part of my reason to start with drawing though not the biggest. I focused on 3 year loans due to that though.
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I dont think he has done enough research:
From what I can tell, harmoney actively promotes it and potentially gives people a better rating now that they have a payment history.Quote:
I hope that Harmoney’s credit score is reduced for such borrowers when they, and shareholder Heartland Bank, observe people agreeing to repay an old loan by initiating a new larger loan.
The Harmoney loans really are drying up by the looks. Nothing on the marketplace as of writing. Doing a last bit of investing before the fee change, where I'll start peeling out.
So what's happening with "Lending Club" over in the US?
Read on below:
http://www.zerohedge.com/news/2016-0...ones-sharehold
Loan. 64997. This is a real godie .... onthly repayments. 0.00.
A freeby?
Just sent an email to Mark Bardi. And got ...
"Hi -
As of Friday, 3 June, I am no longer working on the Investor Services team at Harmoney"
Along with other pple to contact ...
Has he left or moved within HM? Anyone else heard?
He's left... Evidently. Gone back to USA
Another loan listed ... with ZERO. Monthly repayments A1. 64996
The other loan this morning still was warmly received by oher investors!!!
The CEO Renaud Laplanche resigned over dodgy handling of loans sold to a large investor and the stock took a dive.
http://www.nytimes.com/2016/05/15/bu...l?ref=business
TSB Bank is now also investing into \ thru Harmoney... It would appear
http://www.interest.co.nz/opinion/81...ender-harmoney
we should be more confident that the big banks are dipping in.. we only invest in small chunks of cash, which is a risk for us.. Its good to know a bank is sharing the risk
there are currently three loans on the platforms that are re-writes. its says the previous previous loan pay off amount was $00.00. Can this ne right?
I wonder if the lack of loans is the high demand from lenders wanting to get as much in as possible before the fee hike, or Harmoney purposefully holding back loans until the fee hike.
I was rather hoping to get a little more in before Monday, but there aren't nearly enough loans to bother.
First post.
I've been investing with Harmoney since October. One of the issues I raised with them early on was their fees seemed to be out line with the risk.
Currently:
They assess the applications and grade the loans.
We invest.
Harmoney takes a fee that is a percentage of the CAPITAL.....and unrelated to the actual performance of the loan. Good or bad, they get their fee. So where is the incentive to rigorously assess risk in grading the loans? It appeared to be a moral imperative only. Only indirectly do they suffer as investors back off IF the grading of loans wasn't in line with actual risk - in aggregate. But we would not know that for years, possibly.
Under the new fee structure, Harmoney is in the risk pool right along with us. If the loans perform badly....we don't get any interest...and Harmoney doesn't get any fees. Hurrah!
As for the new fees, there is incentive to invest more and pay lower fees. I'm already well over the $10,000 threshold and should pay 17.5% instead of 20% of interest. I'm also provisionally assuming we can deduct their fee from our earnings for tax purposes. So we pay less tax on the gross interest. That's good.
Re-writes? I like them. They are a chance to get back - in full - the amount loaned to a lender long before the 36 months of 60 months elapses. Good. In my view, that improves my liquidity, if only by accident.
But re-writes are also necessary when a loan is topped up. Each top-up is - or should be - a chance to re-assess that borrower. Are they headed off the rails? Will they go into a death spiral long before the term of the loan is up? If loans were just topped up without re-writes, I'd be very worried. My money could be locked in for a ride down the plug-hole to a borrower who thinks the solution to too much debt is more debt. Re-grading them along the way would be irrelevant if I can't get my money out. No thanks. I love re-writes.
I rarely (almost never, but not quite) lend money to anyone asking for the $35,000 cap. They have nowhere left to go if they run into trouble. At least if someone runs into trouble at $30,000, they can go for a re-write....and I can get my money back and not lend them any on their new, improved $35,000 last dance.
Maybe I'm missing something....but I'm seeing people upset with what I think are some of the best features of the way Harmoney operates and the upcoming direct alignment of their rewards with the same risk we all face in lending the money.
