SteveT
Member of DD Central
Posts: 6,875 
Likes: 7,924
|
Post by SteveT on Oct 28, 2016 14:26:05 GMT
That'll be the day 😉
|
|
|
|
Post by eascogo on Oct 28, 2016 15:25:48 GMT
I collected figures below as best as I could but make no claim of accuracy. I wanted to find out if that could help shed light over concerns expressed on this forum about FS's state of health. The large number of loans awaiting funding, the slow uptake of them, the bulging SM have all raised eyebrows. Also inducing caution is the number of loans extending beyond term not repaying.
20 loans on offer at the moment
all @ interest 13% pa
8 loans have added bonus offer
4 loans have CB & bonus offer
£6.8m loan total
£2.3m pledged
£4.5m awaiting fund
Secondary market
332k total for sale
1284 parts for sale
450 at premium
420 at par
414 discounted
200 with less than 50 days remaining
409 with between 51 and 89 days remaining
675 with 90 or more days remaining
Loan history
581 completed
292 active (>£35m)
14 defaulted
5 cancelled
Looking at the figures I note that loans open for funding (£6.8m in total) represent about 1/5th of active loans (approx. £35m). This seems a hugely ambitious proposition for FS.
Of 892 historical and active loans 14 are defaulted (unredeemed) -- a small proportion and I hope many of them will eventually return funds without loss.
As for the SM the large number of parts is initially dauting. However the total on offer is less than 1% of the active loan value (0.33/35). Premium, par, and discounted offers are spread in almost equal proportion. Lately I saw discounts as high as 2.5% appear. I suppose this is the level necessary to ensure a quick sale. But this makes me wonder whether parts at premiums of 2 or 3% sell at all. Perhaps they reflect hope value and are kept in place only because there is no interest penalty.
This exercise leaves me without a firm direction. With investment limits mostly removed, interest higher than on most other P2P platform as well as availability of cashback/bonus -- the incentive is there for me to stay put but perhaps not add more.
|
|
Neil_P2PBlog
P2P Blogger
Use @p2pblog to tag me :-)
Posts: 355
Likes: 209
|
Post by Neil_P2PBlog on Oct 28, 2016 16:17:48 GMT
For selling at premium on secondary market, I went through a period of listing all of mine at 2-3% premium 'just in case' someone really wants it, and in the past sometimes they have. I also did it because I wanted a snapshot of accrued interest based on the number of days held, not with the entire 30 days accrued interest given on day 1. If you copy from 'current active investments' it gives first 30 days accrued on day 1, but if you list all your loan parts for sale on secondary market (at a premium no-one would buy) you can get the more accurate 'current net value' with accrued interest based on days on the 'your investments for sale' page. So that's one possible explanation for some of the premium SM you mentioned eascogo |
|
stevio
Member of DD Central
Posts: 2,065
Likes: 894
|
Post by stevio on Oct 28, 2016 20:15:15 GMT
I collected figures below as best as I could but make no claim of accuracy. I wanted to find out if that could help shed light over concerns expressed on this forum about FS's state of health. The large number of loans awaiting funding, the slow uptake of them, the bulging SM have all raised eyebrows. Also inducing caution is the number of loans extending beyond term not repaying. 20 loans on offer at the moment all @ interest 13% pa 8 loans have added bonus offer 4 loans have CB & bonus offer £6.8m loan total £2.3m pledged £4.5m awaiting fund Secondary market 332k total for sale 1284 parts for sale 450 at premium 420 at par 414 discounted 200 with less than 50 days remaining 409 with between 51 and 89 days remaining 675 with 90 or more days remaining Loan history 581 completed 292 active (>£35m) 14 defaulted 5 cancelled Looking at the figures I note that loans open for funding (£6.8m in total) represent about 1/5th of active loans (approx. £35m). This seems a hugely ambitious proposition for FS. Of 892 historical and active loans 14 are defaulted (unredeemed) -- a small proportion and I hope many of them will eventually return funds without loss. As for the SM the large number of parts is initially dauting. However the total on offer is less than 1% of the active loan value (0.33/35). Premium, par, and discounted offers are spread in almost equal proportion. Lately I saw discounts as high as 2.5% appear. I suppose this is the level necessary to ensure a quick sale. But this makes me wonder whether parts at premiums of 2 or 3% sell at all. Perhaps they reflect hope value and are kept in place only because there is no interest penalty. This exercise leaves me without a firm direction. With investment limits mostly removed, interest higher than on most other P2P platform as well as availability of cashback/bonus -- the incentive is there for me to stay put but perhaps not add more. Only 14 defaulted?
