unmadem
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Post by unmadem on Apr 11, 2014 13:20:07 GMT
I agree with bengilbert too.
It is particularly frustrating when a date keeps moving a week at a time. The frustration would at least be reduced if when a date is missed we got an update rather than having to chase for an answer.
I remember andrewholgate putting in place changes at the start of the year. I was wondering what the stats were, has there been the improvement you hoped for Andrew ?
It isn't just about the reduced rate of return on bids on the primary market (which is bad enough) but also knowing when you need to add new funds to buy when it drawdown and becomes available on aftermarket.
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merlin
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Post by merlin on Apr 11, 2014 16:43:11 GMT
Andrew made some ambitious forecast for the growth of Assetz in the coming year at the Lenders Day and predicted that the loan book would grow from £20m to £100m over the coming year. I am sure most of us on this thread are keen to see this achieved and even exceeded. However whilst I understand how and why some loans get delayed in the drawdown phase, IMO this in itself could become a serious detraction to potential new lenders. Currently I have 9 loans awaiting drawdown, two of which date back to February and I am becoming increasingly irritated by the delay.
Assetz is putting much effort into developing its web site but I for one hope they are putting a similar amount of effort to improving the throughput of loans to completion.
Anyone else finding this a pain? I have been thinking about Andrew's hope that Asstez would achieve a loan book of £100m by the 2nd anniversary of the business. Now given that the current loan book is c£20m with 9 loans awaiting drawdown, extrapolating forward to the end of the year does this imply that we could then be waiting on 40+ loans to complete? Although my comment is tinged with a touch of irony it does carry a implied warning that something has to change and quick and not with just a quite nudge to the marketing department!
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markr
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Post by markr on Apr 11, 2014 17:37:01 GMT
Am I being thick (I usually am), but why not simply get the loans to the point when they could draw down immediately, *then* auction them. Most loans get fully funded so there's little chance of the work being wasted.
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ramblin rose
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Post by ramblin rose on Apr 11, 2014 17:40:29 GMT
Am I being thick (I usually am), but why not simply get the loans to the point when they could draw down immediately, *then* auction them. Most loans get fully funded so there's little chance of the work being wasted. Well if you are being thick then so am I because I was thinking exactly the same thing. And they'd probably fill more quickly because bidders wouldn't be hanging around trying to time their bids at the end so as to minimise dead time.
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mikes1531
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Post by mikes1531 on Apr 11, 2014 17:54:47 GMT
... perhaps the LendInvest model is one that would improve the situation. For those of us who don't know anything about LendInvest, could someone summarise their model in a sentence or two? Thanks.
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j
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Post by j on Apr 11, 2014 19:02:00 GMT
I don't see why not. Let me speak to our marketing team as they run the communication side. A Any chance we could also get an update on upcoming loans.
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bugs4me
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Post by bugs4me on Apr 11, 2014 21:36:54 GMT
... perhaps the LendInvest model is one that would improve the situation. For those of us who don't know anything about LendInvest, could someone summarise their model in a sentence or two? Thanks. I'll try - effectively you are buying in the AM - the loans are already funded. A couple of 'small' problems as I see it. Minimum 10k investment coupled with minimal information. Seems more of a - 'we've got the experience so you can trust us' - scenario. There were some postings earlier about reducing the 10k amount but nothing further materialised. AIUI, LendInvest do not see any requirement to release detailed information regarding investments - just a brief summary. Everything is property asset backed. Apologies - that was more than a couple of sentences.
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mikes1531
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Post by mikes1531 on Apr 11, 2014 21:49:15 GMT
For those of us who don't know anything about LendInvest, could someone summarise their model in a sentence or two? Thanks. I'll try - effectively you are buying in the AM - the loans are already funded. A couple of 'small' problems as I see it. Minimum 10k investment coupled with minimal information. Seems more of a - 'we've got the experience so you can trust us' - scenario. There were some postings earlier about reducing the 10k amount but nothing further materialised. AIUI, LendInvest do not see any requirement to release detailed information regarding investments - just a brief summary. Everything is property asset backed. Apologies - that was more than a couple of sentences. Thanks a lot. And there's no need to apologise. I'm very happy with more than just a couple of sentences, but I didn't want anyone to think they had to write a lot, as I was afraid that would prevent them from writing anything. This sounds a lot like the SS/W&C approach, which is great as long as the platform has the wherewithal to fund the loans before offering them to their lenders. If AC are hoping to grow their loan book to £100M in the current year, that could be a big ask.
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mikes1531
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Post by mikes1531 on Apr 11, 2014 21:57:47 GMT
I agree very much with bengilbert. It isn't so much the waiting as the lack of communication on it, an update only ever being given if asked for, and such requests sometimes taking a few days to get a response. i have suggested previously a weekly update on drawdown of all outstanding loans, either on here or via a weekly email. I think would do a lot to keep lenders calmer and happier about the issue. I'm quite sure most of the issues are out of Assetz's direct control and relate to solicitors etc who don't act on the day they say they will. However, communication is within control and I for one would welcome not having to trawl through every loan to find out if there is any update. Is what I am suggesting realistic andrewholgate? I agree, we shouldn't need to chase AC for updates. IIRC, chris has said that one of the system updates planned is to have a central place on the website where progress updates were supposed to be placed. I would have thought that would have been brought in at the same time that the LoanInfo tab disappeared from the individual loan pages, but that obviously didn't happen. Perhaps chris or someone else could give us an update on the status of this website enhancement?
