dorset
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Post by dorset on Jun 5, 2014 19:08:25 GMT
If it was only a year or 18 months I might have been tempted - but 5 years combined with that low credit score means that 8% isn't enough to tempt me to buy any of these to keep. I think it's going to be tough to shift on the SM too. A 60 month loan at 8% or so and with general interest rates likely (?) to have started rising during this period then it does not make any sense to me.
Will be sitting this one out.
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Post by yorkshireman on Jun 5, 2014 21:06:55 GMT
If it was only a year or 18 months I might have been tempted - but 5 years combined with that low credit score means that 8% isn't enough to tempt me to buy any of these to keep. I think it's going to be tough to shift on the SM too. A 60 month loan at 8% or so and with general interest rates likely (?) to have started rising during this period then it does not make any sense to me.
Will be sitting this one out.
All of which adds weight to my opinion that lending at around 6% on Rate setter’s 5 year market isn’t a good strategy.
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is
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Post by is on Jun 8, 2014 19:34:53 GMT
Autobidders were very busy in the small hours putting their repayments into this. I am assuming that the rule about Autobidders only making up a certain percentage at MBR still applies. 8% is MBR and there are no other options. Rather more bids than I thought on this one. By my simplistic analysis, close to 57% of the current 341k bid may have come from autobidders (I've just filtered out all names that made only a single bid). Bound to be an overestimate but not by an enormous amount, I would think....
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blender
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Post by blender on Jun 8, 2014 21:38:04 GMT
By my simplistic analysis, close to 57% of the current 341k bid may have come from autobidders (I've just filtered out all names that made only a single bid). Bound to be an overestimate but not by an enormous amount, I would think.... IIRC it was a max of 40% autobid at MBR. Perhaps that was quietly forgotten when autobid was changed. It never worried me much and it may fill this loan. Autobidders have been shut out of 6415, so there are swings and roundabouts - but FC first priority is presumably to fill loans and without an autobid limit this big one will probably fill by next Sunday if everthing else is 100% funded. Edit: Must qualify this. For the last two early mornings (sun and mon) there has been little evidence of overnight autobids from the processing of repayments. So either there are very few autobidders left to take their part, or the limit has been reached and there are a few single part manual bidders on the night shift. The last 20% may still be tricky. There are also some large multi-part stakes by serious buyers, so someone likes it.
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is
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Post by is on Jun 9, 2014 20:40:56 GMT
By my simplistic analysis, close to 57% of the current 341k bid may have come from autobidders (I've just filtered out all names that made only a single bid). Bound to be an overestimate but not by an enormous amount, I would think.... IIRC it was a max of 40% autobid at MBR. Perhaps that was quietly forgotten when autobid was changed. It never worried me much and it may fill this loan. Autobidders have been shut out of 6415, so there are swings and roundabouts - but FC first priority is presumably to fill loans and without an autobid limit this big one will probably fill by next Sunday if everthing else is 100% funded. Edit: Must qualify this. For the last two early mornings (sun and mon) there has been little evidence of overnight autobids from the processing of repayments. So either there are very few autobidders left to take their part, or the limit has been reached and there are a few single part manual bidders on the night shift. The last 20% may still be tricky. There are also some large multi-part stakes by serious buyers, so someone likes it. This would be a big effort to re-sell, even compared to Ramsgate - long duration, low rate, autobidders already up to the limit. Seems to be hardly worth splitting the bids into small parts if you do want to own it - you will be in for a while. Better to wait for the upcoming low-duration tranches of the development loans (or new offerings). Should hopefully mean higher rates set by FC for future similar loans (though maybe they are happy to feed it to autobidders...) In general it would be good to see the rates reflect liquidity better - £400k will always be harder to get out of than £200k, so Ramsgate and Forest Hill should not have been priced the same.
