registerme
Member of DD Central
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Post by registerme on Oct 27, 2015 10:13:50 GMT
I haven't yet exited FC, being in wind down mode (no rush), but yes, I still visit this forum just for the wit and commentary  . |
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Post by jackpease on Oct 27, 2015 10:18:42 GMT
I like SS and have a good chunk in it but beware of jumping from one ship that has been broadly tested and survived defaults to one that hasn't.
If a platform paying 12% goes pop there will be a chorus of hindsight merchants crowing that it was all too good to be true and SS is definitely not too big to be allowed to fail.
Jack P
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Post by Deleted on Oct 27, 2015 10:37:51 GMT
I suggest that jumping ship from FC is a mistake unless you carry out some of the flipper activities which of course now struggle or have morphed. For me the route out of FC is a gradual decline. However they, like RS, offer a more mature type of lending and I expect to be receiving interest at ever higher rates (as the short term loans repay) over the next 5 years. What has interested me is how few borrowers have gone for closing a loan early for a new one at a lower rate, so either the costs to FC or the intermediaries are too high, that gives me hope that my 5 year loans will survive, though the default risk remains as ever.
FS, SS, MT etc are not the complete answer, they offer higher rates for a higher risk reason and each person's appetite for risk varies by perception and life experience.
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Post by goldservice on Oct 27, 2015 11:06:38 GMT
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blender
Member of DD Central
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Post by blender on Oct 27, 2015 14:03:45 GMT
Who holds the charge, please, lenders or SS? Do you still lend to the platform with SS or has that changed?
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registerme
Member of DD Central
Posts: 6,624
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Post by registerme on Oct 27, 2015 14:16:57 GMT
Changing. New loans are going on the new structure, some old loans are meant to be migrated, other old loans will likely roll off.
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dorset
Member of DD Central
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Post by dorset on Oct 27, 2015 15:12:23 GMT
I don't want to leave but am now withdrawing funds due to the lack of suitable loans.
For a while I have been in equilibrium as new loan opportunities just about covered incoming repayments but I am now building up uninvested surpluses which are being taken out at £1,000 per pop.
I have been in FC since 2011 and this is the first time that I have resorted to taking money back. Not my choice but what on earth has happened to the loan flow?
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Post by GSV3MIaC on Oct 27, 2015 15:32:14 GMT
Looking at the weekly summaries, a lot of it went to WLs (of which we sample only the rejects), a lot of it went away (replaced with property loans) and a lot of the rest turned into over-rated under-rewarding 'A+ 'opportunities'.
Which is a long-winded way of saying 'me too'. 8>.
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Post by Financial Thing on Oct 27, 2015 16:07:45 GMT
I'm really surprised about this "jumping ship" mentality, especially into high risk platforms. Blinded by interest rates rather than looking at the long term risk reduction?
We'll see how this plays out.
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acky
Posts: 481
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Post by acky on Oct 27, 2015 16:15:49 GMT
I don't want to leave but am now withdrawing funds due to the lack of suitable loans. For a while I have been in equilibrium as new loan opportunities just about covered incoming repayments but I am now building up uninvested surpluses which are being taken out at £1,000 per pop. I have been in FC since 2011 and this is the first time that I have resorted to taking money back. Not my choice but what on earth has happened to the loan flow? The loan flow has not reduced. Monthly average accepted (excluding whole loans) is about £24.5 million over the last 6 months and October is heading towards that figure. We see fewer loans on the marketplace because they are filling quicker in the "fixed rate" world. And I really do think the quality has fallen (even though a greater proportion are apparently A+).
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Post by goldservice on Oct 27, 2015 16:30:41 GMT
I'm really surprised about this "jumping ship" mentality, especially into high risk platforms. Blinded by interest rates rather than looking at the long term risk reduction? We'll see how this plays out. After two years (A and A+ only) my feeling about Fragile Credit is that there are so many defaults that it is itself a high risk platform 
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Post by GSV3MIaC on Oct 27, 2015 16:33:57 GMT
Counting millions is misleading though .. a couple of property loans can rack up £3m between them, while it used to take 30 x £100k SME loans to get there, and once you have bought tranche1 of the property loan, tranches 2-N are of little interest in most cases (cash back flippers excepted).
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Post by Financial Thing on Oct 27, 2015 17:09:36 GMT
I'm really surprised about this "jumping ship" mentality, especially into high risk platforms. Blinded by interest rates rather than looking at the long term risk reduction? We'll see how this plays out. After two years (A and A+ only) my feeling about Fragile Credit is that there are so many defaults that it is itself a high risk platform When you have just South of £1bn in loans, defaults are par for the course. Statistically speaking, I don't see FC as being a high risk platform but if their underwriting standards drop, that's another story. I look at platform sustainability more that anything because if the platform can't sustain, then the real headaches will follow. Newest example is Fruitful, they just announced winding down their P2P platform after finding they can't sustain their business model. FC has shown its ability to scale and grow and should be profitable soon. Now if they could sort out their web tech issues. 
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ablender
Member of DD Central
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Post by ablender on Oct 27, 2015 17:45:10 GMT
I cannot understand the reasoning that FC's unsecured loans are better than SS's secured loans especially considering the interest rate difference. A security is always better. There is also the fact that SS is lending its own money in many of the loans. If they are confident about these loans I think that they should be secure enough. On top of this there is also a fund of 2% of the loan book which they can use to make up losses. I know that they are not forced to do it but I think it would be economical suicide if they had to back out of it.
Having said all this, I am totally new to investing so I might be short sighted and would appreciate any comments.
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dorset
Member of DD Central
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Post by dorset on Oct 27, 2015 18:42:59 GMT
I'm really surprised about this "jumping ship" mentality, especially into high risk platforms. Blinded by interest rates rather than looking at the long term risk reduction? We'll see how this plays out. Not sure why you think that we are going into higher risk platforms? A chunk of my FC cash taken out this month has gone into RS 36 months at an average of 5.5% after costs and with a provision fund. I am convinced that a lot of the non property A+/A loans coming up on FC would have been A/B six months ago.
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