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Post by solicitorious on Mar 2, 2015 18:18:40 GMT
How bad (or good) are those figures... Considerably better than SCP&M ever was!  At least SCP&M had an LTV0 of zero. We should be thankful for small mercies, I suppose....
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mikes1531
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Post by mikes1531 on Mar 2, 2015 21:12:36 GMT
If AC think it would be an issue to pre-announce draw down & then only for that not to happen, hence peeving us off, they needn't worry. I think we all expect some promised draw downs to not materialise every once in a while, provided it does not happen on a very regular basis. Coupled with no instant transfer/deposit facility, lenders need to know pre-hand otherwise it will be another big PR own goal. The odd delayed draw down has never been an issue in my mind. I'd sooner that everything was correctly in place before the monies were released. Unfortunately this seems to have become a more and more common occurrence in the recent past although I'm not placing any blame on AC for that. I'm sure they're as eager as all of us to see the loan live. I had set a target for 156 but there were no funds available today. They'd been gobbled up by another target over the weekend and without knowing this loan was going live today coupled with the lack of a fast deposit system into the account, there was no way to get a slice of the action anyway. Even in the current situation of no means of funding an account instantly, a bit of advance notice of drawdown still would be very helpful. I expect most of us have -- I certainly do -- a few holdings I'm a bit ambivalent about. And some of those have no parts for sale most of the time. So with even a small amount of notice, I probably could sell some of those holdings pretty quickly. And that would allow me to have funds available in my account to cover my target for the loan that's about to be drawn down by the time those parts become available to buy. I know that AC have told their underwriters that they must release a certain amount of their holdings when a loan draws down, but I can't imagine anybody would be too upset if that release didn't happen until the day after drawdown. And if AC were to announce that drawdown had occurred on the day it happened, and that the parts would be released tomorrow, IMHO that would be a major improvement compared to what happened today. Today's event will have pleased virtually nobody, and this was so unnecessary and avoidable that I'd have to agree with the description of it as an own goal. If AC could stop doing that they'd do wonders for their attractiveness to investors.
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mikes1531
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Post by mikes1531 on Mar 2, 2015 21:32:29 GMT
Considerably better than SCP&M ever was! At least SCP&M had an LTV0 of zero. The fact that the LTV0 is calculated as zero is very misleading. This is caused by the tiny amount (£4k) of unencumbered hard assets held as security. So LTV0% may be zero, but LTV1% is substantially greater than zero. I think it's about 63%. And I think LTV32% is over 100%. Which is to say that 'hard' security was severely lacking in this case. But we all know that -- now.
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Post by solicitorious on Mar 2, 2015 21:43:32 GMT
At least SCP&M had an LTV0 of zero. The fact that the LTV0 is calculated as zero is very misleading. This is caused by the tiny amount (£4k) of unencumbered hard assets held as security. So LTV0% may be zero, but LTV1% is substantially greater than zero. I think it's about 63%. And I think LTV32% is over 100%. Which is to say that 'hard' security was severely lacking in this case. But we all know that -- now. Oh, I agree. That's why LTV50 and LTV90 are essential to understand. In the Plumber's case the answers are "not applicable", because the hard assets provided insufficient security to afford any protection against those levels of loss. You want all three LTVs to be as low as possible. The point I was making was, there but for the grace of God, LTV0 could have been "n/a" also....
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baldpate
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Post by baldpate on Mar 2, 2015 22:17:49 GMT
As a relative beginner, I would really appreciate if someone would explain what is meant by LTV0, LTV50, LTV90. Pretty please  ! Thanks |
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Post by solicitorious on Mar 2, 2015 22:40:09 GMT
As a relative beginner, I would really appreciate if someone would explain what is meant by LTV0, LTV50, LTV90. Pretty please ! Thanks LTV0: the amount the security would have to fall to, percentagewise, for you to recover nothing. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV50: the amount the security would have to fall to, percentagewise, for you to recover half your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV90: the amount the security would have to fall to, percentagewise, for you to recover 90% of your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. Remember when borrowers get into difficulty, such assets as they may have are usually sold quickly at a discount from the headline valuation given at the time of them taking out the loan. A knock-down to 70% of the initial valuation is not unusual. So, if you saw LTV0 of 70%, you are at high risk of losing EVERYTHING if things go bad...
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mikes1531
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Post by mikes1531 on Mar 2, 2015 23:05:46 GMT
The fact that the LTV0 is calculated as zero is very misleading. This is caused by the tiny amount (£4k) of unencumbered hard assets held as security. So LTV0% may be zero, but LTV1% is substantially greater than zero. I think it's about 63%. And I think LTV32% is over 100%. Which is to say that 'hard' security was severely lacking in this case. But we all know that -- now. Oh, I agree. That's why LTV50 and LTV90 are essential to understand. In the Plumber's case the answers are "not applicable", because the hard assets provided insufficient security to afford any protection against those levels of loss. The answers in the Plumber's case are "not applicable" only because results above 100% have been declared to be N/A. IMHO that's an artificial limitation, and I believe that results above 100% should be allowed -- and shown. Seeing that a loan's 'hard' security would have to be sold for 125%, 150%, or 200% of its value in order for lenders to achieve some specified level of recovery is a lot more informative than seeing 'N/A' as the result.