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wysiati
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Post by wysiati on Jun 10, 2014 10:35:42 GMT
IIRC it was a max of 40% autobid at MBR. Perhaps that was quietly forgotten when autobid was changed. It never worried me much and it may fill this loan. Autobidders have been shut out of 6415, so there are swings and roundabouts - but FC first priority is presumably to fill loans and without an autobid limit this big one will probably fill by next Sunday if everthing else is 100% funded. Edit: Must qualify this. For the last two early mornings (sun and mon) there has been little evidence of overnight autobids from the processing of repayments. So either there are very few autobidders left to take their part, or the limit has been reached and there are a few single part manual bidders on the night shift. The last 20% may still be tricky. There are also some large multi-part stakes by serious buyers, so someone likes it. This would be a big effort to re-sell, even compared to Ramsgate - long duration, low rate, autobidders already up to the limit. Seems to be hardly worth splitting the bids into small parts if you do want to own it - you will be in for a while. Better to wait for the upcoming low-duration tranches of the development loans (or new offerings). Should hopefully mean higher rates set by FC for future similar loans (though maybe they are happy to feed it to autobidders...) In general it would be good to see the rates reflect liquidity better - £400k will always be harder to get out of than £200k, so Ramsgate and Forest Hill should not have been priced the same. Looking at these property/commercial mortgage loans it appears that autobid is working inconsistently; an alternative interpretation could be that funds are being directed in favour of certain (new) loans. For example, the first of the recent commercial mortgage loans (6036 c.£115k A, 8.5%, 60m, Secured with First Charge) has had a stack loan parts sitting at 0% premium for over a month now. Meanwhile much larger loans have been filling and this latest commercial mortgage loan (6391 £429k A 8.0%, 60m, Secured with First Charge) is almost funded with what others estimate to be a far higher £ value of autobids at a lower headline % rate. It is not clear to me whether autobid takes into account cashback impact on returns (I had assumed not) but it is difficult to work out why consistent application of autobid in primary and seondary markets would produce such contrasting outcomes. The commercial priority for FC is presumably to get these new loans funded. It appears that relying on autobid to clear a large holding in the secondary market is even more of a gamble.
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wysiati
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Post by wysiati on Jun 10, 2014 10:38:09 GMT
This would be a big effort to re-sell, even compared to Ramsgate - long duration, low rate, autobidders already up to the limit. Seems to be hardly worth splitting the bids into small parts if you do want to own it - you will be in for a while. Better to wait for the upcoming low-duration tranches of the development loans (or new offerings). Should hopefully mean higher rates set by FC for future similar loans (though maybe they are happy to feed it to autobidders...) In general it would be good to see the rates reflect liquidity better - £400k will always be harder to get out of than £200k, so Ramsgate and Forest Hill should not have been priced the same. Looking at these property/commercial mortgage loans it appears that autobid is working inconsistently; an alternative speculative interpretation could be that funds are being directed in favour of certain (new) loans. For example, the first of the recent commercial mortgage loans (6036 c.£115k A, 8.5%, 60m, Secured with First Charge) has had a stack of loan parts sitting at 0% premium for over a month now. Meanwhile much larger loans have been filling and this latest commercial mortgage loan (6391 £429k A 8.0%, 60m, Secured with First Charge) is almost funded with what others estimate to be a far higher £ value of autobids at a lower headline % rate. It is not clear to me whether autobid takes into account cashback impact on returns (I had assumed not) but it is difficult to work out why consistent application of autobid in primary and seondary markets would produce such contrasting results. The commercial priority for FC is presumably to get these new loans funded. It appears that relying on autobid to clear a large holding in the secondary market is even more of a gamble.
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markr
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Post by markr on Jun 10, 2014 11:35:42 GMT
Looking at these property/commercial mortgage loans it appears that autobid is working inconsistently; an alternative interpretation could be that funds are being directed in favour of certain (new) loans. For example, the first of the recent commercial mortgage loans (6036 c.£115k A, 8.5%, 60m, Secured with First Charge) has had a stack loan parts sitting at 0% premium for over a month now. Meanwhile much larger loans have been filling and this latest commercial mortgage loan (6391 £429k A 8.0%, 60m, Secured with First Charge) is almost funded with what others estimate to be a far higher £ value of autobids at a lower headline % rate. It is not clear to me whether autobid takes into account cashback impact on returns (I had assumed not) but it is difficult to work out why consistent application of autobid in primary and seondary markets would produce such contrasting outcomes. The commercial priority for FC is presumably to get these new loans funded. It appears that relying on autobid to clear a large holding in the secondary market is even more of a gamble. I don't think so necessarily. On the secondary market you will only sell to autobidders who don't already hold the loan, on the primary market every autobidder can bid (if their settings allow it). On a loan that recently finished, most eligible autobidders will already have it because they bid for it in the primary market.
