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Post by perpetualtraveler on Apr 30, 2016 10:52:33 GMT
At what price discount do 60+ overdue loans typically sell?
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Post by rahafoorum on Apr 30, 2016 10:55:21 GMT
Hugely varies loan by loan depending on the type of loan and situation. You could take a quick glance at the stats highlighted here: bondpicking.com/Or simply look into the resale archive dataset from Bondora to see what the sales rates are around nowadays for specific loans. |
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Post by perpetualtraveler on Apr 30, 2016 18:51:29 GMT
Thanks for the link, not sure how to use this.. do you have any tips on where to look?
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Post by perpetualtraveler on May 1, 2016 12:49:29 GMT
it would also be interesting to know at what level of discount 60+ overdue loans (in lets say the collection stage) become worth it to buy.. I see 52% recovery rate quoted by Bondora, so perhaps any discount above that could be worth to be in small amounts spread out over many loans?
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323 
Likes: 897
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Post by JamesFrance on May 1, 2016 15:38:37 GMT
Where do you see 52% recovery rate? What is such a claim based on? I am not saying it is impossible but recovery amounts for my defaulted loans will not be known for many years and the total in default is still increasing rapidly even after some is recovered.
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Post by perpetualtraveler on May 1, 2016 15:40:52 GMT
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Post by perpetualtraveler on May 1, 2016 15:52:08 GMT
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323
Likes: 897
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Post by JamesFrance on May 1, 2016 16:00:57 GMT
That post is dated June 11 2014 which is just before the default rate began to increase rapidly, so it has no relevance to today. I would suggest you look through the forum topics started since then to see what has happened more recently.
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Post by rahafoorum on May 1, 2016 16:13:16 GMT
it would also be interesting to know at what level of discount 60+ overdue loans (in lets say the collection stage) become worth it to buy.. I see 52% recovery rate quoted by Bondora, so perhaps any discount above that could be worth to be in small amounts spread out over many loans? This is something you definitely shouldn't be doing. Especially since you don't seem to grasp the real situation with these loans yet. But even if you did, then Bondora is showing incorrect values for any loans that have had any recovery through DCA so you don't really know what amount of claim you are actually buying. A €20 loan piece might actually only be €10 in reality. Also feel free to ignore any recovery figures from 2013 and before. Those have almost no relevance for today whatsoever for many reasons. Some of those: 1. Since 2014 there are new countries added to the platform which haven't shown anything close to Estonian recoveries. 2. The recovery process has been totally changed and from at least the data that I've checked for the defaulted loans being sent to DCAs, isn't very promising for EST loans (seems like recoveries have reduced instead...) and possibly could have some at least short term increase for recoveries from non-EST loans (especially Spain), but somehow I'm thinking it won't reach anywhere close to the 2013 and prior EST loan recoveries and could very easily be insignificant or even negative if you look at the results in the longer term. Also, using averages to buy on SM is inherently flawed logic, because the loans you see there, are probably below average, plus you haven't really accounted for time value of money (in short, if you give me €100 today and I'll give you back €110 in 50 years, you have actually lost money).
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