mikes1531
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Post by mikes1531 on Apr 14, 2014 11:46:10 GMT
100% funded with underwriting Following drawdown last week (8/Apr) the underwriters appeared to have put all their loan parts on the AM. As of last night £336k of those parts were still available. This morning, there were none for sale! Did someone with very deep pockets come along and scoop up all the parts? Or did the underwriters give up trying to sell their parts because nobody's been buying? Or is there a problem with this loan? I looked at the loan's web page to see if I could learn anything, but found nothing except an unanswered question regarding what looked to the questioner like an inconsistency between the reported term of the loan and the size of the one and only scheduled payment. (I think I know the answer to the question, but it's probably not appropriate to post it in a public place, so if the questioner is reading this, please feel free to PM me.) Does anyone here know anything new about this loan?
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oldgrumpy
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Post by oldgrumpy on Apr 14, 2014 12:01:44 GMT
As of last night £336k of those parts were still available. This morning, there were none for sale!
There's £216K showing on the AM now.
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mikes1531
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Post by mikes1531 on Apr 14, 2014 14:09:11 GMT
As of last night £336k of those parts were still available. This morning, there were none for sale!
There's £216K showing on the AM now.
Easy go, easy come! 
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Post by Ton ⓉⓞⓃ on Apr 14, 2014 17:16:23 GMT
With Wrexham I checked at a few mins after 10 this morn and there were 1234units, a while after that they were all gone. Now there's a nice cashback bonus.
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mikes1531
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Post by mikes1531 on Apr 15, 2014 1:19:38 GMT
Now that it's gone midnight, the horseshoe charts have had their daily update. This loan has gone from having £336k of underwriter involvement to an underwriter share of £212k. A few possibilities come to mind... - The underwriters decided to keep £125k of parts for themselves
- Someone came along and purchased £125k of loan parts (and earned themselves an instant £1,562.50 cashback bonus!)
- The borrower decided they really didn't need such a big loan.
The latter possibility could explain why all the loan parts went missing from the AM for a few hours on Monday. And it doesn't strike me as too far-fetched either. The developer could have taken a few more 'off plan' deposits and now is expecting an improved cash flow. Or perhaps they've found another source of funding. Then again, this loan is supposed to have a minimum charging period of six months, so an early release of the commitment might not be such a bright idea.
Can anyone else -- including AC -- shed any more light on this?
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andy2001
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Post by andy2001 on Apr 15, 2014 3:11:00 GMT
If the underwriter doesn't want to sell all their loans parts then they won't put all of them all on the market like Re*****h. This doesn't effect the shoe horn. If the lender had made a partial repayment then this would show in the payments. If it's still done the way CCL was it may even be classed as a hole new loan. It seems clear the underwriters have simply sold a good chunk of loan parts.
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Post by Ton ⓉⓞⓃ on Apr 15, 2014 9:10:59 GMT
mikes1531 this might be interesting but possiblely out of date, If someone on the forum is trying to buy a very large number of loan parts and is getting an error, you're actually submitting enough data to trigger our Denial of Service protection. We're going to adjust the way it works to allow large transactions to get through these protections but in the mean time if you break your purchase up into a couple of smaller transactions then it will work fine. Edit;We've increased the number of loan parts you can purchase in one transaction to double what it was before. A more elegant solution is in the works but needs to be tested before being rolled out so will take us a little while. Anyone know if this issue now has an elegant solution? Anyone know what was the limit?
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Post by Ton ⓉⓞⓃ on Apr 15, 2014 9:40:16 GMT
With the u/wers I've always assumed that they get the full interest rate due on a loan without any deduction from AC as the deal simply wouldn't happen without them. But the bargain with AC is that they have to sell when AC want. If this is true, and I must be wrong to some degree, then if they want to go to Lender status then they have to take Lender returns. These are just my ideas etc. Please correct and add.
