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Post by bonfemme on Sept 1, 2015 10:25:28 GMT
I did not get the call, however I was told that the yield on existing loans will not be affected. Re. Savingstream ..... Just increased my prefunding limit. Me too. A bit annoyed about the way this has been announced to the chosen few. Just wondering now if there's a silver lining .... is this a death sentence for all bots and their unfair practices?
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mikeh
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Post by mikeh on Sept 1, 2015 10:28:46 GMT
So should we
a) Make hay while the sun shines
b) Hold fire
c) Get out quick?
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SteveT
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Post by SteveT on Sept 1, 2015 10:31:13 GMT
So should we a) Make hay while the sun shines b) Hold fire c) Get out quick? I'm going with a) for new loan auctions and b) for my existing holdings (in the hope I may be able to command better premiums in a month or two than I can now)
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nick
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Post by nick on Sept 1, 2015 10:35:00 GMT
The bottom line is for those of us who generally invest at a higher interest rate than the average rate (ie towards the highest marginal rate) will be worse off as the interest rate bands won't be to far above the current average rate achieved for each credit rating and maturity. Conversely, those who have less time to invest in auctions and participate via auto bid will bid. Its should be a zero sum game, but with interest rate having to be set slightly higher than average to accommodate fluctuations within risk bands.
Personally, my effective interest rate is probably going to fall off a cliff. But, the current auction madness towards the close of auctions (which I suspect many of us played their fair part) was never going to last long and deeply flawed. Personally I believe that a dynamic auto-bidder would be a better solution than a fixed rate, but I guess a fixed rate system is just less hassle for them to implement and administer.
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blender
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Post by blender on Sept 1, 2015 10:41:40 GMT
If it is to be fixed interest rates per band for the partial SME loans then that has been inevitable for some time. The reverse auction does not do its job either in establishing whether a loan will be funded or setting the rate according to the risk. The E band rates were a sign - sort of fixed. Presumably we can still buy or sell at +or- 3%.
A few lenders will wish to exit but presumably FC are willing to trade that for simplicity in the site and a greater fairness among lenders. Though cash back will be needed to shift the larger loans.
I wonder how it will change the property loans, if at all.
(I have not had a chat with FC.)
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nick
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Post by nick on Sept 1, 2015 10:48:37 GMT
Announcement apparently will be made tomorrow by Fixed Convictions of a fundamental change in their marketplace model in a month or so's time. For some reason, I (and presumably a number of others on this forum?) warranted a phone call to pre-warn me but I've been asked not to reveal details before the announcement. Suffice to say, unless something changes at the last minute, it will end my interest in the platform, at least in respect of SME loans. Happily it appears there shouldn't be any problem progressively selling down my current holdings; in fact I may be minded to wait until the new model is launched in the hope of better SM premiums later. Interesting times, and the likes of FK and ReBS will be popping corks I suspect. I'm astonished that they could think that releasing information like this to some people earlier than others could in any way be a sensible thing to do. Actually I think the exercise was completely pointless. Effectively they spoke to some of us and gave us a days advance notice a more general announcement that a fundamental change in the platform is going to occur. We have no way of influencing the changes which have been presented as a fait accompli. The one day advance notice to this type of event does not really help us individually. Perhaps it mean't us feel loved and they have actually called all members......
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registerme
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Post by registerme on Sept 1, 2015 10:56:29 GMT
I'm astonished that they could think that releasing information like this to some people earlier than others could in any way be a sensible thing to do. Actually I think the exercise was completely pointless. Effectively they spoke to some of us and gave us a days advance notice a more general announcement that a fundamental change in the platform is going to occur. We have no way of influencing the changes which have been presented as a fait accompli. The one day advance notice to this type of event does not really help us individually. Perhaps it mean't us feel loved and they have actually called all members...... I agree that it was pointless, I also agree that it is unlikely to have any material effect on anybody. That having been said if something like this was done in the capital markets the regulators would be all over it like a rash. FC's naivety here surprises me, they could have simply avoided any issues by not talking to anybody up front. As soon as an institution treats one part of the market differently to another they open themselves to regulatory risk.
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Post by mostlywrong on Sept 1, 2015 10:57:16 GMT
I agree that the bunfight at the end of auctions and on the E loans was probably too much for FC to manage; the peak load on the servers must have been horrendous!
I have suggested to FC that they should provide an investment trust style fund in the same way that the Government has, for the last 2 years, funded 10% of each loan at the average rate (and it would be interesting to know how the Government has done on its (our) investments). I understand that Zopa has moved to a similar model.
Nothing stands still in this fast moving world...
MW
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Post by nickthefool on Sept 1, 2015 11:02:20 GMT
A move to fixed rates, if that's what it is, will probably be pretty bad for my personal returns, though I didn't expect them to be sustainable in the long term anyway. However it might improve the rates available without investing much time (excluding use of bots). It will be interesting to see how the SM functions, though.
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oldgrumpy
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Post by oldgrumpy on Sept 1, 2015 11:09:33 GMT
I've always thought one thing was particularly unfair to borrowers.
Example: an A band borrower wanting £20K would get close to minimum bid rate 8%.
An equally creditworthy business wanting £200K would probably have to pay 10%+.
I wonder if that anomaly will be levelled out by whatever new model is to be sprung on us.
We will have a month to rethink our strategies, it seems.
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SteveT
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Post by SteveT on Sept 1, 2015 11:18:17 GMT
I've always thought one thing was particularly unfair to borrowers. Example: an A band borrower wanting £20K would get close to minimum bid rate 8%. An equally creditworthy business wanting £200K would probably have to pay 10%+. I wonder if that anomaly will be levelled out by whatever new model is to be sprung on us. We will have a month to rethink our strategies, it seems. I think blender may be right that the largest loans may start needing CB (or some other form of incentive) to fill if there's no longer a natural uplift in marginal rate versus much smaller loans at the same risk band (and term). Wondering if Fundamentally Challenged have thought that through too?
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TitoPuente
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Post by TitoPuente on Sept 1, 2015 11:51:33 GMT
Who's going to want to lend on an A unsecured at c9% when secured 10%+ is so available both here and elsewhere? Cashback seems inevitable, especially on larger loans. On the plus side, I've concluded that Christmas has indeed come early as Sept/Oct will be akin to the usual Dec/Jan drop in rates, although it will be muted slightly with the abundance of large 10%+ secured loans. I fully agree. The market for unsecured loan parts at the current average rates will probably be significantly reduced as many rational lenders will fly to quality. Only autobidders will stay. One observation that is bothering me: I am seeing a spike in property loan sales, specifically the 10% ones. I wonder if the reported "information asymmetry" is causing this.
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SteveT
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Post by SteveT on Sept 1, 2015 11:58:05 GMT
My concern is what I'm now going to do with the considerable amount of time I've previously invested in substantially beating Footling Change's average rates.
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Post by Deleted on Sept 1, 2015 12:22:12 GMT
Actions so far Booked a holiday in France and Spain Ordered new computer Signed up for Italian classes Spent more time trying to read AC reports (and turn them the right way round) Get back in the stock market where I understand what is happening more. Spend more time giving holiday advice on Fodors It is going to be tough without the 3 times a day trawl of FC  |
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Post by GSV3MIaC on Sept 1, 2015 13:16:39 GMT
]Me too. A bit annoyed about the way this has been announced to the chosen few. Just wondering now if there's a silver lining .... is this a death sentence for all bots and their unfair practices? Nope, Es are already effectively fixed rate and that's where the bots are most active.
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