blender
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Post by blender on Apr 1, 2014 22:00:20 GMT
If FC panicked when that large C- loan failed to fund yesterday and introduced a cashback, then they will at least be happy that all the loans were funded today - though one waited until 8 mins before the end. But I wonder if anyone selective wants a C-, even with a 1% cashback, when you can fill your boots with a B at over 14%. With the secondary market as it is, jumped from 20k unsold loan parts at par or better to 25k in a single day, the appeal of the cashback to flippers is just not like the old days - you cannot turn the money over quickly. So at present I would not buy what I cannot afford to keep for some months.
The cashback tends to move the cash around and pull it forward rather than increase the pot. After a week (I guess) it will not work at all. FC should be addressing those going for ISAs at present and telling them how much better they could do - caveat, caveat, - with an FC account.
Where is the fix for this problem, rather than the temporary patch?
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Post by bracknellboy on Apr 1, 2014 22:27:51 GMT
blender: I fear that whereas the prior situation has wrapped prison bars round you, the cashback offer has gone and thrown away the key....
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fasty
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Post by fasty on Apr 1, 2014 22:47:22 GMT
Why can't FC allow autobid to hoover up loan parts from the secondary market at a discount (rather than at the moment, it only sees loan parts offered on the secondary market at par)? That way: - Lenders could have greater assurance that they could flog their loan parts if they really needed the cash in emergency (albeit at a penalty)
- build-up of loan parts in the secondary market would be mitigated
- Lenders using autobid could pick up some good value loans
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blender
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Post by blender on Apr 1, 2014 22:56:56 GMT
Fear not for me, Bracknellboy, because I am sure that many of us on this Forum know how to manage an FC portfolio pretty well, have worked hard to maintain liquidity - or so we thought - and can still get out by growing expensive wings and flying over the top of the bars. I need to reduce my account for tax reasons and am doing so - but I expected to make a good profit from the sales, not a loss! Others closely associated are buying the cashback loans at 14% to hold.
What worries me is those poor autobidders/autosellers who are going to find exiting much more difficult than I do - and when they stampede the health of the platform is at risk and we are all in trouble. This forum is important as an early warning system for FC, though it is getting a bit late on this issue. I am losing confidence in their marketing abilities.
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blender
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Post by blender on Apr 1, 2014 23:19:07 GMT
Why can't FC allow autobid to hoover up loan parts from the secondary market at a discount (rather than at the moment, it only sees loan parts offered on the secondary market at par)? That way: - Lenders could have greater assurance that they could flog their loan parts if they really needed the cash in emergency (albeit at a penalty)
- build-up of loan parts in the secondary market would be mitigated
- Lenders using autobid could pick up some good value loans
You need to say how this would work before anyone can judge the idea. At present Autobid only buys at auction or at par, and only at interest rates at or above the threshold set by the lender. It ignores any loan part at a discount. At present for Autobid the interest rate and the buyer rate are the same. If Autobid is allowed to buy parts at a discount, does it then simply look at the buyer rate (which may be increased from the interest rate) in the same way that it looks at the interest rate on the parts at par? That would be the simple change. Or are you suggesting that the fact of or the amount of the discount should affect the decision?
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Post by aloanatlast on Apr 2, 2014 1:30:52 GMT
Well 5622 the curry house wasn't as frantic as I expected and I bought more than I intended. Not much cash for this afternoon now.
Egg on face if they don't take it. Half of it is to pay off their existing cheaper loan, which makes for a very high effective rate on the new money.
I hope they do take it. With the SM as it is its about the only way I'll manage to shift the original loan out of my portfolio. Well after yesterday afternoon's performance I'm kind of hoping they don't take it. The bottom of the market was at 14.2% on Monday, now 14.6%, and there are B60 down there amongst the C-. Got some B60 not selling at 14.2, so a big plate of curry at 13.8% doesn't look too tasty any more.
