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Post by GSV3MIaC on Sept 1, 2015 7:19:36 GMT
Surprised to see a new E (15399) listed today, Bank Holiday. Is this a cast-off from the Whole Loans marketplace? There were actually 4 listed on the holiday, one small E which went to MBR very fast. I didn't check the loan numbers, but rejected WL seem the most likely reason.
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nick
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Post by nick on Sept 1, 2015 19:41:06 GMT
Yep, but it's a 6-monther which makes it pretty much un-flippable at a profit, even if you could buy it above the 18.2% level. We can debate about whether 6 month E is more or less likely to go mammaries skyward than a 60 month E, but personally I am firmly in the 'hands in pockets' brigade for this one (not that my £100, or even £600, would make a big difference). I suspect the big flippers feel the same. One thing I've noticed is there seems to be a higher demand for short duration E loans. All E loans i've resold with 12 and 24 mth maturities have gone like hot potatoes at above average premiums and thus unusually low effective rates for the buyer. It seems that there are a number of buyers in the SM who place significant value on short dated loans (although I scratch my head as presumably liquidity is cannot be the cause given the ability to quick realise cash in the liquid SM). Just an observation which I think strange. I can't recall the size of the loans, but they weren't very small, although smaller than the one subject to this discussion).
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arbster
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Post by arbster on Sept 2, 2015 7:45:23 GMT
Interestingly, I met two separate investors at the FC investor evening who said they only invested in loans of up to 2 years on FC, due to their discomfort over longer term lending rates. It could be that they were representative of a group of investors who buy and hold to term, but only short-term or established loans.
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Post by GSV3MIaC on Sept 2, 2015 11:52:41 GMT
It was true - not sure how the new 'lower rate for shorter term' is going to affect it, if at all. Selling on SM, short loans have historically sold for higher prices (lower rates) than you would suspect (although still more scope for profit flipping a 60 month loan than a 6 month, but not the 10x you might expect).
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fasty
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Post by fasty on Sept 4, 2015 14:42:02 GMT
I sneezed and missed today's token "E" (15477) Not so disappointed considering several recent ones I rushed to bid on have declined the dosh. Can't blame them really, looks like they could save a few quid by waiting.
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Post by goldservice on Sept 4, 2015 15:30:45 GMT
7 (58%) rejects for E loans issued 12-28 Aug out of 12 that I had bids on and have been determined. Cf 2 (5%) rejects out of 43 for 1 Jul - 11 Aug. I did wonder if Frankly Careless has been advising E borrowers to withdraw (at no cost to them but some loss to bidders) and come back when the new fixed rate regime is in place. But the new fixed rate won't be much less than the current virtually fixed 18.2%.
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blender
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Post by blender on Sept 4, 2015 15:51:18 GMT
I completed my test of E loans by buying two early ones and selling before the second payment. Went at a modest 0.5% mark up, but lost interest on money tied up on a third which refused at the last moment.
Worthwhile - annualised returns over 20% - but the future rather uncertain at present.
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grahamg
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Post by grahamg on Sept 4, 2015 18:03:29 GMT
I see that Faintly Credible have thrown another A+ googly and a perfect example of the rating shambles and why its going to be more of a disaster at fixed rates with more autobodge bidding, than it already is has just turned up. Loan 15511.
Farmer wants to borrow 60K but is only making 11K or less profit. Not even enough to pay the principal back. Can only go bust yet its A+ rated and the flippers have piled in no questions asked (Bazinga is in for at least £12640. 316 bids in less than one minute.). The more sensible of you for a lot less.
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wysiati
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Post by wysiati on Sept 4, 2015 19:14:11 GMT
I see that Faintly Credible have thrown another A+ googly ...... Even if your judgement of the loan quality is correct fundamentals are not the key driver in the current transitional phase before fixed rates. There is a land grab to accumulate LPs at levels above the proposed fixed rates to sell on and it would in any case be a mistake to naively assume that participation in any auction reflects a fundamental view of a given borrower/loan proposition.
