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Post by Deleted on Aug 10, 2016 8:27:29 GMT
Only seems to be A and A+ these days.
I hope that riskier borrowerers are not being upgraded to make them look good.
I am only investing in A+ companies and don't want anything else in my portfolio of business P2P lending sites.
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fasty
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Post by fasty on Aug 10, 2016 9:36:06 GMT
There has been discussion in other threads about the potential "upgrading". For example, take a look at:
www.p2pindependentforum.com/thread/3211/shape-come?page=40
In summary, some of us share your concern. I personally suspect that FC have reviewed actual performance of loans against their predicted failure rate graphs, and tweaked their assessment algorithm constants to "upgrade" new loan ratings, making them fit the graphs better.
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blender
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Post by blender on Aug 10, 2016 12:11:22 GMT
Agreed. The only definition of the A+ band is the loss rate, and so it is possible for FC to let a bit more risk into the bands if losses are below target. Now consider that the A+ property loans have had no losses and that all of the losses are currently found in the non-property SME A+ loans. That rather suggests that a policy of buying only A+ SME loans could end in tears - say an A risk for A+ rates. Be careful out there.
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fp
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Post by fp on Aug 10, 2016 13:34:49 GMT
Agreed. The only definition of the A+ band is the loss rate, and so it is possible for FC to let a bit more risk into the bands if losses are below target. Now consider that the A+ property loans have had no losses and that all of the losses are currently found in the non-property SME A+ loans. That rather suggests that a policy of buying only A+ SME loans could end in tears - say an A risk for A+ rates. Be careful out there. Not as yet, but a good amount run well over, by as much as 3 months to my knowledge. I had almost 20k in FC, all my loans were looked at before buying, and when it got to the stage where some days I would not touch any loans, despite them being A+ or A band and there being 10 or so loans to pick at, then to me the banding was way out. I had a quite a bit in property loans, due to security, but when it was apparent many were running over pretty much with the blessing of FC, it was time to de-vest and stick it in similar loans paying 10-14% elsewhere.
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Post by Harland Kearney on Aug 10, 2016 13:58:56 GMT
I too am concerned about the recent rates. I'm thinking of winding down my investment and transferring the funds into more attractive loans on other platforms for the same risk, but with higher returns...
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archie
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Post by archie on Aug 10, 2016 14:09:38 GMT
I too am concerned about the recent rates. I'm thinking of winding down my investment and transferring the funds into more attractive loans on other platforms for the same risk, but with higher returns... That's what I did 
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Post by Harland Kearney on Aug 10, 2016 14:18:44 GMT
I too am concerned about the recent rates. I'm thinking of winding down my investment and transferring the funds into more attractive loans on other platforms for the same risk, but with higher returns... That's what I did Do you mind if I ask which platforms you invested the funds into. I'm currently in SS, AC; I'm thinking of trying Money Thing but I'm not entirely sure. Thanks for any advice!
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archie
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Post by archie on Aug 10, 2016 14:37:56 GMT
That's what I did Do you mind if I ask which platforms you invested the funds into. I'm currently in SS, AC; I'm thinking of trying Money Thing but I'm not entirely sure. Thanks for any advice! I already had a fair bit in LI, added SS, MT, FS (for the pawn loans rather than property) and Collateral. MT is my favourite of those.
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fasty
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Post by fasty on Aug 10, 2016 14:44:33 GMT
I've been slowly winding down my lower-rate property loans on FC (at a small premium!) and migrated the funds into SS. Almost all done now.
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fp
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Post by fp on Aug 10, 2016 15:59:04 GMT
That's what I did Do you mind if I ask which platforms you invested the funds into. I'm currently in SS, AC; I'm thinking of trying Money Thing but I'm not entirely sure. Thanks for any advice! I slowly sold just over half of mine off at .3% / .5% over a two week period, the rest I sold at PAR within 12 hours one night, I now have a much larger lump spread over a few platforms: I now have mine spread pretty much as follows: SS 40% (12%) MT 30% (10-13%) Collateral 10% (12%) FS 4% (11-15%) Bond Mason 5% (8%) Unbolted 1% (10.2% protected) I think i'm likely to reduce my SS balance in the not too distant future, I have a little more there than i'm happy with.
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Post by Harland Kearney on Aug 10, 2016 16:05:50 GMT
Thanks for the informative response guys. I'm going to start winding down my FC loans and drip feed them into new loans that appear on the other platforms, mainly MT and SS as I'm already overweight/qued on AC currently. I will be keeping my FC 10 percent property loans ( 9% after fee's) and selling them 3 months prior the end date. Money Thing is new to me but just signed up and looks interesting place to lend in my portfolio.
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blender
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Post by blender on Aug 16, 2016 14:34:00 GMT
Looking at the fourteen live loans on FC this afternoon, there is one which is not A+ - only an A. Must be very dodgy so I did not look further. In fact not really worth looking at all. We old timers could tell you stories about the olden days, about feeding frenzies to get 14% on a large A+ loan after a two week listing. But you've probably heard all that before.
Should I turn the lights out as I leave this FC board?
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happy
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Post by happy on Aug 16, 2016 17:02:26 GMT
When fixed rates came along I immediately noticed a change in the ratio of A+/A loans and the change in quality of these. After a few months I did some analysis of loan rank ratio prior to and after fixed rate and I was seriously shocked at the massive increase in A+/A ranked loans. I selected loans using strict criteria including Debt Rervice Ratios from profits, acid test liquidity, asset to loan ratio etc and I used to get about 20% or so A+/A loans meeting my initial health check. After fixed rate arrived this dropped to maybe 5% tops and I can only put this down to Frighteningly Confused being able to drive down their rates to borrowers now the lenders were not able to set rates via the auction. After that it just became too much effeort to analyse 20 or so loans to get one worth looking at in more detail so I called it a day and dumped most of my SME loans. Now I just reinvest repayments into low LTV property loans (ideally sub 50%) but I am struggling to do this so money is slowly coming out of Fixed Criteria. Oh by the way blender , I think the light is already off, can chameleons see in the dark?  |
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fasty
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Post by fasty on Aug 16, 2016 19:01:59 GMT
I have discovered an amusing new measure which I regard as the Peer-to-Peer-Feeding-Frenzy-Index.
To be truthful, it is simply the number of people viewing if you go to the top index of this board.
Once upon a time, the Funding Circle forum consistently had lots of viewers much of the time, perhaps 50, while most other forums typically had only one or two.
Now the tables are completely turned. Typically I am seeing Saving Stream consistently well in the lead with around 45 viewers at any one time, whereas Funding Circle has only one or two.
Go take a look!
If I trust the wisdom of the crowd, does this measure indicate where the good deals are?
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Post by dualinvestor on Aug 16, 2016 19:05:41 GMT
I have discovered an amusing new measure which I regard as the Peer-to-Peer-Feeding-Frenzy-Index. To be truthful, it is simply the number of people viewing if you go to the top index of this board. Once upon a time, the Funding Circle forum consistently had lots of viewers much of the time, perhaps 50, while most other forums typically had only one or two. Now the tables are completely turned. Typically I am seeing Saving Stream consistently well in the lead with around 45 viewers at any one time, whereas Funding Circle has only one or two. Go take a look! If I trust the wisdom of the crowd, does this measure indicate where the good deals are? You have answered your own question. If you trust the wisdom of the crowd.......... But to me it means absolutely nothing.
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