I have had this situation for many months and it is quite frustrating, also, when you bring up the individual arrears loans they don't always make sence. Well to me anyway.
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It quite possibly coulld be the delay between when Harmoney receive the Borrowers funds in, and the clearance time ( 3 to 4 days? ) before those funds are Credited to your Investor account.
Not the case as far as I am concerned Saamee, one instance being a loan in arrears for 3 months without payment and yet amount in arrears is 0. Some months ago I had 3 loans written off and I noticed that the amount in arrears on those loans stayed in my arrears total. They are probably still there??? Who knows, there is no way of finding out as far as I can see. This part of their website is pretty hopeless in my opinion.
Might see a few changes now that the founder (and largest shareholder) has returned to the board. http://www.nbr.co.nz/article/harmone...20Edition%2520
I agree it was odd that he left. Maybe the recent conversation was along the lines of ... I'm coming back onto the board, all agree, or shall we do this the hard way? Lol. With about 5x Heartlands investment and over 3x Trademe's investment, I think this is a good move for the founder to re-take the reigns; stabilise the platform policies; address contrary investor feedback; ensure performance of the company and growth. Those will be necessary to cement the longer term footprint in what is rapidly becoming a more crowded market.
Are any other investors also witnessing the anticipated escalation in Xmas \ New Year arrears yet?
Just today ( Fri ) my accounts Arrears doubled from $55 to $110 outstanding in arrears.
The week just gone was the 1st full 5 day week without any Public Holidays.... So no exuses for delayed bank transfers - only borrowers with no money left in their bank accounts to honour their agreements to Harmoney ( and of course us Investors!! )
The rewrites are getting earlier 1 Month !?!?!
Attachment 7802
I reckon that the RAR should be updated daily.
It's all computerised; once you have a formula it should be updating real-time along with account balances etc.
Imagine if the NZX50 had all the share prices updating daily but they only published the index once a month.. Ridiculous:ohmy:
Just to nit-pick, presumably the investors only have a contractual obligation with Harmoney... and Harmoney credits the investor according to the contract it has with the investor.
The Grade of loan you invest in my determine your level of Christmas period arrears...do you invest in low grade loans?
Hi Humvee,
Interesting data presented on that loan, the Harmoney monthly repayment the person is looking to make is 20% of their monthly income. That alone woudl stop me investing!. I wonder how long before their next rewrite? The cynic in me may ask 'Does Harmoney get the borrower to quickly sign up, at the same time as saying. don't worry we will upgrade your loan immediatley after it is finalized".....
I've got 2 arrears and both are B rated. So much for more risk with the lower grades eh lolQuote:
a little less interest for hopefully a little better reliability of investor! Of course this does not always pay dividends ( or my Harmoney capital & interest back!!
At least they are not charge-offs atm!
I see on https://www.harmoney.co.nz/investors...ace-statistics that Harmoney are reporting that actual defaults for every grade of loan are less than those it was forecasting.
I contacted harmoney about this about a week ago - they said it is going to be updated monthly - the reason given was "At the moment, Realised Annual Return (RAR) updates at midnight once a month. It's still a relatively new figure, so were tracking it's progress closely. We may start updating it more frequently if our investors would prefer, although we don't want to unnecessarily create short term volatility."I replayed that I would understand why they did not want to up date it to often especially with bank clearance times etc - But I could not see any reason why they could not update it at least weekly say on a Wednesday to include everything up until the end of the previous Sunday.
Because I'm not interested in out of date information.
They used to update the investor return on the old website continually as investments were made and repayments were credited. They also had interactive pie-charts with all the subgrades on them. The new so called improved website was introduced and these features had vanished.
I did send an enquiry email about it at the time and am still waiting for a response.
I personally would like to know exactly what % amount to 2 decimal places I have invested in each subgrade just like I would like to see the latest RAR updated daily.
Interest.co.nz has this article
Is peer-to-peer lender Harmoney facing growing pains, or is something more serious going on?
http://www.interest.co.nz/opinion/79...-serious-going
Bugger - you have to be a subscriber to read it
I can second guess the gist of what Gareth ison about
Does anybody know if the charts that show our loan grades and loan terms distribution are for actual outstanding capital or are they just for loans issued (which may or may not have been repaid)
Calculations from my own spreadsheet show that the loan grade and loan term distributions are for the current outstanding loans.
But in the "Reports-Loan" data section it shows you the Total number of loans you have ever invested in; you can then use their filters to work it out for yourself.
I am starting to see a lot of my arrears being paid up to date (or close to) this month. Anyone else seeing this? Guessing Christmas bills have all been paid.
After reading the majority of this thread as well as general research into Harmoney, seriously considering investing.