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Post by solicitorious on Mar 2, 2015 23:32:14 GMT
Oh, I agree. That's why LTV50 and LTV90 are essential to understand. In the Plumber's case the answers are "not applicable", because the hard assets provided insufficient security to afford any protection against those levels of loss. The answers in the Plumber's case are "not applicable" only because results above 100% have been declared to be N/A. IMHO that's an artificial limitation, and I believe that results above 100% should be allowed -- and shown. Seeing that a loan's 'hard' security would have to be sold for 125%, 150%, or 200% of its value in order for lenders to achieve some specified level of recovery is a lot more informative than seeing 'N/A' as the result. I will look into it. I had to calculate it programmatically moving down in very small decrements from 100%, and it takes a while to run. If I had to start at a 1000% or higher it could take forever... It was simpler to define everything over 100% as "n/a", meaning safety margin "not applicable" or "none available" [else some improbably high increase in the value of the security (under fire sale conditions)]
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Post by solicitorious on Mar 3, 2015 1:07:58 GMT
As a relative beginner, I would really appreciate if someone would explain what is meant by LTV0, LTV50, LTV90. Pretty please ! Thanks LTV0: the amount the security would have to fall to, percentagewise, for you to recover nothing. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV50: the amount the security would have to fall to, percentagewise, for you to recover half your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. LTV90: the amount the security would have to fall to, percentagewise, for you to recover 90% of your investment. In some cases it wouldn't have to fall at all, because it's insufficient to begin with. Remember when borrowers get into difficulty, such assets as they may have are usually sold quickly at a discount from the headline valuation given at the time of them taking out the loan. A knock-down to 70% of the initial valuation is not unusual. So, if you saw LTV0 of 70%, you are at high risk of losing EVERYTHING if things go bad... When evaluating a loan you could follow this bit of pseudocode. BEGIN REM: Only you can decide what is an acceptable value for low in this program IF LTV0 =0 OR is very low PROCEED WITH CAUTION ELSE EXIT IF LTV50 is low PROCEED WITH CAUTION ELSE EXIT IF LTV90 is low PROCEED WITH CAUTION ELSE EXIT PROCEED WITH CAUTION (again, just to make sure) END
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Post by lynnanthony on Mar 3, 2015 5:38:31 GMT
Today's event will have pleased virtually nobody, ... Who you calling a virtual nobody?!
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Post by lynnanthony on Mar 3, 2015 5:40:10 GMT
This one has gone live with very little fanfare. I was very lucky to have over 2.9k available and picked up far more than I expected. I've been zeroed out so I'm wondering what the maximum was. I picked up £7.5 at 16:48 and I wasn't "zeroed out". There were many lots of £1400 or £1500 so it looks to me as though there were only five people (myself included) who had set large enough targets for this on drawdown to hit maximum allocation. How can you tell who picked up what?
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baldpate
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Post by baldpate on Mar 3, 2015 7:26:46 GMT
Thanks for the explanation, solicitorious
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Post by solicitorious on Mar 9, 2015 1:10:49 GMT
The answers in the Plumber's case are "not applicable" only because results above 100% have been declared to be N/A. IMHO that's an artificial limitation, and I believe that results above 100% should be allowed -- and shown. Seeing that a loan's 'hard' security would have to be sold for 125%, 150%, or 200% of its value in order for lenders to achieve some specified level of recovery is a lot more informative than seeing 'N/A' as the result. I will look into it. I had to calculate it programmatically moving down in very small decrements from 100%, and it takes a while to run. If I had to start at a 1000% or higher it could take forever... It was simpler to define everything over 100% as "n/a", meaning safety margin "not applicable" or "none available" [else some improbably high increase in the value of the security (under fire sale conditions)] I've now optimized the code by making two passes. I can now generate an entire LTV curve for any loan. e.g. #156 
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mikes1531
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Post by mikes1531 on Mar 9, 2015 3:46:09 GMT
I've now optimized the code by making two passes. I can now generate an entire LTV curve for any loan. And interesting chart. If I'm interpreting it correctly, then if that same loan had a second charge as its security and the first charge was 30% of value, then the purple triangle would sit on top of a -- red?? -- rectangle of 30% height, so the purple triangle would start at 30% for zero recovery and increase to 81% for 100% recovery.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Mar 9, 2015 13:04:52 GMT
I've now optimized the code by making two passes. I can now generate an entire LTV curve for any loan. Like the Graph. So what does the graph for loan #66 look like ?
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! Thanks