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Post by aloanatlast on Apr 2, 2014 3:15:49 GMT
Why can't FC allow autobid to hoover up loan parts from the secondary market at a discount (rather than at the moment, it only sees loan parts offered on the secondary market at par)? That way: - Lenders could have greater assurance that they could flog their loan parts if they really needed the cash in emergency (albeit at a penalty)
- build-up of loan parts in the secondary market would be mitigated
- Lenders using autobid could pick up some good value loans
If Autobid were buying, discounting would help people trying to shift sub-MBR loan parts, though I wouldn't call those good value.
Other than that, anything Autobid would take at a discount, it would also take at par, if it were buying at all. But if it's not buying, it's not buying at any price.
To work as intended, if that's a good thing, which I'm dubious about, it would need to sweep the secondary market before resorting to auctions to place money. The sticky loans like Fabric Makers would clear if a part were wished on every new lender.
Instead of which, it appears to favour auctions first, and with over 100 on the table, most new money can be placed without there being any left over to go shopping.
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Post by aloanatlast on Apr 2, 2014 4:07:25 GMT
If FC panicked when that large C- loan failed to fund yesterday and introduced a cashback, then they will at least be happy that all the loans were funded today - though one waited until 8 mins before the end. But I wonder if anyone selective wants a C-, even with a 1% cashback, when you can fill your boots with a B at over 14%. With the secondary market as it is, jumped from 20k unsold loan parts at par or better to 25k in a single day, the appeal of the cashback to flippers is just not like the old days - you cannot turn the money over quickly. And if rates do fall, flippers won't want to buy, because anything they buy will be hard to sell in competition with the great pile of high-rate parts already out there. What's actually on the market is a drop in the ocean compared to what's in the hands of overstocked overexposed lenders waiting for a price.
Which will make it very hard for rates to fall. The Cheap Loan Part Mountain could blight the market for ages.
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blender
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Post by blender on Apr 2, 2014 8:47:21 GMT
The one to watch today is 5660, C- £100k, 60 months. Will it fill, even with the cashback?
I make no comment on the quality of the proposal, have not even looked because I would not buy C- at 15% today.
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Post by GentlemansFamilyFinances on Apr 2, 2014 12:14:34 GMT
Got my eye on this as well - I reckon it will fill. But who would want to hold onto it? I'll be selling as soon as I can.  |
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blender
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Post by blender on Apr 2, 2014 12:42:34 GMT
It needs another £18k, but there is some flipper cash hanging around on the goal line, and so perhaps the plan is to tip it over just before the close. Then to sell asap for 0.75% plus whatever premium can be got. There is every chance of borrower acceptance, IMO, because the C- rate must always lie between 11.6% and 15%.
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blender
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Post by blender on Apr 2, 2014 22:06:40 GMT
As well as the 1% cashback the number of loans listed has fallen to 72, from about 115. I hope we are not seeing a retrenchment.
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fasty
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Post by fasty on Apr 2, 2014 22:27:43 GMT
The one to watch today is 5660, C- £100k, 60 months. Will it fill, even with the cashback? I make no comment on the quality of the proposal, have not even looked because I would not buy C- at 15% today. I've started to steer clear from C- as well. Despite extreme diversification of my loan parts, I seem to have suffered defaults about double what FC advise as typical. Statistically I must be extremely unlucky! I got a small nibble of loan 5660. The financials look a bit odd, but they looked interesting and at least not in the well-paid profession which seem to be defaulting all over. Nevertheless, if the loan gets taken up I shall probably reduce my exposure to a minimum.
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Post by pepperpot on Apr 2, 2014 23:30:45 GMT
As well as the 1% cashback the number of loans listed has fallen to 72, from about 115. I hope we are not seeing a retrenchment. Loan volumes originated so far this week Mon-736k Tue-645k Wed-673k, much less than last weeks 1.7m 1.4m 1.2m. (They might be too busy looking for the key to your cell) There's another big day on Friday (1.6m originated last Fri) but if new loans don't pick up I'd expect the 1% offer might get pulled next week.
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blender
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Post by blender on Apr 4, 2014 15:40:08 GMT
FC should ban the use of distracting images such as that associated with borrower 5704. Would get a decent rate even without the 1%. I have given up on the rate with 20mins to go.
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