blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 4, 2015 18:45:55 GMT
It would not be sensible to tag a loan part with having been bought by autobid at MBR (and only at MBR) and then to keep a running account of all changes - sales of such parts to manual purchasres and purchases of all all parts on the SM by Autobid at the historical MBR applying at the time of the auction - so as to keep a check on the total percentages of the reducing total capital. Whether it is "sensible" or not would depend on what it was that FC wished to achieve by having the 50% (now 65%) quota. However, Becky's comment seems to support my original assumption, as it refers to 50%/65% "of each new loan". As MBR is rarely relevant on variable-rate auctions, I'd concur with pepperpot's suggestion that this is probably primarily directed at the fixed-rate property loans. No need for assumptions, or memory. From FC blog Edit 24th June 2013 "Additional information on how minimum bid rates will work There will now also be a limit on the portion of a loan that can be funded by Autobid users at the minimum bid rate, to ensure that both Autobid users and those bidding manually have equal opportunities to lend on a loan requests. Up to 50% of the available amount of the loan can be funded by Autobid users bidding at the minimum bid rate. So on loans where Government funds 20% of the loan, a maximum of 40% of the loan can be funded by Autobid users at the minimum rate. Autobid users will be able to fund more of the loan if they bid above the minimum bid rate."
|
|
sl75
Posts: 2,092 
Likes: 1,245
|
Post by sl75 on Aug 4, 2015 19:03:31 GMT
No need for assumptions, or memory. From FC blog 20 June 2013 That's just outsourcing your memory to the FC blog! 
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 4, 2015 21:36:39 GMT
No need for assumptions, or memory. From FC blog 20 June 2013 That's just outsourcing your memory to the FC blog! I call it archival research based on the post in another place. But memory tells me that the purpose was to respond to requests from unhappy manual bidders, not a scheme of FC's for some nefarious purpose. FC's plan to introduce the first MBRs, to raise the floor, failed because of the insistence of lenders to be able to bid as low as they wished - turkeys insisted on their right to celebrate Christmas. Edit: Sorry, it was 24th June - picked up the wrong date.
|
|
|
|
Post by GSV3MIaC on Aug 5, 2015 9:11:57 GMT
Actually the turkeys were objecting to a sudden, unannounced, overnight step change from 4% to something 2 or 3x higher.
Once FC moderated it a bit, and introduced it with some notice, it went through fairly painlessly. It only becomes an issue (MBRs that is) when something at MBR is generally deemed to be desirable a a rather lower rate (hence sells like hotcakes on the SM at a fat premium .. the initial C-s, and now Es, seem to be in that category). People want Es at 17.5% (I just sold one for that) and don't see why they have to buy them on the SM to get them at 17.5%, guaranteeing a profit for whatever bot grabbed them at 18.2%. I concur - the MBR for Es is just too high (based on the 8% default rate assumed, and the new tax treatment of losses). Or else D max rate is too low.
Oh, and the main forum links seem flaky again this AM .. got here via the .net back door. 8>.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Aug 5, 2015 10:28:17 GMT
Actually the turkeys were objecting to a sudden, unannounced, overnight step change from 4% to something 2 or 3x higher. Once FC moderated it a bit, and introduced it with some notice, it went through fairly painlessly. It only becomes an issue (MBRs that is) when something at MBR is generally deemed to be desirable a a rather lower rate (hence sells like hotcakes on the SM at a fat premium .. the initial C-s, and now Es, seem to be in that category). People want Es at 17.5% (I just sold one for that) and don't see why they have to buy them on the SM to get them at 17.5%, guaranteeing a profit for whatever bot grabbed them at 18.2%. I concur - the MBR for Es is just too high (based on the 8% default rate assumed, and the new tax treatment of losses). Or else D max rate is too low. Oh, and the main forum links seem flaky again this AM .. got here via the .net back door. 8>. Using the back door is equally valid nowadays. Resistance to MBR was nothing do do with flippers stuck with stock, then? Agree that D max is too low. I have no opinion on E MBR yet.
|
|
|
|
Post by nickthefool on Aug 5, 2015 10:41:04 GMT
...People want Es at 17.5% (I just sold one for that)... Mildly surprising to me, since there have been plenty of parts available on the SM for 18% for a few days now. My guess at why the MBR is where it is for E loans is because FC aren't that confident in their predicted default rate of 8% (which makes some sense, given that they are new). Looking at the stats page (last 100 loans), the average rates (net of fees and defaults) for the other bands is around 7% for each band, whereas for Es at MBR it's 9.2%.
|
|
|
|
Post by transo on Aug 5, 2015 13:14:04 GMT
(based on the 8% default rate assumed, and the new tax treatment of losses). It's worth noting that that's still "the proposed new tax treatment". Unless I missed it the budget didn't actually introduce the change (but confirmed they did intend to apply it to loans taken out this tax year, when it is introduced for the next tax year). There is a (hopefully small) risk that it won't be introduced, in which case any higher-rate tax payers in particular could get badly burned by defaults on Es.
|
|
