min
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Post by min on Sept 27, 2014 5:10:13 GMT
I'm surprised people (other than autobidders) still go for the FC property, now flipping is very difficult and FC (almost certainly) channels autobid to their steady pipeline of new loans. AC offers a much better choice in that space, both in due diligence and rates (up to 14% with no fees, equivalent to FC 15%) Drawdown time is the problem on AC. Will be interesting to see how FK handle property loans.
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Post by davee39 on Sept 27, 2014 8:52:11 GMT
I'm surprised people (other than autobidders) still go for the FC property, now flipping is very difficult and FC (almost certainly) channels autobid to their steady pipeline of new loans. AC offers a much better choice in that space, both in due diligence and rates (up to 14% with no fees, equivalent to FC 15%) Drawdown time is the problem on AC. Will be interesting to see how FK handle property loans. When a Minor, and fairly unsuccessful P2P goes into property it must be a signal to everyone else to get out! All these 12 month loans assume everything will go to plan and buyers will be available at the end. All it needs is a bad winter/brick shortage/labour shortage/mansion tax or similar to delay a project for a couple of months or deter buyers, and the LTV gets stretched. Furthermore an initial difficultly in re-financing a loan could snowball as the borrower looks less and less creditworthy. Some platforms are now heavily into property and could be putting their financial stability at risk
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blender
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Post by blender on Sept 27, 2014 10:54:37 GMT
Drawdown time is the problem on AC. Will be interesting to see how FK handle property loans. When a Minor, and fairly unsuccessful P2P goes into property it must be a signal to everyone else to get out! I assume that you might have FK in mind here rather than FC? Especially since we learn from another thread that FK's much smaller loan book has a substantial ownership by one of FK's backers. FC may find that its future does not rely heavily on property - shall we say - but its property commitment, including contingent funding liabilities, is small compared with the non-property loanbook. And the capital funding FC have raised seems to me to be sufficient to cover any risk from the property loans without crashing the non-property business. Also I believe that FC has sufficient strategic sense not to overstretch itself chasing growth through property loans at any cost. I might mutter about the effects on the SM, but I think in this emerging P2P sector that, despite 'is's valid observations above, there is something to be said for avoiding being too much of a rate tart and giving some slack to an operator with a solid and proven track record (yes I know about the annoying quality issues).
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Post by davee39 on Sept 27, 2014 12:01:14 GMT
When a Minor, and fairly unsuccessful P2P goes into property it must be a signal to everyone else to get out! I assume that you might have FK in mind here rather than FC? Especially since we learn from another thread that FK's much smaller loan book has a substantial ownership by one of FK's backers. FC may find that its future does not rely heavily on property - shall we say - but its property commitment, including contingent funding liabilities, is small compared with the non-property loanbook. And the capital funding FC have raised seems to me to be sufficient to cover any risk from the property loans without crashing the non-property business. Also I believe that FC has sufficient strategic sense not to overstretch itself chasing growth through property loans at any cost. I might mutter about the effects on the SM, but I think in this emerging P2P sector that, despite 'is's valid observations above, there is something to be said for avoiding being too much of a rate tart and giving some slack to an operator with a solid and proven track record (yes I know about the annoying quality issues). Yes, I did mean FK, and I would include SS which is now majority property loans. For all its faults FC appears to still be a good bet (sticking to business loans of course). My only disappointment with FC is the volume of deals available to 'non whole loan' buyers. I had hoped we would be seeing more than the 50 - 60 a week.
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blender
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Post by blender on Sept 27, 2014 13:34:25 GMT
... My only disappointment with FC is the volume of deals available to 'non whole loan' buyers. I had hoped we would be seeing more than the 50 - 60 a week. I believe that FC would agree with you there. I think that FC is probably adjusting the number of whole loans to keep a balance between borrowers and lenders on the main board - judged by the interest rates being within an acceptable band. If they went up to 100 partial loans per week there would not be enough lender cash to support the partial loans and property loans. I am sure FC are working on that - and have been for some time. They should advertise on TV for the consumer lender.
