kaya
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Post by kaya on Jul 30, 2016 11:08:19 GMT
I note that recent auctions have been ending in a more satisfactory way, with no large late low-rate bids knocking out all of the higher rate bids. So credit where credit is due, it keeps everyone happy this way. Are we starting to see a more natural market-led bidding process appearing?
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TheDriver
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Post by TheDriver on Jul 31, 2016 7:49:08 GMT
The most recent have been topped up to target by underwriters with a day or so to go (or at least the final morning), then left for the market to underbid each other - as per philosophy.
Whilst the pub auction closed a day early with minimal rejections, (they must be desperate for the money quickly!) the "wet leisure" company one saw about £5k of overbids on the last morning, with 60% of total bids rejected at market rates; however, this only reduced the overall interest rate by 0.05%!
So yes, things are looking up; maybe there's hope for the platform yet - although disappointing (lack of) progress with issues such as communication, functional developments and defaults.
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ablender
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Post by ablender on Jul 31, 2016 11:22:29 GMT
I note that recent auctions have been ending in a more satisfactory way, with no large late low-rate bids knocking out all of the higher rate bids. So credit where credit is due, it keeps everyone happy this way. Are we starting to see a more natural market-led bidding process appearing? Are you sure? I have been outbid on the last few loans by bidders who place a low-rate bid. I have noticed that some of these bids are placed by the usual bidders and amount in the thousands. My question to lendingcrowd is, are these underwriters or in anyway related to lendingcrowd ? Underwriters would not fill in the loan before it ends and leave no space for other bidders.
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TheDriver
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Post by TheDriver on Jul 31, 2016 13:35:14 GMT
Hi AB;
At least the last 4 auctions have followed the pattern of low-rate topping up and causing market bid rejections. Prior to that there were instances you refer to.
Agreed about the underwriter term, perhaps "rate-fixers" would be more appropriate - and accurate! LC have previously said that they are not placing these bids, but those bidders may be associated with them.
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ablender
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Post by ablender on Jul 31, 2016 14:47:00 GMT
Hi AB;
At least the last 4 auctions have followed the pattern of low-rate topping up and causing market bid rejections. Prior to that there were instances you refer to.
Agreed about the underwriter term, perhaps "rate-fixers" would be more appropriate - and accurate! LC have previously said that they are not placing these bids, but those bidders may be associated with them. I wonder what the authorities would say if they had to investigate this. One cannot pretend to run an auction and then not follow the rules.
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TheDriver
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Post by TheDriver on Jul 31, 2016 18:32:07 GMT
I suppose with a fixed end-time auction - unless it closes early as per the pub loan last week - you know in advance when you might need to monitor the situation if you would be willing to rebid at a lower rate. As long as all bids are open and in real time I'm not sure it matters who does the bidding?
Perhaps it would be interesting if everyone could make a "best and final" bid for an hour after close of auction!
I don't know what made the wet leisure co last week so attractive, but I wouldn't have offered low enough to get accepted however long the auction went on! I did wonder if people were just caught up in auction fever for the sake of it, but when I have looked at previous instances there have been only a small proportion of rebids - maybe I'll check that one later.
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TheDriver
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Post by TheDriver on Aug 1, 2016 20:42:37 GMT
So, having reviewed the "wet leisure co" bids, about 1/3 (40:120) of the rejected bids were rebid. This is a greater proportion than I have previously seen, but being a minority of rejects is still relatively small and boosted by several multi-bidders going down incrementally.
Thus it seems the majority of lenders are unable or unwilling to reduce the rate at which they are prepared to lend. However, others are sitting on the sidelines, presumably waiting to see what rate will be likely to succeed.
The big-hitting loan-fillers are in a difficult position; do they put more money in early, and risk causing carnage in later bidding rejects, or stand by so that the loan struggles to fill, then the interest rate may be too high for the borrower to accept?
A dilemma for this auction type of lending - Discuss
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ablender
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Post by ablender on Aug 15, 2016 21:11:21 GMT
Personally, it is my policy not to lower my bid if I am rejected, as a matter of principle. This is because I feel that lendingcrowd are allowing (if not directly doing) market manipulation. I encourage people who are negatively effected by this to have a look at this thread. |
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Post by Whitbourne on Aug 19, 2016 16:15:05 GMT
So, having reviewed the "wet leisure co" bids, about 1/3 (40:120) of the rejected bids were rebid. This is a greater proportion than I have previously seen, but being a minority of rejects is still relatively small and boosted by several multi-bidders going down incrementally.
Thus it seems the majority of lenders are unable or unwilling to reduce the rate at which they are prepared to lend. However, others are sitting on the sidelines, presumably waiting to see what rate will be likely to succeed.
The big-hitting loan-fillers are in a difficult position; do they put more money in early, and risk causing carnage in later bidding rejects, or stand by so that the loan struggles to fill, then the interest rate may be too high for the borrower to accept?
A dilemma for this auction type of lending - Discuss
Personally, I just don't have the time to revise existing bids. I will put in a series from the maximum allowable down to the level I'm happy with - perhaps 4 bids. Then leave it. I expect to be knocked out of the top one or two, that's fine and there is no real downside other than locking the money up for a few days. I don't blame the lenders who act later to fill the loan, unless they are in fact related parties as has been alleged. That would be wrong. On the whole the LC system work well, my main concern with this platform is with the lack of transparency about which borrowers are late with their repayments. They have said they are working on that.
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mj87
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Post by mj87 on Aug 31, 2016 14:52:44 GMT
Hello,
For me these auctions are not ending fairly. There seems to be two or three large investors who invest between 5k to 10K near the end of the auction.
It seems a little suspicious, as these large bids bring the interest rate down on the loan quite a lot.
I have had several loans not have successful bids, unless you glued to the computer a few hours before you won't get a decent interest rate on your loan for your risk. I agree with the above statement of not bidding on the loan if the loan is completely full.
I as side note find it odd that some individuals put their money in a loan at the lowest or near to lowest interest rate. I have seen this on several platforms but more so on Lending Crowd.
Kind regards
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TheDriver
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Post by TheDriver on Nov 11, 2016 15:04:02 GMT
It seems an appropriate time to revive this thread, with the answer to the title probably being "not any more!"
With today's finish being less than half-funded during the final morning, it was topped up with low-rate bids with just over 2 hours to go, plus another rate-fixing bid in the final hour which increased the over-funding - why not do the base-loading early in the loan so an auction becomes more evident? ALL top-rate bids were rejected in those 2 hours, after an extension looked more-than-likely until then; probably a bit unexpected and not a warm welcome for new recruits to the platform!
I don't agree it's actually unfair, but does seem counter-productive; virtually none of the rejects re-bid for whatever reason, so are probably more likely to feel alienated than part of a competitive event - although in time they might feel it was a lucky escape! (The apparent quality of recent loans is probably worth a separate thread.)
I imagine not everyone realises that the average relates only to the borrower, and that the rate you bid is your specific return, so the low bidders are sure of getting less rather than bringing down the average for everyone, whereas high ones probably know they risk not getting anything.
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kaya
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Post by kaya on Nov 11, 2016 15:23:43 GMT
Aye, 'tis sad indeed, but no surprise to hear that the same old game is being played out. Many lenders have surely long since given up believing that these were true open market auctions. I suppose its up to LC how they want to run things, but as long as they don't mind me leaving with their investor bonus ~(ha ha, be lucky if that + interest covers the losses).
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