platform last is a mistake which is why all the platforms that did it have ended up in court. Retained & rolled up interest and fees so the borrower isnt paying anything so is the default interest and CP income dependent on a successful recovery? AC charge the borrower an extra three % and pass it on to lenders ... provided the borrower pays it. Default interest is lovely if it is a) recoverable and b) affordable.
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Post by overthehill on Nov 10, 2021 17:47:11 GMT
I think it's more that AC put lenders firmly at the back of the queue when loans are in trouble. Compare that with CP, who charge the borrower an extra 2% as soon as the borrower is a day late and pass the whole amount on to lenders. But what do they charge to the borrower themselves? Disclosure of that is a regulatory requirement but I cant find it on the loan particulars. I cant see a default waterfall anywhere so how do you know lenders arent ranking behind CP? As we know in 'hindsight' ranking the platform last is a mistake which is why all the platforms that did it have ended up in court. Retained & rolled up interest and fees so the borrower isnt paying anything so is the default interest and CP income dependent on a successful recovery? AC charge the borrower an extra three % and pass it on to lenders ... provided the borrower pays it. Default interest is lovely if it is a) recoverable and b) affordable.
AC are filling their boots especially given the persistently high number of default and late loans.
To draw a line under it, any concerned lender should go through just their own loans and check AC's %cut of the monthly fee and any extra monitoring charges. I've seen monitoring charges double and triple for extended periods on some of my errant loans. I dispute 15% as their average %cut of the monthly fee. Only the lender rate is in the spreadsheet so you would have to go into every loan to find the borrower rate and work out the average.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 10, 2021 19:12:30 GMT
But what do they charge to the borrower themselves? Disclosure of that is a regulatory requirement but I cant find it on the loan particulars. I cant see a default waterfall anywhere so how do you know lenders arent ranking behind CP? As we know in 'hindsight' ranking the platform last is a mistake which is why all the platforms that did it have ended up in court. Retained & rolled up interest and fees so the borrower isnt paying anything so is the default interest and CP income dependent on a successful recovery? AC charge the borrower an extra three % and pass it on to lenders ... provided the borrower pays it. Default interest is lovely if it is a) recoverable and b) affordable.
AC are filling their boots especially given the persistently high number of default and late loans.
To draw a line under it, any concerned lender should go through just their own loans and check AC's %cut of the monthly fee and any extra monitoring charges. I've seen monitoring charges double and triple for extended periods on some of my errant loans. I dispute 15% as their average %cut of the monthly fee. Only the lender rate is in the spreadsheet so you would have to go into every loan to find the borrower rate and work out the average.
I looked at the last 25 loans, its closer to 17%, though 2/3s are under 15% the average is brought up by a few outliers which have a higher % due to be being short term. It is certainly true that extensions the % can jump significantly to 30-40% on occasion though generally nearer 25% Under 5% of the loanbook has defaulted, about 8% by value though that doesnt account for any recoveries so the figures are likely the same or lower.
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Post by overthehill on Nov 10, 2021 22:10:40 GMT
AC are filling their boots especially given the persistently high number of default and late loans.
To draw a line under it, any concerned lender should go through just their own loans and check AC's %cut of the monthly fee and any extra monitoring charges. I've seen monitoring charges double and triple for extended periods on some of my errant loans. I dispute 15% as their average %cut of the monthly fee. Only the lender rate is in the spreadsheet so you would have to go into every loan to find the borrower rate and work out the average.
I looked at the last 25 loans, its closer to 17%, though 2/3s are under 15% the average is brought up by a few outliers which have a higher % due to be being short term. It is certainly true that extensions the % can jump significantly to 30-40% on occasion though generally nearer 25% Under 5% of the loanbook has defaulted, about 8% by value though that doesnt account for any recoveries so the figures are likely the same or lower.
Again I dispute those figures in the last line, I totalled the size of the active loans and the size of the loans which are either in default or suspended, also not accounting for any recoveries which would require going into every loan, we're not even close. Easily verified by others who want to check.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 10, 2021 22:19:22 GMT
I looked at the last 25 loans, its closer to 17%, though 2/3s are under 15% the average is brought up by a few outliers which have a higher % due to be being short term. It is certainly true that extensions the % can jump significantly to 30-40% on occasion though generally nearer 25% Under 5% of the loanbook has defaulted, about 8% by value though that doesnt account for any recoveries so the figures are likely the same or lower.
