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Post by GSV3MIaC on Oct 9, 2015 17:39:29 GMT
One payment left, or buyer rate <4%, are the only two I know of.
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oldgrumpy
Member of DD Central
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Post by oldgrumpy on Oct 9, 2015 18:30:09 GMT
SteerpikeGSV3MIaCWell done, gents! Thank you. Two of the parts were "one payment left". I was only whizzing by looking at the rate and clicking "sell". Another thirty parts up for sale now, some at par, some at 0.1%/0.2% markup to try and cover a bit of the fees while maintaining the "magic" 10% buyer rate. (Don't go searching; you won't want them  ) Now why couldn't Fanny Craddock just produce a pop-up to explain when someone tries to breach that regulation. I mailed them; no doubt in two days they will just refer me to the page detailing what can't be sold. edit: and they are selling already  at below the new fixed rates.
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Post by GSV3MIaC on Oct 9, 2015 19:19:45 GMT
I already raised it as a complaint - if I can't sell them, *** do they even show them to me on the 'sell individually' page (they don't show the RBR ones, for instance)?
However, as someone pointed out, this is the only page on the whole site that'll tell you the true interest rate on a loan part, regardless of how you got it or whether you paid a premium. so maybe it has its uses.
[My list-bot tripped over the same issue; now she's been taught to look at payments remaining column].
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Post by bollidear on Oct 9, 2015 19:26:39 GMT
I'm out.
To quote Johnny Lydon:
"Ever get the feeling you've been cheated? Good night!"
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am
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Post by am on Oct 9, 2015 21:16:27 GMT
Property loans might be an option, but only with 2% CB, and slow flipping - don't want significant sums invested in overpriced London Flat developments, Thanks. ** They just are not there guys/gals .. don't blame the autobidders or bots (although B*z... and el*** haven't helped, I agree), the volume has not appeared. I'm still lending on property loans - but I'm passing on London and stockbroker belt projects, and other ones with high per unit values, such as the recent Wilmslow one. I'm thinking I'll have to find another source of SME loans, in order to maintain asset class diversification.
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jimbo
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Post by jimbo on Oct 11, 2015 7:22:13 GMT
I'm done with FC now. Feel completely disgusted by this change, and that the explanation of how it would benefit us was an insult to my intelligence. It seems clear they no longer need retail money coming into the platform and can more than compensate for its loss with institutional demand for whole loans. I feel the new fixed rates do not adequately compensate me for the risks involved. I'm going to stick with Thincats and Funding Knight for the forseeable future.
I personally feel that the next severe downturn in the Business Cycle will see a wave of defaults hit all P2B platforms. Funding Circle will certainly get theirs and I suspect it might be awkward explaining 20%+ defaults to the autobid army. Yield hungry institutions buying whole loans will probably be less bothered. With the exception of family offices, it's mostly not their own money they're playing with.
When it's your own money you're investing at the riskier end of the credit spectrum, it makes sense to be able to choose a rate you feel is commensurate with the default risk involved. This new fixed rate modwl is a train wreck waiting to happen in my view...
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jayjay
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Post by jayjay on Oct 11, 2015 8:24:06 GMT
Fixed rates bring a touch of reality to some people on this site. FC was becoming little more than a gaming site and an addictive one at that. The entertainment for many has clearly gone. Unsecured lending to SME's should be more then pass the parcel. None of us want to be the one holding it when it goes pop. After two and half years with FC, I am selling my SME loans and will only hold secured property to term in the future. I expect the SM market to move to discount transactions only within a month or so. This would be a normal market where you pay a price if you want to liquidate early - instead we have had silly games with CB and early closing leading to premiums. That is over and we are back in the real world of investment. Got to be a good thing but less fun?
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Post by GSV3MIaC on Oct 11, 2015 10:01:41 GMT
Fixed rates bring a touch of reality to some people on this site. FC was becoming little more than a gaming site and an addictive one at that. I take issue with the 'becoming' part .. it always was a computer gaming site. See This old post for instance.
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Post by nightmare on Oct 11, 2015 10:37:17 GMT
Although I am not a fan of the change to fixed rates I will continue to use FC for the bulk of my P2P/P2B lending. There are better rates available elsewhere but those platforms on the whole are no where near as established as FC and carry much greater risk of going pop. I really think that P2B lending in particular is at a similar stage as P2P betting was a few years ago where one player (Betfair) had outgrown its rivals and it went from strength to strength whereas many of its smaller rivals began to struggle and eventually failed.
