Quote Originally Posted by alundracloud View Post
One thing I would love to see is for Harmoney to allow the retail lenders to have a nibble at the loans that get diverted to the wholesale market. You could still have the wholesale investors taking 75-80%, but why not let the retail lenders fill the first $5k of a $25k loan before getting 'vacuumed up' by the whales? As it stands, us little-guys don't see four out of every five loans Harmoney processes.
Quote Originally Posted by beacon View Post
I'll second that. By doing this, they'll achieve the same wholesale:retail outcomes, while upping the loan volume on both markets and minimizing the rising chatter about poor loan quality in both markets. They have been concerned about this chatter, that is why they had taken the decision to invest their own money as a wholesaler. Upping the volume also makes the sub 10% platform returns more digestible because choice was increased
I might be missing what your saying, but there is a limited number of loans. The current approx. 25%/75% retail/wholesale volume split means the loans we are getting are all the loans that we will get. The only way to increase loans to retail, at that split ratio, is to increase the total number of loans, which just don't seem to be available at the moment.

Allowing the retail market to cherry-pick all loans before they go to wholesale would be unfair on the wholesale lenders, who already clearly take on the lower end of the loans. i.e. average retail RAR is around 12.2% vs average wholesale RAR around 9%.

Personally I think however Harmoney have been making the decision to split loans to retail and wholesale is okay - they appear to have been 'protecting' retailers to some degree, hence the higher average RAR of retail lenders. I'm not sure how much of this is due to historical influence (i.e. it may be changing). At around the beginning of this year the slowly growing gap between retail RAR vs wholesale RAR appears to have stopped growing and now appears to be constant or possibly even reducing. Something to watch over time. [shown in the RAR graph below]

RAR.jpg