Wondering about the withdrawing money process, are there any fees involved with this? How do Harmoney return the cash to you? Bank transfer, credit card ect.
Thanks in advance!
I make withdrawals regularly as income. They are paid into my nominated bank account. They get processed in real-time, you can see your balance change. They also send an immediate email of confirmation.
I usually receive it that evening but I guess it depends on your bank.
What I don't understand, why in the "funds" section of their website they post the withdrawls as uncleared for at least 3 days when you can only withdraw funds that are showing as cash in your balances. :confused:
Look at the extra employment information this site is showing that is not shown on the official harmoney dashboard
http://www.mortgagerates.co.nz/p2p-loans.html
Good find humvee. I've subscribed to the RSS feed http://www.mortgagerates.co.nz/feeds...er-lending.xml - I'm hoping it's real time.
Maybe I'm an extreme case, but my RAR with Harmoney is currently -83.06%. Put in $500 initially just to test the water, put $100 each into a D1, E2, 2xE3, and an E4. One E3 was written off with no payments at all, one E3 was paid off as a rewrite, and the E2 and E4 were written off after only around $10 each paid. At the moment only the D1 is rolling along, but I don't hold out much hope for that one.
Harmoney at the moment is giving me the same feeling I get when playing blackjack at the casino and the dealer keeps hitting 21... The odds are what they are, but I'm not putting any more money into it.
According to the most recent RAR distribution on the Harmoney Statistics page, your results are an extreme case - the bottom most dot on their graph!
As I was investigating Harmoney, my first $12,000 was invested on the basis of $25 per loan, in order to give me a chance of replicating something like their expected return distribution. With just 5 loans, performance comes down to luck and unfortunately you've had the bad rather than good kind.
Like others, have experienced a bump in write-offs in the last few days although still within an acceptable and expected tolerance. Suspect Harmoney still have some back-office issues, this is the 2nd "batch" of write-offs I've experienced. I hope they smooth this process out to provide a better understanding of performance.
Attachment 7849
RAR was updated on 22 or 23rd from the looks of it after the last round of write-offs. Mine has dipped below 15% which is disappointed as per their statistics, it should be up nearer 20% so my writeoffs seem to be impacting heavier than expected. Though not nearly as bad as Puggy - proof that diversification does pay. My return suggests i am invested in B loans (per Harmoney statistics) but I am predominately in D,E and F's. I might be a bit confussed with this though as I think the default rate is an annual thing so to the extent it defaults in the first year, your predicted return isn't as simple as interest rate less estimated default rate???
I would ultimately like to see it drift back up above 15%.
I read somewhere over the weekend that the 1.25% charge is soon to increase.
Im scratching my head a little as to how to explain the difference in the FAR vs the RAR figures -
My Current FAR figure(from old dashboard) is 25.80% My RAR is 18.35% Now I realize that we are talking Forcast VS actual Return but given that harmoney say
"This chart illustrates that the loss rates actually being experienced are significantly lower than the loss rates Harmoney forecasted prior to commencing lending in 2014. This is in part due to the conservative manner in which we originally forecasted and also due in part to improvements in technology and access to data that we have been able to apply in our credit decisioning processes."
This should not be the reason for the lower actual return, Now Rewrites is going to explain some of the difference, but not all of it, Now maybe I have done worse then average - but looking at https://www.harmoney.co.nz/assets/Performance-Graphs/Jan16-Update/Individual-RAR.png It would appear that 18.35% is in the middle to upper range of returns for portfolios the age of mine ~ 1 year.
Infact it would appear very few people at all are getting a RAR close to my FAR of 25.80%
Dont get me wrong 18.35% is a good return, Im just a little puzzled how defaults can be so much better then forcasted (and as allowed for in the FAR) and yet it seems that everyones RAR is way below their FAR - If defaults are lower then forecast in general the RAR should be higher then the FAR
You can still see the FAR figures here
https://app.harmoney.com/investor/da...y#/performance
If anyone at all does have a RAR that is equal or greater then their FAR I would be very interested to know
Are the RAR figures published including tax?
I calculate my own 30-62 day moving average from the net interest posted by Harmoney I receive each day i.e.(less the fee and less my personal tax rate), but I add the Charged Off amount $value to the principal, as this returns 0% interest and reduces the Rar.
I also don't include any loans from the outstanding principal invested that are less than 30 days old, this slightly increases my Rar until those loans start generating income.
I have had more than 450 loans 17%A, 30%B, 25%C and the rest D,E 22% and 6%F. My own figure shows about 15% net, this is what I expect. Been investing for 1 year and have had 0.65% number of loans default to date.
I was wondering the other day who are the two dots at the bottom. Now I know one. Looking at the scale, I think your -83.06 would be the second one from the bottom. So you have been in for about 290 days or 9.5 to 10 months. I did thought having a result like yours will be the result of just a handful of loans.
