registerme
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Post by registerme on Sept 2, 2015 5:05:21 GMT
"..de Koning replied that since the autobid will bid on loans listed at discount.."
Now that's new.
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SteveT
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Post by SteveT on Sept 2, 2015 5:12:39 GMT
When I asked about SM changes I was told that Autobid will in future be permitted to buy parts listed at discounts of "up to 20%" (but still NOT parts listed at a premium) so that borrowers with low rate parts "are able to liquidate their holdings". My guess is that selling "fixed rate" SME loan parts at par will prove very difficult on anything but smaller / older loans and discounting will be needed to exit at any sort of speed. Existing loan parts at rates well above the new fixed rates should, by extension, look rather attractive... [and yes, now it's public domain, the key message was all auctions will become fixed rate, with 3 term-dependent rates per risk band "to reflect that lending for longer is riskier"]
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registerme
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Post by registerme on Sept 2, 2015 5:53:01 GMT
So, are FC going to eliminate the lender fee?
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SteveT
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Post by SteveT on Sept 2, 2015 5:58:03 GMT
So, are FC going to eliminate the lender fee? I very much doubt it! They're in this to make money, after all.
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Post by GSV3MIaC on Sept 2, 2015 6:20:02 GMT
Well, they'll likely be making less of mine. I approve of everyone getting the same rate, but I don't approve of Fixed Copout being the ones to set it. See also Zopa.
Seems like the most useful sort of bot in future will be one that hoovers up 'distressed seller' parts, at a fat discount, on the SM (then tries to resell over time at a lower discount).
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Post by jackpease on Sept 2, 2015 7:27:19 GMT
I'm trying to cast my mind back - before Assetz reinvented itself and got all automated and aggregated - didn't it have fixed rate auctions where it set the rates - and we got upset when it changed?
Much as I dislike FC, this could make bidding an option again for me - and i'm not sure that the current system could get any worse so any change could be beneficial for ordinary folks.
Jack P
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SteveT
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Post by SteveT on Sept 2, 2015 7:27:24 GMT
When I asked about SM changes I was told that Autobid will in future be permitted to buy parts listed at discounts of "up to 20%" (but still NOT parts listed at a premium) so that borrowers with low rate parts "are able to liquidate their holdings". My guess is that selling "fixed rate" SME loan parts at par will prove very difficult on anything but smaller / older loans and discounting will be needed to exit at any sort of speed. Existing loan parts at rates well above the new fixed rates should, by extension, look rather attractive... [and yes, now it's public domain, the key message was all auctions will become fixed rate, with 3 term-dependent rates per risk band "to reflect that lending for longer is riskier"] Sill thinking it through, but the change in Autobid behaviour seems more of a game changer than fixed rates. Flipping as part of any strategy becomes far less attractive. Yes, my assumption is that this will kill off sales of property loan parts at par, so anything still held in property loans in a month's time will either have to be held to term or discounted to sell.
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agent69
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Post by agent69 on Sept 2, 2015 7:37:30 GMT
Anyone know what the fixed rates will be?
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SteveT
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Post by SteveT on Sept 2, 2015 7:40:30 GMT
All they would say yesterday was "close to the current average rates" (for each risk band).
Current statistics (last 100 loans) gives:
A+ = 8.6%
A = 9.8%
B = 10.6%
C = 11.8%
D = 13.2%
E = 18.2%
(but these will be higher than the longer term average given the recent summer holiday uplift in rates)
Interesting that yesterday saw 15435, a fixed rate (asset secured!) A+ 36 month loan at 8%, currently 94% filled.
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SteveT
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Post by SteveT on Sept 2, 2015 7:49:17 GMT
Announcement now live on the website: link New fixed rates table:  The resulting projected net returns make interesting (!?) reading |
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Post by goldservice on Sept 2, 2015 7:54:24 GMT
It has not taken long for the first negative development for an E risk-band borrower; only a CCJ though and not that FC has yet seen fit to disclose it to secondary market purchasers or anything! Can you tell us the loan no, please?
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registerme
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Post by registerme on Sept 2, 2015 8:20:13 GMT
So, here's the thing. If FC are so confident of their risk model, why don't we lend to them at a fixed rate and then let them lend the funds out? That at least would take the diversification risk away from us lenders. If we can't differentiate on price they might as well go the whole way and do a Zopa. EDIT: I suspect that FC have simply concluded that institutional money + the prospect of ISA monies means they have to scale, and if that scaling leaves out more.... discriminating... investors like those who inhabit these forums, then so be it  . |
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SteveT
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Post by SteveT on Sept 2, 2015 8:37:04 GMT
Announcement now live on the website: link New fixed rates table: The resulting projected net returns make interesting (!?) reading: Perhaps I've missed it in that update, but did it say anything about Autobid buying loan parts on the sm at a discount? I don't see it directly but I assume the sentence "2. The gross interest rates you have set in your current Autobid settings will remain in place for when you buy loan parts from other investors." implies that you will be able to set SM Autobid rates at higher than the fixed rates for new auctions. For post-change loans, such rates could only be achieved by discounting. Certainly the employee who called me yesterday stated clearly that discounting up to 20% would now be possible (versus the current 3%) and that Autobid would be permitted to buy discounted parts, but still NOT those listed with a premium.
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arbster
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Post by arbster on Sept 2, 2015 8:36:52 GMT
On the FAQ about the change they're inviting feedback, which I'm not inclined to give as I don't think it'll make any difference. However, they are also inviting people to an Investor Evening on 17th September. Sadly I can't make this one, but would be interested if anyone from the forum was to go along and ask questions.
I'm not terribly happy with the fixed rates they're offering now - the B and C rates in particular are below my personal threshold for investment in that risk band.
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mightyoak
"Always a chance of rain at times"
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Post by mightyoak on Sept 2, 2015 8:38:37 GMT
And the whole thing has just arrived by postie.
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