Harmoney

[Art]

Are you certain that service charges will be deductible for all investors including for those who are "not in business"?

Income collection commissions whether it be that charged by lawyers collecting interest, trust companies collecting dividends and interest, real estate firms collecting rent, financial advisors collecting income etc have always been deductible as an expense against income. You would need to be an extreme worrier not to claim Harmoney fees against the income earned.

[Knot]

I need someone to check the spreadsheet i uploaded the other day from that its roughly 2% at an individual loan level.

I don't see a mistake in your calculations, but look at those stats another way;

Your paying almost 7 times the fee (or 372% increase) and getting nothing extra in return, in my case because I have not invested heavily in Harmoney that changes to 9 times the fee (496% increase). I have done this calculation across my entire loan book, and if this had been in place since they increased the % on loans (December) I would have paid 570 % more in fees (approx, it's on the other computer).

Yes the return is still ok(ish) but to be honest I can get the same or better return with less risk elsewhere, and to reduce the risk with Harmoney either means going A or B loans (and then the return drops right down), or buying loan repayment insurance when they release that to the rest of us (and at a guess that will be too expensive to make it worthwhile).

I'd accept a 10% across the board flat fee, but 20% and for them doing nothing extra?!?! nope.

[Art]

I have no problem with everyone making a profit and for the business model to be profitable, but the way I see it for there to be such a massive increase in fees (4 times in my view) one of the following must have happened:

1. Whoever developed the original business model got it very wrong and it was never going to fly at the original fees; or
2. The original fee structure was a 'loss leader' to develop the business; or
3. The shareholders have decided to ramp up the fees 'because they can' to maximise profits.

If either 1 or 2 they will probably get away with it, if 3 I think their competition will catch up with them, Harmoney ain't no TradeMe - well not yet anyway.

[Kelvin]

Surely they don't need to increase the fees 4x to make the business model work. Isn't the whole point of P2P having an online platform with lower overheads so that both borrowers and lenders get a better rate, with the platform taking a cut? But taking a 20% cut seems really excessive for this kind of business , perhaps 10% is more reasonable - In my view, they are being really greedy or need to look at their costs

[IntheRearWithTheGear]

Yeah, but a and b loans suffer at a higher rewrite ratio than the e,f risk loans - that alone erodes your real return. You may also have your capital eroded depending on when the borrower rewrites which you cant offset to your tax payments.

So at a individual loan level - it dosnt look as good as it used to - but now over a group of loans it kinda equalises out (not perfectly but you get the point).

Your not charged on your capital and your capital can be reinvested into another loan. Rewrites have zero effect (that i can see) - we dont care if harmony chases the borrowers for rewrites and everybody is happy. This rewrite side of the business would be a sore point for harmony and us investors.

SO they are charging you at higher rate of interest but on a smaller portion of your loanbook ie less the capital amount you invested - at the moment they are charging your capital plus interest.

One of the issues this new cost is more upfrount than over the duration of loan - which impacts on the compounding of loan amounts.

The reason im interested so much is ive being trying to write a program to calculate out the loan books - so that i make the best decision on how to invest for example loans compounding into other loans.

So for example imagine a system which mimicks defaults and rewrites over thousands of different loans and spits out a number. They have provided enough information to do this. The piece missing is a rewrite profile - which now dosnt matter. For example ive seen mentions of 20% rewrites but skews depending on risk profile.

I got the system but i cant prove the results are correct - so i just keep my mouth shut.

[Knot]

The entire system is no longer viable for investors (IMHO), high % of defaults at one end, low returns at the other. The only party (that thinks) they are winning on this new fee structure is Harmoney. There is nothing in it for us, other P2P providers work out better now, or money into ETF's etc.

The thing that I really liked about Harmoney was the low size of their notes, I could throw money in without having to think about it, I could easily keep my money working for me within the platform, none of the other P2P platforms currently have these benefits.

Your program has me curious, being an IT person, and Harmoney having such a woeful info portal I've been developing my own, I know how much is due, when, what is overdue (which is different to Harmoney's overdue), a full usable transaction history, graphs out the wazhoo showing all kinds of neat visuals (like since my last stolen principal I have actually been in the negative, still down about $2 over what I put in, but that I should be up $2 in the next day or so - Yet my RAR is going up according to Harmoney - 3% since the last official update?!?).

The only thing I needed the Harmoney website for anymore was downloading transaction histories and actually placing orders.

I hadn't quite finished it when Harmoney announced the changes (Just needed to make it look nice really), whether I will or not I don't know, guess I could still have investments with them for the next 5 years since I can't sell.

p.s. You forgot to shut your mouth, we all know now

Yeah, but a and b loans suffer at a higher rewrite ratio than the e,f risk loans - that alone erodes your real return. You may also have your capital eroded depending on when the borrower rewrites which you cant offset to your tax payments.

So at a individual loan level - it dosnt look as good as it used to - but now over a group of loans it kinda equalises out (not perfectly but you get the point).

Your not charged on your capital and your capital can be reinvested into another loan. Rewrites have zero effect (that i can see) - we dont care if harmony chases the borrowers for rewrites and everybody is happy. This rewrite side of the business would be a sore point for harmony and us investors.

SO they are charging you at higher rate of interest but on a smaller portion of your loanbook ie less the capital amount you invested - at the moment they are charging your capital plus interest.

One of the issues this new cost is more upfrount than over the duration of loan - which impacts on the compounding of loan amounts.

The reason im interested so much is ive being trying to write a program to calculate out the loan books - so that i make the best decision on how to invest for example loans compounding into other loans.

So for example imagine a system which mimicks defaults and rewrites over thousands of different loans and spits out a number. They have provided enough information to do this. The piece missing is a rewrite profile - which now dosnt matter. For example ive seen mentions of 20% rewrites but skews depending on risk profile.

I got the system but i cant prove the results are correct - so i just keep my mouth shut.

[IntheRearWithTheGear]

Well you wont, because your investments will rewrite fairly shortly. This 5 year thing is a maxmium you will hold your investment for - your borrowers will move to cheaper rates, ask for more money etc - ie rewrite well before 5 year point.

I suspect about a third each year.

[Vermeer_paul]

Has anyone received (or able to download) a statement from Harmoney for Tax purposes that states the Harmoney fees paid and write-offs for YR 2014/2015? I can't seem to find any of that.

[Knot]

Reports - Statements - Tax Certificates

[Darchie]

Best email HM direct, as far as i can see only year ending 2016 is on their site