arbster
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Post by arbster on Oct 8, 2015 9:04:43 GMT
At a very rough and non-expert first glance, that seems to say that there's no bias in passing "better" loans to WL, if anything slightly the other way. If we take the initial-PL figures as an average of the WL and Rejected-WL-then-PL, then it really does seem to be a more-than-fair split for PL buyers. The one message that screams out is that WL buyers don't reject loans for no reason... I agree, and still believe that FC are honest and fair and that their processes ensure that the PL and WL market are treated equally. However, I am concerned that the "intelligence" arising from the WL market rejecting a loan ought to be fed back in to the risk assessment process, perhaps resulting in a downgrade of risk rating for those loans so that investors get a higher return for what appears to be a higher risk (admittedly based on 18 months of numbers).
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SteveT
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Post by SteveT on Oct 8, 2015 9:06:00 GMT
Well, that was interesting. | 1 Year | PLs | PLs (Rejected WLs) | WLs | | Default | 0.33% | 1.08% | 0.42% | | Late | 0.58% | 0.94% | 0.30% | | Repaying | 94.56% | 92.85% | 95.31% | | Repaid | 4.53% | 5.13% | 3.97% |
| Since WLs started | PLs | PLs (Rejected WLs) | WLs | | Default | 0.77% | 1.61% | 0.68% | | Late | 0.72% | 0.81% | 0.33% | | Repaying | 91.17% | 90.59% | 93.63% | | Repaid | 7.35% | 6.99% | 93.63% |
So, it appears that professional institutions somehow "get lucky" when picking which WLs they take, and are definitely not just better at due diligence than FC's team... I believe that it is the risk assessment and therefore the loss rate per band which adds value to FC's offering. Institutions are probably not doing a further layer of due diligence, just selecting. This does give comfort that the WL rejections may not be on the basis of risk. Does it? Am I reading the figures incorrectly then? My reading was that this says the % Default on WLs since their inception is 0.68% but on the PLs that were originally offered as WLs it is 1.61% (substantially higher than the 0.77% PL average). That would suggest the institutions are rather good at smelling a rat and chucking it back over the fence.
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blender
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Post by blender on Oct 8, 2015 9:12:27 GMT
Sorry - did not read your post thoroughly. Maybe the institutions apply some filter which is effective. They do not have any more info that we do.
My mistake - (blends into ground).
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arbster
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Post by arbster on Oct 8, 2015 9:42:10 GMT
Fair comment, chrisf, and for interest, breaking down the defaults by risk band: | Since WLs started | PL | Rejected WL | WL | | A+ | 0.06% | 0.18% | 0.03% | | A | 0.27% | 0.18% | 0.11% | | B | 0.21% | 0.36% | 0.24% | | C | 0.21% | 0.63% | 0.22% | | D | 0.12% | 0.27% | 0.08% |
Worth noting that the numbers are relatively small for the period, so we're approaching the limits of statistical significance. EDIT: It seems chrisf removed his query, which was whether WLs propensity to prefer low risk loans was to blame, but I don't think it's borne out by the numbers. |
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SteveT
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Post by SteveT on Oct 8, 2015 9:59:37 GMT
Yup, the WL lenders look pretty good at sniffing out smelly Cs and Ds too. If I were still bidding on SME loans then I'd definitely be abstaining from the random mid-morning listings.
It occurs to me just how insignificant we (former active bidders) are to Faustian Contract's world view these days. 75-80% of new loans are going to the WL market, much of what's left are property loans (which were Fixed Rate from the outset) and Autobid is merrily filling 65% of the remaining SME loans in no time. No wonder they didn't care about our reaction to introducing Fixed Rate SME loans. If they can antagonise the remaining manual bidders sufficiently to make them go elsewhere (or, in FC's dreams, turn on their Autobid instead) they can then justify raising the Autobid stop-limit still further (75% / 85% / 95%). Then they'll be well on their way towards the utopian vision of all-Autobiddies and little or no need for CB.
