kaya
Member of DD Central
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Post by kaya on Sept 24, 2015 14:50:30 GMT
With Ch***** Ltd going under, and now a loan with only one repayment not looking like a very, er, jolly, investment, I am looking at getting into increasingly dodgy territory with Rebs. Not quite negative territory looming yet, but getting closer..... Are dodgy loans becoming a problem for Rebs, and how goes it for you? I sense evasive responses and attitudes re the jolly loan, but could this really be an honest business glitch? What think ye?
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merlin
Minor shareholder in Assetz and many other companies.
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Post by merlin on Sept 24, 2015 17:02:48 GMT
With Ch***** Ltd going under, and now a loan with only one repayment not looking like a very, er, jolly, investment, I am looking at getting into increasingly dodgy territory with Rebs. Not quite negative territory looming yet, but getting closer..... Are dodgy loans becoming a problem for Rebs, and how goes it for you? I sense evasive responses and attitudes re the jolly loan, but could this really be an honest business glitch? What think ye? I have had one default in 16 months on REBS and also have concerns about another but IME overall, it appears that the default rate is somewhat better than FC. However going along with the law of averages I would expect a higher rate than is current. This is also affected by the length of time that loans have run.
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Post by jackpease on Sept 25, 2015 7:47:20 GMT
Hmmmmm this might be tracking my experience at FK where I was enthusiastic and tried to spread my risk but pretty well this stage of the platform the loans started to go wrong and it ended up looking like I could end up in negative territory.
I am still modestly growing my investment at ReBS but it is worrying - this 'worrying' phase seems to hit all platforms - it takes months/years to figure out whether guarantees come to 'owt
With so many people claiming they are deserting other platforms (FC!) one wonders what fantastically safe profitable place they are jumping too that they haven't maxed out their diversification limits already.
For me the jinx has been to be fond of a platform!
Jack P
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merlin
Minor shareholder in Assetz and many other companies.
Posts: 902
Likes: 302
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Post by merlin on Sept 25, 2015 8:17:30 GMT
Hmmmmm this might be tracking my experience at FK where I was enthusiastic and tried to spread my risk but pretty well this stage of the platform the loans started to go wrong and it ended up looking like I could end up in negative territory. I am still modestly growing my investment at ReBS but it is worrying - this 'worrying' phase seems to hit all platforms - it takes months/years to figure out whether guarantees come to 'owt With so many people claiming they are deserting other platforms (FC!) one wonders what fantastically safe profitable place they are jumping too that they haven't maxed out their diversification limits already. For me the jinx has been to be fond of a platform! Jack P Sounds like we are both virtually in the same Club. I also largely moved out of AC for a number of reasons: falling interest rates, increasing failures and the IT system being the main ones. Now I remain trapped with a number of loans that are "suspended" and cannot be sold except at a considerable loss. It needs to be seen just how Rebs will deal with defaults and recoveries when they occur, although I am not holding my breath!
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Post by jackpease on Sept 25, 2015 8:52:26 GMT
I quite like simplicity, wysiwyg and the illusion of being in control and 'choosing' (whether it is bidding is a moot point) FK and Rebs loans. I have given up doing due diligence as I think companies' ability to hoodwink lending platforms far exceeds my ability to spot it. I try to avoid turning against platforms when loans go bad and am desperately gunning for Assetz, FK and Rebs that they can keep the defaults down not least because the banks would really enjoy seeing these guys fail Jack P
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sqh
Member of DD Central
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 25, 2015 12:05:33 GMT
Defaults aren't really a problem if the recovery is good. Trouble is ReBS don't provide recovery statistics. It's difficult to find any information on defaulted loans. If you own a piece of the loan then they keep you updated by "hope you had a nice week email". This usually comes out late on a Friday, which means your weekend has just been ruined. I get the feeling they press the send button after putting on their coats and turning out the lights. In fact, it's probably automated to send 10 mins after they leave the building. It failed once and had to be resent on Monday.
My experience with FK is no better. Signed up and asked about the loan that went walkies without any payment and was told we can't provide any information. It makes you wonder whose side they are on.
On the other hand AC keep everyone informed, but the best bit is they spank the borrower with default interest. I'm confident that the default interest on some loans will cover any losses on others, so no nett loss, in fact I'm making a profit on defaulted loans.
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baldpate
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Post by baldpate on Sept 25, 2015 21:31:36 GMT
As far as I can make out, ReBS lifetime defaults are running at something just over 4%. With only around 170 loans since the platform started seriously (early 2013?), it's difficult to say where the default rate will eventually end up. But 4% so far doesn't seem to me too bad considering the sort of rates it is possible for lenders to get on ReBS. The majority of loans are classed C or B, with maximum rates of 20% and 17% respectively. You should be able to get, on average, maybe 17.5% & 14.5% on these classes of loans. That seems to me a fair compensation for the risks involved. Not forgetting that the RebS risk classification system seems to me pretty capricious, so if you exercise some judgement (avoid the really flaky stuff, look for security in addition to so-called "Personal Guarantees") you might be able to do even better. This is the reason I invest here, despite the horrendous performance & design of the ReBS platform! [ + I enjoy the Discussion threads ]
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nick
Member of DD Central
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Post by nick on Oct 2, 2015 8:46:05 GMT
It is early days to gauge/properly assess the default rate given the young age of the platform and relatively low number of loans. I think ReBS' credit assessment and modelling is very immature and a lot less advanced than FC who provide projected default rates for each credit band and track actual against these. In contrast, ReBS provide a credit rating, but provide no quantitative assessment of the expected default rate across the bands. With this, it very difficult to place much value on the credit rating.
Nevertheless, my experience to date has been ok and the default rates across the platform are better than I would have expected for the interest rates achieved. As always, the key is to diversify as much as possible across all loans. Personally, my DD is mainly focused on immediate past financial performance and the age of the company. I place little value on the Q&A which I believe can give a false sense of comfort based on little substance beyond what the lender says, although it can help to give a sense of the general competence of the lender. Security is always a consideration, but secondary to whether the underlying business is sound. Guarantees are generally worthless as financial security, but do ensure that the lender's interest's are completely aligned and helps prevent owners syphoning off value from the company prior to insolvency at lender's detriment.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
Posts: 1,426
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Post by sqh on Oct 2, 2015 9:35:40 GMT
I would like to see ReBs produce default stats for each Introducer. These people should have an understanding of the whether the borrower business will default. If the Introducers aren't kept on their toes they will present any Tom, Dick or Harry. ( No offence to Thomas, Richard or Harold.)
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johnfleet
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Post by johnfleet on Oct 4, 2015 15:24:24 GMT
I've now got 4 defaulted loans (out of about 80) - resulting in my projected rate of return dipping below 10 per cent. Not happy with that so for now I'll be investing elsewhere...
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Post by jh on Oct 5, 2015 9:46:58 GMT
I would like to see ReBs produce default stats for each Introducer. These people should have an understanding of the whether the borrower business will default. If the Introducers aren't kept on their toes they will present any Tom, Dick or Harry. ( No offence to Thomas, Richard or Harold.) An interesting point, am happy to be transparent, although please note that all cases are "underwritten" by ReBS. My experience shows that only 2 in 5 actuall get to listing stage. It is disapointing as an introducer when any loan goes bad. Personally I get involved in trying to resolve any payment issue as I see that as my responsibility. Thankfully out of 41 loans I only have one default (1 too many) and one regular late payer. Not specifically naming any other introducer I chose not to hide behind my clients and take an active role in each and every case, whilst others pass the buck to their client and hide in the shadows.
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