elliotn
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Post by elliotn on Nov 18, 2016 12:10:24 GMT
A similar post has been subsumed within a technical discussion on the SM so I think this is better suited here, pls feel free to delete other post  . As a newbie my strategy for buying re-sold loan parts is continually evolving as I get used to the nuances of FS. Where there are differently prioritised loan parts on SM can the borrower still repay smaller, later 'charges' from part sales of the property first ie the enforcement priority of different loans outlined in the overviews (on the same first charge) only stand in the instance of a default otherwise the borrower can repay active loans at his/her own prerogative? I can't yet think of a multi-tranche loan on FS where individual tranches have been repaid in stages but, based on standard practice elsewhere, as a lender I'd generally expect to see: - 2nd / 3rd charge tranches repaid before 1st charge tranche(s) since these will be incurring higher costs for the borrower, provided of course that LTV on the 1st charge is not impaired as a result (if, say, units start to be sold off from a multi-unit development) - where tranches rank pari-passu, earlier tranches repaid ahead of later tranches (certainly this is how such repayments are processed on FC) Many thanks (again) Steve. I was thinking of somewhere in Liverpool that would apparently pay back some subsequent, much smaller, loans from a partial sale ahead of fully repaying the main loan that ranks as the 'first' charge. That makes commercial sense even if the '1st charge' holders wait a little longer .
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Post by Deleted on Nov 18, 2016 13:41:31 GMT
I noticed since the underwriters have been used for renewals, cashback has dried up I'm sure that FS have redeployed the margin that was previously going towards CB into covering underwriters' fees instead. And it is clearly having a much greater effect on liquidity. It's noticeable how much faster the renewal loans fill once they have been underwritten; possibly some of that is due to other funds being released and reinvested from other underwritten loans, but I do wonder if a significant subset of FS lenders still haven't cottoned on that interest starts accruing immediately these days, not just once a loan completes. Interested to know if investors in the expiring loan who choose not to renew are being repaid when the loan is underwritten, that would certainly have a large effect on liquidity.
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SteveT
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Post by SteveT on Nov 18, 2016 16:09:22 GMT
Interested to know if investors in the expiring loan who choose not to renew are being repaid when the loan is underwritten, that would certainly have a large effect on liquidity. Yes, they are. As well as new loans now filling faster (especially the newly-underwritten renewals, curiously), the "best available" SM rates have also dropped substantially in the last couple of weeks as released money is rapidly recycled into other loans.
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mikes1531
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Post by mikes1531 on Nov 19, 2016 2:49:22 GMT
It's noticeable how much faster the renewal loans fill once they have been underwritten; possibly some of that is due to other funds being released and reinvested from other underwritten loans, but I do wonder if a significant subset of FS lenders still haven't cottoned on that interest starts accruing immediately these days, not just once a loan completes. Interested to know if investors in the expiring loan who choose not to renew are being repaid when the loan is underwritten, that would certainly have a large effect on liquidity. Yes, they are. As well as new loans now filling faster (especially the newly-underwritten renewals, curiously), the "best available" SM rates have also dropped substantially in the last couple of weeks as released money is rapidly recycled into other loans. Further to the above, there's another reason why some people might be opting out of the automatic renewal... If you want to renew only part of your investment, you have to opt out of the automatic renewal and then place a separate investment in the new loan. Before underwriting, this meant you had to bring in new money to fund the new bid and then wait until the renewal was fully funded before receiving your earlier investment back. With underwriting, you can wait until the underwriting is in place and use the money coming back from the initial loan to fund the follow-on loan. If you try that, of course, you're running a risk that FS might decide not to underwrite a loan and you don't realise that's happening until after the renewal loan is fully funded -- at which point you've lost the opportunity to invest in the renewal loan..
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elliotn
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Post by elliotn on May 3, 2017 14:08:01 GMT
I started last year as a c20%, non tax paying, bottom feeder.
As I still have loans overdue from last year I switched to buy PM, sell SM.
Rich tax payers are making that work a treat, TY FSIFISA.
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kulerucket
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Post by kulerucket on May 3, 2017 21:27:20 GMT
I started last year as a c20%, non tax paying, bottom feeder. As I still have loans overdue from last year I switched to buy PM, sell SM. Rich tax payers are making that work a treat, TY FSIFISA. Sounds like I'm a year behind and need my hand bitten.
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Post by resiak on May 4, 2017 13:38:45 GMT
Before anyone gets led astray, the first strategy listed only really makes any sense for non-taxpayers and company lenders (that can offset accrued interest purchased against interest ultimately paid) Hi. I see your post was from Nov 2016 so well before the launch of the IFISA on FS, but am I right to say the 1st strategy now makes sense for IFISA investors too? The main limit of buying on the SM is the tax liability on all interest paid when the loan completes but this shouldn't be a problem when buying within the ISA. (Yes, I'm still a bit confused about the SM-IFISA combo)
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Liz
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Post by Liz on May 4, 2017 14:13:25 GMT
Before anyone gets led astray, the first strategy listed only really makes any sense for non-taxpayers and company lenders (that can offset accrued interest purchased against interest ultimately paid) Hi. I see your post was from Nov 2016 so well before the launch of the IFISA on FS, but am I right to say the 1st strategy now makes sense for IFISA investors too? The main limit of buying on the SM is the tax liability on all interest paid when the loan completes but this shouldn't be a problem when buying within the ISA. (Yes, I'm still a bit confused about the SM-IFISA combo) If you think the loan will repay or renew, then yes you can boost your returns using no.1.
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