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Thread: Harmoney

  1. #4481
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    Quote Originally Posted by vernon View Post
    Well I got my first loan write off. A grade, with house and never a payment made. Who would have thought it!!
    Attachment 10934

    Maybe I should just go for the F grades and get a better return if H can't get money out of someone with a house.

    I guess that's unsecured lending at its worst...a lot of the info borrowers supply is accepted on trust. Who knows the true state of the property, its ownership and value v debt. It may not even exist! Harmoney has proven time and time again that very little due diligence in done when checking borrowers bona fides. Essentially they're keen to get $450 for each loan written/rewritten (which is paid (lent) up front by us - the lenders) and probably view the interest commission/fee as a bonus!

  2. #4482
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    wow, 15 loans available at one time.. whats happened?

    Hmm, some with only 9 days remaining.. odd, there was nothing there an hour ago.
    Last edited by Vagabond47; 08-01-2020 at 04:19 PM.

  3. #4483
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    Quote Originally Posted by Vagabond47 View Post
    wow, 15 loans available at one time.. whats happened?

    Hmm, some with only 9 days remaining.. odd, there was nothing there an hour ago.
    Yes, saw that too. From nothing to 15 loans, all after pressing the 'refresh' button.

    Anyway just wanted to say I've had my first charged-off too. A B4!!! I did enquire to HM a while back, as no activity was seen against this loan, and no payment ever for about 4 months. I got a reply from HM saying this was a case of 'family fraud'. Whatever that means? (what is family fraud as opposed to straight-up fraud?).

    In any case, I would agree with the commenters here who said we are accepting HM's rating and information on trust, and suspect HM do not do a huge amount of due diligence (does the property exist? In what state is it in? What is its true ownership structure? What is the difference between 'living with parents' and 'renting'? How are bank statements PDFs checked? Do they check that the partner with large income is indeed a true partner? ....)

    So far out of 130 loans that are over 3 months old, I have about 5 where no repayment has ever been made, there's a B4, a C5, a D5, a E4 and a F2. Quite the mix!
    Last edited by Toukshare; 08-01-2020 at 06:10 PM. Reason: adding information

  4. #4484
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    Toukshare, be prepared for a higher rate of defaults as you build your portfolio - typically you feel the effects from 9 months to 15 months (depending on the speed of investing). As you build your portfolio the number of loans invested in is high, as is the number of defaults after the initial 'grace' period. Once you have the bulk of your $'s invested and move into replacement of paid/re-written loans, the number of loans you invest in reduces, as does the overall defaults. Have a look at some of the previously posted RAR curves and you'll see the typical peak that drops down to a relatively steady RAR - something to be prepared for.

  5. #4485
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    Quote Originally Posted by myles View Post
    Toukshare, be prepared for a higher rate of defaults as you build your portfolio - typically you feel the effects from 9 months to 15 months (depending on the speed of investing). As you build your portfolio the number of loans invested in is high, as is the number of defaults after the initial 'grace' period. Once you have the bulk of your $'s invested and move into replacement of paid/re-written loans, the number of loans you invest in reduces, as does the overall defaults. Have a look at some of the previously posted RAR curves and you'll see the typical peak that drops down to a relatively steady RAR - something to be prepared for.
    Thank you Myles. I am indeed prepared, having read the whole of this thread before investing 'proper'. So first of all, a big thank you for your own contributions on this thread, and to the others who have offered their wisdom and lessons learned from experience too. I particularly appreciated the stats. I know I will experience more defaults and charged off, and not necessarily only in the E and F grades. And as you say, my current RAR is somewhat meaningless, it only has proper value beyond 1 year of investing really.

  6. #4486
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    Whelp, Harmoney's dead. In my email:

    Good morning,
    After careful analysis of Harmoney’s business model and the company’s strategic direction we have made the decision to no longer offer new loans for investment by retail lenders from 1 April 2020.

  7. #4487
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    CageyB, I just got the same email from Harmoney

    Subject: No new loans available to Harmoney retail lenders from 1 April 2020
    From: The Harmoney Team
    After careful analysis of Harmoney’s business model and the company’s strategic direction we have made the decision to no longer offer new loans for investment by retail lenders from 1 April 2020.
    This does not affect existing loans, so current retail investments will continue to run out in accordance with their current terms following our closure of the platform to new retail lending.
    This is not a decision we have taken lightly but we believe it is the right move to enable Harmoney to continue to lead the way in creating better personal loan products in a highly competitive market.
    What this means for you as a Harmoney lender is laid out in detail below, however we would like to thank you for your support of Harmoney as a growing New Zealand business over the past five years.

    What’s changing from 1 April 2020:

    • Retail lenders will be unable to invest in new loans with Harmoney.
    • If loans in your portfolio are rewritten or are paid off early, principal and interest repayments back into your account will not be able to be reinvested in further loans with Harmoney.

    Auto-lend will be deactivated on 31 March 2020.
    So that's it - the end. As a newish investor (started August last year), thanks for nothing, HM. Anyone got any alternative apart from the Lending Crowd?