Again I dispute those figures in the last line, I totalled the size of the active loans and the size of the loans which are either in default or suspended, also not accounting for any recoveries which would require going into every loan, we're not even close. Easily verified by others who want to check.
Thats because I'm looking at the whole loan book across the platform lifetime. Just looking at the live loans gives a distorted figure of performance.
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iano
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Post by iano on Nov 10, 2021 22:46:27 GMT
Again I dispute those figures in the last line, I totalled the size of the active loans and the size of the loans which are either in default or suspended, also not accounting for any recoveries which would require going into every loan, we're not even close. Easily verified by others who want to check. Thats because I'm looking at the whole loan book across the platform lifetime. Just looking at the live loans gives a distorted figure of performance. Have to agree completely. It's my main reason for annoyance at AC's continued inability to properly write off loans and get rid of the woefully inaccurate overall holding figure - something that should have been in the system from day one - AC's (I have to say feeble) excuses for delay aside. Still, at least I've got that impressive outstanding interest to comfort me*. * Frontal Lobotomy not supplied.
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Post by Ace on Nov 10, 2021 22:46:38 GMT
I think it's more that AC put lenders firmly at the back of the queue when loans are in trouble. Compare that with CP, who charge the borrower an extra 2% as soon as the borrower is a day late and pass the whole amount on to lenders. But what do they charge to the borrower themselves? Disclosure of that is a regulatory requirement but I cant find it on the loan particulars. I cant see a default waterfall anywhere so how do you know lenders arent ranking behind CP? As we know in 'hindsight' ranking the platform last is a mistake which is why all the platforms that did it have ended up in court. Retained & rolled up interest and fees so the borrower isnt paying anything so is the default interest and CP income dependent on a successful recovery? AC charge the borrower an extra three % and pass it on to lenders ... provided the borrower pays it. Default interest is lovely if it is a) recoverable and b) affordable. I couldn't find the details of exactly what CP charge the borrower, so it seems that they may be failing that regulatory requirement, which surprises me as I thought them to be more thorough (tagging CrowdProperty Representative for comment). There seems to be gaps where documents state that specific fees would be specified elsewhere, but they don't seem to be there. E.g. For extension/default fees the Fact sheets point to Portfolio, Term 11 v points to Fact Sheets, but the only concrete statement is in the FAQs which states that the extension rate is 10% (tagging CrowdProperty Representative again for comment). From memory, I thought they charged the borrower 3% to 4% upfront fee for curating the loan, then around 2% pa on top of the lender rates, and fixed fees for MS reports when needed. I thought that lenders ranked above CP in recovery from my reading of Term 16 ii: However, reading further, this would appear to be at odds with Term 16 viii: I'm really not sure where this leaves us! Regardless of the above, perhaps the main reason for my belief that I'm much more likely to lose capital on AC than on CP is really down to the fact that I'm in many loans on AC where it looks like I will lose some capital, but none on CP, despite having more loans and more capital invested on CP than AC. And, in AC loans where I'm expecting losses, AC seem to be taking substantial fees which increase those losses. Despite that being contractually allowed it leaves an unpleasant taste, and it hardly incentivises AC to curate better loans. Having said that, my forecast final XIRR (after deducting expected losses defined by their Capital Valuation figures, which may fall further yet) at AC is around the same as I expect on CP (~7.5%). But I don't expect to be able to achieve that on AC going forwards, hence I'm drawing down there.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 10, 2021 23:32:08 GMT