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Oct 28, 2016 21:28:41 GMT
Loan history 581 completed 292 active (>£35m) 14 defaulted 5 cancelled Only 14 defaulted? I was surprised by that low number as well, but I suspect that's because there's no mention of any loans shown as 'Recovered'. I don't know if eascogo included those in 'completed' or omitted them entirely. I thought about it a bit at the time and decided not to mention it. If a borrower defaults but the security can be sold for enough that investors receive all their capital back and all the accrued interest then perhaps it doesn't deserve to be classified as a default because a 'default' suggests that a loss has been incurred and with Recovered loans there was no loss. The only real consequence of a recovery is that the loan period turned out to be longer than originally anticipated, but that's really no different from a borrower who requests, and is given, an extension and then repays in full. (There's a tiny difference for some auction sales where the interest stops accruing on the sale date but the sale proceeds aren't received until a few weeks later. That's a rare enough situation that it probably doesn't merit worrying about.)
|
|
|
|
Post by eascogo on Oct 28, 2016 21:54:39 GMT
I was surprised by that low number as well, but I suspect that's because there's no mention of any loans shown as 'Recovered'. I don't know if eascogo included those in 'completed' or omitted them entirely. I thought about it a bit at the time and decided not to mention it. If a borrower defaults but the security can be sold for enough that investors receive all their capital back and all the accrued interest then perhaps it doesn't deserve to be classified as a default because a 'default' suggests that a loss has been incurred and with Recovered loans there was no loss. The only real consequence of a recovery is that the loan period turned out to be longer than originally anticipated, but that's really no different from a borrower who requests, and is given, an extension and then repays in full. (There's a tiny difference for some auction sales where the interest stops accruing on the sale date but the sale proceeds aren't received until a few weeks later. That's a rare enough situation that it probably doesn't merit worrying about.) I reported data from Investments: Active and Past Loans. As you mention recoveries do not appear in that listing.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Oct 29, 2016 1:27:10 GMT
I reported data from Investments: Active and Past Loans. As you mention recoveries do not appear in that listing. : Recovered loans are in that list. Recovered is a possible entry in the Defaulted column (second from the right). If you enter Recovered in the Search box you'll see them. There are 58 of them, and their Status is Loan Completed, so that's where they've ended up in your statistics. And that's probably where they belong.
|
|
r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
|
Post by r00lish67 on Oct 29, 2016 3:12:55 GMT
SteveT, just a quick note to correct - the point of using underwriting is that the original investors have been paid in full - both their capital and the interest. FundingSecure Many thanks for explaining where I was going wrong. I should have looked up the original Plymouth hotel loan again (I don't hold it) and realised it had been Completed yesterday too. It does seem a helpful approach to unblocking a renewal log-jam, one I now hope may be applied at some stage to other loans where I'm waiting on a slow-filling renewal. Would it be worth adding another icon (a U perhaps) to Available loans that are already underwritten and therefore certain to run for the full 6 months? , this does sound good. Are there, or will there be, any defined processes around when a renewal will be underwritten and original investors repaid? Or will it be on a discretionary basis?
|
|
r00lish67
Member of DD Central
Posts: 2,692
Likes: 4,048
|
Post by r00lish67 on Oct 29, 2016 3:26:25 GMT
On another note, just noticed the property bonuses on 4000064049:
Investment range: £250,000.00 - £575,000.00 5.00% Bonus
< coughs up morning coffee > good god, who is investing this much in a single FS loan?! And are they practicing good 1% diversification for their £25m-£57.5m P2P portfolio?
Doesn't seem to have worked in this case, yet anyway, as the largest investor has stumped up 'only' £90k - you'd have thought they'd have checked the piggy bank for an extra £10k to get the 4% bonus wouldn't you?
|
|
stevio
Member of DD Central
Posts: 2,065
Likes: 894
|
Post by stevio on Oct 29, 2016 7:15:24 GMT
I was surprised by that low number as well, but I suspect that's because there's no mention of any loans shown as 'Recovered'. I don't know if eascogo included those in 'completed' or omitted them entirely. I thought about it a bit at the time and decided not to mention it. If a borrower defaults but the security can be sold for enough that investors receive all their capital back and all the accrued interest then perhaps it doesn't deserve to be classified as a default because a 'default' suggests that a loss has been incurred and with Recovered loans there was no loss. The only real consequence of a recovery is that the loan period turned out to be longer than originally anticipated, but that's really no different from a borrower who requests, and is given, an extension and then repays in full. (There's a tiny difference for some auction sales where the interest stops accruing on the sale date but the sale proceeds aren't received until a few weeks later. That's a rare enough situation that it probably doesn't merit worrying about.) Wouldn't class recovered same as extended. High number of recovered suggests FS have lowered their/have a low borrower selection criteria. Just because all funds were recovered, doesn't mean the borrower was a good borrower, just the security adequate and FS recovery procedures adequate for that asset class. IMHO FS should not be lending to such borrowers and should have better (any!) selection criteria in place when evaluating the borrower. Suggest FS either have low criteria or incompetent personel to do this. If loans are needing to go into recovery, there is a much greater chance that you won't get back all you capital and interest. That is very different risk than an extension where your capital and interest is at very little risk As we all know, FS's asset class has changed from pawn to property. Those recoveries were all pawn items. We have yet to fully test their property security valuation and recovery process.
