So what are you trying to tell us? We all had to do it when the conditions changed. No big deal.
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So what are you trying to tell us? We all had to do it when the conditions changed. No big deal.
Doesn't seem to have been many loans this week? Or have I just been looking at the wrong times?
Lending Club ( USA ) P2P Woes.....
http://www.zerohedge.com/news/2016-0...ver-negative-m
I have noticed this too. My arrears use to hover between $25 to $30 but have now gone up to $79. As you say Soolaimon, I hope that this isn't a sign of things to come.Quote:
I notice that my Arrear total seems to be growing daily. I hope this is not a indication of what is to come.
You are right, My arrears also been growing slowly for the last few weeks.
I am withdrawing my finds from Harmoney as they become available with no further investment being made. I have made a few investments with Lending Crowd but since their loans are so few and far between I feel this may be a lost cause for now. Too much effort required until they have more loans and an auto-invest function.
So I think I'll be investing my withdrawn funds into my index funds until a more viable P2P alternative comes along.
Does anyone else feel the same, and what are you doing about it?
My arrears are now $210 and most loans are invested in A and B's with some C and D's. No longer investing in Harmony and moving most to Smartshares ETF's. Still with Squirrel as they have their default guarantee and with LendingCrowd as the ones I have all have some kind or security, mostly vehicles for what that is worth. There is risk in everything but I believe Harmony loans are probably the most insecure as there does not seem there is any security offered against loan defaults apart from some form of credit checking.
My arrears are static around $25-$31. Like you I have not made new investments since the hike. Am withdrawing all my funds on a weekly basis for good.
Only have a few loans with LC but my Net RR is about 10.50% currently and I will probably get a few more soon. I like the secured loan feature.
I have been investing in Senior and Tier I, and Tier II bank bonds as new issues come along, average rate about 5-7%. But I guess the best investments of all I have are self managed rental properties.
So does the Lending Club also run what we would know as a managed fund/unit trust/group investment fund, as well as the P2P lending? Now that would be a nightmare to value the units, as interest rates move up the value of the units would need to fall and vice versa.
My arrears do look nasty at 54 ... it's 'SHOWING' as just a tad under $200. .. but that's false... as when one looks closer
I see that I have 10 loans that show as 0.00 arrears owing ..... that doesn't include the 8 loans that've not made a single payment ... so is this how we guess that these 10 are in the so 'called hardship group' ... i ask has anyone else obtained any info on these zero arrears?
My arrears seem to have leveled out some in the last few days, but, where have all the loans gone?? 3 this morning and they are still there with very little taken up during the day. Also, over at LCrowd, the action has dropped off.
I had considered withdrawing funds from Harmoney but looking back I still reckon it is more than subsidizing my term deposits, so will carry on re-investing in the meantime in both platforms. Return percentage is slowly climbing each month (13.6) with 50% of loans in B and very few in D,E,F. and I am up to 12.2% over in LC. That's ok by me and the extra fees at H are not that big an issue, as I said before in a post, it is an increase of around 8% when re-pays are considered.
Quite a few loans have been listed up in clumps over the day ... i too am continuing reinvesting at this stage, but not introducing more principal. Want to see how it goes ... But my investing strategy has altered big time ... i have just one criteria of F loan i take ... have stopped all D & E loans ... trying to reinvest into mainly B with some C and A3-5 and only into the smaller A's if there's nothing else to choose from. I think with the new fee structure, it's fair not to smack the repaid principal but the percentage charged just makes me think the higher risk loans are too costly for me to bear the brunt of their losses.
I was surprised to read JohnMac's comment about his arrears he saying
"arrears are now $210 and most loans are invested in A and B's with some C and D's."
Gosh here was I thinking if I took less riskier loans I'd lower my arrears tally!!
Just checked my account and my arrears are $7.48 on a balance of $25k balance. 13.31% RAR. The arrears have hovered around this amount for months.
I invest in Harmony for the compound interest. Have searched NZ for a good compound interest investment but this is the best I have found.
Any others that I should look at. ??
