blender
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Post by blender on Jun 8, 2014 9:55:35 GMT
If for example the selection process was truly random but the operator, knowing the triallist(s) would not take A+ or C-, did not bother to put the borrower through a purposeless rejection loop before listing as partial loans, then the individual statements about random selection and no loans (other than the two) offered to the trial lenders being rejected might be true, but I would be missing a part of the truth that I would consider important. (Note I am not saying that this happened, it's a hypothetical example. I could list some variations.)
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wysiati
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Post by wysiati on Jun 8, 2014 13:41:43 GMT
These two have been identified by a very reliable and knowledgeable contributor IMO on the other inferior forum, as 6394 and 6397. These identities have not been confirmed by FC, only that there are two, nor can I find any reference to the whole loans on the loan requests. But are you sure that FC said they would identify the partial that had been whole at the trial stage? I would be surprised since the idea was for the trial to be private, except through the loan book. GSVetc has asked the question about the randomness of trial risk bands on the other forum. I doubt there will be a speedy reply, but we will see. AIUI, where auctions offered as 'whole loans' are rejected they are automatically relisted on the partial loans market but they are not currently identified as previously having been listed as whole loans - no comments/confirmations are being added in the Q&A for example. FC informed that the information (prior whole loan offering status) would only be visible in the loan book data once/if the loans are drawn down. There is certainly a case for greater up-front transparency and hopefully FC will act on some of the feedback and improve the presentation/disclosure of loans which have been offered in both whole and partial loan markets.
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Post by GSV3MIaC on Jun 8, 2014 16:29:52 GMT
Except that they are obvious, by having a loan ID number which is out of sequence (in fact 'in sequence' for 24 hours earlier). That requires perhaps more intelligence on the part of the bidders than can safely be assumed, so yeah adding a flag to the title ('nobody wanted this one at fixed x%') would be nice, and autobidders would still never know.
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Post by davee39 on Jun 8, 2014 17:53:05 GMT
I do not understand the direction of this discussion.
The suggestion seems to be that because an institution or HNWI has failed to take up a loan, it is somehow devalued on the marketplace. Considering that these loans cannot be traded, the buyer would be 100% at risk on the loan, and the rates may be lower than average depending on the recent market performance and range of listings, it is not surprising that some loans will not be attractive on this market. The rest of us merely need to use our Dross Diviners on rejects as with all other listings. Longer term some of the small loans, which always end up at MBR, might be deliberately streamed down the whole loan route.
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blender
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Post by blender on Jun 8, 2014 19:19:10 GMT
I do not understand the direction of this discussion. The suggestion seems to be that because an institution or HNWI has failed to take up a loan, it is somehow devalued on the marketplace. ... This is not the issue for me either, and we will see the whole process following the trial and can make our own judgements as to what to think of a whole loan not taken up. The issues for me is as wysiati concludes: 'There is certainly a case for greater up-front transparency and hopefully FC will act on some of the feedback and improve the presentation/disclosure of loans which have been offered in both whole and partial loan markets'.
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blender
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Post by blender on Jun 9, 2014 15:37:58 GMT
FC have come clean on the other forum. Whole loans were selected at random. They were shown to the triallists and only those they wanted to buy were listed (except two). So any they did not want to buy, A+, C- and others, were listed straight as partial loans. So it was true to say that all those listed (apart from two) were purchased. Of course we have no idea how many in total were 'shown' to the triallist(s) and therefore cannot judge whether this was cherry picking (and to pursue it would be fruitless). It is clearly important that borrowers should not be messed about by a formal rejection (or non-selection) process, but FC should be more open and not cover an obvious nonsense with half truths. Otherwise the intentions were good and the whole loans ideas, IMO, is good for the stable growth of FC and for the majority of lenders.
FC should get credit for owning up, but would do better to more transparent in future.
