Harmoney

[Saamee]

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

Could it just be a Borrower Proactively paying more Capital than they are rquired to pay.... Thus dimisnishing and paying off their loan sooner?

[emveha]

There is a Brexit recession brewing in the UK. There are indications that investment decisions are being put on hold. It will be interesting to see how UK P2P fares...if there are fewer borrowers.

So far no sign of slowing down on Funding Circle.

[humvee]

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!

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

[Darchie]

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!

[whitt]

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.

[Darchie]

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!

[whitt]

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..

[Finite]

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?

[whitt]

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.

[Finite]

I thought Harmoney was a new company in NZ so how can they been doing it for decades?

I'm talking about the principal staff not the company.

How come your cherry picking is more accurate than Harmoneys methods?
Maybe you should go into business as a credit scoring agency