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markr
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Post by markr on Sept 27, 2014 21:18:35 GMT
Here's a couple of general questions for those who follow the property loans:
- Do I recall seeing a property loan request recently that didn't feature the 2% cashback, or was that just a mistake or my imagination? - Do we anticipate the cashback to continue (for a while yet, at least) to get loans filled? - When might we predict to see the third tranche following loans 7248 & 7421 (the A at 9%)?
Thanks in advance for opinions, which would help me plan. The second tranche of Harrogate had no cashback, and there was a small first tranche recently as well. I predict the cashback will continue until the earlier interest only loans start repaying (so say 9-12 months from now). At the moment, interest only property loans are a massive money-sink with no track record. Presuming that they pay back promptly, they will then be dumping cash back into lenders accounts that will be looking for a new home. I expect the SM to get more liquid then as well.
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blender
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Post by blender on Sept 30, 2014 8:31:59 GMT
Despite large numbers of whole business loans (see loan book) being kept off the platform recently, property loans 7848 and 7870 reach the end of their long struggles this pm. No doubt the good people of FC have their Funding Circle Solutions hats at the ready and their mouse fingers flexed to help these two ascend just before the close.
Edit: In another place FC have announced their intention to start selling the parts they have bought in property loans on the SM, and that this will be their practice going forward. At present this is about £50k in two loans in £20 loan parts.
While this is not good news, in that the secondary market is being used to place loan parts which failed to find a real buyer in the primary market, at least FC have stated that that they will be offered at par, avoiding unfair competition, and the volume managed. It is good that this has been announced and the need not to abuse or unbalance the secondary market has been recognised. At least we know what to expect, though FC are going to find these sub 8% parts hard to shift at par and their total stake will increase before it decreases.
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Post by GSV3MIaC on Sept 30, 2014 11:55:59 GMT
Anyone else selling them at par will find it equally hard (or harder, if you look at 'chances of selling one part' .. basically, assuming it stays a level playing field, your chance of selling one depends on how many you have on offer. It is also going to soak up autobid SM capacity, so selling other things at par will be harder too.
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adrianc
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Post by adrianc on Sept 30, 2014 13:53:40 GMT
It is also going to soak up autobid SM capacity, so selling other things at par will be harder too. I dunno about that. Every autobidder's going to have exposure already - or soon - so it shouldn't have a knock-on to other par sales, except for just mopping a small percentage of new money up.
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Post by GSV3MIaC on Sept 30, 2014 15:02:52 GMT
That was what I meant - all new chums arriving with autobid on will get sold property loan parts .. mind you, they probably already do. Instant portfolio. 8>.
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blender
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Post by blender on Sept 30, 2014 15:54:35 GMT
FC have bought up unsold 7848. Their parts at par on the SM, being lower interest rates, will not sell very quickly. My worry is what they will do if their holdings get too high. If they start giving their parts priority on the platform, or if they take advantage of their fees in selling at a discount then those would be two examples of unfair competition. Funding Circle Solutions Ltd is setting a bad example in the way it is building its portfolio. Rather than spreading its risk through diversity over 100 loans, by the end of the day it will still be a serious diversity criminal with about £100k spread over just four loans.
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blender
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Post by blender on Oct 9, 2014 13:17:25 GMT
Edit: Oh dear - this post was all about new loan 8254 without cash back - but no it is the usual problem. 2% cash back is written at the end of the entry on the loan requests page and there is a mention of the terms on the Q&A - but no 2% flash, and no mention of the cash back on the auction front page. It's a semi-secret cash back offer. Looks like Mr C*ck*up is visiting again.
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markr
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Post by markr on Oct 9, 2014 13:36:45 GMT
(I am assuming there has been no c*ck*p). c*ck*p gets my vote. There's no "2%" flash on the image, but it does say 2% cashback under the loan title, and they've added their usual "question" pointing to the cashback Ts&Cs. I've bid on it, so I'll be B*****y Cross (see what I did there?) if there isn't any cashback. Edit: My post and your edit crossed!
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oldgrumpy
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Post by oldgrumpy on Oct 9, 2014 13:49:47 GMT
Make sure you get a screen shot of the bit which shows the 2% cashback - just in case.
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blender
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Post by blender on Oct 9, 2014 16:31:59 GMT
Three of them now, without any indication of the cash back on the front auction page.
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