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bugs4me
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Post by bugs4me on Apr 11, 2014 22:11:15 GMT
I'll try - effectively you are buying in the AM - the loans are already funded. A couple of 'small' problems as I see it. Minimum 10k investment coupled with minimal information. Seems more of a - 'we've got the experience so you can trust us' - scenario. There were some postings earlier about reducing the 10k amount but nothing further materialised. AIUI, LendInvest do not see any requirement to release detailed information regarding investments - just a brief summary. Everything is property asset backed. Apologies - that was more than a couple of sentences. This sounds a lot like the SS/W&C approach, which is great as long as the platform has the wherewithal to fund the loans before offering them to their lenders. If AC are hoping to grow their loan book to £100M in the current year, that could be a big ask. It is but if AC were able to underwrite all the loans before offering them then that would remove probably the biggest gripe folks have now - the delayed drawdown timescales. IMO it is the delays that will gradually put off investors so will have an impact on the growth plans of AC although I appreciate only time will tell on that opinion. I prefer the AM and that's where I'm active ATM. One loan I am waiting for drawdown has been extended by about 3 weeks at the request IIRC of the borrower. Sure there is some small compensation being added but dead money really impacts on the shorter term loans whereas with the AM you do not have the problem. If underwriters can offload their positions in the AM thereby releasing funds for underwriting new loans - and there would be every incentive for those offloadings to be snapped up due to investors earning money from day one, then AC and lenders could be in a win win situation.
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mikes1531
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Post by mikes1531 on Apr 11, 2014 22:11:24 GMT
Ramblin Rose-shadow bid facility is not the solution it may appear given the relationship of new loans appearing versus NONE drawing down.I'm in the position of having to settle shadow bids which are not yet due in order to free up shadw bid headroom.I've since increased my shadow "allowance" but if drawdown timescales dont improve I'll end up back in the same position. Thanks for the heads up on that - I hadn't realised there was a limit to the allowance. I suppose it makes some sort of sense, although FS didn't feel the need to impose one recently - perhaps AC have been 'bitten' by not imposing a limit at some point. AIUI, a lender's shadow bids are limited to no more than 25% of their account balance, but that this doesn't happen automatically. Lender's have to ask, and I haven't a clue how often AC say no to such a request. I expect there are a large amount of shadow bids on every auction and, since some of these auctions are for substantial sums, if I were AC I'd be a bit worried about the possibility of a number of auctions coming to drawdown at once, some lenders failing to settle their shadow bids when asked, and there being a shortage of funds at a critical moment that could cause real problems -- and damage their reputation. I don't know whether or not they've ever been 'bitten', but I think I've detected the appearance of a fair number of loan parts on the AM in the past when requests to settle shadow bids have been made. That's fine as long as there are plenty of buyers in the AM, but it could easily come unstuck if there weren't.
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mikes1531
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Post by mikes1531 on Apr 11, 2014 22:21:43 GMT
If underwriters can offload their positions in the AM thereby releasing funds for underwriting new loans - and there would be every incentive for those offloadings to be snapped up due to investors earning money from day one, then AC and lenders could be in a win win situation. I agree, but I also see how long it is taking for the aftermarket to absorb the underwriters' shares on some loans. For example, Ha****y. On Monday this loan will be a third of the way through its term, and the underwriters still have £260k of parts to offload. Also, between Ip****h and Ep****, underwriters have £1.9M of parts to shift, so those also may take some time to find buyers for.
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mikes1531
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Post by mikes1531 on Apr 12, 2014 1:40:18 GMT
Out of curiosity, I assume that AC will benefit from interest earned on lenders money that is not lent out? I am not suggesting for one moment that there is any deliberate attempt to delay loan completions for AC’s gain but at the end of the day we, the lenders are AC’s lifeblood and it’s our money lying idle.
I think you'll find that AC do not benefit from delays. Firstly, banks will pay only a pittance, if anything, on client accounts. Secondly, and much more importantly, AC get a 'loan monitoring' fee from the borrower that's typically in the range of 1-2% p.a. That produces nothing for AC until the loan is drawn down, so I'm sure they'd like to see everything proceed quickly to drawdown so their income stream can start.
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Post by jackpease on Apr 12, 2014 6:43:28 GMT
>>>>but why not simply get the loans to the point when they could draw down immediately, *then* auction them. If we like Assetz because we are lending against asset-based loans ie property, then presumably the loan has to be raised before the lawyers can tie it into the property, then presumably contracts are exchanged etc before the loan is released. I imagine this just like housebuying ie a series of frustrating delays seemingly caused by problems you imagined would have been dealt with before. So good security, long drawdowns. Other platforms do instant drawdowns and rely on director's guarantees. So security short drawdowns. But yeh, i am really fed up with half a dozen bids all sitting there too Jack
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mikes1531
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Post by mikes1531 on Apr 12, 2014 19:10:31 GMT
An alternative would be underwriting everything, and we lenders don't see anything until after drawdown when the loan parts appear on the AM. That solves the dead money problem, but causes other problems... - Underwriting doesn't come free, so we could expect lower returns; and
- The Q&A option becomes a lot less useful. We could still ask Qs, but would we get any As? (The borrowers have their money, so what's the incentive for them to provide As? The agents/introducers will have moved on to other deals, and would have the same lack of incentive.) Also, I'd hope that AC value the Q&A as a help to their own duedil efforts, inasmuch as we might ask Qs that they didn't think about.
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