arbster
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Post by arbster on Oct 29, 2015 15:23:58 GMT
They only managed 7 repayments, so unless they leveraged themselves massively in the last 6 months, most of this should have been evident to FC during their pre-lending due diligence. Unless, of course, the borrower was fraudulent in their declarations. I bet the "asset-based lenders" mentioned get more of their money back than we do...
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adrianc
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Post by adrianc on Oct 29, 2015 15:47:10 GMT
They only managed 7 repayments, so unless they leveraged themselves massively in the last 6 months, most of this should have been evident to FC during their pre-lending due diligence. <shrug> First repayment Feb 12th, so auction immediately after new year. Q&A page has Jan 7th comment from FC saying previous auction, 9676, due to borrower "not being in position to accept" (whatever that means). 9671 appears to have been listed Dec 16th - so DD in Nov? Supplier went south April.
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arbster
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Post by arbster on Oct 29, 2015 16:04:18 GMT
I guess I was referring to the highly-leveraged nature of the business, rather than the particular domino that fell first. Maybe I'm expecting too much, or just using 20/20 hindsight.
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Post by bonfemme on Nov 5, 2015 18:33:38 GMT
I was really hoping I could get past just one Thursday without a gloomy comment. Not so. What's more depressing is that at the moment they are virtually always £18 or £19 (x 2 or 3 sometimes). Hardly ever is there a £5.42 or even a £10.84. Sick of it. Wahey ...... what a refreshing change. Just one default today and it's for 0.63p
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nick
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Post by nick on Nov 5, 2015 19:23:13 GMT
I guess I was referring to the highly-leveraged nature of the business, rather than the particular domino that fell first. Maybe I'm expecting too much, or just using 20/20 hindsight. Hindsight is a great thing. Seems like the real problem is was not necessarily the operational leverage (I believe most businesses are fairly leveraged and should be maximising use of supplier credit within reason), but the credit concentration and dependency on a few suppliers. It is difficult to pick-up and reliably identify and measure such risks from a high level review at underwriter level. Hopefully the A+ rating will reflect on the final recovery % and that there was some control in the company's demise.......
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Post by bracknellboy on Nov 5, 2015 19:41:42 GMT
I was really hoping I could get past just one Thursday without a gloomy comment. Not so. What's more depressing is that at the moment they are virtually always £18 or £19 (x 2 or 3 sometimes). Hardly ever is there a £5.42 or even a £10.84. Sick of it. : lucky you. Most of mine are normally in the +£200 category. Today's contributor to the -ve list is £211 + shrapnel. Mind you, currently just downgraded due to notice of "a signifcant county court judgement". So that should turn out alright then. With an ever reducing loan book, and in passive run down mode, I probably should take a long hard look and trim back significantly i.e. go active sell rather than passive run down.
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Post by p2pinfo on Nov 6, 2015 11:52:51 GMT
Wonder how people's default rates compare to the official statistics?
It just seems to me that the statistics aren't reflecting reality. On the face of it, it looks like the E loans have a good performance with only £91k late.
However, that might equate to around 20-40 late E loans already (as FC must refer to the payments only that are late, not the entire amount of the loan) and it seems to be that there 120 E loans on the books. That is a pretty alarming rate of non-payment at a very early stage of the loan and could only get worse as the loans go on.
You have to wonder if FC might start gaming the statistics, saving defaults for one year for smoothing purposes.
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bigfoot12
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Post by bigfoot12 on Nov 6, 2015 11:57:47 GMT
For all FC's faults they are not Bondora. The £91k covers 3 loans and is the total capital (and possibly interest - not sure) outstanding. You can click on loan volume to see the number 3, or you can download the entire loan book. One of the great things about FC (and RS and Zopa) is the transparency.
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SteveT
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Post by SteveT on Nov 6, 2015 12:37:04 GMT
Wonder how people's default rates compare to the official statistics? It just seems to me that the statistics aren't reflecting reality. On the face of it, it looks like the E loans have a good performance with only £91k late. However, that might equate to around 20-40 late E loans already (as FC must refer to the payments only that are late, not the entire amount of the loan) and it seems to be that there 120 E loans on the books. That is a pretty alarming rate of non-payment at a very early stage of the loan and could only get worse as the loans go on. You have to wonder if FC might start gaming the statistics, saving defaults for one year for smoothing purposes. You need to understand that Financial Contortions aren't looking to beat their projected bad debt rates for each risk band, they're trying (more or less) to hit them. Hence their willingness to award A+ status to increasing numbers of rather dubious looking loans since all of the A+ property loans have performed to date, which is flattering the overall average A+ default rates. This, of course, is nonsensical and there ought to be an entirely separate risk band for the secured property loans, with A+ SME loan criteria remaining unaffected. Likewise the bad debt rates on E band loans are likely to look great until the defaults start adding up 6 / 9 / 12 months down the line. If, in time, FC feel that they are tracking to undershoot their projected bad debt rate, they will simply relax the lending criteria further and accept even dodgier loan applications.