|
|
stevio
Member of DD Central
Posts: 2,065
Likes: 894
|
Post by stevio on Oct 29, 2016 7:24:56 GMT
I reported data from Investments: Active and Past Loans. As you mention recoveries do not appear in that listing. : Recovered loans are in that list. Recovered is a possible entry in the Defaulted column (second from the right). If you enter Recovered in the Search box you'll see them. There are 58 of them, and their Status is Loan Completed, so that's where they've ended up in your statistics. And that's probably where they belong. 873 loans 72 ran into difficulties (not going use term default as people will argue meaning) About 8℅ of loans But we are yet to see the majority of property loans reach completion
|
|
Liz
Member of DD Central
Posts: 2,426
Likes: 1,297
|
Post by Liz on Oct 29, 2016 12:43:42 GMT
On another note, just noticed the property bonuses on 4000064049: I Doesn't seem to have worked in this case, yet anyway, as the largest investor has stumped up 'only' £90k - you'd have thought they'd have checked the piggy bank for an extra £10k to get the 4% bonus wouldn't you? Because there was only £99,400 availability at the time I made my bid.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Oct 29, 2016 13:14:48 GMT
On another note, just noticed the property bonuses on 4000064049: Doesn't seem to have worked in this case, yet anyway, as the largest investor has stumped up 'only' £90k - you'd have thought they'd have checked the piggy bank for an extra £10k to get the 4% bonus wouldn't you? Because there was only £99,400 availability at the time I made my bid. : Then why not invest in the Phase 2 loan instead? Comparing £90k@16% with £100k@17%, the extra £10k effectively would be earning 26% p.a. That sounds like an opportunity not to be missed.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Oct 29, 2016 13:36:23 GMT
High number of recovered suggests FS have lowered their/have a low borrower selection criteria. Just because all funds were recovered, doesn't mean the borrower was a good borrower, just the security adequate and FS recovery procedures adequate for that asset class. IMHO FS should not be lending to such borrowers and should have better (any!) selection criteria in place when evaluating the borrower. Suggest FS either have low criteria or incompetent personel to do this. : I think you're being overly critical of FS. As you say later in your posting, "FS's asset class has changed from pawn to property." AIUI, a large proportion of pawned items are not redeemed and have to be sold by the lender to repay the loan. That's just the nature of the business -- the pawnbroker isn't relying on the borrower returning to redeem their property, so they don't care about the 'quality' of the borrower as long as they're convinced the goods aren't stolen. I expect that a goodly proportion of pawnbrokers' clients have no intention of retrieving their goods and consider the arrangement to be a means of arranging a quick sale of the item(s). The critical question is whether FS are giving a bit more attention to borrower quality when dealing with property loans. We can hope so, but only time will tell. As a SS investor, I can say that info has come out recently regarding some of their borrowers that suggests that SS don't worry too much about borrower quality either. Perhaps that's a common characteristic of secured lending. It's a bit too early to say whether this will translate into losses for investors.
|
|
sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
Posts: 1,428
Likes: 1,212
|
Post by sqh on Oct 29, 2016 13:49:26 GMT
eascogo Your SM statistics are great for a non-taxpayer, but very few loan parts are at discount to a 20% taxpayer and almost none to a 40% taxpayer. When you factor in those loan parts that originally had 1% cashback (and those with backdated interest at the beginning), then from the seller's point of view there are almost no parts at discount However, from a non-taxpayer view it is heaven. A non-taxpayer can pick loans close to the 31 day window and get an effective rate of 25% or more, and that doesn't include compounding. 25% compounded monthly is 28%, and 30% compounded monthly is 34.5%. The current problem is that not enough large property loans are renewed on time, so the non-taxpayer is not getting the effective buyer rate, and not getting the full monthly compounding. I've suggested to FS that the borrower should pay a default rate if they don't renew on time. Some other platforms do this and I think it works well. It would need to be written into new contracts so don't expect to see any default rates in the next 6 months.
|
|
