Possible "Pre-funding" scheme for the SM?

If you were to buy a loan at a loss at Ablrate you could simply ask Ablrate to reverse the transaction, something they have indicated they are willing to do. Though they also monitor the secondary market and might instead contact you to ask if you really meant to do that. They have contacted buyers who made unusual purchases in the past. Though it doesn't seem particularly hard to avoid buying a loan when the AER is a negative number.

I'm not sure that it really takes much erudition to use such secondary markets. There have been more than a quarter of a million successful transactions on the Bondora secondary market, which I think has probably had more transactions than any other in Europe. it's pretty much a case when buying of looking at the AER and deciding if you like it, or when selling adjusting markup or down to the AER you think it'll take to get the deal done, or the one your'e willing to accept if you're not wonderfully keen to sell, just willing for the right price.

It is possible to buy at a loss, just go with a negative AER purchase and the total of capital and interest repayments will be less than the amount paid for the loan. But it's not likely to happen since the negative AER is pretty clear. There are some negative AER offers at times.

What does the seller think when they find that they didn't sell all they were trying to sell? That is the required condition for all buyers to get what they wanted, unless it happens that the seller and buyers had an exact match of amounts wanted. What is much more likely isn't that but rather many buyers not getting what they wanted because there wasn't enough on sale.



Hardly only those who lack patience, though it's also natural for new investors to want to see lots of opportunities in a secondary market so they can put their money to work at their choices of platforms rapidly and with broad diversification between and within each platform, at the potential cost of accepting lower interest rates to do it if they prefer not to wait. For the platform that's a competitive issue, since the money has gone to the competition.

The discussion is somewhat moot for the moment, though, since I don't think that there will be a change here any time soon. Even when there is some change in demand, perhaps after significant interest rate rises, I suspect that platforms with par-only markets may keep at par-only to prevent secondary market sales from competing with the primary market for money, forcing the secondary to stay offering the lower par-only interest rates.

The sucess of SS is allowing any investor simple access to high risk/reward investments. I fear this will also be their ultimate downfall. If you find buying or selling at premium/discount intimidating, I think you should be asking yourself what you're doing on a platform like SS.

It's fine to say that demand exceeds supply so you should be prepared to wait several months to build up an investment, but I disagree that a capacity to sit in front of a screen for hours whilst pressing F5 constitutes being 'patient'. It just means you place a very low opportunity cost on you time.

Errr..not confused..it was sarcasm.
I have invested for over a year with SS and there have been plenty of times where there was lots available.  When I have had spare cash and nothing much on SS I have put it somewhere else.  Each time a loan has gone live there has been tens of thousands on the secondary market. 
As these are bridging loans SS cannot source one every week. The current pipeline has over £10mil. As when these come on there will be more on the SM again.

The fact is lots of people like myself are happy with SS.  SS was able to grow rapidly with this model due to attracting investors with its simplicity. The changes made and further changes will deter a lot as well. 

The argument against selling at a discount is much weaker, basically a desire for simplicity. Guaranteeing an exit possibility (at a price) does have attraction. The argument against selling at a premium is much stronger. Caveat Emptor has been largely ignored by the authorities in recent years - think PPI, bank charges etc. A platform which creates a market place in which a guaranteed loss is possible is risking regulatory punishment. The need for it is also much weaker. It is easy to see how someone might really need to sell quickly, but a scenario in which they needed to invest quickly is unlikely IMO.

If rates were to drop, it would be reasonable to allow holders' of older loans to sell at a premium.

Lending at 12% pretty much is a guarantee of losses. Arguing that hard-to-value/risky loans should be set out such that they appear simple investments, suitable for people who struggle with simple maths (aka KISS on this forum) is to advocate a much greater swindle than allowing people to sell 12% loans at 13% premiums.

I do not see why they need a premium etc even if rates change. With MT now offering some loans at 10% in near future I will probably sell some loans at 12% to diversify into them this is my choice I do not think it would affect SS or other platforms 

My memory/info does not go that far. For how long did the 15% mortgage period lasted?