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registerme
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Post by registerme on Oct 8, 2015 10:06:28 GMT
Yep. My main reason for joining FC was to be able to lend to SMEs. I still want to be able to do that. It's just becoming an increasingly unattractive proposition. FC are doing nothing to encourage me to lend through their platform, and plenty to discourage me  . |
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chrisf
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Post by chrisf on Oct 8, 2015 11:09:38 GMT
Fair comment, chrisf, and for interest, breaking down the defaults by risk band: | Since WLs started | PL | Rejected WL | WL | | A+ | 0.06% | 0.18% | 0.03% | | A | 0.27% | 0.18% | 0.11% | | B | 0.21% | 0.36% | 0.24% | | C | 0.21% | 0.63% | 0.22% | | D | 0.12% | 0.27% | 0.08% |
Worth noting that the numbers are relatively small for the period, so we're approaching the limits of statistical significance. EDIT: It seems chrisf removed his query, which was whether WLs propensity to prefer low risk loans was to blame, but I don't think it's borne out by the numbers. Sorry about that, when reading through my question to check for typo's, I realised I knew the answer!
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grahamg
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Post by grahamg on Oct 8, 2015 15:21:42 GMT
Of the Reject WL Defaults all are within 12 payments
1-3 payments 5 defaults
4-6 payments 6 defaults
7-9 payments 5 defaults
10-12 payments 2 defaults
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arbster
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Post by arbster on Oct 8, 2015 15:29:30 GMT
Of the Reject WL Defaults all are within 12 payments 1-3 payments 5 defaults 4-6 payments 6 defaults 7-9 payments 5 defaults 10-12 payments 2 defaults Worth noting that the first WL was drawn down on 5th May 2014 (iirc) so there have only been a maximum of 17 payment opportunities for any of them, with 16 or less for the vast majority. Time will tell what happens to the rest.
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SteveT
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Post by SteveT on Oct 9, 2015 10:25:47 GMT
This is the latest funding progress of 16308 (£238k A, no CB). Needs another £75k in 100 hours so that's, ermm, £750 per hour from now until Tuesday afternoon. Fretting Calculators will be hoping for a pick-up over the weekend (I suspect the new loans tap may be turned firmly towards OFF this afternoon)
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arbster
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Post by arbster on Oct 9, 2015 10:33:16 GMT
This is the latest funding progress of 16308 (£238k A, no CB). Needs another £75k in 100 hours so that's, ermm, £750 per hour from now until Tuesday afternoon. Fretting Calculators will be hoping for a pick-up over the weekend (I suspect the new loans tap may be turned firmly towards OFF this afternoon) Thanks Steve - a really interesting analysis. I wonder if they'll retrospectively add cashback, if required to fill. It's clearly a learning process for them and I'm personally hoping that enough active investors keep faith in them while they learn.
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SteveT
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Post by SteveT on Oct 9, 2015 10:36:08 GMT
This is the latest funding progress of 16308 (£238k A, no CB). Needs another £75k in 100 hours so that's, ermm, £750 per hour from now until Tuesday afternoon. Fretting Calculators will be hoping for a pick-up over the weekend (I suspect the new loans tap may be turned firmly towards OFF this afternoon) Thanks Steve - a really interesting analysis. I wonder if they'll retrospectively add cashback, if required to fill. It's clearly a learning process for them and I'm personally hoping that enough active investors keep faith in them while they learn. 100% of the credit goes to LoneRifle's quite excellent FCViz extension for Chrome (I believe he lurks over here although only active in another place)
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arbster
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Post by arbster on Oct 9, 2015 10:47:10 GMT
100% of the credit goes to LoneRifle's quite excellent FCViz extension for Chrome (I believe he lurks over here although only active in another place) I had a little play but can't seem to get it to work reliably. Is there a trick to getting it to show the additional graphs, etc?
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SteveT
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Post by SteveT on Oct 9, 2015 10:49:40 GMT
100% of the credit goes to LoneRifle's quite excellent FCViz extension for Chrome (I believe he lurks over here although only active in another place) I had a little play but can't seem to get it to work reliably. Is there a trick to getting it to show the additional graphs, etc? Sometimes the data retrieval and parsing doesn't fire up properly when you click on "All Bids" but it seems to work OK if you then hit Ctrl-R to reload.
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SteveT
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Post by SteveT on Oct 9, 2015 11:21:06 GMT
Looks like Autobid kicked in again an hour or so ago on 16308, which seems odd since it shut down 2 days ago, presumably on hitting the self-imposed 65% limit. Now, Fiddling Clauses wouldn't be bending their own rules, would they ....?
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