If I've gone wrong somewhere.....please tell me. :-)
Actually I preferred the old system because there was more incentive to squeeze the pips out of every loan. Now there is no immediate incentive to work hard on poor performing loans to get at least some of the capital back. Fees are also front loaded under an interest based approach. Having said that I am happy with Harmoney and take comfort from the quality of management, shareholders, wholesale funders and FMA licence. I think it is great addition to a portfolio of investments if you diversify correctly.
I have no problems with the new method of calculating the fees - it is one of the better ways of doing it. My issue is with the level they are set at - and the size fee increase this will result in for pretty much EVERYONE even those in the cheapest fee bracket. If you look at the other P2P lender in NZ that does their fees the same as the new harmoney way they charge 10% NOT 15%-20%. If at least harmoney set there fees at 10%-15% most investors would have ended up paying more then they did before but the increase would have been more modest.
With Re-writes I see why they do it the way they do - but it penalises those that took the 1st initial risk with a new borrower and potentially risked the higher default rate. The best of all worlds fair to all way of dealing with this would be to offer existing investors the 1st right of acceptance to remain invested, Eg you have say 24 hours to log into your dashboard and say yes I want to remain invested. If you don't accept that part of the loan goes out to the market too. While this is happening the increased proportion of the loan can already be out in the market being filled - so the slow down in funding the loan would be minimal
So Harmoney have updated their disclosure document and I took another read through as a refresher and this caught my eye:
"Harmoney and its Related Companies may be paid a commission or other financial benefit by any person in connection with any loan or the Harmoney service (eg a commission if it participates in a loan)."
From this, it seems there is a risk of Harmoney purchasing high-risk debt from another lender and "subjectively" grading it (lipstick on pig) if sufficiently incentivised? Curious what protections are there under the FMA, governance or otherwise against this?
Linuxluver ...
I have been with HM since the latter part of September last year .... i have 9 write offs so far
:
4 of those were in the fraud lot so i will exclude those for this example:
So 5 left to consider
NOW..... Of those 5 .... 2 had been rewrites ....... So i think your initial view on re writes may have to mature over time!
I ask you
When looking to invest ... How do you even know if a rewrite has been an early attempt to ease their dire position? ... or
They initially borrowed a low amount ... paid a few payments on time, then go back for a much higher rewrite with no intention of repaying ...
It's time consuming but over past say couple/few weeks ... loans seem to be listed up in groups and full at a blistering speed ... like some 3-5 odd minutes ... so if ya aren't loggin at that particular time ya may think listings have dried up ... i counted up 55 odd one day - i think if Harmoney revealed just how many loans they've listed each day - you'd possibly have an eyebrow raising moment ...
Another crude way is checking out the loan numbers for a month ... just did this and i see they've gone from approx 63297 up to 65355 .. so roughly averaging around 68 odd loans per day yet within this time frame we had a long weekend ... so the daily listed up loans would be a little higher.
Yes but at what point is the loan ID allocated - Based on the fact they arrive to market out of order - and the odd one can turn up out of order by several thousand - this means the ID's are allocated at an earlier stage - probably either to each application (approved or not) or at approval . So the number you get from this calculation is most likely the number of applications - or the number of approved applications - not the actual number of loans issued.
I also believe that all loans where the borrower chose insurance are being exclusively funded by the corporate lenders and are unavailable to retail currently. So this will further reduce the retail number available.
Why then is the chance of being able to invest in any Loan(s) like a lottery, depending when one logs-in?
I think if Harmoney would text investors, that wish to opt-in, when loans are placed on the market; providing a fair opportunity.
There maybe a good number of investors that are unable to log-in regularly (work) during the day to take a chance.
The only downside to my idea is a possible Log-Jam..
Hi Darchie
Thank you for your comments. I'm up to over 100 loans and haven't had any write-offs or defaults since October '15, but then I have tended to stick to the A-C (mainly A2 to C2) loans and only occasionally dipped into what I see as murky waters at the D-F level.....just to add a flourish of higher interest to my otherwise (relatively) conservative approach. I do have one loan that falls into arrears and then they pay...and then it falls into arrears....but so far none have gone bad.
