On the other hand HM held 8m in cash as of Mar17.
Considering it burned through 4m last year (funded in whole by share issuance), HM could only invest with safety if it had guaranteed access to capital.
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On the other hand HM held 8m in cash as of Mar17.
Considering it burned through 4m last year (funded in whole by share issuance), HM could only invest with safety if it had guaranteed access to capital.
I've already taken excess funds out of the platform.
I've started to think about whether our calculated RARs are a true representation of the return were getting. Calculated RAR is the sum of the interests paid less fees and dishonored loans projected for the year. But your sum will include interest from recently funded loans that have a probability of default not taken into account in the annual projection. Essentially if you were to stop funding new loans and let your funded loans run their course you can probably expect a lower return than your calculated RAR.
Thoughts?
The latest disclosure statement is set out much more exacting then the 16 March 2018 investor agreement, which is rather vague on wholesale and no mention of distinct marketplaces and random allocations.
IF HM is using its own 8m? cashpile - was there any mention which marketplace they'd access?
Either way according to the T&C's HM is free to change around the allocations between wholesale and P2P. If its only investing its 8m (and trimming back retail while it does so) , it should take 3 months to push it all through.
Having not read the latest disclosure statements I was assuming that Harmoney would be treated just like other wholesale lenders on the platform who are included in RAR (but clearly with no fees the returns would be higher). However I think you are suggesting that there is now effectively another platform for just wholesale (possibly with continued presence on the P2P platform being loan run-out). This would make me a little uneasy if they don't report the results of the new wholesale platform form too as we have no check on the fairness of loan allocations. It should be noted that one of the major shareholders is also a wholesale client so maybe they are moving to direct investment to improve returns?
Below is the relevant section from the email Harmoney sent out (4 May is when I received it):
Lender documentation:
The Investor Agreement and Disclosure Statement have been updated to reflect a new funding structure that allows Harmoney to invest in loans as another wholesale lender, putting its capital at risk just like you. This lending will be subject to the same controls as other wholesale lenders as described in the Disclosure Statement. The Privacy Policy is also being updated. You can review these agreements via the corresponding links or the first time you enter the marketplace in your lender account from 8th May 2018.
I do not believe there is 'another platform for just wholesale' - little has changed in respect to the platform, changes/additions have been made to various documents to allow Harmoney to invest in the platform. I suspect that the structure that they set up will see them pay fees etc. the same as all other wholesale lenders - it is a separate 'entity' that is investing so cannot be seen to be at an advantage - the whole point of all the document changes...
I've reached another milestone in the last few days:
Recoveries $2.13
My recoveries have exceeded one dollar!!! :ohmy:
I hope you are right Myles. I'll reserve judgement, and hopefully the availability of loans will return to previous levels :)Quote:
When Borrowers apply for a loan on Harmoney’s website they are automatically allocated to be funded through either the Peer-to-Peer Service or the Wholesale Funding Model.
No problem with recoveries trickling through, better then nothing! How are your defaults looking as a % of interest?
Still 10%'ish, but I've never seen the point of this comparison. If an investor invests in higher risk loans, this value will be high but the return will also likely be high - an investor who invests in low risk loans should have a low value, but a corresponding low return...e.g. if an investor only invested in loans with interest rates of say 30% and had a default to interest % of 30%, they would be doing very well. It's not a comparative value.
I think the Harmoney team have all wandered of skiing for a few days and everything will be back to normal soon........
Check out the platform stats for auto lend volume.
Last couple of days it was only 3k and 1k each day. Compare that to a few months back when it was 50k to 100k per day.
There's something seriously wrong at Harmoney
I think it fairly clear that Harmoney itself is just another wholesale investor. What I want clarified is why the retail volume has dropped, and when its expected to return to normal volumes. If this a couple of weeks of slow retail loans because harmoney has injected ~$8m of capital into the market that is fine, but if this is because of a lack of overall loan applications being received/approved I need to set up auto-withdraw and find a new home for my money.
I assumed "Fully funded loan amount" includes wholesale and retail ie it's the whole market. If so, the reduction in this amount wouldn't be explained by Harmoney's participation which just reduces retail market share.