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Thread: Harmoney

  1. #4411
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    Quote Originally Posted by leesal View Post
    Worked out the net impact on my current portfolio. My current weighted average interest rate on loans is 20%... superimposing new interestrates on revised dashboard it will be 17%

    As per coolbear comments above, default rates unlikely to have changed in the last 2 years... that 3% reduction just a full hit to investor return.

    I wonder how the insto's feel about the drastically reduced income with practically no change to the underlying risk?
    I agree - I was aiming for a weighted average lending rate of around 20%, which put me at a C2 "centerpoint". I will now have to get down to a D5 (!) centerpoint, which obviously carries a lot more defaults risk. I too think the reduction in rates are drastic. Down 5% in some grades is not fine-tuning, it's a complete change of tack.

  2. #4412
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    Quote Originally Posted by Toukshare View Post
    I agree - I was aiming for a weighted average lending rate of around 20%, which put me at a C2 "centerpoint". I will now have to get down to a D5 (!) centerpoint, which obviously carries a lot more defaults risk. I too think the reduction in rates are drastic. Down 5% in some grades is not fine-tuning, it's a complete change of tack.
    Sorry I doubted your numbers, it just seemed way too radical! Agree this is a dramatic repricing of risk. The base rate component of these loans is practically immaterial on the higher grades.

  3. #4413
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    No problem - actually my new centerpoint is D3, not D5. Still a big step down from C2.

  4. #4414
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    Toukshare,

    You may find the following two charts of interest - these are my current loan distribution and all time defaults (ignoring grades with small loan numbers):

    grades.png

    defaults.jpg

    Using Harmoney platform average default rates can be well off if you apply any form of 'sane' selection process to your loans. It should be pretty obvious why I favour D's and E's when I can get them. Lower grades may not necessarily be lower risk. Hard to compare when everyone's selection process is different.

  5. #4415
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    Quote Originally Posted by myles View Post
    Toukshare,

    You may find the following two charts of interest - these are my current loan distribution and all time defaults (ignoring grades with small loan numbers):

    grades.png

    defaults.jpg

    Using Harmoney platform average default rates can be well off if you apply any form of 'sane' selection process to your loans. It should be pretty obvious why I favour D's and E's when I can get them. Lower grades may not necessarily be lower risk. Hard to compare when everyone's selection process is different.
    So the higher the number the higher the risk? The number seems more predictive than the letter! Does this perhaps suggest there could be an algorithm override happening? Perhaps I got the wrong end of the stick - again!

  6. #4416
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    The number in the second chart (y-axis) is the total number of defaults for that grade - these numbers are for my loans.

    If you compare my C and D loans, D loans have had less defaults than C loans (by one) and I have more D's than C's - so D's are well ahead of C's for my loans. (i.e. D's are showing lower 'risk' than C's for my loans)

    Selection of loans is different for everyone, so my results won't be indicative of someone else's, but they do show that using Harmoney generated average values can provide poor indications of actual risk/return.

  7. #4417
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    Very interesting Myles.
    It looks like for your loan book, defaults for C4 and C5 are worse than D1, D2, D3 and D4, and again D5 is worse than any Es.
    As you say, it may indeed be because of your selection criteria, which I presume is a mix of grade-related criteria items (employment status, residence status, marital status, age, income, ratio) and non-grade-related (loan purpose, loan length, pp). If your selection criteria was purely related to items which influence the grade, then you'd expect your figures to be similar to HM, but obviously it's not.

  8. #4418
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    Harmoney raises more Financing for Ozzy expansion....

    https://www.interest.co.nz/news/1023...-and-2-unnamed

  9. #4419
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    wow:

    In the interest article:
    Harmoney describes itself as a digital platform lender. Although it was licensed by the Financial Markets Authority as a P2P lender in 2014, Roberts says he now can't see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

    So the founder of Harmoney cannot see a viable P2P lending future in NZ.