I have assumed that where a person has had a previous loan and has a payment history far less than 36 payments is almost certainly a re-write. But they could have paid another loan off early, too, so there is that possibility. Often the comments make it clear the would-be borrower is increasing their loan for some purpose.
As for people dealing in bad faith.....well....that's built into the risk profiles, I guess. They are included in the estimated default rate. They are the reason we don't lend $1000 at a time and stick to smaller amounts across many loans. I agree we can never be certain. If there are too many liars and fraudsters out there then I suppose we'll all find out the hard way. But so far, fingers crossed, I haven't seen such behaviour among my loans.
Completely different issue: today my Harmoney fund balance shows as -$87. I assume some cheque has bounced? A big one? I had a positive balance - maybe $13 - yesterday. That looks suspiciously close to a round $100 variation.
Has anyone else seen this now or ever? I've sent them an email asking about it.
Welcome Linuxluver,
Good move sticking to A-C grades. I can tell you that I have just reached the 600+ loans invested, 420+ loans are in the A_C grade, have had only 1 charged off loan, a B4 grade over the last 15 months invested.
The other 180 odd loans D_F have had 4 defaults 3 E grade, 1 F grade.
I am happy with the return so far, but I'm not sure if I'm happy with the new fee structure come Monday!
That's how I see it and why I don't generally invest in re-writes. To me re-writes are an indication that the borrower constantly needs to borrow more to fund future repayments. I sometimes make an exception if the original loan was very small or if the purpose was for house renovations which, lets face it, always blow out.
Sorry but how does 3 month really prove consistency and that they're going to be reliable long term???
From Harmoney website
"Are you going to continue actively marketing to Borrowers to rewrite their loans?
Harmoney plans on continuing to offer our most creditworthy borrowers the chance to top up their loan up to their approved limit after at least 3 months of full payment history. This is a standard practice in consumer lending, as it is rewards Borrowers for consistent repayment behaviour, ensures that Harmoney creates a long-term relationship with that customer, and encourages that customer not to look elsewhere for their borrowing needs.
What's the uptake volume on the new loans been sine Monday's Fee change?
I honesty cannot be bothered to even go and look!
It's been very quiet on this Thread since Sunday :)
25 loans sitting ..pretty much been not many fill for day..... very stagnant.
I see I've got EIGHT arrears that've paid zero, missing their first payment ..... I certainly hope we're not into another fraud stint! Anyone else noticing an increase with these?
Gues what 3 of them are rewrites . Ya know "cream of the crop"
No, the fraudulent loans were over about time 2 months. From memory, starting around christmas ending around 2 feb. The point is they wernt in quick succession.
Here are the list of Fraudulent loans I was hit with. Note harmoney have only acknoledged that 9 of the 11 loans listed were fraudulent - I missed to other 2 off my list(or they hadnt yet been written off) when I asked about them
LAI-00055146 Feb 10, 2016
LAI-00054117 Feb 2, 2016
LAI-00054100 Feb 1, 2016
LAI-00053612 Jan 27, 2016
LAI-00053360 Jan 19, 2016
LAI-00053274 Jan 15, 2016
LAI-00052943 Jan 12, 2016
LAI-00052647 Jan 4, 2016
LAI-00052256 Dec 23, 2015
LAI-00051494 Dec 14, 2015
and also Maybe
LAI-00055174 Feb 10, 2016
Im very pleased to see this to be honest - and hopefully it will stay this way - wake up call for harmoney hopefully - the raised fees are too high.
although they might be able to bandaid this problem by using the corporate investors
I got slammed with 19 early repayments between 4pm Friday and Sunday morning. and more since by the looks of it. And there were almost no loans at all in the market place over the weekend. So now i need to decide what to do with this. But for the forseeable future i wont be depositing more money into harmoney.
Agree with you here humvee ... absolutely do. ... I too have stopped depositing funds ... there was a bit of a balance left after the dry weekend of loans, along with the many repays, cancelled, expired ... just seems a lot of recycling or catching up going on in background.
I'm sure harmoneys system was pushed to its maximum if not beyond in that period leading up to their outrageous LEAP in fee. ..