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mikes1531
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Post by mikes1531 on Apr 15, 2014 13:40:32 GMT
As far as I'm concerned, if an underwriter decides to keep some of all of their loans parts then they're no longer underwriters for those parts -- they're lenders/investors. The horseshoe chart should be adjusted at the time they make that decision. When I decide when and which loans to invest in, the presence or absence of underwriters affects my decision. For instance, if an auction is near its closing time and still has a lot of underwriter green on the chart then I'll expect to be able to pick up parts of that loan on the AM (e.g. Re***ch). If a loan already has been drawn down and still has a lot of underwriter green on the chart then I'll expect that selling parts of that loan on the AM will be difficult if not impossible (e.g. Ep****) so I'll assume that I'll probably have to keep those parts until maturity.
If the bright green on the horseshoe charts doesn't actually mean that those parts are going to be sold on the AM at the earliest opportunity, then the charts are misleading -- to me at least -- and I shouldn't be trying to use them the way I have been. If that's the case then I'd really appreciate it if AC told me that.
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j
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Post by j on Apr 15, 2014 17:51:34 GMT
As far as I'm concerned, if an underwriter decides to keep some of all of their loans parts then they're no longer underwriters for those parts -- they're lenders/investors. The horseshoe chart should be adjusted at the time they make that decision. When I decide when and which loans to invest in, the presence or absence of underwriters affects my decision. For instance, if an auction is near its closing time and still has a lot of underwriter green on the chart then I'll expect to be able to pick up parts of that loan on the AM (e.g. Re***ch). If a loan already has been drawn down and still has a lot of underwriter green on the chart then I'll expect that selling parts of that loan on the AM will be difficult if not impossible (e.g. Ep****) so I'll assume that I'll probably have to keep those parts until maturity. If the bright green on the horseshoe charts doesn't actually mean that those parts are going to be sold on the AM at the earliest opportunity, then the charts are misleading -- to me at least -- and I shouldn't be trying to use them the way I have been. If that's the case then I'd really appreciate it if AC told me that. It's difficult. On one hand, totally agree that there should be a clear distinction between underwriting & investing. On the other, many loans would never have closed if not for them & if they want to keep some or all parts of underwriting, how can we argue. If the latter though, then a certain % must be sold on AM to justify their extra commission.
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mikes1531
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Post by mikes1531 on Apr 15, 2014 18:18:44 GMT
As far as I'm concerned, if an underwriter decides to keep some of all of their loans parts then they're no longer underwriters for those parts -- they're lenders/investors. The horseshoe chart should be adjusted at the time they make that decision. When I decide when and which loans to invest in, the presence or absence of underwriters affects my decision. For instance, if an auction is near its closing time and still has a lot of underwriter green on the chart then I'll expect to be able to pick up parts of that loan on the AM (e.g. Re***ch). If a loan already has been drawn down and still has a lot of underwriter green on the chart then I'll expect that selling parts of that loan on the AM will be difficult if not impossible (e.g. Ep****) so I'll assume that I'll probably have to keep those parts until maturity. If the bright green on the horseshoe charts doesn't actually mean that those parts are going to be sold on the AM at the earliest opportunity, then the charts are misleading -- to me at least -- and I shouldn't be trying to use them the way I have been. If that's the case then I'd really appreciate it if AC told me that. It's difficult. On one hand, totally agree that there should be a clear distinction between underwriting & investing. On the other, many loans would never have closed if not for them & if they want to keep some or all parts of underwriting, how can we argue. If the latter though, then a certain % must be sold on AM to justify their extra commission. Apologies if I didn't make myself clear. I appreciate AC bringing in underwriters whenever they're need to make sure a loan if fully funded and proceeds. And I don't begrudge U/Ws for the extra fees they earn. I presume they're taking a risk by putting their money in and it's appropriate that they should be rewarded when they step in when other lenders won't. My only problem is with the info AC are providing. If the U/Ws are investing as a catalyst to get things going, with the intention of exiting when that's feasible, then that's when the U/W green should be shown on the horseshoe chart. If, however, the U/Ws are investing with the intention of holding their investment, then the chart should treat that investment the same as any other investment. I don't think I care if the U/Ws are getting better terms than I am when they're investing for their own account because they're providing a service to AC that I'm not. But I do want the info in the horseshoe charts to reflect the reality of whether or not the 'green' parts are going to come onto the AM, as that influences my investing activity because of the effect it has on my own investments' liquidity. I accept that an underwriter might intend doing one thing when they invest and change their mind later. They're entitled to do that. But I think they ought to keep AC informed of their intentions, and AC ought to pass that info along to us smaller lenders via the horseshoe charts.
