grahamg
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Post by grahamg on Oct 14, 2015 12:33:19 GMT
arbster perhaps your criticism was understood and this time the underwriter has stepped in to almost fill the loan without knocking out any higher bids. This achieves a reduction in the average interest rate and also ensures that anyone else wishing to enter the bidding process has to do so at a lower rate thus knocking off the top bids. Same result but without direct responsibility. Perhaps I am being over sensitive and perhaps even cynical, heaven forbid  I would agree that without underwriters many platforms would not succeed. I just would prefer that they refrain from manipulation and that platforms remember that if our money is desired then it should be respected. If we are taking W*** H***** Some bids must have been knocked out as the total bid = 25120, except it does not show in the bid list, only adds to 25001. I can understand that maybe there are not yet enough lenders to fill loans but I think its wrong for in house to buy 60% of the loan in the first days and then have it close 2 days early. First they are making the loan seem more popular than its is. Second as has been said they are lowering our rates. Of course the upside is that everything is available on the SM for new investors to diversify and get their bonus!. I think we need a statement from LC. I don't think they are trying to manipulate rates but they are walking a fine line and maybe not getting it right, if there is a right.
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jimbob
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Post by jimbob on Oct 15, 2015 10:43:06 GMT
We're down to 2 loans to bid on now, any idea what happened to the 3 that were around previously ?
Filled up or taken off ?
I decided to give them a miss.
In possibly cheerier news my first withdrawal from LendingCrowd is now back 'home' reducing my outstanding debt to HSBC.
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kaya
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Post by kaya on Oct 15, 2015 19:01:08 GMT
At least two of them finished early, possibly as soon as they were 100% filled, as a borrower may of course do if wished. I really cannot see the reason for any problem about the in-house bidder, without which this platform could never have got off the ground. Early chunk-bids get the auction off the ground, and if needed can fill it at the end, though was not needed on the one that I can still access the all-bids info. I agree that the in-house bidder should not knock out other bids at the end, though whether or not this has ever happened I do not know. As soon as the all-bids info disappears, it is impossible to check.
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ablender
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Post by ablender on Oct 16, 2015 6:07:42 GMT
I have seen this happening and have wondered how much money this guy commands. I have not made up my mind yet so I am sort of thinking on two feet.
1. If this guy keeps the average interest low, will it help to attract more businesses to ask for loans? In this case, as opposed to FC, there is still some room for higher bids.
2. Also, if this guy is ready to risk so much money on these loans at such a low rate, will it mean that he or SS are confident that these loans will not default, given the large percentage and actual sum of money they are investing in it?
I would appreciate any comments about these points.
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adrianc
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Post by adrianc on Oct 16, 2015 8:10:31 GMT
I have seen this happening and have wondered how much money this guy commands. Considering the number of all-but-unsellable £960 parts he's long been buying, I don't think I want to know. Apart from the fact that he can't affect the rate of a fixed-rate loan, he used to do the opposite by blocking the AutoBiddies out of auctions. He's long been lobbing vast sums at loans I've ruled straight out...
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madpierre
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Post by madpierre on Oct 16, 2015 8:39:56 GMT
1. I am certain his aim is to keep interest rates low to display to potential borrowers what attractive rates Lending Crowd can offer. He has always funded the majority of the loans but in the early days this left ample room for higher bids as there weren’t many of us bidding. Now there are more bidders I suspect he is ensuring the interest rate is kept low by weighting the average down with his later bids. I appreciate why this is happening but it is a careful balancing act and may disuade many potential lenders. Obviously I appreciate that LC would wish to inhibit the ‘Flipping’ tactics previously characterising FC but they do still advertise themselves to lenders as ‘bid at your own rate’. With the underwriter almost filling loans two days before the deadline and their subsequent early closure does not give late bidders a chance, regardless of their desired rate. 2. I started loaning at Lending Crowd for the very reason of a higher degree of confidence both because I believe the applications were considered more rigorously and because of the heavy financing the underwriter was prepared to put in. I have given up at FC (more due to defaults and poor security than fixed rates) and am withdrawing my funds which could find a happy home here at LC. But I am closely monitoring the practices and I if I consider them over manipulated (or see a deterioration in loan quality) then my high standards of rectitude (and common sense) will oblige me to move elsewhere. I am not naïve enough to believe that a level playing field is attainable in the financial industry but I can live with the pretence of one  |
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registerme
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Post by registerme on Oct 21, 2015 9:24:20 GMT
If you look at the SSL loan B, it might struggle to get across the line. Had the "underwriter" not dragged rates down I wonder would it have attracted more interest? As it is he has 40% of the target amount at relatively low rates.