I do think they have been extremely greedy with their chosen Hike in fees ..... I agree their new method is far better, and needed to be increased, but NOT by this amount... hell when i run a calculator over my figures ... it's ugly ...
as so far on old system on figures showing on dashboard today I've been charged $253.16 in fees ... if this new structure had been in place AND I'd been on my tier @ 15% from start ... so take my gross interest paid to date * by 15% OMG fees charged would shoot up to $736.90
and that would look a heck of a lot worse @ 17.5% ... let alone 20% !!!!!
In my view Harmoney do want RID of as much of the Retail as possible .... just too much hassle for em ... so maybe this new fee pricing is their way of reducing the noise!!!!
I will meantime take some new loans with available cash, just see how things go.... but my whole way of accessing a loan position has completely changed ...
Ha ha - I just tried to do something I had not done for 3 months > Go and look at new loans....
I saw the new Harmoney T & C's acceptance flash up and thought NUH... Logged out again :)
777 - With a due respect - again that is too much manual checking to have to do.
My belief has always been Harmoney should have offered from the get go their own System to deliver the customer a platform that they can exactly know where they are.
I think > My NZ Bank Accounts ( daily real time balances line by line, entry by entry )
NZ Share Trading > Line by Line accounting
I do not have any of these issue or questions over at Lending Crowd. I ALWAYS know exectly where I am from their reporting.
That is Absolute peace of mind :)
Harmoneys self pump on their home page
" 99% of loans funded in 24 hours " MIGHT Need to be reaccessed and altered!
I think a lender fee set at 10% of gross interest should have been sufficient for Harmoney's "cost recovery and profit margin". A 10% fee on gross interest would probably have been received more favourably by lenders, when taking into account the previous jump in interest rates.
If they do wish to phase out retail lenders, they should be open about it, and say they wish their P2P model to be the more traditional finance model with corporate shareholders and/or lenders providing the finance. Their new fee structure seems to favour larger lenders. I wonder how long will it take for the retail RAR to drop below the platform RAR?
In the reports section the first filter item is "Active loans". When a loan is paid off the active loan number reduces. The default filter can be changed by clicking the star.
I have the filter "All Loans" as my default and then if I want to see the total loans repaid, I select the outstanding principal column an click to get $0.00 then I can see the number of pages in pale grey that are paid off. To see arrears, cancelled, charged off etc. I click on the status column so I get an A-Z list.
I keep track of my loan variables with a simple list of entries in my spreadsheet.
Below for those not yet signed up with / familiar with Lending Crowd, is a screen shot of what you see on their Main Webpage...
Attachment 8107
Here's a cracker. Loan Repaid ........
Date Issued 10 June I took one note .. ($25.00)
Yet look at this.
I tried to copy all detail ... but wasn't working ... but would copy the first column ...
LAI-00065354. A4
TOTAL LOAN AMOUNT:$7,375.00
MAXIMUM TERM:36 months
RECEIVED PAYMENTS
LAST PAYMENT DATE:Jun 10, 2016
LAST PAYMENT AMOUNT:$62.62
PAYMENTS TO DATE:$0.00
PRINCIPAL:$0.00
GROSS INT. PAID:$0.00
FEES
So last payment amount at $62.62 ... thats a bit above my note taken! ... but then I've still got zip back from this investment!
That's just too weird!!!!
Attachment 8108
They are filling the loans from somewhere - down to 15 from 28 now
Most likely wholesale/corporate i would guess - Infact all of yesterdays loans have dissappered suddenly - even the crappy ones - that I would not touch under the old fees
I've got that one too - with exactly the same details showing. Can't bear any resemblance to what has actually happened though since my loan balance/cash balance total is not missing $25 nor is it $62.62 higher than it should be. Have you asked Harmoney to check it out?
Will still phone then this avo as what now shows still doesn't stack up .. what a long time to wait for PRN. And 1cent of interest!
Today being Thursday with 1,610 odd loans you'd think I'd be getting some sort of interest paid out, yet my available balance has gone negative by quite an amount!!! But here's a WEIRD discovery. One of my write-offs which was written off yonks ago has recently now gone -1.7556 principal .... I'm starting to get somewhat suspicious with recent maneuvers! I had planned to phone them this avo ... but had too many visitors to allow that to happen.....
