jamesc
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Post by jamesc on Feb 16, 2016 15:18:16 GMT
Ignoring cash back has there been other property loans where different charges have launched at different rates ?
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Post by GSV3MIaC on Feb 16, 2016 15:25:59 GMT
Not as far as I can tell. They really are desperate to avoid CB, and the subsequent SM sell-off of stripped parts, for some reason.
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SteveT
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Post by SteveT on Feb 16, 2016 16:12:00 GMT
Bizarre. If this (and presumably all subsequent) tranches are now going to carry 10%, that pretty much stuffs anyone looking to sell on any 8% tranches that didn't carry CB. Have Foolish Critters thought this through?? Who is going to buy (manually) into future large 18+ month property schemes at 8% when there's now the obvious risk of later tranches getting a better rate.
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Post by GSV3MIaC on Feb 16, 2016 16:17:39 GMT
Except selling them to autobodge, which won't care whether they are 8% or 10% in most cases. But as you say, fairly bizarre. You have to wonder where the extra 2% is coming from .. the borrower, or Furious Contortions.
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jayjay
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Post by jayjay on Feb 16, 2016 16:34:15 GMT
Who is going to buy (manually) into future large 18+ month property schemes at 8% when there's now the obvious risk of later tranches getting a better rate. Not sure there is any difference here than when later tranches were subject to CB. Those who waited got more. If all future CB is to be effectively rolled up into the interest rate it kills the stripping game. I can well understand FC would like to put an end to that. For the investor to term it doesn't change much.
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blender
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Post by blender on Feb 16, 2016 17:37:48 GMT
The interest always comes from the borrower - never FC. So they have restructured it and kept their fee. I think this a sensible and successful move for FC - they do not always get it wrong. So I will be taking some.
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Post by Deleted on Feb 16, 2016 17:45:00 GMT
It is clear that FC are moving more and more towards the automatic/funding model and they care less and less about manual bidders.
In any case, considering also what other sites offer (SS 12% with ltv of 70%), I believe it would seem strange/daft for any manual bidder to bid at 8% rates (and no CB) for 12+ months....
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blender
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Post by blender on Feb 16, 2016 18:06:01 GMT
Agreed. I am disposing of my last 8% parts and do not expect to buy any more.
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metoo
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Post by metoo on Feb 16, 2016 18:09:02 GMT
The interest always comes from the borrower - never FC. So they have restructured it and kept their fee. The LTV didn't change, nor any of the other numbers. Either that's an error, or the extra interest required a reduced fee to make the numbers add up."... please note that a loan request for this company was previously listed on the Funding Circle platform. This loan request was cancelled due to the loan being restructured with the borrower. We understand that the borrower will accept an offer on this occasion." (!) Newly Fudged Communications! Edit: according to Q&A, apparently there is to be extra interest charged to the borrower , and the LTV will stay within the 69%. It looks like the remainder of the loan can if necessary be funded at 10% interest for LTV less than 70%, depending on the timing of the tranches, or perhaps the LTV will sneak over 70%. IR and opening Q&A statement do not show updated numbers though. Edit: LTV raised to 70% on WB7 and note on front of IR.
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blender
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Post by blender on Feb 16, 2016 18:30:28 GMT
Yes, agreed they may have waived some or all of the borrower fee - but they are not giving us the fee as cash back. This is a small part of the whole project. This looks like a determined effort to remove cash back and set the rate to get it lent - which is better overall. Cash back is, in any case, a promotion and not a normal part of the deal.
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guff
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Post by guff on Feb 16, 2016 19:05:21 GMT
Which is a shame because I consider this to be a lot more attractive than smaller loans…
Perhaps there are external pressures being brought to bear.
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metoo
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Post by metoo on Feb 16, 2016 19:16:24 GMT
Which is a shame because I consider this to be a lot more attractive than smaller loans… Perhaps there are external pressures being brought to bear. Many financial organisations offer ongoing promotional cashback - banks, credit cards, stocks & shares ISA providers, financial advisors for example.
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guff
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Post by guff on Feb 16, 2016 19:28:07 GMT
Which is a shame because I consider this to be a lot more attractive than smaller loans… Perhaps there are external pressures being brought to bear. Many financial organisations offer ongoing promotional cashback - banks, credit cards, stocks & shares ISA providers, financial advisors for example. Agreed, but they're not all trying to become ISA providers by April.
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metoo
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Post by metoo on Feb 16, 2016 19:42:49 GMT
Many financial organisations offer ongoing promotional cashback - banks, credit cards, stocks & shares ISA providers, financial advisors for example. Agreed, but they're not all trying to become ISA providers by April. Mmmm. Q&A answers on the second WB6 were leaving the way open for CB to be offered, apparently softening the resolve against it. Perhaps the outcome hinged on negotiation with the borrower, which went Fiendishly Canny's way? "We understand that the borrower will accept an offer on this occasion." However, we don't know whether the cost of higher interest was in effect covered or shared by a fee rebate, or borne entirely by the borrower. For the first time we learn " Possible rate increases are detailed in the facility letter".
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guff
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Post by guff on Feb 16, 2016 20:18:59 GMT
Would you Adam and Eve it? Someone has asked the pari parsu question. The OED are no doubt on standby to add another definition.
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