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adrianc
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Post by adrianc on Nov 6, 2015 12:49:27 GMT
Give 'em half a chance... The first Es were only launched at the end of June! The first E loan drew down on the 1st July, so the first payment on the very first E loan was due at the start of August, meaning the very first 30+ late possible was at the very, VERY end of August. That's only two months ago... So three Es have gone 30+ late in their first two months.
Now, OK, these are 30+ late, not defaulted. Yet. Gotta give 'em a bit more time before they get to that state - and every default starts off as 30+ late, without any chance to sell...
But... 3 out of 120 so far. 2.5%, against an expected bad debt rate of 8%. Except that's in two months, not a year - so that's 15% per year.
Except... Not all of those 120 Es can even have reached the 30+ late rate yet. Only 67 have been around for 30 days after their first payment date. So that's 3 of 67 - 4.5% - in two months - 27%...
And that's assuming linearity, which is probably unfair - the first two months are, after all, the safest...
Can somebody remind me why I don't bother with Es, because I'm suddenly feeling SOOOOOOOOO tempted?
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jayjay
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Post by jayjay on Nov 6, 2015 13:20:29 GMT
Wonder how people's default rates compare to the official statistics? It just seems to me that the statistics aren't reflecting reality. On the face of it, it looks like the E loans have a good performance with only £91k late. However, that might equate to around 20-40 late E loans already (as FC must refer to the payments only that are late, not the entire amount of the loan) and it seems to be that there 120 E loans on the books. That is a pretty alarming rate of non-payment at a very early stage of the loan and could only get worse as the loans go on. You have to wonder if FC might start gaming the statistics, saving defaults for one year for smoothing purposes. You need to understand that Financial Contortions aren't looking to beat their projected bad debt rates for each risk band, they're trying (more or less) to hit them. Hence their willingness to award A+ status to increasing numbers of rather dubious looking loans since all of the A+ property loans have performed to date, which is flattering the overall average A+ default rates. This, of course, is nonsensical and there ought to be an entirely separate risk band for the secured property loans, with A+ SME loan criteria remaining unaffected. Likewise the bad debt rates on E band loans are likely to look great until the defaults start adding up 6 / 9 / 12 months down the line. If, in time, FC feel that they are tracking to undershoot their projected bad debt rate, they will simply relax the lending criteria further and accept even dodgier loan applications. I think you are right that that is what FC seem to be doing. The scary thing to me is that defaults will follow the economic cycle not an even pattern as that analysis suggests. The attrition rates in an economic downturn are likely to be very nasty indeed in this scenario, and for my money I would like to see FC realistically under targeting their expected default rates by large margins in the current environment. It will be too late to 'tighten' up criteria on A+ when they are defaulting at 10%pa.
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jayjay
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Post by jayjay on Nov 26, 2015 15:59:47 GMT
I cant see any defaults today. Can they still come after 4pm? When was the last clean sheet?
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acky
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Post by acky on Nov 26, 2015 16:02:23 GMT
I cant see any defaults today. Can they still come after 4pm? When was the last clean sheet? There's always "Fergie time"
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min
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Post by min on Nov 26, 2015 16:16:43 GMT
I cant see any defaults today. Can they still come after 4pm? When was the last clean sheet? Was thinking the same but didn't want to speak too soon. Hope you haven't put the kybosh on it! Hasn't been a clean sheet since the 'improved' system where you don't get individual emails. The emails used to be sent at 6pm, presumably so you couldn't ring them up and shout down the phone and by the morning had calmed down a bit. Interesting (but meaningless) fact. My recoveries make up almost exactly 10% of my net earnings.
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jayjay
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Post by jayjay on Nov 26, 2015 16:25:29 GMT
I cant see any defaults today. Can they still come after 4pm? When was the last clean sheet? Was thinking the same but didn't want to speak too soon. Hope you haven't put the kybosh on it! Hasn't been a clean sheet since the 'improved' system where you don't get individual emails. The emails used to be sent at 6pm, presumably so you couldn't ring them up and shout down the phone and by the morning had calmed down a bit. Interesting (but meaningless) fact. My recoveries make up almost exactly 10% of my net earnings. Ah those unwelcome eMails....My recovery rate is 20%. and will get a boost if we ever get 7079, an A+ who has allegedly sold a property and promised to clear what will be another 10% for me. Fingers are crossed.
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