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Post by supernumerary on Oct 30, 2016 8:07:04 GMT
SS can continue to make that statement for many months, even if no more 12% loans are released. It'll be true as long as there's even one 12% loan left on the platform, because a part of that loan might appear on the SM. I'm eagerly awaiting the next 12% loan to appear in the pipeline -- but I'm not holding my breath. PLEASE stay positive. IMHO, it won't be long before Saving Stream announce their next new 12% loan, because they don't want to lose investors and lenders like you...  ...and they don't want to lose their other valued investors either!! 
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ablender
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Post by ablender on Oct 30, 2016 11:05:09 GMT
Since the rates have been freed from the tyranny of the 12%, I expect rates to float both up and down. We all know that the 12% was an average. I do not think that the higher risk loans are going to dry up. When they come, will it be acceptable for savingstream to offer these at an "average" 12%? For me, the answer is an emphatic NO. |
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Liz
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Post by Liz on Oct 30, 2016 14:16:54 GMT
SS can continue to make that statement for many months, even if no more 12% loans are released. It'll be true as long as there's even one 12% loan left on the platform, because a part of that loan might appear on the SM. I'm eagerly awaiting the next 12% loan to appear in the pipeline -- but I'm not holding my breath. PLEASE stay positive. IMHO, it won't be long before Saving Stream announce their next new 12% loan, because they don't want to lose investors and lenders like you... ...and they don't want to lose their other valued investors either!! We will see more 12% loans because they won't fill £3m+ loans at a lower rate. We may even see 13% on a loan if SS can snag a large enough loan, maybe a £20m+ loan.
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ablender
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Post by ablender on Oct 30, 2016 18:15:29 GMT
PLEASE stay positive. IMHO, it won't be long before Saving Stream announce their next new 12% loan, because they don't want to lose investors and lenders like you... ...and they don't want to lose their other valued investors either!! We will see more 12% loans because they won't fill £3m+ loans at a lower rate. We may even see 13% on a loan if SS can snag a large enough loan, maybe a £20m+ loan. I think that interest rate should go up with risk not with size of loan, but I do understand your argument and I do think you might be right after all. It just means that we have to be more careful in what we fund and what we reject.
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mikes1531
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Post by mikes1531 on Oct 30, 2016 19:49:08 GMT
We will see more 12% loans because they won't fill £3m+ loans at a lower rate. We may even see 13% on a loan if SS can snag a large enough loan, maybe a £20m+ loan. : I accept that SS would have to offer a significant incentive to fund a £20+M loan. But I haven't a clue what rate it would take to fund a £3M loan. SS know exactly how much pre-funding there was for PBL144 at 9%, and PBL145 at 10%. If the PBL145 pre-funding exceeded £3M then 10% might be all they'd need to offer for a £3M loan. If it was close to £3M, they might decide to give 11% a try. No doubt investors' appetites will depend on the LTV, as well as other aspects of a given loan and what the competition is offering, but SS do have access to good info to help them set the interest rates they'll offer to their investors. Unfortunately, this looks like it's heading in the direction of setting interest rates for loans based on their size rather than based on their risk, and that's not a positive thing IMHO.
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am
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Post by am on Oct 30, 2016 22:38:57 GMT
We will see more 12% loans because they won't fill £3m+ loans at a lower rate. We may even see 13% on a loan if SS can snag a large enough loan, maybe a £20m+ loan. I think that interest rate should go up with risk not with size of loan, but I do understand your argument and I do think you might be right after all. It just means that we have to be more careful in what we fund and what we reject. That was one of the flaws with FC's auction system - the rate, and especially the marginal rate, depended as much or more on the size of the loan as on its quality. Stopping auctions might have been throwing the baby out with the bathwater, but the problem was real (and I don't have a convincing alternative fix).
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Post by robberbaron on Oct 31, 2016 12:55:38 GMT
Unfortunately, this looks like it's heading in the direction of setting interest rates for loans based on their size rather than based on their risk, and that's not a positive thing IMHO. Interest rates don't just reflect risk but also liquidity. As loans grow in size, more and more marginal lenders have to participate. The only way to incentivise them is to increase the interest rate if the risk stays the same. It's similar to a widget manufacturer having to drop his prices to sell to more marginal buyers if the quality stays the same.
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jamesc
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Post by jamesc on Oct 31, 2016 17:28:39 GMT
So far IMHO none of the three loans we have seen at reduced rates look any better than the rest of the SS loan book in fact many of the existing loans look a lot better. SS said or at least inferred that by bringing loans at lower rates they would be able to access a previously untapped market offering safer loans, that has not happened. If the real reason is they are being more greedy then fair enough but at least say it how it is ! I will not be buying any of these lower rate loans and instead will be hanging on to my 12% loan book in its current state and repayments when they come will be going elsewhere.
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james
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Post by james on Nov 2, 2016 23:53:52 GMT
PLEASE stay positive. IMHO, it won't be long before Saving Stream announce their next new 12% loan, because they don't want to lose investors and lenders like you... That post worried me. It's not something to stay positive about. If a trustworthy platform is offering good deals compared to the competition then those deals are worth using. If not, then there are other places. It's a rapid fire money following the best deals across all platforms exercise if investors are acting correctly. If a platform isn't offering those deals then the money should be expected to move away. That moving away is what provides the necessary feedback so that a platform doesn't just take a higher cut of the total amount being paid by the borrower than before.