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andy2001
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Post by andy2001 on Apr 15, 2014 18:30:35 GMT
What you can say for sure with the green in the house shoe is that you can remove them at the auction stage. In most cases these units seems to be put up for sale on the aftermarket, but there's no guarantee of this.
This is from the Q&A on Re*****h
On 7th Apr 2014 at 02:17 PatS1531 asked:
"Very few of the loan parts held by the underwriters have been offered for sale in the aftermarket since the loan completed over three weeks ago. Is there a simple reason for this?" ◦ On 14th Apr 2014 at 13:40 Assetz Capital answered:
"The underwriter is under no obligation to sell their loan units."
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j
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Post by j on Apr 15, 2014 18:36:41 GMT
It's difficult. On one hand, totally agree that there should be a clear distinction between underwriting & investing. On the other, many loans would never have closed if not for them & if they want to keep some or all parts of underwriting, how can we argue. If the latter though, then a certain % must be sold on AM to justify their extra commission. Apologies if I didn't make myself clear. I appreciate AC bringing in underwriters whenever they're need to make sure a loan if fully funded and proceeds. And I don't begrudge U/Ws for the extra fees they earn. I presume they're taking a risk by putting their money in and it's appropriate that they should be rewarded when they step in when other lenders won't. My only problem is with the info AC are providing. If the U/Ws are investing as a catalyst to get things going, with the intention of exiting when that's feasible, then that's when the U/W green should be shown on the horseshoe chart. If, however, the U/Ws are investing with the intention of holding their investment, then the chart should treat that investment the same as any other investment. I don't think I care if the U/Ws are getting better terms than I am when they're investing for their own account because they're providing a service to AC that I'm not. But I do want the info in the horseshoe charts to reflect the reality of whether or not the 'green' parts are going to come onto the AM, as that influences my investing activity because of the effect it has on my own investments' liquidity. I accept that an underwriter might intend doing one thing when they invest and change their mind later. They're entitled to do that. But I think they ought to keep AC informed of their intentions, and AC ought to pass that info along to us smaller lenders via the horseshoe charts. In which case I'm in total agreement
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Post by Ton ⓉⓞⓃ on Apr 15, 2014 19:34:58 GMT
What you can say for sure with the green in the house shoe is that you can remove them at the auction stage. In most cases these units seems to be put up for sale on the aftermarket, but there's no guarantee of this.
This is from the Q&A on Re*****h
On 7th Apr 2014 at 02:17 PatS1531 asked:
"Very few of the loan parts held by the underwriters have been offered for sale in the aftermarket since the loan completed over three weeks ago. Is there a simple reason for this?" ◦ On 14th Apr 2014 at 13:40 Assetz Capital answered:
"The underwriter is under no obligation to sell their loan units."
I must say that PatS1531 asks some very pertinent questions, I just wish they were on this board doing that kinda work here too...!
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pikestaff
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Post by pikestaff on Apr 15, 2014 21:05:04 GMT
IMHO an underwriter is fully entitled to sell or keep their loan parts as they see fit, and there is no reason why they should be under any obligation to tell us, or AC, of their plans. And no, I am not an underwriter. £250k (which is what I was told you need to be invited) is too rich for me!
I just thank the underwriters for being there and enabling AC to get big loans away - something that TC and FC struggle with. I worry that the supply is limited, which will constrain AC's growth unless they reduce the entry limit significantly.
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