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Post by chris on Jan 21, 2016 7:37:08 GMT
Not all interest rates will be published on the new list, that's not the reason. Sorry, I meant the list of upcoming loans you have posted on this thread as a preview didn't have any rates against any loans (was containing the time of loan, amount, duration), so I can only assume it was still being decided. I think interest rates in "recent" loans published on AC have gone down quite a bit, so I could see why such information has to be managed carefully, particularly when other platforms now also have loans with security at 12 or 13%. It's not so much about managing the information carefully, it's because the rates are still being finalised. With the way the introducer market works we often have to put an offer out on partially completed information. So it tends to be "based upon what you've told us we'll lend to you at x%". Once that offer is accepted the lender is legally obliged to go ahead with us and the full due diligence process starts. If everything they've told us is correct and the complete picture then they'll get their loan at x%, however if the circumstances of the loan are different then the rate is recalculated and can vary. So the rate will be displayed for loans where the repayment schedule has been fully entered but will not be displayed for other loans. That way the admin team will be able to decide when they're comfortable enough with the details that the rate is most likely accurate and enter it for display. With the other platforms may offer higher rates not all security is equal and borrowers are paying those rates for a reason. Where we find borrowers who we think are a good bet for our platform we'll lend at those rates in those sectors, but equally we aim to offer a wide range of loans with varying risk profiles. Different platforms will perform differently over time and particularly as economic conditions deteriorate.
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Post by chris on Jan 21, 2016 7:46:12 GMT
Because AC is a singular on going project with a fixed team we are personnel limited not budget / time limited, and that affords me a different approach. So it's more like an effort-driven model, or being Agile, where the business can prioritize their features based on development capacity available. Makes perfect sense, and many web or IT projects have moved to that model. I think AC has the best and most polished web site, when it comes to functionality and design, particularly when compared to FC for instance, which must have sacked its web development team 18 months ago. However, It's just "content", business available that is lacking on AC. It's a variation on the agile theme but with a little more up front speccing, as we have compliance to worry about. Works for us but wouldn't for most agencies where they have to give fixed quotes to customers. I appreciate the praise on the web site. Last time I checked FC had around 25 developers, five times more than us at current levels although the team will grow this year. There's still a heck of a lot of polish we can add so many feature ideas. I've got a list of over 30 projects on my table at the moment although not all are for the front end website. The loans are coming. Wish I could show you the internal graphs for activity at each stage of our pipeline. They've all been swinging massively upwards in turn, drawn loans is the final one to swing upwards which should start happening over the next couple of months.
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Post by chris on Jan 21, 2016 12:23:06 GMT
The loan pipeline is now being displayed. I'm promised the rates will be filled out asap as there's only one that has it at the moment. So please no grumbles about that for the time being!
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Post by oldnick on Jan 21, 2016 13:58:56 GMT
Hope for the future!
(Accepting your caveat that some may drop out along the way)
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sl75
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Post by sl75 on Jan 21, 2016 14:35:02 GMT
I guess anyone naive enough to believe AC's estimated drawdown on the pipeline loans will be expecting the last few days of January to be extremely busy for drawdowns based on the new list! I was mildly surprised to find that I already had a target set on one of the pipeline loans - I think it was one that was previously upcoming and they later pulled, but as none of the rest have interest rates, I'll wait for those before setting any more... As a suggestion for a future release, chris , could it be made possible to set a buy instruction for pipeline loans that takes effect if and only if the annual rate is at least some user-specified figure? [Although, this could lead to feeping creaturism, when someone else wants it only if the LTV is at least some figure, and someone else wants something else etc. - something that might be more appropriate for the Bespoke Investment Account, if that's ever pulled out of its mothballs] This would allow for setting of targets before a holiday without having to take a gamble on interest rate, and could also provide some feedback to the admin team about what interest rate lenders feel necessary for a particular (type of) loan. |
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Post by chris on Jan 21, 2016 14:44:43 GMT
I guess anyone naive enough to believe AC's estimated drawdown on the pipeline loans will be expecting the last few days of January to be extremely busy for drawdowns based on the new list! I was mildly surprised to find that I already had a target set on one of the pipeline loans - I think it was one that was previously upcoming and they later pulled, but as none of the rest have interest rates, I'll wait for those before setting any more... As a suggestion for a future release, chris , could it be made possible to set a buy instruction for pipeline loans that takes effect if and only if the annual rate is at least some user-specified figure? [Although, this could lead to feeping creaturism, when someone else wants it only if the LTV is at least some figure, and someone else wants something else etc. - something that might be more appropriate for the Bespoke Investment Account, if that's ever pulled out of its mothballs] This would allow for setting of targets before a holiday without having to take a gamble on interest rate, and could also provide some feedback to the admin team about what interest rate lenders feel necessary for a particular (type of) loan. A new step has been added to the back office process that forces the admin team to enter the rate in the borrower's offer letter into the system. That will mean that any loans added to this list will have to have their rates filled in moving forward. I'm just waiting back for confirmation of when this data will be entered for all the loans in the pipeline but I'd expect it to be in the next couple of working days. The expectation is that this rate is the floor at which we'll lend to that lender barring new security being offered. So the rate could go up as the due diligence process proceeds, however if it falls then the agreed process is that we'll suspend all lender targets that have been set up to that point and ask lenders to confirm they still want to go ahead.
