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18-12-2017, 03:14 PM
#2881
Originally Posted by Investor
Your RAR is supposed to fall over time as more defaults naturally occur. Depending on your fee & tax rate, it is still possible to obtain a return of 12% p.a. after fees, tax and Harmoney's predicted default levels.
Indeed Investor, at 15% fees, less than 4% default and low-mid income tax rates. For someone on higher tax rates, 12% net of all these is now an unsustainable dream. Scorecard 1.5 squeezed gross rates, and arrears and defaults continue to rise disproportionately into the tail end of their hazard curve. Justification given for lender margin squeeze was safer, tightly screened borrowers. I haven't seen that coming through yet, but then its only been 4 months since August. Next year's Harmoney performance will be crucial, especially with competition keeping arrears and defaults manageable.
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18-12-2017, 04:48 PM
#2882
Member
Harmoney to start using debt collectors according to article on Interest.co.nz
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18-12-2017, 05:03 PM
#2883
Originally Posted by beetills
Harmoney to start using debt collectors according to article on Interest.co.nz
Read the previous two posts.
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18-12-2017, 08:24 PM
#2884
Member
Originally Posted by beacon
Indeed Investor, at 15% fees, less than 4% default and low-mid income tax rates. For someone on higher tax rates, 12% net of all these is now an unsustainable dream. Scorecard 1.5 squeezed gross rates, and arrears and defaults continue to rise disproportionately into the tail end of their hazard curve. Justification given for lender margin squeeze was safer, tightly screened borrowers. I haven't seen that coming through yet, but then its only been 4 months since August. Next year's Harmoney performance will be crucial, especially with competition keeping arrears and defaults manageable.
Hope is at hand; I have just reached a personal milestone, My RAR as at DEC09, 14.60%, have been in 33 months, this is 350 pips above the platform RAR of 11.10%
With over 1550 all-time loans, I think I have found my utopia of Harmoney investing. "Diligence in Selection of Loans".
Two points that I would like to mention, E and F grades, that I stopped lending too more than a year ago, have now reached break even with a default rate of 15 per 100 loans. So if the remaining 20% of the original loans end full term, I will have about an 11% gross return. But no more E and F for me. (Don't want red ink on my copy book)
Secondly, for the record, I have had only one(1) B Grade Charge-off from a total of 489 all-time loans taken in this grade from March 2015, that equates to a default of 0.20 loans per 100.
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19-12-2017, 07:56 AM
#2885
Member
Originally Posted by whitt
Harmoney today have emailed saying they will on sell the charged off loans to a third party.
I cant see this as good as the incentive is gone for Harmoney to chase loans in arrears. Previously it was in Harmoneys best interest to keep arreared loans under control so the charged off department had less work.
Now nothing stops them giving up, throwing it into charged off then onselling that loan.
Questions are - is this a breach of contract between Harmony and all current investors? Do enough investors care to make an issue of it? Would making an issue of it return money to us? Should we just roll over and allow such changes to the terms on which we invested in loans? My view - I never expected any return on defaulted loans, haven't received any and don't want the stress levels with objecting to Harmoney failings (as yet).
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19-12-2017, 08:53 AM
#2886
yeah, nah
Best read the agreement:
https://www.harmoney.co.nz/assets/Le...tober-2017.pdf
Collection Services - 57
"selling any Loans that have been charged off if and on suchterms (including as to price) as Harmoney considersappropriate"
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19-12-2017, 09:54 AM
#2887
Member
Originally Posted by myles
But what we don't know is if now there is no appropriate considering involved - has Harmoney taken a business decision not to attempt any recovery at all, merely to quit its responsibility for a price. That isn't what the original deal considered at all. But, we don't know. Given that the contract already allowed for loans to be sold after appropriate consideration, what has changed that we needed to be told about it?
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19-12-2017, 11:02 AM
#2888
Originally Posted by permutation
RAR as at DEC09, 14.60%, have been in 33 months, this is 350 pips above the platform RAR of 11.10%
With over 1550 all-time loans, I think I have found my utopia of Harmoney investing. "Diligence in Selection of Loans".
I have had only one(1) B Grade Charge-off from a total of 489 all-time loans taken in this grade from March 2015, that equates to a default of 0.20 loans per 100.
Well done, and well deserved, for all the effortthat would have taken.
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19-12-2017, 11:37 AM
#2889
Originally Posted by BJ1
... merely to quit its responsibility for a price. That isn't what the original deal considered at all. But, we don't know. Given that the contract already allowed for loans to be sold after appropriate consideration, what has changed that we needed to be told about it?
Debt Sale was part of the plan from the beginning, but to answer your question, I think it is just that Harmoney sees easier pickings in matchmaking and value-added like Payment Protect, rather than in attempting recovery. There is no harm in that, so long as investors don't suffer. Depending on age, type and size of portfolio, debt sells for 2-20% of the face value of debt, so you will get your recovery faster. Harmoney would sell it only after it has made the easier initial recovery efforts. Lender still bears the loss of charge-offs though, so unless Harmoney sharpens up its borrower screening, investor losses will come back to bite its bum (as investors start to migrate to its more efficient competitors, and there will be less retail left to matchmake). Saamee's got an interesting summary of his LC portfolio performance on Lending Crowd thread, for example.
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19-12-2017, 12:16 PM
#2890
yeah, nah
Originally Posted by BJ1
Given that the contract already allowed for loans to be sold after appropriate consideration, what has changed that we needed to be told about it?
Prior to the announcement they weren't doing it (but could), now they are? Details of the process were linked in the email.
To me it appears that Harmoney are working to gain additional funds back for investors - a positive not a negative.
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