I have over 1500 loans at the moment with about 130+ already repaid.
Hi Humvee, my own calculations show 16.64 but the RAR calculated by Harmoney is 14.94. The difference is timing.
When we calculate our returns we are calculating earning that interest from day 1. Harmoney only takes in the interest when we receive it. So, there is a lag as the repayment cycle is either weekly or monthly, so the RAR is lagging by that. Add to that the arrears. Also the one or two days in between when you invest and when the loan goes "live"
Oh and also the increase in fees due to rewrites. See next post
As mentioned in an earlier post, I am now tracking the effective service fees as a result of rewrites. Due to rewrites, the fees had effectively increased from 1.25% to 2.60% (in the 7 months I have invested) although the increase is now tapering off. Hopefully it will stay below 3%. See chart below - all figures as at the beginning of the month.
Attachment 7852
Hi,
Is there someone out there who really knows the position regarding deducting defaults and fees against income for income tax purposes.
Harmoney does not do it so they must be under instructions from the IRD not to do so.( I guess that is because the IRD believe that they are not valid deductions).
What does one have to do to been seen by the IRD as being "allowed" to deduct these fees/losses?
Harmoney have told me that they will provide end of year statements with these values, if they are requested by the investor.
Thanks in advance.
This has been discussed on this thread several times before. Last time I emailed Harmoney about deductions, they said that they will still awaiting a ruling from the IRD. See my post on 25/11/15 at http://www.sharetrader.co.nz/showthr...l=1#post598730 .
It may be time for another request to Harmoney for clarity on what amounts if any are allowed (for individual taxpayers) as a deduction for tax purposes.
It really is quite simple. The write offs are a straight non deductible capital loss. Simply a bad investment. Live with it. The 1.25% charge against interest and repayments is a deductible expense. You just have to ask Harmony what that figure is for your tax year. They should provide it as a norm but they didn't last year.
Any one have an idea on the kind of fee's people are charged for getting behind? One 'payment' since April. Attachment 7853
Until Harmoney says otherwise, I agree with you. However there could be a possibility that since the typical individual invests in perhaps hundreds of "notes" each of which is ascribed by Harmoney a default risk percentage, then the "charge-offs" are an "anticipated cost" of the individuals investment in Harmoney notes (in the same way as service charges) and not an unanticipated capital loss. I imagine that is why Harmoney is seeking (so they have said) a ruling from the IRD.
Did any body else notice that their RAR rate changed over night on Monday? Mine edged down 0.5%...
This seems to be the essence of it.
How does one prove to the IRD that you are in the business of investing.
I'm in business doing many things (farming, tourism etc) - can't I just add investing to the list - how about "Money Lending" as a business description?
Is there any way to clean up fully paid loans off the loans sheet? Or do they disappear after a set period of time?
It needs a decision on whether or not the service charges and charge-offs are deductible for individuals and whether they are definitely deductible for investment businesses. I think that is why Harmoney needs to press the IRD to get a ruling. I think an argument could be made that charge-offs are an inevitable cost of earning the taxable income from the Harmoney notes whether you are an individual portfolio investor or not. Professional advice is necessary.
NZ Income Tax can act as a capital gains tax and sometimes simply a capital tax. With financial arrangements, NZ income tax can be applied to what many would understand to be capital profit/loss .
Harmoney is already seeking a ruling from the IRD. Companies often seek rulings from the IRD on tax implications, to their shareholders or investors, of proposed actions or payments. It saves their investors and their expensive tax accountants having to duplicate research into the tax consequences. I am surprised that Harmoney have not already obtained such a ruling on service charges and charge-offs for the various types of investors.
Agree.
I dont think they will be able to get a ruling from IRD as the outcome is fact specific, not a matter of interpretation which is all a ruling can be on. Per my comments above, I believe my situations allows it but others investing directly doesn't. IRD will only be able to issue a ruling saying interest is taxable, fees are deductible but charge-offs depend on the situation of the investor. Which isn't very useful. I would be surprised if Harmoney even tried as it would be a great way to waste $50k+ on fees.
Just had some interesting account activity- LAI-00031926 was credited on 27th Jan with an amount to become paid off. Today, the same amount has been debited - maybe somebody didn't want to take the rewrite after all??
In the meantime I've already invested the amount meaning that my cash balance is now negative. I'm currently investing harmoney's money :t_up:
The service fees I am paying is tapering off its scary growth and as at today is effectively 2.62% (instead of 1.25%). I started in July last year and the calculations as at the first of each month was Jul 1.25%, Aug 1.39, Sep 1.50, Oct 1.71, Nov 2.00, Dec 2.44, Jan 2.61, Feb 2.62%.
