Would they actually record arrears for a loan if a hardship "repayment holiday period" had been granted?
Printable View
At HM I honestly cannot say what happens....
Over at LC, when a Defaulting Loan gets to 90 Days old, then it is Removed.....!
I guess if a loan has been granted a hardship repayment holiday, then payments will not be due until after the hardship holiday period ends. Only then if payments are not resumed by the new due dates would it be in default. So perhaps the covid hardship payment holidays have merely postponed the day of reckoning for some loans. Also, some borrowers who may have struggled regardless of the Covid measures, may have been able to latch onto Harmoney's covid hardship response to delay their day of reckoning?
I'm folllowing and liking your Logic... BJ
Current 87.51%
Arrears 3.71%
Hardship 8.44%
Protect Waiver 0.34%
Current 85.3%
Arrears 3.9%
Hardship 10.8%
Current 85.2%
Arrears 7.4%
Hardship 7.0%
P Protect 0.4%
Hardship 6.9%
Arrears 2.5% (1.7% >30 days)
I suspect that some loans that would normally be in arrears have ended up in hardship, but given the meagre returns from the Harmoney collections process I'm fine with that in the hope that some of them return to current status.
I'm finding that the ratings meant very little a lot of my defaults are the better graded loans!
The effects of Job losses, business failures etc. from COVID-19 are not likely dependant on loan rate (i.e. likely ability to repay) - so it's quite possible that effects will be felt across the full rate range? e.g. if a well established small business that relied on an expected 'guaranteed' tourism based turnover, or someone who worked for same, received an A rated loan 6 months ago, I doubt too many would have raised an eyebrow?
At this point I'm not seeing the loses that I thought might be seen - still running a 15.06% RAR, but that may be due to my loan selection. My net-charge offs are not excessive at this stage.
How are others RAR and charge offs going?
RAR 10.75% (hasn't moved much in the last 6 months)
(my own XIRR is 11.56%)
244 loans
Hardship 18 (A 1, B 1, C 3, D 6, E 7, F 0), whereas my portfolio is exactly centrered on Cs, then Bs and Ds, then As and Es with very few Fs. So I notice hardships are more heavily weighed towards the riskier loans in my case.
Just one charge off since end of March. (I only have ever had 3 charge offs incidentally: 1 B, 1 C and 1 E.)
So in my case, it's the hardships: I had one before COVID-19 hit, and 17 more in the past 3 months. I don't expect much from them, not too sure about Harmoney's willingness to truly help and see them through. I suspect they'll slowly morph into charge-offs.
This is what my breakdown looks like:
Grade Active Loans Hardship Loans B 14% 12% C 33% 29% D 34% 42% E 17% 17%
Pretty much across the board for me - heaviest in the D grades only a little less in the lower grades.
52 in hardship out of 723 so 7% in hardship.
Arrears 3570.3 3.36% 104 Current 93106.71 87.59% 2329 Hardship 9320.15 8.77% 193 Protect Waiver 305.16 0.29% 8 Total Outstanding 106302.32 2634 40.3577524677297
By dollar value. Out interest - seems to be a move toward hardship from arrears as predict by forum. Seems to be more movement in current(people paying back/refinancing ) than towards other categories, no real change to the late categories - i dont follow stats before covid (bc). July/august will be interesting as things begin to bite economy wise.
Whats everybody else doing with their money ? are we all of to squirrel ? shares - or just sitting on it ?
If you are over 65 think about your kiwisaver potential.