LAI-00032550 Oct 16, 2015 Charged Off E2 26% $150.00 -$1.76 $0.00 60 $1.76 N/A
Has anyone else got this loan as well? Oh and yes it was one of those 'cream of the crop re-write loans'
Did something weird happen to their system on 10th June 2016? I have four loans all issued on that day and cancelled/repaid. I have had one or two cancelled/repaid in the past but never four on one day. Also all of them have incorrect last payment amounts. Don't seem to be any issues on the days before and after the 10th.
Actually I have 5 loans like that - I suspect its recovered money after write-off
I even have 1 written off loan where I have now received 121% of the original investment ie Full principal plus some interest
Attachment 8110
Another good & interesting read about P2P up in the USA....
http://www.zerohedge.com/news/2016-0...blow-p2p-model
Thats exactly right - if there is a -value, it means that there is recoveries after write-off. A good result. If you would like any information on particular loans, you can email myself at investorservices@harmoney.co.nz Regards Monica
Hi Art, did you get what you needed on this. If not, contact me on investorservices@harmoney.co.nz. Kind regards Monica
Hi guys, looks like a few are using Precis which is good to see. To make life a little easier it's now on a custom domain, http://www.precis.net.nz/.
Attachment 8114
PP.
I've ended up with a -$6 cash available balance, while my outstanding principal has increased. Have made a withdrawal, but no new deposits or investments recently.
What happened? Customer decided to cancel their re-write so my cash went back to them?
Remember me mentioning this Cracker ... WELL .. it's certainly a SPECIAL LOAN! ...
It spent quite a long time in Paid Off. .... then moved along into the Cancelled relm ... BUT.... Now today it's gone CURRENT. So OMG. What a swing around!!! Hard to keep track of I say!
I see my RAR has dropped a bit ... was 14.34% now. 14.15%
Anybody got a handy dandy chart aboud max level you can borrow at each level ? it looks like f can only get 5k ? etc
Seems to be a pattern "A" risk loans seems to be able to get 35k, "f risk loans" seem to be able to get 5k loans.
I understand the limit all loans is $35,000. Maybe those that get loans in the F's can only support repayments for a lesser amount due to repayment capability.
From my observation;
A - up to $35k
B - up to $30k
C - up to $25k
D - up to $25k
E & F - sorry - haven't been watching these ones.
E - up to $10K
F - up to $5K
Where are all the new loans today? Must have logged in 6 times...
Hi there numbers man, there are around 18 loans in the marketplace currently. Perhaps change your filters? Email me on lenderservices@harmoney.co.nz should you need any help. Monica
Yep.Just seen them right now & invested.thanks :) No filters on
Hopefully more to come.
Hi 777, Borrower limits are located at https://www.harmoney.co.nz/how-it-wo...rates-and-fees
Kind regards Monica
Harmoney seems to be in a bit of 'disarray' over last few days. .. catchup up! ... unwinding or whatever!.... I'm spending a lot of time in quite high negative territory on my available cash .... but when i look back over last months worth of loans it seems to be bathed in grey... 15 paidoff, some are cancelled ... so many of them their fees taken is higher than interest earned ... just seems heafty ..... I think of Saamee's thoughts mentioned on this issue - and say WELL. Time will Tell ....as remember the new fee structure alters any advantage/disadvantage .... mindyou; seen as I'm not bothering introducing new funds it won't be quite an even comparison. But others who are increasing their investment stake may have a better comparison.
Any one seeing some early payments on loans? I had some issued in early June, which means first payment isnt due till July. I have this on 5/13 loans issued in June.
my returns have been quite healthy so far, considering I invested the bulk in A and B loans. It might change in the future tho, when we have enough data on loan-cycles
Is anyone else having the same issue Logging on to the Harmoney Website right now?
Time = 18:00
Browser = Chrome
See below image >>>
Attachment 8134
Works OK for me.
Got my first RAR after 3 months or so in. 17%. Will only go down of course, but fairly happy so far. Risk is basically a bell curve, with a few more in E/F than A/B.
They are still waiting for my Acceptance!!
Attachment 8142