  8. #4488
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    Quote Originally Posted by CageyB View Post
    Whelp, Harmoney's dead. In my email:
    It was always going to happen. There always seemed to be a favouritism towards the corporates. Was it really p2p?

  9. #4489
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    Quote Originally Posted by Toukshare View Post
    CageyB, I just got the same email from Harmoney



    So that's it - the end. As a newish investor (started August last year), thanks for nothing, HM. Anyone got any alternative apart from the Lending Crowd?
    Squirrel has a platform.

  10. #4490
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    ...we believe it is the right move to enable Harmoney to continue to lead the way in creating better personal loan products in a highly competitive market.
    Well that's a lot of words telling us nothing - and there I was thinking their business model was P2P. Well, the signal-to-noise ratio was low on this one in any case, despite being first out of the blocks. Hope it doesn't start a trend though.
    "The market can stay irrational longer than you can stay solvent." John Maynard Keynes

  11. #4491
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    It could be a case of the retail IT platform being too expensive to manage, maintain and improve for very little benefit to them (assuming the percentage of money coming from retail investor was at most 20% and going downhill)

  12. #4492
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    Quote Originally Posted by Toukshare View Post
    It could be a case of the retail IT platform being too expensive to manage, maintain and improve for very little benefit to them (assuming the percentage of money coming from retail investor was at most 20% and going downhill)
    Although you'd imagine they'd be locked into the IT system for the next 5+ years.

    AML would be costly to enforce. Imagine they'll save that. Plus less queries; and new accounts to set up.

    But suprised about HM lack of spine. Sell a line to push their own status, and when the going gets tough, they find their "new friends" - the very ones they intended to disrupt in the first place
    Last edited by leesal; 13-02-2020 at 04:07 PM. Reason: typo

  13. #4493
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    the very ones they intended to disrupt in the first place
    So you think maybe those "new friends" just gradually bought up the place. Invested a bit more each year, and a bit more, and then turned round and said "get rid of those pesky retail investors, and we'll go back to being the members-only club that we've always been"?

  14. #4494
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    Quote Originally Posted by Toukshare View Post
    So you think maybe those "new friends" just gradually bought up the place. Invested a bit more each year, and a bit more, and then turned round and said "get rid of those pesky retail investors, and we'll go back to being the members-only club that we've always been"?
    More like, HM intention right from the outset was to "become big".

    How that was achieved didn't matter. Rationalise the motive post-hoc.

  15. #4495
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    Default Zagga

    Quote Originally Posted by Toukshare View Post
    CageyB, I just got the same email from Harmoney



    So that's it - the end. As a newish investor (started August last year), thanks for nothing, HM. Anyone got any alternative apart from the Lending Crowd?
    Look at zagga.co.nz. Not that many loans and the one at the moment is not that attractive. But very good communication and good security.

  16. #4496
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    Quote Originally Posted by leesal View Post
    Although you'd imagine they'd be locked into the IT system for the next 5+ years.

    AML would be costly to enforce. Imagine they'll save that. Plus less queries; and new accounts to set up.

    But suprised about HM lack of spine. Sell a lie to push their own status, and when the going gets tough, they find their "new friends" - the very ones they intended to disrupt in the first place
    Just phoned them up and asked about getting reclassified as a wholesale investor... need $10m for that lol

    But had a good talk to them. Reason I got is low value retail investors are simply not economical to serve. Too much admin required answering queries, phone calls, IT etc

  17. #4497
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    Quote Originally Posted by alistar_mid View Post

    But had a good talk to them. Reason I got is low value retail investors are simply not economical to serve. Too much admin required answering queries, phone calls, IT etc
    That really does make sense. If you can get on the platform with $50 loans or whatever the amount is that would be generating bugger all revenue for Harmony but the costs would still be as large if not larger than dealing with more experienced investors. Sad but it is the reality.

  18. #4498
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    Quote Originally Posted by alistar_mid View Post
    Just phoned them up and asked about getting reclassified as a wholesale investor... need $10m for that lol

    But had a good talk to them. Reason I got is low value retail investors are simply not economical to serve. Too much admin required answering queries, phone calls, IT etc
    Cheers for the infor alistar.

    Would it not be more reasonable if HM had looked for a solution to accommodate the investors. Arrange for a 3rd party to setup a managed fund; or a scheme through an institution?

    Were the investors not part of the journey, over the past 7 years?

  19. #4499
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    Quote Originally Posted by leesal View Post
    Cheers for the infor alistar.

    Would it not be more reasonable if HM had looked for a solution to accommodate the investors. Arrange for a 3rd party to setup a managed fund; or a scheme through an institution?

    Were the investors not part of the journey, over the past 7 years?
    I guess as has happened often with shares and financial (non-real estate) investment in NZ - individual investors are cannon fodder or just the means to an end.

  20. #4500
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    Quote Originally Posted by Cool Bear View Post
    Look at zagga.co.nz. Not that many loans and the one at the moment is not that attractive. But very good communication and good security.
    Hi Cool Bear. Been with Zagga for a year but never invested. How frequent do the loans come up?




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