Harmoney

[Stevo]

Would you mind pasting your risk grade and term graphs. I suspect if your graphs are like mine the difference will be bigger. How long have you been investing

Attachment 8033

You must have quite a set of 'nads to adopt that investment profile, given the vulnerability of the F grades. How old are your oldest loans? What's your RAR and do you think its accurate?

[Bjauck]

For what it's worth I calculate that if the new structure had been in place for the whole period that I have been invested my pre tax return would have reduced from 12.13% to 11.20%

Not that I agree with their logic, but Harmoney are arguing that since December the interest rates charged to borrowers increased by about 2% so this will almost recoup the huge hike in their service charges to lenders from June onwards compared with pre-December. They had to try to find a less negative spin by delving into history somehow...

[Knot]

Yup if the two things had been linked they would of done it then, or at the very least let people know.

[Whippeedo]

Wow. I'm shocked. I can't believe the size of this fee increase. It is outrageous. I was the biggest raving fan of Harmoney until today's Lender fee announcement. Its very disappointing to hear. The model showing impact is bullocks / lies / a creative statistic.

I estimate going from a 1.25% fee on interest earned up to 5% would more than compensate for stopping charges on the principle repayment fee of 1.25%. I mean hell! - go all the way up to 10% on interest earned - like LC if you must, but going all the way to 15% from 1.25% (6 fold increase?!) cannot be justified because they are dropping principle repayment fee. Crazy.

[Bjauck]

I am wondering if Harmoney ultimately want to become a business-to-peer lender as their announced charging scale does nothing to encourage the smaller investors.

[Whippeedo]

Harmoney said they did this to align Harmoneys' interests with Lenders - Yeah righto - what a crock ( well ya sure as hell dropped the ball on that one with a 6 fold increase in your fees to invests!...how does that help investors/lenders? what a joke )

Can we please stay with the old fee structure. I take it all back. 1.25% on interest and 1.25% on principle is a fantastic structure. the cost of early re-write fees currently are nothing compared to the increased interest commission costs just announced - 6 fold increase in interest commission Harmoney will soon be taking.

Even 2.5% on I and 2.5% on P is better than 0% on P and 15% on I don't you think.

Harmoney have effectively just increased their fees to investors by about 200%.

I'm not happy about this at all

[Stevo]

I am wondering if Harmoney ultimately want to become a business-to-peer lender as their announced charging scale does nothing to encourage the smaller investors.

You're probably not too far from the truth.

I think they're trying to take things to the next level i.e. big increases in both borrowing and investment. It certainly doesn't pay so well to chuck small change in their direction. At first, the notes of $25 may have been a nice enticement for "mum and dad" investors, but it now looks like the notes are primarily used to promote fractionalisation. And investors are being nudged to put more in to make it worthwhile, just as borrowers are nudged to take on more (affordable) debt.

[humvee]

You must have quite a set of 'nads to adopt that investment profile, given the vulnerability of the F grades. How old are your oldest loans? What's your RAR and do you think its accurate?

I don't look at my P2P portfolio as solely 1 platform. Under the old fee structure I judged that what harmony delivered best for me Was the higher risk higher return, While My A & B Grades are provided by squirrelmoney and lending crowd. For the levels of return of A & B loans I start wanting so see things like Secured loans and/or loan shield.

That said 75% of my P2P investment is with harmoney currently

My oldest loan would be reaching close to 17 months now At the moment my RAR is at ~16% after taking a hammering from the latest Fraud cases (I had invested in ALL nine fraudulent loans) Not all of these were F grades either.

Under both the old and new fees I wont be investing in A or B grade loans with harmoney, Under the new fees I wont invest in F grade either and probably not E Grade either as these are hit too hard by the new fees. So that leaves only C & D Grade and Im not sure a C & D Grade portfolio with harmoney under the new fees can make a good enough return over safer secured Lending Crowd loans to make it worth while.

[Bjauck]

Well explained Humvee. I had been reaching a similar conclusion as to cost/ benefit/risk. Harmoney should be expecting that many existing investors would be considering a gradual drawdown of their positions after such a massive jump in charges.

[Stevo]

I don't look at my P2P portfolio as solely 1 platform...

Thanks for the info, humvee. That's really bad luck getting stung with those fraudulent loans. I'm only with Harmoney for P2P lending but may look at the other options later. I like being able to export the spreadsheets because I'm a numbers geek. I know what you mean about unpredictability; some of my fastest/earliest repayments have come from F grade borrowers.

I'm actually looking forward to getting more data (over the years) to try and make sense of this market.