mikes1531
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Post by mikes1531 on Sept 15, 2015 3:12:34 GMT
I see that the £30+k of discounted parts in MTFP (#104) have disappeared. Since the available parts total hasn't dropped by much at all, I presume that the seller changed their mind, but I haven't a clue why. Alternatively, the buyer(s) was/were just looking to flip for a 1% profit, so the same quantity remains on sale? It's possible. But considering how long it's taken to shift the first half of this loan, the buyer(s) must be rather patient! There's been a big drop in units available on the other MTFP tranches today. Tranche 2 is on the verge of being the first to go to O availability... Possibly the work of the QAA? If it buys up all the loan units, it can feed into the excess demand at will! Considering how long Tranche 2 has been available, I'd question whether there's much excess demand left -- though I accept that a bit might develop if there are no longer any parts available on the Aftermarket. But with so little operating history for the QAA, I'd think it might be a bit imprudent to put much of the fund into a loan that could be difficult to sell if necessary. If, after a few months of operation, AC decide they can afford to tie up a chunk of the QAA assets in illiquid loans because the QAA balance has stayed high consistently, then they might be justified making such a decision, but doing that now strikes me as a bit premature.
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jonah
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Post by jonah on Sept 15, 2015 7:17:53 GMT
Assuming I'm looking in the right place, there are no discounted parts on offer At the time of typing. The fact that there are only 6 loans with parts and only slightly more than 1m in total may mean that people know they don't have to offer discounts to sell. Hopefully 174 will go live today and an another 600k+ onto the platform. It will be interesting to see how QAA copes. That said as this is the only loan this week, I assume it will be all gone by the end of the week.
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tonyr
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Post by tonyr on Sept 15, 2015 8:02:37 GMT
I see that the £30+k of discounted parts in MTFP (#104) have disappeared. Since the available parts total hasn't dropped by much at all, I presume that the seller changed their mind, but I haven't a clue why. I'm not sure I do either, and I was the seller. As previously stated I was playing about with this feature. In 12 hours I'd established that it was effective and with drawdown dates being moved back (yet again) I had no immediate need for the cash.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Sept 15, 2015 8:08:13 GMT
andrewholgate, Now we have loan discounting back can we please allow trading of some defaulted loans. There are many new lenders who may relish the idea of buying asset backed loans paying 18% pa, and many older lenders who are so fed up with waiting for asset sales that they are prepared to offer a discount on top. I am specifically thinking of loans #84, 129, 132, 137, where there is a quantifiable asset but a slow recovery. At the moment the platform is broadcasting loud and clear that it has 10% of lender funds tied up in suspended loans. Comments on the forum suggest that the suspended loans are seen as a deterrent to new lenders. AC has a policy of charging an interest rate premium upon default which I really like, and should be used as a marketing advantage. Instead it's used to highlight how illiquid these loans are.
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Post by andrewholgate on Sept 15, 2015 8:14:45 GMT
One question we are discussing internally. Intention for me is to say yes, but I need to understand the mechanics and then test the system to make sure we don't break it.
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Mike
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Post by Mike on Sept 15, 2015 8:50:08 GMT
...SNIP... AC has a policy of charging an interest rate premium upon default which I really like, and should be used as a marketing advantage. Instead it's used to highlight how illiquid these loans are. If this happens, will there be a minimum discount set by AC? They initially price the risk of the loan in the interest rate but this surely needs to be re-evaluated as the default rate of interest does not depend on current circumstances... It's set at/before drawdown (I believe). I would like to see that, and perhaps this would be a good excuse to charge a fee for offloading genuinely ill loan parts at discounts that are above an AC-approved level, given the extra time this would take for the AC gents (and ladies??!).
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sqh
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Post by sqh on Sept 15, 2015 9:20:07 GMT
...SNIP... AC has a policy of charging an interest rate premium upon default which I really like, and should be used as a marketing advantage. Instead it's used to highlight how illiquid these loans are. If this happens, will there be a minimum discount set by AC? They initially price the risk of the loan in the interest rate but this surely needs to be re-evaluated as the default rate of interest does not depend on current circumstances... It's set at/before drawdown (I believe). I would like to see that, and perhaps this would be a good excuse to charge a fee for offloading genuinely ill loan parts at discounts that are above an AC-approved level, given the extra time this would take for the AC gents (and ladies??!). I don't think there should be a minimum discount. I don't think there should be a fee, and the default rate of interest still applies. Let the market decide. "genuinely ill loan parts", is not a phrase AC would use. The 4 loan numbers mentioned are certainly expected to settle most, if not all, outstanding capital.
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Mike
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Post by Mike on Sept 15, 2015 10:32:54 GMT
I think what I meant was, in the case that 'genuinely ill' loan parts do become tradable then I think there should be a minimum discount, and in exchange for the work to decide what the minimum is a fee would be reasonable.
I didn't mean to be too specific about the numbers you mentioned, as you say they just have a cold and are not too poorly. And without a minimum discount, there's no need for a fee but 'let the market decide' when it comes to risking capital in exchange for interest isn't the AC model so I would query the wisdom in letting loans that have a less than likely chance of full repayment become tradable without any intervention in the rates set by sellers.
I think most people don't understand how to really price loan parts. Myself included. And to boot AC are better placed to do so with the additional info they generally have...
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bigfoot12
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Post by bigfoot12 on Sept 15, 2015 10:45:38 GMT
I think that if impaired loans are for sale, and I am thinking of those where there is a significant chance that there will be a capital or interest shortfall, it would be better if buyer prices were displayed as well as seller prices. Seeing that someone was prepared to buy the plumbing loan at a 60% discount might inspire people to offer it at a significant discount. And as long as new members aren't mislead about it I think that would be a good thing.