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blender
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Post by blender on Jun 10, 2014 11:36:43 GMT
It is good that you are focussing on this WYSIATI. It is clearly from the compromises on the whole loans trial that FC are not as open as they were. And I think there is considerable pressure to grow the business through these new ventures of whole loans and property loans, by attracting new lenders/funds. Autobid is probably the greatest free-to-pull lever that FC have to encourage lenders to support new ventures and so it is good that some attention is paid here to its working to help keep FC honest. Personally, I could not confirm that Autobid is being used to direct funds in particular directions, except that the balance between the primary and secondary market is one way the lever could be pulled (and I suspect has been before), but it does not trouble me because I would consider that a reasonable use. My understanding is that on the primary market Autobid was changed so that it helped to fill loans according to their percentage fill rather than the amount of cash - and again this is OK with me because rates were too much dependent on loan size rather than risk. The limit of 40%? fill of any loan by Autobid at MBR was a good safety feature which meant that loans were scrutised by manual bidders. But now I would not put it past FC to say that MBR is not a relevant concept for fixed rate loans and remove it on fixed rate loans such as 6391, convincing themselves that the fact that the rate is also MBR is just coincidence.
I think that if there were further Autobid levers which directed money to particular loans or groups of primary market loans that would be a serious step onto the slippery slope of preference. Not so much for the lenders but for the borrowers, and FC will really wish to be able to say to borrowers have equal access to funds from lenders - I wonder how the recent cashback only on larger loans went down with borrowers? I doubt, I hope, that Autobid would not be quietly changed to favour new loans with cashback. That would be two feet on the slippery slope.
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wysiati
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Post by wysiati on Jun 10, 2014 12:08:43 GMT
Looking at these property/commercial mortgage loans it appears that autobid is working inconsistently; an alternative interpretation could be that funds are being directed in favour of certain (new) loans. For example, the first of the recent commercial mortgage loans (6036 c.£115k A, 8.5%, 60m, Secured with First Charge) has had a stack loan parts sitting at 0% premium for over a month now. Meanwhile much larger loans have been filling and this latest commercial mortgage loan (6391 £429k A 8.0%, 60m, Secured with First Charge) is almost funded with what others estimate to be a far higher £ value of autobids at a lower headline % rate. It is not clear to me whether autobid takes into account cashback impact on returns (I had assumed not) but it is difficult to work out why consistent application of autobid in primary and seondary markets would produce such contrasting outcomes. The commercial priority for FC is presumably to get these new loans funded. It appears that relying on autobid to clear a large holding in the secondary market is even more of a gamble. I don't think so necessarily. On the secondary market you will only sell to autobidders who don't already hold the loan, on the primary market every autobidder can bid (if their settings allow it). On a loan that recently finished, most eligible autobidders will already have it because they bid for it in the primary market. Well no, actually. In this case if you look at 6036 there were only c.130 successful bidders for the c£115k on offer in the primary market auction and the loan was highly concentrated with the top 5 bidders accounting for almost 70% of the total, the top 10 bidders almost 80%, top 20 bidders 87%. So this loan had very limited autobid representation going onto the secondary market (vs c50% being the norm going back even 12 months) and yet there has been suspiciously limited take up since then.
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wysiati
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Post by wysiati on Jun 10, 2014 12:12:45 GMT
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Post by davee39 on Jun 10, 2014 17:29:10 GMT
And a much more attractive £66k Loan fills within about 15 mins. Interesting to see what autobid does with this on the secondary market - it should have some appetite left.
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wysiati
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Post by wysiati on Jun 10, 2014 17:37:39 GMT
And a much more attractive £66k Loan fills within about 15 mins. Interesting to see what autobid does with this on the secondary market - it should have some appetite left. Top 2 bidders have got 80% of the loan capital on offer. Only c.45 successful bidders in total. If Autobid doesn't go for this one suspicions must be confirmed, surely?
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jm72
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Post by jm72 on Jun 10, 2014 17:41:31 GMT
And a much more attractive £66k Loan fills within about 15 mins. Interesting to see what autobid does with this on the secondary market - it should have some appetite left. Top 2 bidders have got 80% of the loan capital on offer. Only c.45 successful bidders in total. If Autobid doesn't go for this one suspicions must be confirmed, surely? I'm trying to work this one out - document states loan requested was 60,000. Amount listed was 66,140. I know that some company add the FC fees onto the loan amount - but that would imply a 10% fee? Is this correct for property loans (if so, no wonder FC's happy to provide 2% cashback), or am I missing something? Edit: Just noticed the 66,140 includes 'interest and fees' - but interest is 4,920 - leaving only £1,220 for fees. Given cashback is £1,322 - looks like FC's making a loss??
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Post by GSV3MIaC on Jun 10, 2014 17:46:46 GMT
I wonder if they borrowed the interest too?!
Regardless, FC do seem to be a bit whacky on rates .. This one is, as someone said, more attractive (A+) and shorter duration, but gets the same 8% / 2% cash back as the 429k A.
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