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adrianc
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Post by adrianc on Oct 21, 2015 9:30:48 GMT
If you look at the SSL loan B, it might struggle to get across the line. Had the "underwriter" not dragged rates down I wonder would it have attracted more interest? As it is he has 40% of the target amount at relatively low rates. But there's still nearly 30% of the loan available at full rate... Without the underwriter putting 40% in, the loan would be less than 30% funded, with two days to go. Or am I missing something?
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registerme
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Post by registerme on Oct 21, 2015 9:34:52 GMT
That's a fair point, especially about there being two days to go. Certainly when I bid on it I bid at a rate that was lower than maximum because I feared being knocked out (looks silly now, but hey ho still getting used to the platform). Had the underwriter put 40k in at the top rate I would have been knocking those funds out......
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adrianc
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Post by adrianc on Oct 21, 2015 13:12:37 GMT
Had the underwriter put 40k in at the top rate I would have been knocking those funds out...... Not until it reaches 100% funded, you wouldn't. Only at that point do the highest-rate offers start to get knocked off. Which, really, is exactly what OUGHT to happen with underwriting.
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grahamg
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Post by grahamg on Oct 21, 2015 13:28:37 GMT
G*** A** F******** is a perfect example of what is wrong . We have Bid £35,200 /Target£30,000
with 1 day to go.
However looking at the bids there some very large one's.
L** £5,000 10.60% 07/10/2015 16:35 Live
s******* £5,000 10.50% 07/10/2015 10:07 Live
s******* £5,000 10.35% 05/10/2015 20:35 Live
s******* £3,000 11.00% 01/10/2015 18:19 Live
s******* £3,000 11.00% 15/10/2015 15:42 Live
If S******* is underwriting then only 47% of the loan is available to ordinary lenders if its all underwriting then only 31% who are now bidding against themselves as the loan is oversubscribed.
So in house maybe are both pushing the loan rate down and squeezing the amount available. I don't see max investment limit in the T&C maybe there should be ?
I have no problem with in house filling the remainder of a loan at the end of auction but not at our expense.
A little edit on SSL S*** holds 50% of loan and on SL 40%
Any thoughts?
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kaya
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Post by kaya on Oct 21, 2015 15:34:02 GMT
To be fair, this is probably the first loan I have seen where there is real and sustained competition between 'ordinary' bidders. I would agree that the main underwriter should indeed monitor this carefully, and make adjustments to lower the initial percentage of their large bids if necessary. I do not see a problem so far, but there certainly would be a problem if 'ordinary' bidders were being forced down to much. Overall, rates achievable on the open auctions are still reasonable, though they are hardly worth it on the secondary market, except to pick up the cash incentive. Are the loans good? Only time will tell, and it is encouraging to see someone willing to back them - though I assume they can well afford it if one or two goes bad.
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grahamg
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Post by grahamg on Oct 21, 2015 16:18:23 GMT
Well i put the question to LC about underwriting and got this response.
"I can confirm that all the Investors on our platform are individuals, some of which are high net worth individuals. We have no institutional capital. Each Investor can choose an interest rate that they feel comfortable with. "
"We are not involved in setting rates as a company and until the loan has closed everyone has a fair opportunity."
Interesting !
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Post by thesnoop on Oct 22, 2015 12:38:46 GMT
m***b**** just dropped 2K in at 11% this morning  There was no competition for this one pushing the rate that low, all the filling bids were 13/14% range. Maybe I'm being too cynical here, but it feels like underwriting activity. I can't imagine an investor who throws down 2k a pop investments not having had a look at the going rate and realising he could have put that cash in at 12% or 12.5% tops instead without risking being underbid! |
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Post by grumbledore on Oct 22, 2015 12:51:18 GMT
Well i put the question to LC about underwriting and got this response. "I can confirm that all the Investors on our platform are individuals, some of which are high net worth individuals. We have no institutional capital. Each Investor can choose an interest rate that they feel comfortable with. " "We are not involved in setting rates as a company and until the loan has closed everyone has a fair opportunity." Interesting ! LC have previously said on this forum that companies can open an account (see here p2pindependentforum.com/post/64089) so seems odd for them to say all their investors are individuals. I suppose it could be the case that no Limited Companies have actually opened an account and bid, even though they could. A Companies House search would suggest that the large bidder is related to LC whilst being a separate legal entity. Interesting indeed...
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