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Mike
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Post by Mike on Sept 15, 2015 11:03:38 GMT
as long as new members aren't mislead about it That's difficult to be sure of, not only in ensuring buying of discounted loan parts know what they're doing but also sellers. I would sell plumber ippy eppy optics etc but I'm not in a position to price the discount on those as well the men at AC are. It's OK to say those who aren't confident in their ability to price dodgy debt shouldn't buy it in the first place, but its hard when people had it before it was dodgy and can then sell it. How to stop them being exploited or advise them on the real value of their holdings? How about when I am a borrower and I meet you in the pub, having a celebratory drink because my loan being sold at a heavy discounts has just got a refinance and I've been buying it at a huge discount before AC announce the news? Or my family, or my friends. I wouldn't know what to do with my ill loan parts, anyway even though I know I should sell them I couldn't price them. I'm certain I'm not the only one who would feel a bit out of their depth and certainly as it stands without individual loan price history or market depth, I would be pretty hesitant to start guessing what prices to set
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bigfoot12
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Post by bigfoot12 on Sept 15, 2015 11:17:39 GMT
as long as new members aren't mislead about it That's difficult to be sure of, not only in ensuring buying of discounted loan parts know what they're doing but also sellers. I would sell plumber ippy eppy optics etc but I'm not in a position to price the discount on those as well the men at AC are. It's OK to say those who aren't confident in their ability to price dodgy debt shouldn't buy it in the first place, but its hard when people had it before it was dodgy and can then sell it. How to stop them being exploited or advise them on the real value of their holdings? How about when I am a borrower and I meet you in the pub, having a celebratory drink because my loan being sold at a heavy discounts has just got a refinance and I've been buying it at a huge discount before AC announce the news? Or my family, or my friends. I wouldn't know what to do with my ill loan parts, anyway even though I know I should sell them I couldn't price them. I'm certain I'm not the only one who would feel a bit out of their depth and certainly as it stands without individual loan price history or market depth, I would be pretty hesitant to start guessing what prices to set I agree with all of your concerns, but they are slightly different than mine. I am worried about a new member, who doesn't know how things works and decides to split his money between the 10 loans on offer 10% in each. And these loans are some of the trade finance loans, a lend to let, a care home, a couple of the latest loans to draw and then the plumbing loan at a 10% discount, and possibly some other loans similar to the plumber. I am like you. I don't know the price the plumbing loan should trade at, but I wouldn't buy it at a 10% discount and I imagine you wouldn't either. We would probably discuss it here first in any case. My guess is it would trade at a 60% discount, but I wouldn't be shocked if it traded at 40% or 80% discount. As long as those buying it know that there is a serious problem and have read some of the documents that is up to them.
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mikes1531
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Post by mikes1531 on Sept 15, 2015 13:57:57 GMT
I don't know the price the plumbing loan should trade at, but I wouldn't buy it at a 10% discount and I imagine you wouldn't either. We would probably discuss it here first in any case. My guess is it would trade at a 60% discount, but I wouldn't be shocked if it traded at 40% or 80% discount. As long as those buying it know that there is a serious problem and have read some of the documents that is up to them. In general, I agree. But you can be sure that some newbies -- and probably some experienced lenders as well -- won't be able to assess properly the possible recovery outcomes and the probabilities that go with them. Some people will end up happy and some won't. And some of the ones that won't will be vocal about it. AC can say that all the info was available before the punters bought the 'bargain' parts, but that won't stop the unfavourable PR. And that could damage the long-term prospects of the business despite AC's position being perfectly correct from a legal point of view. AC have to consider the situation carefully and do what's best for them. Ultimately, that may well be what's best for all of us. But that's JMHO.
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niceguy37
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Post by niceguy37 on Sept 15, 2015 14:24:53 GMT
I don't know the price the plumbing loan should trade at, but I wouldn't buy it at a 10% discount and I imagine you wouldn't either. We would probably discuss it here first in any case. My guess is it would trade at a 60% discount, but I wouldn't be shocked if it traded at 40% or 80% discount. As long as those buying it know that there is a serious problem and have read some of the documents that is up to them. In general, I agree. But you can be sure that some newbies -- and probably some experienced lenders as well -- won't be able to assess properly the possible recovery outcomes and the probabilities that go with them. Some people will end up happy and some won't. And some of the ones that won't will be vocal about it. AC can say that all the info was available before the punters bought the 'bargain' parts, but that won't stop the unfavourable PR. And that could damage the long-term prospects of the business despite AC's position being perfectly correct from a legal point of view. AC have to consider the situation carefully and do what's best for them. Ultimately, that may well be what's best for all of us. But that's JMHO. Perhaps 6 months of AC membership should be required before you can buy monitoring event loans.
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ilmoro
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Post by ilmoro on Sept 15, 2015 14:31:04 GMT
In general, I agree. But you can be sure that some newbies -- and probably some experienced lenders as well -- won't be able to assess properly the possible recovery outcomes and the probabilities that go with them. Some people will end up happy and some won't. And some of the ones that won't will be vocal about it. AC can say that all the info was available before the punters bought the 'bargain' parts, but that won't stop the unfavourable PR. And that could damage the long-term prospects of the business despite AC's position being perfectly correct from a legal point of view. AC have to consider the situation carefully and do what's best for them. Ultimately, that may well be what's best for all of us. But that's JMHO. Perhaps 6 months of AC membership should be required before you can buy monitoring event loans. including experiencing at least one loan going a bit funny, maybe
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Post by oldnick on Sept 15, 2015 15:10:24 GMT
Perhaps 6 months of AC membership should be required before you can buy monitoring event loans. including experiencing at least one loan going a bit funny, maybe Hands up who hasn't had one of their loans "go a bit funny"?
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