No strategy whatsoever. Just buy what is on offer taking the lowest risk first with whatever funds I have.
My present spread is A=28%, B=26%, C=10%, D=15%, E=10%, F=5% roughtly.
I observe ...... I've taken 99 loans since 13th june where the different fee structure kicked in (as in no fee being charged on repaid Principal). NOT 'O N E' OF THESE HAS REPAID OR CANCELLED AS YET .... but prior to the fee structure change my repaid and cancelled was Unbelievably High ..... and many of them the fees came in higher than what I get ....
Be interested to hear if others notice same or different?
Dont they pump them for renewal three months into the loan ? and as such your too early.
My best mate applied to Harmoney for a loan of approx11K.
3/4's of the way throug the Sign Up the Internet hung up and the attaching the Financial Documents failed.
However he received an Email form Harmoney saying ALL was approved ( Remember that Financial verifications were Not completed )
Then just 2 hours later ( aftr the initial application ) he received a 2nd Email from Harmomey saying he had been approved to borrow more than he had originally requested...
Financial were never resolved. In the end he got Mortgage Top up Finance from ANZ.
I'm sure this is going on.....
Maybe the guy has other indicators, such as clean credit history and perhaps enters his earnings in other fields. The uploads are a proof but not perhaps the only indicator of honesty. I mean, i could forge something up real good using paint shop pro that says im a millionaire. If your self employeed you can say anything for income really (but then its historic) - so they would really be wasting time looking at these uploads. Its the things that cant be changed such as credit history held by credit agencies.
In regards to the extra money they offered - macdonalds always does that when you go throught the drive thru - they call it upsell - you know wanna larger coke with your order. I thought that was a good thing as they are in the business of selling "our" credit ?
Happy to look into this - as a responsible lender, we take this very seriously. Please email me on monica.mathis@harmoney.co.nz
Has anyone else noticed Harmoney not processing loans through from Funded to Issued in recent days? I've got multiple loans in multiple orders over multiple days that are no longer available to invest in (although one is at 97%), but are not issued.
@kiwi_on_OE: Yes, I've observed the same behaviour over the last few days/maybe week.
Out of curiosity, now that Harmoney has been going for a while longer now, are others influenced by the "Purpose" that people put in?
I saw notes earlier on about how some did look at this as an indicator.
@Drew yes I am. I had three of four defaults in the last couple of weeks which has reduced my RAR from nearly 15% to 13.91 so I'm eager to minimise the damage.
An example of one I passed on this week or last was for 'tax bill'. Maybe a bit critical on my part, but if you can't manage your tax I'm not lending to you...
I've just checked & can say I've passed up a few loans over past few days but have gone into:
14th taken up 6 different loans
15th taken 1 loan
16th taken 4 different loans and
17th gone into 4 different loans
But do get the feel that there's a slowness of my interest/prn funds being paid by HM
And there seemed to be some unwinding going on ... so hopefully they catchup soon!
I see a couple of people here have said they are not going to continue with Harmoney and are going to pull funds as they expire.
-What is your reasoning for pulling funds?
I thought even with defaults and fees the return was fairly good ( over 10% RAR)
- fee increase: increasing the fees to take a 20% cut of my interest is just too excessive in my opinion, especially when I'm the one taking on all the risk
- platform bugs: have experienced a bunch of issues with the platform such as loans getting stuck in funding, loans with 0 months payments showing up as rewrites etc.
- general distrust: generally don't trust the platform anymore. Seen plenty of loans with ridiculous income vs loan repayment amounts, loads of crap around rewrites etc.
I've chosen to go over to the Lending Crowd where I expect the returns to be slightly lower than Harmoney but the loans are secured. I also like Squirrel money. Lower returns but your capital is safer with the reserve fund system.
I think RAR does reflect the lender fees. Although the increased fees only apply to loans invested in from 13 June so it will take a while to see how much of an impact the new fees have on your returns.
Just to add to what Kelvin said, 10% may be 'good' but does it reflect the risk. I was getting a high proportion of defaults even though the economy has been going strong. So what will happen during a recession? So while the return may be good now, does it reflect a good risk/return ratio.
