registerme
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Post by registerme on May 10, 2015 16:27:08 GMT
Do we (individuals) have any idea how the whole loan market works? How many WL investors are there? How much capital do they have to invest? Do they bid against each other for WLs in an equivalent rate auction? Do they get better info from FC, or the opportunity to do more due diligence?
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Post by goldservice on May 10, 2015 16:35:10 GMT
This is very interesting. We part loan bidders can get better rates on the larger loans. So I'd like to know what share of the larger loans the WL peeps are taking. Would you be able (in exchange for a gold star, perhaps) to determine the spread of loan values (eg <£100k, <£150k, <£200k, >£200k) between WL, WL/PL and PL? Many thanks.
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adrianc
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Post by adrianc on May 10, 2015 19:36:31 GMT
Do they bid against each other for WLs in an equivalent rate auction? Do they get better info from FC, or the opportunity to do more due diligence? I believe Fairly Competitive have said that WL lenders get offered the loans at the average rate of recent PL closures in that band. Given that they're going to be "proper real-world lenders", I don't think they'll need much more than the company name to do as much dd as they want, but - who knows - their questions to the borrower might even... get... ANSWERED...
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blender
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Post by blender on May 10, 2015 19:38:12 GMT
Thanks Timmy, a useful analysis. I see no real problem except that the reject ought to be visible as such. Note that the property loans do not go as whole loans.
To answer some questions - there is no auction for whole loans. The rate is fixed as an average of recent partial loans an it is just first come first served.
On the loan size, the choice is random and so the distribution of sizes on WL and PL should be the same. It would be interesting to know what sort of loans are rejected as WL. There may be a bias by band or size or region (I would exclude Wales). The suspicion is that the rejected ones may carry too much risk for the interest rate.
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sl75
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Post by sl75 on May 10, 2015 22:07:13 GMT
Taken as read, there may be a significantly greater number of loans in the lower ranges (0-100k) that first started in the WL market compared with those that first started in the PL market. An FC bias? Or innocent random variation? (I would not exclude the possibility that my analysis has an error, but I think it’s correct.) Your analysis would presumably be ignoring loans that were not taken up by the borrower. Larger loans in the PL market tend to be less oversubscribed, and thus borrowers are offered higher rates that they are less likely to take up.
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oldgrumpy
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Post by oldgrumpy on May 26, 2015 16:10:51 GMT
Withdrawn post ... mainly answered up-thread.
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