chrisf
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Post by chrisf on Feb 17, 2015 8:58:58 GMT
An interesting question in the Q+A for 10770. It appears to be the platforms 2nd best resourced flipper b****** asking the borrower if they are likely to close their auction early, and pointing out that if they do, the platforms best-resourced flipper t***** will do very well out of it at the expense of the borrower. It seems like shady practice to me. Can a lender who hasn't got the time/inclination/resource to chase early-closers but who likes be in at the end of an auction go through all of the auctions and put a question in the Q+A advising that the borrower should let the auction run to the end for the best rate (even though it is stating the obvious). The question has been there for a week without being moderated (it has a purple flag so has been reported) so it can't be breaking any rules.
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blender
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Post by blender on Feb 17, 2015 9:30:01 GMT
You could try "Does your business need this loan very urgently or are you happy to let this auction run to its close to get the lowest rate?"
It asks a valid question and breaks no rules. Not on every loan!
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Post by davee39 on Feb 17, 2015 10:14:10 GMT
This loan would need a massive volume of last minute cash to lower the rate to a more sensible level, having been filled at 15%. The borrower might do better rejecting it and returning later for two smaller loans which would be less likely to be manipulated in this way.
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Post by goldservice on Feb 17, 2015 12:38:09 GMT
The Q has been answered:
A. 17 Feb 2015 11:10 - Thank you for your feedback this is really useful. We are keen to secure the best rate possible and are not pressured into drawing funds immediately, we do intend to let the loan run its full course on the platform. I hope this has answered your question?
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chrisf
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Post by chrisf on Feb 17, 2015 12:50:03 GMT
...and then it will be crazy in those last ten minutes, the server won't cope with it, and that will help to keep the rate up too.
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oldgrumpy
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Post by oldgrumpy on Feb 17, 2015 12:50:13 GMT
One of the "moderated" "questions" gave the borrower the blunt advice to reject and relist because "system playing" by another "lender" would be responsible for a noticeable higher rate than necessary. FC were challenged on their lack of action to stop this activity which has been observed for a long time. No wonder they moderate their "unmonitored" Q and A so much. FC cannot tolerate public criticism.
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Post by GSV3MIaC on Feb 17, 2015 14:32:07 GMT
I don't think the 'pre-load it to chase away autobidders' will actually work when there are no other underfunded auctions for autobid to send the money to. The 'dump a load of money in big chunks in with 1 minute to go and crash the servers as they try to reject/return 000s of £20 bids' will still work OK though.
But I fear you are right about the FC culture .. it goes something like 'There shall be no criticism', 'There shall be no apology unless it is completely unavoidable', 'Never explain, forecast, or commit', 'The only news is good news'. Maybe they use Tony Blair's PR and spin agencies?
To be fair we did see one retraction, when the MBRs were introduced too high too fast (and that even got Samir to actually post something).
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blender
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Post by blender on Feb 17, 2015 16:02:10 GMT
One of the "moderated" "questions" gave the borrower the blunt advice to reject and relist because "system playing" by another "lender" would be responsible for a noticeable higher rate than necessary. FC were challenged on their lack of action to stop this activity which has been observed for a long time. No wonder they moderate their "unmonitored" Q and A so much. FC cannot tolerate public criticism. All the keen lender has done is to bid on the loan, just optimistically to get a large part at a high rate (though it is a C). FC had a plan in 2013 to limit the holding of each bidder to 20%, which would stop the perceived malpractice. They have not done it. (Probably the computations during the last phase of bidding would not help matters.)
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chrisf
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Post by chrisf on Feb 17, 2015 16:31:54 GMT
I wasn't suggesting that 'keen lender' t***** had done anything wrong (though I think it would be good if the 20% thing did apply to all bidders). What I thought dodgy was the way that b****** asked a question in a way that made out he was generously giving some advice to the borrower about how to achieve a lower rate, when I suspect he only had his own interests in mind.
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wysiati
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Post by wysiati on Feb 17, 2015 16:36:19 GMT
I don't think the 'pre-load it to chase away autobidders' will actually work when there are no other underfunded auctions for autobid to send the money to. The 'dump a load of money in big chunks in with 1 minute to go and crash the servers as they try to reject/return 000s of £20 bids' will still work OK though. Sounds right. Less than 5% of the request is accounted for by bids at the MBR and the overall rate is still 13.7% with under 24 hours to go. Compare the c.220k C- loan listed only yesterday which was still short of full funding at the end of the day prior to the overnight processing etc - within 24 hours having likely received much autobid attention it is already fully funded at below 13% aggregate with >80k of bids (almost 40% of the total request) at its MBR. Even allowing for the higher MBR of C- risk band loans the outcomes suggest that the system is not sufficiently flexible to adapt/moderate such variance in outcomes - some algo tweaking called for perhaps? The damage was probably already done in terms of both autobid and early smaller flipper participation. You should see some more late-stage bargain hunting so it could be a useful real test of some of the incremental changes recently made to live bids etc.
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blender
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Post by blender on Feb 17, 2015 17:07:55 GMT
... You should see some more late-stage bargain hunting so it could be a useful real test of some of the incremental changes recently made to live bids etc. Yes, but it is more that I feel morally obliged to do what I can to reduce the Borrower's interest rate, to some extent.
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coop
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Post by coop on Feb 18, 2015 11:23:35 GMT
Forgive my ignorance but dont really see how putting in a big bid at 15% would prohibit/put off others bidding and pushing the rate down... on the other hand I never autobid so dont know how that operates.
I'm lolling at moral obligation though!
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wysiati
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Post by wysiati on Feb 18, 2015 11:45:19 GMT
Forgive my ignorance but dont really see how putting in a big bid at 15% would prohibit/put off others bidding and pushing the rate down... on the other hand I never autobid so dont know how that operates. I'm lolling at moral obligation though! One school of thought... If the vast majority of the funding is plonked in at 15% it raises the following considerations (amongst others) - Flippers in particular may be deterred (forum members here have stated as much in relation to other loans) if it appears that you have a very determined bidder who could provide competition in the resale market in unusual £ size. - The aggregate rate starts at 15% which should be unacceptable for all but the desperate making acceptance seem less likely. - Not helped by these uncertainties the aggregate % rate will be slower to grind down to a % rate which might prompt early acceptance. Clarification by the borrower can help/hinder. - So, other bidders face the initial prospect of locking in funds for a full 7 day auction plus up to another week for completion by the borrower with a lower than average probability of the loan being completed. - Bidding early helps bring the rate down and based on the above some potential bidders will take the view that they can reasonably afford to wait and see how things develop. - The situation is generally worse with larger loans. - Etc etc
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coop
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Post by coop on Feb 18, 2015 11:49:05 GMT
Well put! Thank you.
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blender
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Post by blender on Feb 18, 2015 14:46:22 GMT
It's gone to pre-agreement, and so a good chance with my 13.5% bids.
The Borrower seems very competent - so it's worth a punt for a few months.
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