Does make you wonder why they are written off. Appeared to have a good job and payments weren't that high. Fraud or bad circumstance?
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I emailed off some questions and have received some answers - Note I have only included sections of the email trail for ease of reading
Me: A number of loans show different income information between the old and new dashboards often different by more then $1000/month in some cases $4000/month. Please advise what is going on and which is right as I have made investment decisions based off the higher income before finding out that that may not be the actual income of the person.
(Detailed examples of LAI-00029655, LAI-00029657, LAI-00029664 were then given)
Harmoney: Yes, we're aware of this discrepancy between the borrowers income on the old vs. new dashboard. We're going to be fixing it so they're pulling from the same field. You'll want to refer to the old "marketplace" for a few more days until we can put in a fix.
Me: So the figures in the old market place are correct? , So what are the figures shown in the new market place?, Are the income figures shown before or after tax?
Harmoney: I don't think they're factoring in any co-borrower income (i.e. spouse) like we do on the old marketplace. We'll be adjusting them shortly, as we think this is a more accurate representation of a borrowers ability to repay.
Me: Some of the loans listed with the problems are listed as Individual loans not Joint, therefore I would have thought they are not jointly liable for the debt and only individual income should be counted. Joint/Co-borrower income should only come into play for joint loans
Harmoney: Right, it's different than a joint application. We take 50% of their spouses income simply because we're looking at all their household expenses, which factors in their spouse, so we think it's more accurate to look at a portion of their spouses income as well.
Me: Ok I think its important that investors understand that - but I haven't seen it mentioned on the site anywhere.
If you are doing that it should be shown separately just like Co-Borrower income is (eg 50% of spouse income =)
I just stumbled into this when looking through my old orders using the new dash board (while trying to find more info on the 1 written off loan I have - which was not this one but was the other loan in the same order)
LAI-00010604 F1 31.88% 60 6.96% $5,300 Home Improvements 100% Funded 2 $50 0.94% BORROWER DETAILS
BORROWER COMMENTS
home improvements - Added By KVP ADMIN- Please do not disburse these funds this account is fraud. Simon, this will need to be unwound and the account closed. -- Brad Hagstrom Chief Operating Officer harMoney
- LOAN PURPOSE:Home Improvements
- AGE BAND:20-29
- MARITAL STATUS:Single
- NZ REGION:Huntly
- RESIDENTIAL STATUS:Living with Parents
- TIME AT RESIDENCE:10 years
- TIME AT EMPLOYER:5 years
- DEFAULTS LAST 6 MONTHS:0
- ENQUIRIES LAST 6 MONTHS:1
- INCOME TYPE:Employment or Self Employed
- MONTHLY INCOME:$6,170.25
- MONTHLY LOAN PAYMENT:$177.43
The write-offs I've seen, my own included, have been after only 1 or 2 payments have been made, and typically those have been late. I suspect fraud, but without any information being provided by Harmoney on the circumstances of the write-off it's hard to say.
This has been discussed before but I do not think anyone knew the definitive answer. Now that capital write-offs are happening, it will be an important consideration. Under the taxation of financial arrangements, will individual taxpayers (i.e. those people who do not invest in Harmoney through a business or company) be able to deduct capital write-offs (charged-off principal) from their interest received from Harmoney. I think, under the taxation of financial arrangements, capital profits over the term of the arrangement are taxable but is the capital loss when a write-off occurs deductible?
While it looks as though the new dashboard has a few teething problems, I am liking it much more, what does everyones risk grade chart look like, I am definitely favouring the D grades:
Attachment 7602
Looks much better but they have got rid of the 'average return' number which is annoying.
I seem to prefer short term risk: Attachment 7603
Just over a year now since I started investing and although there has been some frustrations with their website my returns look ok to me. After deducting $80 from my net interest to allow for 3 loans to default ( hasn't happened yet but......) I have calculated a 14.5% taxable return on an annualized basis. This is ok by me and I am continuing to dribble in funds to try and compensate for the lower term deposit rates available from the banks.
Question......... how do you post graphs etc. from the site to this forum??? And, any ideas why they need 65 staff to run HarMoney??
I took a screen shot, cropped it in MSpaint then attached picture (picture icon when drafting).
65 people does seem a lot given I thought they had automated most of the process. They are going to have to increase their loan book significantly if they are to cover just the wages.