  10. #4420
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    Quote Originally Posted by Toukshare View Post
    wow:

    In the interest article:
    Harmoney describes itself as a digital platform lender. Although it was licensed by the Financial Markets Authority as a P2P lender in 2014, Roberts says he now can't see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

    So the founder of Harmoney cannot see a viable P2P lending future in NZ.
    That’s been the case for a while now
    “Just consider that maybe the probability of you being wrong is higher than you think.”

  11. #4421
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    New scorecard (1.6) will be in force this Thursday (7th Nov)

  12. #4422
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    Reached $5k in interest today, so thought it was timely to share some stats. I've really slowed down this year, due to the reduced quantity of loans hitting the retail marketplace, and tightening up on my investment criteria.


    Total loans = 1,008
    Average amount invested per loan = $39.63
    Average age of loan in portfolio (current status) = 341 days
    Average weighted interest rate (current status) = 20.73%

    RAR (as at 26-10-2019) = 15.45%
    XIRR (as at 6-11-2019) = 9.20%*

    *adjusted by writing-off any loans that are 60+ days in arrears

    Loan Book:
    A = 32 loans
    B = 232 loans
    C = 333 loans
    D = 308 loans
    E = 89 loans
    F = 14 loans


    Account Position.jpg

    Account Summary.jpg

    RAR.jpg

  13. #4423
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    Nice going Alundra. I've hit the two year mark and approaching 15k on 80k active. Diversified across several P2P with around 200k in overall (a year ago had 70% in HM, now only 40%).

    Its going to be a tougher environment returnwise with 1.6. The loans from H2 2018 are now 70% repaid, so 6 months max of RARs at the higher level, and then reducing quick as scorecard 1.6 loans replace the rewrites in the portfolio..





    Static Loss Data
    H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 OVERALL
    Count 203 525 1,141 781 870 3,520
    Origin Amnt $ 6,809 $ 19,083 $ 45,546 $33,193 $ 41,642 146,272
    Months 22 16 10 4 - 1
    Interest Paid $ 1,285 $ 2,929 $ 6,183 $2,828 $ 994 14,219
    Principal Repaid $ 5,719 $ 15,728 $ 30,251 $ 11,811 $ 2,701 66,209
    Principal Remaining $ 905 $ 3,194 $ 14,800 $21,252 $ 38,941 79,093
    Principal 31+ Days in Arrears $ 27 $ 79 $ 636 $ 730 $ 480 1,951
    Default $ 185 $ 161 $ 495 $ 130 $ - 970
    Expect Default - Full Term $ 445 $ 981 $ 1,641 $1,471 $ 1,835 6,373
    HM Cohort Static Loss 3.80% 2.01% 0.96% 0.01% 0.00% 0.74%
    Portfolio Static Loss 2.71% 0.84% 1.09% 0.39% 0.00% 0.66%
    Expect Static Loss 6.53% 5.14% 3.60% 4.43% 4.41% 4.36%

  14. #4424
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    Quick question re Harmoney's behaviour as regards to institutions vs retail investors.

    This morning, I was monitoring the listings, refreshing often as I had some money to invest in loans. It was a good morning actually, and quickly some loans appeared. A D2, 2 D4s, a E5, a C1 and a F1. And then, but quite a while later, a B4. Now the B4 has a loan ID lower than the all the ones mentioned (LAI-00178855 for those who were monitoring too). Which to me means the application was completed earlier (am I right?).
    So my question is: do we as retail investors see those "safer loans" after institutions have had first dibs, whereas those institutions (or HM) are happy for us to see the riskier loans first?

    Because if that is not the case, then why are we seeing loans appear not in the order of their loan ID?

  15. #4425
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    There will be a delay between a customer registering interest in a loan, completing the application (when the ID will be assigned), and then deciding on whether or not to accept the T&C's, interest rate etc., before it hits the marketplace.

    Depending on the applicant, it may well be that the applications for the riskier loans were completed with a faster turnaround.

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