Harmoney

[Investor]

Good news maybe. Roller-coaster interest rates say something about poor forecasting or errors to me.

Let's hope this now becomes more stable.

Perhaps they weren't happy with the previous potential rates of return. This latest update will take my expected return after tax up approx 2.5% p.a., according to rough excel modelling.

[Vagabond47]

The Investor Agreement and Disclosure Statement have been updated to reflect a new funding structure that allows Harmoney to invest in loans as another wholesale lender, putting its capital at risk just like you.

Hmmm, are we about to get (even more of) the good loans cherry picked from under us?

[RMJH]

Should be worth about 3% gross to me but I wonder if available volumes will decline. I was this very day mulling upping my exposure to P2P.

[myles]

Re Cherry picking: it should be fairly obvious from the retail vs wholesale RAR graph that cherry picking doesn't actually happen the way some suggest...

[Vagabond47]

Re Cherry picking: it should be fairly obvious from the retail vs wholesale RAR graph that cherry picking doesn't actually happen the way some suggest...

Depends whether you are picking for sweetness or shelflife. Will be interesting to see if the lines cross in an economic downturn.

[myles]

Depends whether you are picking for sweetness or shelflife.

Hmm, maybe - I personally don't think so. A low RAR doesn't necessarily indicate good "shelflife", e.g. F Grade (high interest) loans with high default rates will give you a similar RAR to A Grade (low interest) loans with low default rates. If there is a shift downward the F Grade loans return will no doubt fall and I suspect this would be reflected in the wholesale RAR more than the retail RAR.

[Investor]

Harmoney stated in their announcement that they would be lending under the same conditions as other wholesale lenders (directly implying that they aren't going to 'cherry pick').

[joker]

Looks like an admission by Harmoney that interest rate reductions called scorecard 1.5 were too low (as evidenced by a severe drop in the RAR graph since).

[permutation]

Looks like an admission by Harmoney that interest rate reductions called scorecard 1.5 were too low (as evidenced by a severe drop in the RAR graph since).

Oh!, does that mean I should stop withdrawing my available cash balance everyday because of the recent decline in return??

[leesal]

Looks like an admission by Harmoney that interest rate reductions called scorecard 1.5 were too low (as evidenced by a severe drop in the RAR graph since).

10% wouldn't provide institutional investors with adequate return relative to the risk.

Capture.JPG

Since HM success is through ticket clips, I'd say the institutions are behind this (us as lendors are simply a marketing angle). HM "investing" would better align their interests with institutional investors

Either way, am happy to have an extra 2-3%