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Post by supernumerary on Nov 3, 2016 9:37:19 GMT
PLEASE stay positive. IMHO, it won't be long before Saving Stream announce their next new 12% loan, because they don't want to lose investors and lenders like you... That post worried me. It's not something to stay positive about. If a trustworthy platform is offering good deals compared to the competition then those deals are worth using. If not, then there are other places. It's a rapid fire money following the best deals across all platforms exercise if investors are acting correctly. If a platform isn't offering those deals then the money should be expected to move away. That moving away is what provides the necessary feedback so that a platform doesn't just take a higher cut of the total amount being paid by the borrower than before. James, my post was in response to the comment by mikes1531; SS can continue to make that statement for many months, even if no more 12% loans are released. It'll be true as long as there's even one 12% loan left on the platform, because a part of that loan might appear on the SM. I'm eagerly awaiting the next 12% loan to appear in the pipeline -- but I'm not holding my breath. In responding to your own comments, the main thrust of which appear to me to be explaining is the concept of ‘customer resistance’. If I have understood you correctly, then I whole heartedly agree with you on that. IF in four to six months, Saving Stream have NOT brought onto the market place a sufficient supply of new 12% loans, then, as you quite rightly state; If a platform isn't offering those deals then the money should be expected to move away. That moving away is what provides the necessary feedback so that a platform doesn't just take a higher cut of the total amount being paid by the borrower than before.
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Post by supernumerary on Nov 9, 2016 17:29:12 GMT
Earlier this year I read this article; Saving Stream interview 2016
BY IAIN NIBLOCK | ON SUNDAY, MARCH 27, 2016www.orcamoney.com/blog/saving-stream-interview-2016I have been searching around to find it again, but I only managed to find it today. It was this comment that I recalled; “OM: So what is the sweet spot loan? LB (Liam Brooke): Well we actively market to £1-5m loans, this keeps borrowers happy and gives us scalability and importantly manageability. We were a two-man team after all! In saying that we are expecting to lend to loans in the region £25m. These are less risky. We now have 7 people working in the team full time and a few more on the way.“ Another article mentions this as well; Saving Stream Investment Review
By Jordan Stodart on 27th June 2016www.altfi.com/article/2066_saving_stream_investment_reviewThey report the information this way; “*statistics correct at time of publication (06/16) Liam Brooke, co-founder and CEO of Saving Stream told Orca some months ago that their sweet spot is £1million - £5million loans. Saving Stream forecasted that they’d be listing loans in the region of £25million in the not too distant future. Currently the max. loan value in the portfolio stands at just over £6million.” When Saving Stream announced that they would be dropping the interest rates on new loans, with the statement below, I was surprised at their change in approach, having recalled the Orca article, but at that time I couldn’t find it.
“In order to increase the supply of high quality loans, we intend to begin offering investors the chance to invest in lower risk loans that will pay a lower monthly rate. This will allow us to offer lower cost finance to borrowers, which should feedback to a higher volume of even higher quality loan flow.”
It is just my opinion, but if Saving Stream had listed loans as Liam Brooke was forecasting in the region of £25million, then that would have; [1] Provided the supply for the ever increasing demand and then would have been able to keep the rates at 12%.  [2] Ensured that these new large loans were less risky to Saving Stream investors, as Liam Brooke had stated, “ These are less risky.” [3] Kept the big hitters happy on the Saving Stream platform, because some of them have reported on this P2P independent forum board, that they have been transferring funds out of their Saving Stream accounts. With some of the big hitters now leaving, would Saving Stream now be able to fund these £25million loans that Liam Brooke, co-founder and CEO of Saving Stream was predicting only five months ago? We shall see... |
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Post by moonshine on Nov 9, 2016 17:49:19 GMT
Hmm, interesting article, thanks for posting supernumerary. My worry is that if they consistently start offering huge loans like that, especially at lower rates, then the demand will be in danger of becoming saturated, which will lead to an ever clogged SM. I've said it before and I'll say it again; SS's main success has been a lightning SM exit route (most of the time). If that goes, and becomes like FS, then in my opinion so does the business. They need to somehow maintain stronger investor demand vs deal flow. That will always be better than too many loans and not enough investors. |
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registerme
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Post by registerme on Nov 9, 2016 23:03:43 GMT
/mod hat definitely off
Every other platform that I use offers some guidance as to why a loan might be offered at a higher or lower rate (relatively). Some also offer far more in terms of well, everything. In short, there is more detail, more nuance, and more fidelity in terms of the loan offerings and how the platform allows you to interrogate them and manage them.
Is the risk lower? Tell me why you think so, please don't just stick up yet another 70% LTV (defined in the vaguest possible terms, and in ways that I have, largely due to the diligence of this forum, learnt to look at with a fairly sceptical eye) loan at a lower rate and expect me to take it at face value.
To date part of SavingStream's success has been the simplicity of its offer. But if its offer increases in complexity then IMHO there really needs to be a concomitant increase in communication, nuance and fidelity. x(-y)% take it or leave it, well that's an approach I'm not hugely comfortable with.
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Post by valueinvestor123 on Nov 10, 2016 13:55:48 GMT
I think as long as there is an underlying asset and the lender is directly exposed to it, the risks are quantifiable and limited to things like mis-valuation or illiquidity. I noticed some of the loans keep getting restructured and re-offered and the borrowers set up as SPVs and I need to look closer into this to understand this and the relationship of LTVs.
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oldgrumpy
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Post by oldgrumpy on Nov 10, 2016 14:25:00 GMT
I am sure your forensic enquiries into the minutiae of SS's loan structures and concise commentary will be of interest to many.
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