jimbob
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Post by jimbob on Aug 25, 2016 10:02:17 GMT
If everyone followed the same strategy then loans would be impossible to buy/sell  Personally I try and taper downwards as loans approach nominal maturity. |
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Post by GSV3MIaC on Aug 25, 2016 10:28:19 GMT
As mentioned before, if everyone followed that strategy we would have a feedback spiral down to oblivion, where you tried to sell loans at 30 days, so someone sells at 31, so then I sell at 32, and eventually you sell before they are drawn down.
You can't rely on liquidity, so you might as well spread it around, assume everything will overrun by 90 days (although I do wish SS would make the time remaining less arbitrary, and/or allow for proper refinance / roll over), and not just stick all your eggs into the (few) loans with 6+ months left. For defined exit dates (assuming a stream of new lenders) there is always MT (among others).
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littleoldlady
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Post by littleoldlady on Aug 25, 2016 12:17:28 GMT
As GSV3MIaC says one of the big issues at the moment is the apparently inaccurate "Remaining Term" shown on the loans table. If this was updated on a regular basis, in essence showing no negative periods as we are told that all borrowers are pre-funding the interest on periods beyond the originally stated time, lenders would have a more relaxed approach to loans with less days remaining. This is of savingstream 's own making and can be easily fixed. It would certainly cut the number of complaints posts on this subject. We can be fairly sure that not all borrowers are pre-funding the interest on periods beyond the originally stated time, though probably some are. The problem for SS is if they make this clear by changing the end date, so eliminating negative days, on those that have pre-funded and extended then we will be able to identify those that have not.
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Post by GSV3MIaC on Aug 25, 2016 13:42:39 GMT
I suspect we have the right to know that particular piece of information though. 8>.
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Post by Duane Dibley on Aug 26, 2016 7:53:37 GMT
Everyone employs this strategy! Where are all of the sold short-dated/negative loans parts going? The "loan monster"? No we don't. I for one. This strategy does not eliminate the risk it merely rolls it forward into a longer term loan. If there is a rush to the exit those in short term loans will be better placed. IMO diversification is the best risk reduction strategy. There's no reason at all why selling short dated loans and diversifying should be mutually exclusive, it's easy enough to sell holdings in one short dated loan and invest that money in two or three of the newer loans. In fact with the current deal flow I don't see how you can be fully diversified without selling some of the older loans to invest in the new ones, rather than just waiting in vain for them to repay. Unless of course you've got a magic money tree. Still, please keep holding or buying those old and defaulting loans, it makes it easier for those of us that want to sell. You know it makes sense.
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Post by retired2005 on Aug 26, 2016 9:30:29 GMT
Re :the last poster's last line ...I agree.... !!!
Who IS buying these 10 and £20K chunks of farmland ? ( but at least my small loanpart now only has circa 7K in front of it in the queue .....would have been more than 100K a few days ago ....)
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littleoldlady
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Post by littleoldlady on Aug 26, 2016 17:35:20 GMT
No we don't. I for one. This strategy does not eliminate the risk it merely rolls it forward into a longer term loan. If there is a rush to the exit those in short term loans will be better placed. IMO diversification is the best risk reduction strategy. There's no reason at all why selling short dated loans and diversifying should be mutually exclusive, it's easy enough to sell holdings in one short dated loan and invest that money in two or three of the newer loans. In fact with the current deal flow I don't see how you can be fully diversified without selling some of the older loans to invest in the new ones, rather than just waiting in vain for them to repay. Unless of course you've got a magic money tree. Still, please keep holding or buying those old and defaulting loans, it makes it easier for those of us that want to sell. You know it makes sense. I do not sell simply because there are only x days to go. I will try and sell if I get wind of a problem with the loan but the chances are that every one else will also be trying to unload it. I do not buy "old and defaulting loans" so I am afraid that I do not assist you in your strategy. As has been pointed out many times this strategy will not work if too many people try to use it. But you are entitled to your opinion and to follow whatever strategy you wish, and I cannot stop you being rude.