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Post by GSV3MIaC on Sept 4, 2015 19:30:20 GMT
Not necessarily even to sell on (although that is an option) .. if next week A+s are going to only be available at 8%, then every reason to accumulate some at higher rate while they are available. OK, 'accumulate too many and sell the excess' is one option, but even just accumulate what you want to hold causes a goldrush, once you know the grass in the next field is actually not going to be greener .. more likely going to be gnawed to stubble. I doubt b*z*nga intends to hold them for long though, but some of the bidders might well.
fwiw, in the other place David K (who seems to be chief flak-taker this week) says that max premium on loan part sales is not going to rise from 3%, even when the discount boundary moves to -20%, so no point holding in the hope of getting more than 3%. He also says autobodge buying at discount will be here next week-ish, but manages to not say whether it'll strive to get you the best deal or just 'any deal which meets your rate threshold for that risk band'. Draw your own conclusions as to the efficacy of the autobodge code update!
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am
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Post by am on Sept 4, 2015 20:13:41 GMT
I see that Faintly Credible have thrown another A+ googly and a perfect example of the rating shambles and why its going to be more of a disaster at fixed rates with more autobodge bidding, than it already is has just turned up. Loan 15511. Farmer wants to borrow 60K but is only making 11K or less profit. Not even enough to pay the principal back. Can only go bust yet its A+ rated and the flippers have piled in no questions asked (Bazinga is in for at least £12640. 316 bids in less than one minute.). The more sensible of you for a lot less. I suspect that FC's credit rating algorithm places more weight on the existence of seizable assets and less on the ability to service a loan that we do. Even so, this business doesn't have a particularly hefty balance sheet.
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blender
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Post by blender on Sept 4, 2015 20:43:32 GMT
... fwiw, in the other place David K (who seems to be chief flak-taker this week) says that max premium on loan part sales is not going to rise from 3%, even when the discount boundary moves to -20%, so no point holding in the hope of getting more than 3%. He also says autobodge buying at discount will be here next week-ish, but manages to not say whether it'll strive to get you the best deal or just 'any deal which meets your rate threshold for that risk band'. Draw your own conclusions as to the efficacy of the autobodge code update! Yes it is important to know how the Mk II Autobid will function, but we will only find the detail by treating it as a black box and observing its behaviour.
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blender
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Post by blender on Sept 4, 2015 20:57:42 GMT
I see that Faintly Credible have thrown another A+ googly and a perfect example of the rating shambles and why its going to be more of a disaster at fixed rates with more autobodge bidding, than it already is has just turned up. Loan 15511. Farmer wants to borrow 60K but is only making 11K or less profit. Not even enough to pay the principal back. Can only go bust yet its A+ rated and the flippers have piled in no questions asked (Bazinga is in for at least £12640. 316 bids in less than one minute.). The more sensible of you for a lot less. Farm accounts do not always tell the whole story. But I agree that A+ does not seem right. How can a farm which owns 680 acres of farm land have fixed assets under £900k?
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Post by mostlywrong on Sept 4, 2015 21:45:38 GMT
I see that Faintly Credible have thrown another A+ googly and a perfect example of the rating shambles and why its going to be more of a disaster at fixed rates with more autobodge bidding, than it already is has just turned up. Loan 15511. Farmer wants to borrow 60K but is only making 11K or less profit. Not even enough to pay the principal back. Can only go bust yet its A+ rated and the flippers have piled in no questions asked (Bazinga is in for at least £12640. 316 bids in less than one minute.). The more sensible of you for a lot less. Farm accounts do not always tell the whole story. But I agree that A+ does not seem right. How can a farm which owns 680 acres of farm land have fixed assets under £900k? A sodding great mortgage or the land is owned by someone else - he might be a tenant farmer. MW
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am
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Post by am on Sept 5, 2015 6:39:23 GMT
A sodding great mortgage or the land is owned by someone else - he might be a tenant farmer. MW One would expect that the former to show up has a hefty entry in fixed assets and a corresponding hefty entry in long term liabilities; the latter is contradicted by the statement that he owns the land.
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