Perhaps they weren't happy with the previous potential rates of return. This latest update will take my expected return after tax up approx 2.5% p.a., according to rough excel modelling.
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Hmmm, are we about to get (even more of) the good loans cherry picked from under us?Quote:
Originally Posted by Harmoney9
Should be worth about 3% gross to me but I wonder if available volumes will decline. I was this very day mulling upping my exposure to P2P.
Re Cherry picking: it should be fairly obvious from the retail vs wholesale RAR graph that cherry picking doesn't actually happen the way some suggest...
Harmoney stated in their announcement that they would be lending under the same conditions as other wholesale lenders (directly implying that they aren't going to 'cherry pick').
Looks like an admission by Harmoney that interest rate reductions called scorecard 1.5 were too low (as evidenced by a severe drop in the RAR graph since).
Hmm, maybe - I personally don't think so. A low RAR doesn't necessarily indicate good "shelflife", e.g. F Grade (high interest) loans with high default rates will give you a similar RAR to A Grade (low interest) loans with low default rates. If there is a shift downward the F Grade loans return will no doubt fall and I suspect this would be reflected in the wholesale RAR more than the retail RAR.