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jonbvn
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Post by jonbvn on Aug 27, 2016 23:55:21 GMT
I will admit that looking back on the ranking algo I use to buy and sell loans on SS, both PBL81 and PBL64 always ranked low. I use 5 metrics to rank loans on SS: LTV (not the stated one, my estimate of LTV, lower is better), loan term (longer is better), loan size (smaller is better) and two liquidity metrics (SM turnover/loan size and SM loan available/% total SM). Because of their relative size available on the SM, both loans always ranked lower than would have been expected when regressed vs. loan duration/loan size/LTV. I do wonder whether some investors had done enough DD to know something was possibly sub-optimal about both of them. Generally, I disagree with you wrt this loan. I invested when the loan became available initially Therefore, there was no SM data available. Of course my choice. However, a large house in Surrey seemed like a a good investment. TBH, I do not see how any DD by any SS lender could have discovered the over development by the borrower. IMHO the valuing surveyor is culpable. Not down to inadequate DD, but perhaps misrepresentation by the borrower and possible incompetence by the valuing surveyor. Remember 300 sq.m larger than the plans.........
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Aug 28, 2016 0:16:43 GMT
I will admit that looking back on the ranking algo I use to buy and sell loans on SS, both PBL81 and PBL64 always ranked low. I use 5 metrics to rank loans on SS: LTV (not the stated one, my estimate of LTV, lower is better), loan term (longer is better), loan size (smaller is better) and two liquidity metrics (SM turnover/loan size and SM loan available/% total SM). Because of their relative size available on the SM, both loans always ranked lower than would have been expected when regressed vs. loan duration/loan size/LTV. I do wonder whether some investors had done enough DD to know something was possibly sub-optimal about both of them. Generally, I disagree with you wrt this loan. I invested when the loan became available initially Therefore, there was no SM data available. Of course my choice. However, a large house in Surrey seemed like a a good investment. TBH, I do not see how any DD by any SS lender could have discovered the over development by the borrower. IMHO the valuing surveyor is culpable. Not down to inadequate DD, but perhaps misrepresentation by the borrower and possible incompetence by the valuing surveyor. Remember 300 sq.m larger than the plans......... DD isn't always easy, but in this case, DD by investors could have found the problems with this security (and an investor did - see below*). All the information that has surfaced here has been in in the public domain, easily findable with a simple google search, and TBH, I'm surprised it didn't come to surface sooner. *In fact, it seems that it was an investor that raised the concerns to SS that led to the latest update! I think there is a tendency amongst investors to forgo DD after a loan goes live, but in my honest opinion, DD should be carried out both before and after a loan goes live. Despite the above, I do agree that the valuing surveyor is culpable.
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jimc99
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Post by jimc99 on Aug 28, 2016 4:03:13 GMT
And how on earth did the local authority building control officer miss this? They are supposed to sign off a new build at several stages of construction. Beyond belief that the build was so different from approved plans......
Even worse the place could have been built without their knowledge, in which case things are really bad. Foundations, drainage, structural aspects, insulation, etc, all having to be checked after the event if that's possible.
Fingers crossed on this one.
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duck
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Post by duck on Aug 28, 2016 4:27:33 GMT
Not so far from belief!
I used to run a small building business and I always kept the Control Officers on my side since I knew they could make my life hell. Others take a different approach.
A house in the road I live in was bought by 'amateur developers' a few years ago. After we had defeated the 'build an extra 5 metre wide house in the garden' plans they went for the conventional 'extension'.
2 years down the line the rejected (overlooking neighbours) side windows went in, the non approved attic conversion and extension went on and the 'green permeable' parking for 3 cars turned into permanent hard standing for 4 cars. Due to the history of the development plans the Planning Officers visited often, even the Head of Planning visited due to the number of complaints. To date no enforcement action of any kind.
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jimc99
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Post by jimc99 on Aug 28, 2016 6:13:51 GMT
I agree and unfortunately for us and this loan it will make it virtually impossible to sell this property until the planning and building control issues are resolved. Suppose it could be demolished and the land sold!!
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Post by martin44 on Aug 28, 2016 6:36:27 GMT
No more need for panic, retrospective planning has now been approved, Planning Application Ref: MO/2016/**** Status Description: Decision made 25-Aug-2016 APPROVED WITH CONDITIONS I can only assume that building regulations are in order too. |
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Post by Deleted on Aug 28, 2016 6:52:26 GMT
about 100 sq metres to be demolished if I'm reading that correctly
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Post by martin44 on Aug 28, 2016 6:56:41 GMT
Quite correct, the more important issues were the ridge height, extra windows and additional upper floor space which thankfully are now ok.
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