LAI-00054030 did a similar thing on Friday, even now it is broken, marked as fully funded, and also only 98% funded. I have queried Harmoney but they have yet to reply.
I suspect a number of Investors might of reallocated the returned funds, and now the loan is stuck until their account is brought to a non negative balance (This is just a guess on my part).
My account was only overdrawn for about 16 hours as I had further funds incoming on Friday night.
Up to now, I have not been too concerned about rewrites although I had been monitoring its effect on my investment. I update my criteria for choosing loans to invest and how much to invest in each loan everytime I hit about 500 loans. Now that I am well over 1500, it is time to update again and like you, I did thought to favour loans that are rewrites or near their limits or over a certain $amount.
Has anyone elses arrears just dropped alot (like around 40%). I wonder if maybe they have removed charged off loans from arrears because i dont think this was happening before.
Couple anniversary days will be the reason
Anniversary days are not bank public holidays. So should not really make a big difference
Yeah but it appears Harmoney has a larger hands on with their systems than one would ever expect. Also looks like they do have some issues going on as bulk arrears are stacking up and loans showing fully funded are taking longer to leave the in funding fields, just taking longer than in the past ... bet their IT Department are producing more BO than usual!
How do i cancel an order. Harmoney has double processed my order..... and it was a large order too 16 different notes at once.
I confirmed the order it spent ages trying to process the order then errored saying it could not process and gave me an option to review the order. I checked the error and could not see any problem and my available balance had not reduced. So i tried confrim the order again(as i have done before when an order errored processing.) Again it took ages before erroring and saying it could not process. Again i reviewed the order by balance avaiable still had not reduced. Again i could not see a problem. Again i tried process the order and again it took ages before erroring.
But this time the error was different I had not enough avaiable fund for the order. And now the balance has been updated and shows my account has been emptied of available funds. And looking at order history both the failed orders have been processed duplicating the order
Not what i needed on a long weekend.
They definitely processed a number of loans from in arrears to charged off in a short space of time. I like to see them take more control of their process and smooth this out. This will have cleared arrears but also acknowledged some losses.
There is also some room to improve data quality - I had a number of arrears where the client had paid the correct amount but Harmoney had under-allocated principal and over-allocated interest but the client had net paid the correct amount or that were just up to date but somehow tagged as arrears. Some of these cleared... and others appeared in their place (see Prepaid and Up to Date counts in the Aged Debtors summary on the attached image).
Am watching arrears closely because once the aging moves to more than 90 days the probability of reporting defaults appear to rise substantially. Overall Harmoney suggest I'm making 16.01%, I calculate something more like 15.5% and my lazy cash awaiting investments that they don't factor in calculations drag it closer to 14.5%
http://i1159.photobucket.com/albums/...psze40ppe5.gif
Halebop that dashboard you showed, is it from Harmoney or your own. Mine is nothing like that.
It's the secret Harmoney dashboard given to preferred customers... just kidding!... It's mine constructed from data mostly using the export function on their report page but also a couple of manually maintained tables I keep that specifically track defaults and overall performance.
Heartland and others with their 10s of millions must have some automated process?
Can't imagine several Heartland staff sitting down in front of terminals and deciding one by one which peers they will lend their millions to in $25 lots - yes?
Investing Strategy changed!
With the obvious higher number of Re-Writes around these days @ Harmony, I am now mainly looking for either ( and preferably both ) of the following:
1) Re-Written loans
2) An initial loan with a high loan amount.. 25K+
Hopefully moving forwards, a Re-Written loan has less chance of being a Re-Re-Written loan! plus that an almost max Credit loan will not need to be Re-Written in the coming months....
But won't they just rewrite for another $5k when they have paid off the first $5k of $25k?
I would have thought the fact they have rewritten once means they are motivated to get their balance to Zero
My understanding of Harmoney Re-Writing a loan is to Increase the amount of Credit extended... The Borrower wishes to get deeper in to Debt not even thinking about really the day of clearing the loan!!
The Re-Writes are an Expansion to the original loan. Many new Re-Writes are just 1 month young... meaning very little capital has yet been repaid.....
I read Harmoneys comment in that SST article about their service fee of 1.25% being increased. This spurred me to contact them direct to see how soon this was to happen and more importantly were they going to address this unfair effect upon investors of continually clipping the principal on the many rewrites. Their response was positive as they are, which will be later in the year! so thankfully they've finally listened to the many who have obviously voiced their distain of this rip-off! .. but detail on how they plan this new fee direction I believe should be released sooner than later...
This is good news.
Now we just need them to make good on on their original promise, at the time of launching, of a secondary market.
I won't mention their change (that was not notified to investors) of removing late fees from tardy borrowers that were meant to be paid to investors!