But what do they charge to the borrower themselves? Disclosure of that is a regulatory requirement but I cant find it on the loan particulars. I cant see a default waterfall anywhere so how do you know lenders arent ranking behind CP? As we know in 'hindsight' ranking the platform last is a mistake which is why all the platforms that did it have ended up in court. Retained & rolled up interest and fees so the borrower isnt paying anything so is the default interest and CP income dependent on a successful recovery? AC charge the borrower an extra three % and pass it on to lenders ... provided the borrower pays it. Default interest is lovely if it is a) recoverable and b) affordable. I couldn't find the details of exactly what CP charge the borrower, so it seems that they may be failing that regulatory requirement, which surprises me as I thought them to be more thorough (tagging CrowdProperty Representative for comment). There seems to be gaps where documents state that specific fees would be specified elsewhere, but they don't seem to be there. E.g. For extension/default fees the Fact sheets point to Portfolio, Term 11 v points to Fact Sheets, but the only concrete statement is in the FAQs which states that the extension rate is 10% (tagging CrowdProperty Representative again for comment). From memory, I thought they charged the borrower 3% to 4% upfront fee for curating the loan, then around 2% pa on top of the lender rates, and fixed fees for MS reports when needed. I thought that lenders ranked above CP in recovery from my reading of Term 16 ii: However, reading further, this would appear to be at odds with Term 16 viii: I'm really not sure where this leaves us! Regardless of the above, perhaps the main reason for my belief that I'm much more likely to lose capital on AC than on CP is really down to the fact that I'm in many loans on AC where it looks like I will lose some capital, but none on CP, despite having more loans and more capital invested on CP than AC. And, in AC loans where I'm expecting losses, AC seem to be taking substantial fees which increase those losses. Despite that being contractually allowed it leaves an unpleasant taste, and it hardly incentivises AC to curate better loans. Having said that, my forecast final XIRR (after deducting expected losses defined by their Capital Valuation figures, which may fall further yet) at AC is around the same as I expect on CP (~7.5%). But I don't expect to be able to achieve that on AC going forwards, hence I'm drawing down there. Thanks. Id struggled to find the t&cs (found them now) For the record this is the part of COBS Information: P2P agreements where the lender selects the agreements COBS 18.12.26R09/12/2019 Where a lender has the choice to enter into specific P2P agreements, a firm must provide the lender with at least the following information about each P2P agreement: (1) where the firm determines the price of P2P agreements, the price of the P2P agreement; (2) where not provided under (1), the annual percentage rate that will be paid by the borrower in respect of that P2P agreement, where applicable to that agreement My interpretation is that requires the full rate payable by the borrower to be disclosed, including platform fee/interest spread though happy to be corrected. The 2% is payable if CP step in to complete the build but only after the term has expired so if the project defaults before that it seems unclear if it is payable or in other circumstances and will likely depend on sufficient recovery. The terms dont reference the 2% being charged if the borrower is a day late, they actually can miss 3 payments before being defaulted.
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Post by Ace on Nov 10, 2021 23:45:21 GMT
Thanks. Id struggled to find the t&cs (found them now) For the record this is the part of COBS Information: P2P agreements where the lender selects the agreements COBS 18.12.26R09/12/2019 Where a lender has the choice to enter into specific P2P agreements, a firm must provide the lender with at least the following information about each P2P agreement: (1) where the firm determines the price of P2P agreements, the price of the P2P agreement; (2) where not provided under (1), the annual percentage rate that will be paid by the borrower in respect of that P2P agreement, where applicable to that agreement My interpretation is that requires the full rate payable by the borrower to be disclosed, including platform fee/interest spread though happy to be corrected. The 2% is payable if CP step in to complete the build but only after the term has expired so if the project defaults before that it seems unclear if it is payable or in other circumstances and will likely depend on sufficient recovery. The terms dont reference the 2% being charged if the borrower is a day late, they actually can miss 3 payments before being defaulted. Sorry, I meant late with respect to not repaying the loan by the contracted end date, rather than any other late payments during the term. I usually struggle to find the T&Cs. It's odd that they're hiding under Personal Details, rather than being on the footer of every page like the rest of the legal stuff (tagging CrowdProperty Representative again).
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Post by overthehill on Dec 22, 2021 18:38:08 GMT
Don't know if anyone noticed the latest Shrew* loan where AC's monthly fees are 37% of the borrower's monthly interest, put that in your pipe and smoke it. I'm looking for the lender upside here, I doubt there will be much interest in the MLA. This is what you get mixed into the fodder in the autolend accounts, no thanks.
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