sl75
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Post by sl75 on Dec 18, 2015 8:12:54 GMT
Having been following the upcoming updates pretty closely for several months, I came to the conclusion that the slow pipeline has very little to do with AC. Delays are generally down to borrowers and their lawyers (Stuart has implied as much) who very definately appear to be part time. AC seem to spend an inordinate amount of time chasing stuff. Perhaps I'm being a little naive, but shouldn't it be the borrower (who wants the money) and the lawyer (who is obliged to act in the borrower's interests) doing the chasing? All AC should need to do is clearly communicate their requirements to the borrower in advance, and then maintain a status of "how far through the process we are" and "what is still outstanding" - ideally on some kind of "status" page that the borrower can access, but at least internally so that in the event that the process stalls, AC need only fire off a quick 2-minute email saying "we're still awaiting documents X, Y and Z, please refer to the document we sent you on [date] (copy attached) detailing our standard loan application process".
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Post by oldnick on Dec 18, 2015 8:26:58 GMT
Having been following the upcoming updates pretty closely for several months, I came to the conclusion that the slow pipeline has very little to do with AC. Delays are generally down to borrowers and their lawyers (Stuart has implied as much) who very definately appear to be part time. AC seem to spend an inordinate amount of time chasing stuff. Perhaps I'm being a little naive, but shouldn't it be the borrower (who wants the money) and the lawyer (who is obliged to act in the borrower's interests) doing the chasing? Are some borrowers shopping around for the best deal and dragging their heels while doing just enough to keep all prospective lenders interested?
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shimself
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Post by shimself on Dec 18, 2015 9:46:00 GMT
shimself : Aren't you being a little bit harsh? AC have three loans totalling £839k scheduled to draw down tomorrow. Having been following the upcoming updates pretty closely for several months, I came to the conclusion that the slow pipeline has very little to do with AC. Delays are generally down to borrowers and their lawyers (Stuart has implied as much) who very definately appear to be part time. AC seem to spend an inordinate amount of time chasing stuff. 'twas ever thus. I think TC's model with "sponsors", loan introducers, is more effective.
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sl75
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Post by sl75 on Dec 18, 2015 10:09:01 GMT
Perhaps I'm being a little naive, but shouldn't it be the borrower (who wants the money) and the lawyer (who is obliged to act in the borrower's interests) doing the chasing? Are some borrowers shopping around for the best deal and dragging their heels while doing just enough to keep all prospective lenders interested? Probably... and I guess by ruling themselves out of the market for borrowers who need a quick decision and drawdown, AC are going to get a higher proportion of "shopping around for the best deal" borrowers. However, by chasing too much, it may make AC seem "too keen" giving the borrower the impression that the terms are too much in AC's favour and thus further negotiation to swing them in the borrower's favour should be initiated?
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Post by reeknralf on Dec 18, 2015 10:59:40 GMT
I'm with Butch Cassidy here. Surely 'pricing to risk' refers to ranking loans, and 'pricing to liquidity' refers to the headline rate. They are not two different ways of pricing a loan.
A model can estimate default risk. In practice this will be a range of expected outcomes, as uncertainty in parameter estimates and model assumptions will render a point estimate meaningless. I expect platforms to use models to rank loans along the lines of loan x should pay 2% less than loan y.
I can't for the life of me see the purpose of a model that says, with spurious precision, loan x should pay 8% when everyone else is selling them at 7%.
From the point of view of shareholders, lenders and borrowers alike AC should aim to offer loans that are competitive to those offered by their peers. I like AC, but I wish they'd spend a bit less energy trying to protect us from ourselves.
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bigfoot12
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Post by bigfoot12 on Dec 18, 2015 12:31:49 GMT
Surely 'pricing to risk' refers to ranking loans, and 'pricing to liquidity' refers to the headline rate. They are not two different ways of pricing a loan. I think that pricing to liquidity refers to pricing as it used to happen on FC, for example. A smaller loan will have a lower rate than a larger loan, even if they have a similar risk. Similarly AC could have brought a few loans over the last few months at lower rates because there was excess money (for the number of loans available). On the other hand pricing to risk (as you possibly suggest) doesn't mean that AC can't charge more when there is less competition as happened when banks were exiting some markets. Similarly when there is more competition (from regular banks, challenger banks, P2P and other finance companies) they won't be able to charge as much, but there will be a rate below which they will not lend, even if there might be demand from their lenders. My understanding is perhaps a little idealised.
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