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Thread: Harmoney

  1. #3001
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    Quote Originally Posted by alistar_mid View Post
    for all the loans in status arrears or current, by taking their loan term less payments remaining. This should give the term the loan has been “active”. You get a total months figure for each loan grade, and then you divide by loan counts to get the average length of loan...
    Excluding Paid-offs from calculation can only give you expected return from your current portfolio - rather than actual overall. Also, use of months and Harmoney classification thereof should increase margin of error.

  2. #3002
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    AI assists in assessing credit risk.

    https://www.cio.co.nz/article/632369...s-credit-risk/

  3. #3003
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    Quote Originally Posted by beacon View Post
    Interesting concept Alistar. Segregating and analysing v1.5 only loans (rather than your to-date totals) might provide you purer insights by grade and be more useful.
    oh yeah right, apples and oranges.

    good point.

  4. #3004
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    Quote Originally Posted by myles View Post
    I've covered what I do/have done a while back - the most basic was to write of any portion in arrears over 31 days - at the time I prefered to over estimate losses (still do). I still track that so I know if a big hit is likely to come through - but I'm not seeing this is really necessary, but nice to have. With over 100K, defaults, at the current rate I'm getting them, are looking stable. I'm expecting some growth in defaults but predict compounding will keep up with it at the very least. If that changes I'll see it coming.

    I'm in a unique situation that I've invested 100K quite quickly (3-4 months) and have not withdrawn, so I'm getting quite a good picture of what's going on without being tainted by deposits/withdrawals. I'm surprised at, what is currently, a rock steady straight line of growth. Perhaps I've just hit on a reasonable loan selection process and range? [I gave up trying to get an accurate figure when the new rates etc. came in - not worth the effort for me - started up another account to be a little more conservative, but have pretty much fallen back to the same as my original account as it's doing well and looks like the sweet spot I'm after and still fit's with the new rates].

    One thing I did in the lead up to Christmas was to tighten up my selection process as it's been shown that P2P is similar tos Credit Card default rates - this period being a higher default rate period. This has created a bit of a 'wobble' as I couldn't match enough loans and my available principle crept up to >10K (it comes back quickly!), working on getting most of it back in now. It is a finicky beast, with so many influences...
    An elegant way of treating, that will give you a conservative view; What is the payment rate of 31-60 that you are finding so far? Are you taking the data from the "export" button in reports, or doing your own ageing?


    Quote Originally Posted by myles View Post

    Aware of what it means - not sure how PP at a lower rate, is different from PP at a higher rate, hence my query.
    Some insurers use credit risk as part of their underwriting criteria. This is due to the relatively high correlation between loan default and claims incidence (through moral hazard - eg using imdemnification to ones advantage to engage in risky behaviour).

    So - imagine holding a $20000 Harmoney loan with PP, in the knowledge that layoffs are coming...

    The thought process of a borrower who has diligently settled all their past obligations (grade A), vs somebody with a track record of defaulting (grade E/F) may lead to different behaviours. Thus E/F on average showing an increased incident in envoking payment protect. Would expect this to hold true here.
    Last edited by leesal; 22-01-2018 at 05:14 PM. Reason: typo

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    Quote Originally Posted by beacon View Post
    Your "harm est chg%" figures differ from Harmoney stats a bit leesal, more than rounding down to 1 decimal place should. Eg., In Harmoney supplied stats, F charge-off averages out at 8.06% in v1.5, not at 7.6%. Where are you sourcing yours from?
    So those stats are specific to my portfolio...

    Each grades "harm est chg%" is the weighted average of the est default risk of loans I hold... So for F, I hold nearly all F1 F2 and F3, and very few F4 or F5. So overall my average default on F's will be lower then simply the average of grades F1 to F5.

  6. #3006
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    Quote Originally Posted by leesal View Post
    So those stats are specific to my portfolio...

    Each grades "harm est chg%" is the weighted average of the est default risk of loans I hold... So for F, I hold nearly all F1 F2 and F3, and very few F4 or F5. So overall my average default on F's will be lower then simply the average of grades F1 to F5.
    Cut to perfection.... Sometimes that can be the critical difference between exceptional and mediocre...

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    Quote Originally Posted by beacon View Post
    Cut to perfection.... Sometimes that can be the critical difference between exceptional and mediocre...
    the bigger question is what are you doing up at 5:56am

  8. #3008
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    Quote Originally Posted by alistar_mid View Post
    the bigger question is what are you doing up at 5:56am
    I am an early bird...

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    I am not up with all this technical analyzing of returns but I thought some may be interested in a little exercise I have just done. My first loan purchase was in Sept 2014, In the next 4 months I took out 88 Loans all 36 months and for $ 25 to $ 150. Of those 88 loans, only 8 went full term and there are 3 still running and for some reason well behind in payments. 10 were charged off. The spread of grades was pretty even through A to E with only 5 F's.
    I have steadily invested since but have to take 60 month loans to keep up and as far as RAR goes it was up around 15-16% for the first 6=8 months but then went down to about 13% where it has stayed ever since. ( now at 12.7%)
    Still happy enough but no new funds in for more than a year now.
    Soolaimon

  10. #3010
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    Quote Originally Posted by Soolaimon View Post
    I am not up with all this technical analyzing of returns but I thought some may be interested in a little exercise I have just done. My first loan purchase was in Sept 2014, In the next 4 months I took out 88 Loans all 36 months and for $ 25 to $ 150. Of those 88 loans, only 8 went full term and there are 3 still running and for some reason well behind in payments. 10 were charged off. The spread of grades was pretty even through A to E with only 5 F's.
    I have steadily invested since but have to take 60 month loans to keep up and as far as RAR goes it was up around 15-16% for the first 6=8 months but then went down to about 13% where it has stayed ever since. ( now at 12.7%)
    Still happy enough but no new funds in for more than a year now.
    Thanks Soolaimon. Could have been a bad first up batch, low sample size.

    Harmoney 1.0 suggests you should have only had 6 defaults, in all likelihood you'll end up with 12 or 13. Hopefully the rest of the loan book isn't running similar.

    Grade 3 yr default loans defaults
    A 0.5% 16 0.1
    B 1.6% 17 0.3
    C 3.6% 17 0.6
    D 5.9% 17 1.0
    E 12.3% 16 2.0
    F 29.4% 5 1.5
    Tot 88 5.4

    What is your profit on these loans if any? (eg taking your interest received and deducting all premium outstanding, whether defaulted or in arrears)

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