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SteveT
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Post by SteveT on Jan 21, 2016 14:48:04 GMT
Could we also have an optional user setting that doubles our normal investment target for all loans that will in time go a bit wobbly, enough for default interest to be payable for 12 months or so, and then happily recover to repay capital and accrued interest in full?  |
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Post by chris on Jan 21, 2016 15:29:59 GMT
Rates are now available for most of the loans in the pipeline.
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registerme
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Post by registerme on Jan 21, 2016 15:38:30 GMT
Rates are now available for most of the loans in the pipeline. Minor point, sorting by Annual Rate doesn't appear to work properly / or perhaps as I would expect.
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Post by Butch Cassidy on Jan 21, 2016 15:38:51 GMT
Rates are now available for most of the loans in the pipeline. Wow - I can now see why AC have been hiding them, 1/29 over 10% - I thought only FC was manipulating it's rates lower to drive volume; I just hadn't realised that lending had got so safe 
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jan 21, 2016 16:05:05 GMT
Rates are now available for most of the loans in the pipeline. Wow - I can now see why AC have been hiding them, I thought only FC was manipulating it's rates lower to drive volume; I just hadn't realised that lending had got so safe Im not sure they are that inconsistent with what has gone before (and theyre only the base levels so may be higher ultimately) 7-8% for a BTL consistent with earlier loans (6.5%), business loans @10% thats not really changed over last 6 months. The big change is the bridging loans but then they are much smaller all under £500k (thank god because the big, high rate ones didnt turn out so good).
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Post by chris on Jan 21, 2016 16:29:42 GMT
Rates are now available for most of the loans in the pipeline. Wow - I can now see why AC have been hiding them, 1/29 over 10% - I thought only FC was manipulating it's rates lower to drive volume; I just hadn't realised that lending had got so safe If you don't like the loans then vote with your feet. At the moment we have a wave of cash wanting to do business with the quality our underwriting process works to achieve at the rates we're offering, and we've been working very hard to find our place in the borrower market where we have an attractive offering. We've said before that it would be easy to drop our underwriting criteria, bump rates upwards a little bit, and make hay whilst the sun shines but we do not think that's a recipe for long term success and goes against our core ethos. Every single one of these loans has a rate being paid calculated on our assessment of the risks. If all you do is look at the rate and want 12% every time then this isn't the platform for you.
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Post by Butch Cassidy on Jan 21, 2016 16:48:33 GMT
Wow - I can now see why AC have been hiding them, 1/29 over 10% - I thought only FC was manipulating it's rates lower to drive volume; I just hadn't realised that lending had got so safe If you don't like the loans then vote with your feet. At the moment we have a wave of cash wanting to do business with the quality our underwriting process works to achieve at the rates we're offering, and we've been working very hard to find our place in the borrower market where we have an attractive offering. We've said before that it would be easy to drop our underwriting criteria, bump rates upwards a little bit, and make hay whilst the sun shines but we do not think that's a recipe for long term success and goes against our core ethos. Every single one of these loans has a rate being paid calculated on our assessment of the risks. If all you do is look at the rate and want 12% every time then this isn't the platform for you. I have got to admit I have, reluctantly & with a very heavy heart (as an early adopter & soon to be shareholder) been toying with that very idea but as one third of my portfolio is now suspended that will be easier said than done!!
I agree with your point on high u/w criteria but disagree that any other platform with better rates would, by implication, have riskier borrowers or less of a long term future. I really hope that the lower rate loans work out but if the "suspension rate" of the previous AC loans continues into the future those rates don't reflect the risk - not just risk of capital &/or interest loss (which I believe is still quite low) but the risk of a large portion of the loanbook being in limbo for months & sometimes years to come. Not having access to a large investment is a serious platform risk that u/w or rates don't take account of.
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Post by andrewholgate on Jan 21, 2016 17:19:55 GMT
Your points are noted. Our current average rates for lenders are over 10% for those being offered now and we have done lower rates (6.5%) before. Nothing fundamentally has changed there. It did nudge up slightly past 11% in 2015 for a while, but longer term 10% has been the level. In terms of the suspensions. We are not unsuspending the current batch of suspended loans. I'm not going in to more detail as we have said our piece on this before. Put simply, those loans in their current state should be held back from less sophisticated lenders and the only way to do this is to suspend the loans. I know this is painful. It is a necessary evil I'm afraid. Longer term, we have some ideas we are working on and I want to ensure that when a loan does enter difficulties we have a better way of dealing with it on the platform. That will take some work, and we are exploring different solutions. Those loans have turned out to be messy, and two of them incredibly so. This does happen in secured lending from time to time, and we just happen to have one on our books. If I could free it up, I would, but the complex nature of the recovery simply means we cannot do that. The banks have mis-sold PPI and SWAPS, and I'm sure there would be a lawyer out there looking for P2P "scandals". Granny Weatherwax buying into a defaulted loan and she loses all her life savings... I can see the Daily Mail now! Sorry, but those loans will stay frozen for now. As I say, we are working on new solutions. As soon as we can implement them, we will.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jan 21, 2016 17:43:18 GMT
We got one!
Ladies & Gentlemen The cupboard is no longer bare, #224 is scheduled to drawdown tomorrow. Its a spicy little Italian number paying 8% on £70k at 73%LTV
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