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Post by GSV3MIaC on Jun 9, 2014 16:17:00 GMT
I do not understand the direction of this discussion. The suggestion seems to be that because an institution or HNWI has failed to take up a loan, it is somehow devalued on the marketplace. Considering that these loans cannot be traded, the buyer would be 100% at risk on the loan, and the rates may be lower than average depending on the recent market performance and range of listings, it is not surprising that some loans will not be attractive on this market. The rest of us merely need to use our Dross Diviners on rejects as with all other listings. Longer term some of the small loans, which always end up at MBR, might be deliberately streamed down the whole loan route. It's not, for me, about cherry picking, given that Barclays, Lloyds, AC, and whoever may have cherry picked them long before they reach FC (and we'll never know). The issue I have is with 'Fairness'. There are now too many different classes of FC lenders .. there's the government, which is permitted/obliged to buy 10% of everything at average rate (which will always be at/above MBR) .. a feat Joe Public (the other 55k lenders) can't replicate (although I have tossed the idea into the FC suggestion black hole that autobid ought have the option for 'I'll have £x at the final average rate, please'). Then there's Joe Public, who are able to manually bid, or get screwed by an autobid system which puts most of their money into things manual bidders didn't want. Now we have class 3 - a bunch of HNWIs or companies who have the right, but NOT the obligation, to soak up whole loans at rates above MBR without anyone else getting a look in .. and if they don't like the rate they can join Joe Public in the eventual auction. Yes, there is a downside since neither the government nor the whole loan owners, have any way of passing them on - I'm not sure that compensates.
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Post by bracknellboy on Jun 9, 2014 17:33:48 GMT
FC have come clean on the other forum. Whole loans were selected at random. They were shown to the triallists and only those they wanted to buy were listed (except two). So any they did not want to buy, A+, C- and others, were listed straight as partial loans. So it was true to say that all those listed (apart from two) were purchased. Of course we have no idea how many in total were 'shown' to the triallist(s) and therefore cannot judge whether this was cherry picking (and to pursue it would be fruitless). It is clearly important that borrowers should not be messed about by a formal rejection (or non-selection) process, but FC should be more open and not cover an obvious nonsense with half truths. Otherwise the intentions were good and the whole loans ideas, IMO, is good for the stable growth of FC and for the majority of lenders. FC should get credit for owning up, but would do better to more transparent in future. Well it would be interesting - though I'm sure we won't ever know - how many loans in total were shown to the 'elite'. Twice those that got listed ? 1 and half times ? 5 times ?
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jm72
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Post by jm72 on Jun 12, 2014 13:24:23 GMT
There seems to be more loans coming on which have been rejected as Whole loans. The 3 listed today were out of a total of 4 Whole Loans yesterday - that's a pretty high rejection rate. One each of A+, A and C-.
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blender
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Post by blender on Jun 12, 2014 14:29:02 GMT
There seems to be more loans coming on which have been rejected as Whole loans. The 3 listed today were out of a total of 4 Whole Loans yesterday - that's a pretty high rejection rate. One each of A+, A and C-. Yes but we know that the current triallist(s) will not take A+ or C- so that is one of two not chosen (rather than rejected). Now presumably FC are playing it straight and listing all the randomly selected loans to the triallists and offering those not chosen on the partial market after a day. So it as it will be except that we do not see the whole loans listed in the loan requests yet. They need some time to develop this.
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wysiati
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Post by wysiati on Jun 12, 2014 14:37:17 GMT
There seems to be more loans coming on which have been rejected as Whole loans. The 3 listed today were out of a total of 4 Whole Loans yesterday - that's a pretty high rejection rate. One each of A+, A and C-. AIUI the P2PG platform agreement includes termination rights in favour of FC if investments do not meet specified minimum amount of whole loans. With high rejection rates you may effectively get (albeit indirectly) the (quasi-?) cherry-picking some have been concerned about as to meet the required investment volumes a much larger initial selection/proportion of loans must be offered first in whole loan format in which the vast majority of FC users will not be able to participate.
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Post by aloanatlast on Jun 12, 2014 14:41:05 GMT
Well it would be interesting - though I'm sure we won't ever know - how many loans in total were shown to the 'elite'. Twice those that got listed ? 1 and half times ? 5 times ? The more they reject, the more they'll be offered.
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wysiati
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Post by wysiati on Jun 13, 2014 13:13:52 GMT
Except that they are obvious, by having a loan ID number which is out of sequence (in fact 'in sequence' for 24 hours earlier). That requires perhaps more intelligence on the part of the bidders than can safely be assumed, so yeah adding a flag to the title ('nobody wanted this one at fixed x%') would be nice, and autobidders would still never know. Although a reasonable working assumption it has not been, and will not necessarily be, completely reliable. Today it looks as though there was a loan (6523) listed out of sequence possibly on the same day which could be a whole loan reject.
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Post by GSV3MIaC on Jun 14, 2014 15:37:42 GMT
Yes, I think the 'out of sequence' is likely reliable, but the 24 hour delay is negotiable - FC have stated someplace they are aiming for 3 hours (which would be harder to spot .. given there is a 16 hour gap usually between 8pm one night and new auctions at midday or later the next day.
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