Harmoney

[winner69]

Has any body else noticed investor loans have dried up in last few days?
I would have assumed as xmas is near that loan volumes could increase. However lately there has been very few.

Maybe all being mopped up by the big boys before you mere mortals get the chance to have a look

[Cool Bear]

I have posted a few times before that Harmoney estimated default rates are way too low and the actual rates may be 50 to 100% higher. From my first 500 loans invested in the middle of 2015, the result so far, based purely on number of loans, are:

current 249, 49.8%
paid off 220, 44.0%
defaults 31, 6.2%

My spreadsheet works out the simple average default rate estimated by Harmoney for those 500 loans to be just 3.06%. Already with still half of the loan still ongoing, the actual is more than twice that. Still 3 and a half years to go for all loans to be fully paid off, so the final figure will be probably between 8 to 10% assuming that Harmoney's blurb "that defaults are usually in the first 18 months" is correct.

Note: This post is not to warn investors off Harmoney. The net returns are still very good (can be better than the other p2ps) but do be aware that estimates are just estimates.

[nztyke]

I have posted a few times before that Harmoney estimated default rates are way too low and the actual rates may be 50 to 100% higher. From my first 500 loans invested in the middle of 2015, the result so far, based purely on number of loans, are:

current 249, 49.8%
paid off 220, 44.0%
defaults 31, 6.2%

My spreadsheet works out the simple average default rate estimated by Harmoney for those 500 loans to be just 3.06%. Already with still half of the loan still ongoing, the actual is more than twice that. Still 3 and a half years to go for all loans to be fully paid off, so the final figure will be probably between 8 to 10% assuming that Harmoney's blurb "that defaults are usually in the first 18 months" is correct.

Note: This post is not to warn investors off Harmoney. The net returns are still very good (can be better than the other p2ps) but do be aware that estimates are just estimates.

As I understand it the estimated default rates are per annum and not over the life of the loan. Does your calculation take that into account?

Just checked the Harmoney website it shows annual default rates
A 0.17%
B 0.53%
C 1.20%
D 2.00%
E 4.28%
F 10.62%

[whitt]

I have posted a few times before that Harmoney estimated default rates are way too low and the actual rates may be 50 to 100% higher. From my first 500 loans invested in the middle of 2015, the result so far, based purely on number of loans, are:
.

CoolBear
Did you finds the estimate default rates from them are wrong evenly across all grades or more towards certain grades?

[Investor]

Of course their default rates won't be 100% accurate. Comparing your results which include your own selection bias to platform figures doesn't provide very decision useful information in my opinion. Given there are other factors like the possibility of a recession at some stage this is just a reminder to not take a 'redline' approach to investing in loan grades on Harmoney.

[Cool Bear]

As I understand it the estimated default rates are per annum and not over the life of the loan. Does your calculation take that into account?

Just checked the Harmoney website it shows annual default rates
A 0.17%
B 0.53%
C 1.20%
D 2.00%
E 4.28%
F 10.62%

You are right. If I take into acccount that it is annual, then the difference is not as great. However, I reckon Harmoney's will still be understated.

To negate the annual thing, my calculation is thus as follows: For my entire 3000+ loans, the gross (weighted average) interest is 21.21%. My weighted average default rate (based on Harmoney) is 2.48% So, expected default is 11.69% of gross interest. At the moment, my actual default is 19.6% of gross interest. And that is not taking into account that Harmoney only consider a loan as default only after so many (three?) months of non payment.

[Cool Bear]

Of course their default rates won't be 100% accurate. Comparing your results which include your own selection bias to platform figures doesn't provide very decision useful information in my opinion. Given there are other factors like the possibility of a recession at some stage this is just a reminder to not take a 'redline' approach to investing in loan grades on Harmoney.

Yes, that "not taking a redline approach" is precisely my point to other investors.

[Beagle]

There's really no truth in marketing! Harmoney fined $292k for misleading marketing campaign
http://comcom.govt.nz/the-commission...eting-campaign

There's creative marketing and then there's misrepresentation. The campaign's they ran definitely fell into the latter category. Good on the Commerce commission taking them to task.

[IntheRearWithTheGear]

https://www.dropbox.com/s/b1eyp28qw3lxy4w/P2P.zip?dl=0


requires windows dot net framework.

A feeble attempt at creating a p2p loan simulator which models loans, loan defaults and loan repayments into future.

Its a windows console program so you will have to know something about computers to even get it running.

No support, run at your own risk, the results will not be correct but it maybe in the ball park. Does not model "payment protect". Written after the new loan fee schedule came into effect (you can change that amount in the settings file - 0.15, -- Platform Fee)

You edit the text file tablesettings.txt down the bottom of the file you will notice a settings section which is where you load your portfolo details.




Download and put in a folder on its own.

You edit the text file tablesettings.txt near the bottom of the file you will notice a settings section which is where you load your portfolio details.
You then run the runsim.bat for a bit.

It simulates the loans with defaults etc so one version of a possible future. It keeps adding these futures to the output.csv .

The theory being if you run it thousands of times you will get a range of outcomes - a poor mans monte carlo simulator.

https://en.wikipedia.org/wiki/Monte_Carlo_method

It will be completely wrong and has nothing to do with harmoney and use entirely your risk - run it in a virtual pc if your scared.


For example you will see a line which looks like this

a1,60,100,


you could change it to
a1,60,50,b1,36,100
Which means
50 a1 loans for 60 months and 100 b1 loans of 36 months.

another example.

a1,60,50,b1,36,100,f1,60,1000

the loan types field is for when the system needs to take a new loan it selects randomly a loan from this field so you can create investment ideas
currently set for a1,60 month duration loans

could be
f1,60,f1,36,b1,60,c5,36 etc


loan rates are kepted in fixdata.txt file.

All yours, no returns.


Cheers

Uses excel interest rate which is not the same as their fancy interest rate over real time spans.

[Darchie]

Loans are very sparce!
May be they've run out of subjects willing to get further into debt with re-writing!