Also the lack of liquidity. i expected a secondary market to be created but apparently they surveyed lenders and fond out it wasn't a top priority. Because of this I dont want to invest a large sum of money as I already have enough illiquid investments.
The RAR does reflect fees but the higher fees are only new so the impact wont show yet. I modelled my return dropping below 10%.
*note: my write offs are high so maybe I have just been unlucky and/or not properly diversified (I had 100's of loans so should have been).
Interesting that none of the borrowers on today's loans have any income. Must be "free money day".
Harmoney seem to be having a Lot of issues over past few days ... i see currently 10 loans on offer .. one C loan wont even display detail and rest all have zero income YET OMG! They are almost fill.
^^ an example of one of the many reasons I no longer invest with Harmoney
REVIEW
Over the past year I have found the following:
-10% of Harmoney loans are worth investing and match my own personal criteria.
-Any arrears I get are often limited to the poorer grades. If |I get an arrear in better grades they seem to be resolved fast.
-Unsure how they grade them. Often they can be a "B" but have high repayments per month or be for a poor reason. Why does someone need a high interest loan for a 25k car when a 15k car will be satisfactory?
-Loans come online at random times of day, as there is no notification option you would need to constantly login during day to find good deals.
-Good criteria loans go fast ( less than 1 hr) but in saying that the high risk ones also get taken but sit around many hours longer.
-Customer service is hit and miss. Often the person on end of phone can be nice but you don't get a followup with answers you rang for
I see a few at the moment. It really is pretty sloppy. But my experience from UK, is that they are not alone, but they probably are the worst.
Re a secondary market, I think some issues around that involve whether loan has been in arrears, default etc. and what info you pass on, and/or whether you allow a loan to be sold in those circumstances etc. Think about it the other way, if someone was trying to sell you a loan, what would you wonder about. If nothing, then I've got some loans in arrears to sell you.
Of course these may not be Harmoney's reasons.
Thanks for your first year appraisal.
Re: the 25k car instead of a 15k one. It is an issue that goes to the basis of a consumer finance industry:) However there could be valid reasons - a large family requiring a reliable and efficient vehicle etc. If from Auckland, to find affordable accommodation you may have to live on the periphery away from public transport. Consequently a good car that will not breakdown or overheat when dawdling in traffic jams is increasingly more important.
Rar just updated.. Cant complain really. I don't see any investment vehicles that will yield this much, even if you take into account the write-offs. RAR might go down as the loans mature, who knows, we'll see.
Offtopic but Lendingcrowd has been good to me so far, too
still investing with HM and LC
I keep getting hammered by write-offs. My RAR is now under 13%.
700+ loans around 20k+ NZD invested, weighted towards A and B loans. Mostly single notes, but some loans have 4 notes or more. 80% for 60 months 20% for 36 months.
I've gone as high as 17% but it doesnt hover around there for too long. Also invested the bulk before june.
My rar might drop to 12% - 13% after most of the pre-june loans get paid or written off.
2000+ loans with no write-offs is very impressive, in your case. The bulk of my arrears come from E and F loans. What loan grades do you prefer?
Sorry for the miscommunication. I have 47 charge offs - "$000" ($thousands) of charge-off. Mostly in E and F.
Have been in since June 2015. So, far, the charge offs comes between 5 to 9 months of the loans with an average so far of 6.8months. The soonest was 2.1months and the slowest was 11.8months.
When you said June, did you mean June 2016 or June 2015? If you only started this year, then do be prepared for the charge offs to come later.
my loans profile is:
started late 2015 but, i wouldnt be surprised if the future charge-offs degrade my RAR. I m hoping since the bulk of my loans are less risky A and B, I might not see as much write-offs.
with the new fees and the way defaults are going, I reckon my RAR will eventually (maybe after another year) to drop to between 11 to 12% which will be less than my LC's RAR (at the moment above 12%). But then I am in LC for only about 5 months so early days yet to compare the two.