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Post by gadget on Oct 11, 2015 17:18:41 GMT
At the risk of going slightly off topic i'm intrigued that lots of people are stopping on SME loans and only continuing on the property loans. Why is this?
In my mind property development loans have a big problem in that they'll be a great deal most of the time but in a property downturn will pretty much all go bad at the same time.
Personally I'd only want a small proportion of my money in them.
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am
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Post by am on Oct 11, 2015 17:31:28 GMT
At the risk of going slightly off topic i'm intrigued that lots of people are stopping on SME loans and only continuing on the property loans. Why is this? In my mind property development loans have a big problem in that they'll be a great deal most of the time but in a property downturn will pretty much all go bad at the same time. Personally I'd only want a small proportion of my money in them. In my case I'm not rejecting the principle of SME loans, just the way FC are going about operating them. There is loan specific risk. There are two ways of dealing with this. Either pooling the risk with a provision fund, like AC's GBBA, or by making an informed judgement on whether the risk on an individual loan is acceptable, like AC's MLIA, or FC's property loans. FC and its borrowers no longer offer either - it appears that we're expected to trust FC's judgement and rate bands, which I'm not willing to do. (My de facto policy was to lend if FC thought it was a good risk AND I thought it was a good risk.)
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adrianc
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Post by adrianc on Oct 11, 2015 17:32:55 GMT
At the risk of going slightly off topic i'm intrigued that lots of people are stopping on SME loans and only continuing on the property loans. Why is this? Very simple. Risk vs return. They'll "go bad", in that the security will be worth <sucks teeth> 25% less than the outstanding value. SME loans, when they go bad, have you rummaging for unsecured biscuit crumbs. When the return was (potentially) better than the property loans, and you had time to do due diligence and figure out at what rate you would walk from any given loan, it was worthwhile. Now it's all chod at peanuts rates, and you have to leap at it or miss out, it's a mug's game. A+ at 8%+1% over 12 mo = 9%, with ~70% LTV security against something you can kick if need be...? To get that rate from an A+ unsecured SME loan? Well, you can't. The highest is 8.3% for 48mo+, so a much higher default risk anyway. If you want 9% from SME, you're looking at A. And it's long since been accepted wisdom that A+ property is more like A++ or even A+++ compared to SME, precisely because of that security. B'sides, I rather suspect that many (most?) CB property parts get promptly listed on the SM at par. If they sell to an autobiddy? Great. Instant return boost, if you can then put that money back into another CB property part... Let's say you're buying 12mo +2% CB parts - and they take a whole 6mo to sell. That's just taken your return from 10% to 12%. Sell 'em every 3mo, and that's 16%.
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Post by aloanatlast on Oct 11, 2015 18:17:47 GMT
They'll "go bad", in that the security will be worth <sucks teeth> 25% less than the outstanding value.
If the builder completes the job and has to sell cheap.
Not sure what happens if the builder goes bust leaving the job a quarter finished and/or it's impossible to raise the finance to finish the job. I could see a first tranche being written off because anything else would be throwing good money after bad.
I could think of other ways a project could be doomed to failure after most of the early money has been spent.
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Post by gadget on Oct 11, 2015 18:37:34 GMT
They'll "go bad", in that the security will be worth <sucks teeth> 25% less than the outstanding value.
If the builder completes the job and has to sell cheap.
Not sure what happens if the builder goes bust leaving the job a quarter finished and/or it's impossible to raise the finance to finish the job. I could see a first tranche being written off because anything else would be throwing good money after bad.
I could think of other ways a project could be doomed to failure after most of the early money has been spent.
First tranche would be to buy the land which they could still sell. Though if property falls 25% then may mean development land falls about 50% so recovery wouldn't be great. Still i think average 75% recovery is a reasonable assumption (though may take a while). My problem is that i also think the default rate going from 0% to 50% is also a reasonable assumption... I'm still buying property parts though. But only a small proportion of my portfolio and only short term (< 1 year) loans with cashback. Short term makes the cashback more powerful too...
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adrianc
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Post by adrianc on Oct 11, 2015 18:42:18 GMT
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)
at below the new fixed rates.