Interesting to note, I have 4 arrears currently and two are C grade and the other 2 are D grade. This is a bit of a worry if you see my spread as I have very few D grade loans.
Snapshot attached
Attachment 8184
Yes, I did a quick calculation about 2 weeks ago, tallying up my arrears into before March, March, April and May (based on last payment) and then arbitrarily assigning a percentage to each months total - eg, before March 100%, March, 80% and so on.. I estimated that I will get another $2000+ charge-offs in the next few months.
Over the last week I just witnessed my Arrears grow by $50 to $150. I thought here we go many new Write offs coming.
Then over the last 2 days I had 3 loans repaid early.
Then today I see that the Arrears have gone Down correspondingly!
So the moral ( perhaps ) Growing Arrears does not always equal new Write Offs!
Anyone else witnessed this happening?
http://www.nbr.co.nz/article/harmone...-year-b-192115
Who's got an idea where these came from?. Institutional only maybe? "while performance fees when a lender's portfolio beat an agreed return were $798,000"
Definitely. Harmoney will be managing money from the likes of Heartland. One do not imagine Heartland having a few full time staff to go through the loans available and loan so many notes each to every loan. As in all money (funds) management, there is a always a performance fee if you manage to beat a certain benchmark.
Your arrears also drops when there is a charge-off. It is the age of the arrears that matters more. The total amount of arrears fluctuates greatly - sometimes depending on whether Harmoney process the payments from the borrowers. Often there is a backlog and then a sudden increase in cash available (and reduction in the arrears).
By the way, just is case some here (not you Saamee) are unaware of the distinction. The arrears is just the total amount of payments due from the borrowers that are not paid yet (including interest) not the total principal owing by these delinquent borrowers. That amount (at risk) can be at least 10 times more and if you want to find that out, you have to add up all the outstanding principal owing. Most of you will already know this so just a reminder!:)
Reading this report http://www.sharechat.co.nz/article/7...irst-year.html it is a little worrying that Harmoney has lost more than double in its second year of operation compared to its first year. I presume the increase in fees will go towards improving profit but now sure that is going to be enough. The peer to peer market is becoming a bit saturated so not sure if the is much growth there either. Wonder if the money owing but not paid due to conditions not being met refer to their IT systems :)
A year ago Harmoney had 50 something staff which I thought was a lot but now, apparently they have 80.!!! How can this be profitable and what would they all be doing????? No wonder their losses are increasing.
I wonder how many of the 80 are employed to chase up accounts in arrears.
First time poster here, found this site while searching for some people's experiences with Harmoney. Reading through this thread it looks like most people have pursued a different strategy to me (targeting lower risk A-C loans) so I thought I would share my results so far. Harmoney has been my first experience with investing outside of my Kiwi Saver and Australian superannuation accounts. I'm also planning to purchase shares in a few ASX and NZX listed gold miners, and maybe a few other companies along the way.
So far I've deposited $5550 into my account and invested in mostly 36 month E grade loans, although I've noticed it's becoming much harder to find any loans at all to invest in over the last month or so. I reinvest any repayments so the total Loan investments (funded) is $8225 across 124 loans. Charged off principal is $47 so far, although I'm expecting that to increase over time. RAR is sitting around 23% which I have been exceptionally pleased with. I guess time will tell whether that is sustainable or if it will decline as more loans get charged off.
Attachment 8190
Looking forward to learn a whole lot more about investing from the community here :)
With a rar that high and minimal write-offs, I am guessing you haven't been going over a year.
What a shame. Harmoney to plead guilty to misleading consumers.
http://www.nzherald.co.nz/business/n...ectid=11685047
Purely as an interested observer, I wonder how P2P lending will perform during a recession?
Anyone have any thoughts about this?
@Longhaul, good question; It's something that's been discussed a bit on the Lend Academy podcast (http://www.lendacademy.com/category/podcast/). Remembering, that in the US, p2p lending started during the GFC, which is a tick in the box that there's stability there. But it's still formally untested in a recession like you're referring to.
Et al, as a note, the most recent LC podcast, episode 69, is with Jon Barlow, Founder of Eaglewood Capital. It was a really, really good listen. There's a good section where they cover p2p lending in Australasia.
Of note, he's exiting investing in unsecured consumer credit because as he reads the macro economics, it's not doing as well as other consumer lending markets. This is primarily because banks and investment funds have been able to flood the platforms with capital for low risk investments and that has depressed the interest rates in the US. He sees the US market as going through a commoditisation process.
"Originally Posted by JohnMac http://www.sharetrader.co.nz/images/...post-right.png Things must be getting desperate. Cant wait until I have withdrawn all my investments from them."
Sounds to me more like an over zealous marketing campaign which crossed the line of acceptability in NZ. We do have quite strong consumer protection legislation and it is enforced often enough to keep most bigger companies in line. These charges will not have any impact on any investment decisions I make.
That is going to be the true test of P2P lending. For what it is worth my guess is that the lower grades will have a lot more defaults and the better grades will have a few more but the increase will not be as extreme. I think if borrowers can retain their jobs they will tend to struggle through a recession.
But overall I think consumer lending is a much better bet than second and third mortgages to property developers - when it all turns to custard the first mortgagee sells them up and gets most or all of their money back leaving those next in the queue high and dry.
The other issue for consumer lending P2P in a recession might be a lack of borrowers? When people are concerned about their income they stop spending.
This is a head scratcher for me. Supposed to be going out to September 2020 but have repaid over 60% of the principal already. Some early repayments maybe?
Attachment 8207
This is part of a comment I posted on the lending crowd thread - but it relates to this and prob belongs here
I wish harmoney gave me an easy way to find all loans that are in arrears by 35 days or more (I only have 2 arrears on lending crowd so its easy to find on there)
My current arrears is 25% higher then EVER before on harmoney - so im expecting another big round of write off's before the 20th-21st
I too have noticed an increase in my arrears but one aspect must be noted here is ... that as from the day of their greedy fee increase! I Completely changed my investing style... and; have zero loans I've take as from 13th June showing any arrears! Maybe my selections before were too high risk!
Most arrears I have found occur after 6 to 8 months so only time will tell if your new style will help.
What did you change style from and to?
I mainly am quite picky now myself. Don't invest in d,e or f and I make sure I carefully vet the borrower details of others. Not many decent loans to invest on since I tightened my criteria several months ago though.
Initially I was taking A through to F but mainly D & E with quite a few F loans ... putting higher dollar amounts in mainly A & B's. But soon found I was being slaughtered with Those Re-writes so ... So then decided i had to avoid A loan.
Hell just prior to the fee increase on 13th june I'd increased my holdings ... but found i ended up with a large number of loans that have paid zero .. harmoney have got them down to now having seven arrears that have paid zero .. so that's not good.... l have 85 loans in arrears at the moment ...
My investing as from 13th June has changed ... mainly B with A & good selection of C ... there is a strick critera of an F loan that I do take ...and absolutely no D or E loans.
Yes am selective as well. Since 13th June I have not added any principal, only recycling what's already in there.
I realise the return is reduced with a much lower interest rate and increased fees ... but at the end of the day i just may retain more in my hand!
Looking at Harmoneys own published stats the D,E and F loans have most of the arrears. Basically the stats show they are as predicted but the platforms stats show very little arrears in A, B and C. I am now trending to C mainly now but suspect the newly changed fees structure will make further Harmoney investing unlikely from me..
I'm really baffled.
Why do so many people here think they are better at predicting default rates than the staff at Harmony (who have far more knowledge about the borrower) and have been doing consumer finance for decades and have a ton of sophisticated modelling tools?
Not sure if you are being sarcastic or not?
I thought Harmoney was a new company in NZ so how can they been doing it for decades?
Remember grades such as "C" also have sub grades eg "C1 C2 C3" Bearing this in mind if Harmoney quotes a historic default rate of say 1.20% then this is the average across the entire "C" grade. (See platform stats for accurate info).
As Harmoney usually has plenty of loans to invest in being able to manually cherry pick the best loans in each Grade will improve defaults further for yourself.