Harmoney

[Bjauck]

This is one helluva leap if it happens http://www.interest.co.nz/news/74202...ortgage-market

Thanks for the link. I guess it is not surprising as so much personal debt in NZ is tied up in residential property. I feel a caveat here may be that Harmoney may be in the segment of the market that has been turned down by the established players, so may be more susceptible to a popping of the ever-inflating bubble?

[Harvey Specter]

This is one helluva leap if it happens http://www.interest.co.nz/news/74202...ortgage-market

Interesting but they will need a lot more funders to make it work. This is the bit that I found facinating:

With a mortgage you get the opportunity to have subordinated debt so you can actually fractionalise a single mortgage and take proportions that are risk weighted.

So for a $100k mortgage, they first $80k could be grade A and gets repaid first and the next $20K could be Grade B and gets repaid last but does receive a higher interest rate. Effectively a first and second mortgage in one.

[luigi]

So for a $100k mortgage, they first $80k could be grade A and gets repaid first and the next $20K could be Grade B and gets repaid last but does receive a higher interest rate. Effectively a first and second mortgage in one.

For low grades I can see the potential appeal but I can't see how a grade A mortgage tranche could offer sufficient margin over term deposit rates for a Harmoney retail investor to be interested.

[Harvey Specter]

For low grades I can see the potential appeal but I can't see how a grade A mortgage tranche could offer sufficient margin over term deposit rates for a Harmoney retail investor to be interested.

Who said retail. Only 20% of loans are invested in by retail if my recollection of the story is correct. In the US, funds are starting to invest via these sorts of platforms. Expect the likes of some kiwisaver and Superannuation providers getting exposure to debt via this. The biggests issue I see for NZ is getting enough investors to fractionalise a $500k+ mortgage.

[Bjauck]

Depending on where we are in the economic cycle will affect the allowance in expected annual return for bad debts. When calculating its Forecast Annual Return for the investor, does Harmoney make an allowance for early repayment by the borrower? As discussed earlier, the investor is still charged a % on capital repaid, even on early repayments. If many loans are repaid early then it will have a material effect on investor returns. I imagine there must be a calculable probability of early repayments for each loan grade.

[777]

Those of you investing with Harmoney, is your dashboard updating. Mine has not for close on two weeks yet the amount of money available to invest (as shown on the market page) is increasing with repayments and interest.

Losing faith in their administration.

[Harvey Specter]

Those of you investing with Harmoney, is your dashboard updating. Mine has not for close on two weeks yet the amount of money available to invest (as shown on the market page) is increasing with repayments and interest.

Losing faith in their administration.

Pretty sure mines updating. The 'amount invested' on mine is out by $200 which they haven't fixed even though I have advised them. Waiting till they do their first update before I flood them with feedback as no doubt they are aware of most of the issues with the current site.

[777]

Thanks HS. They are not inclined to keep you updated on queries. May be due to incompetence or simply because of the magnitude of queries. I am close to just taking back money as it comes due and forgetting them. 95% of my loans are for 36 months and total about $26,000. The whole deal lacks transparency for me.

You win some and lose some.

[babymonster]

Hi everyone, I have invested at harmoney as well. Do you know what happen if the borrower missed a repayment. It seems a few of them should make a payment on 11/03 but didn't or hasn't show up on the website?

[Harvey Specter]

Hi everyone, I have invested at harmoney as well. Do you know what happen if the borrower missed a repayment. It seems a few of them should make a payment on 11/03 but didn't or hasn't show up on the website?

I think it may take a day or two to hit your account - could be wrong. If they haven't paid it will show up as 'amount in arrears' on the Dashboard - my performance page. If they dont pay within a week, then I think penalties start accruing.

I constantly have a small amount in arrears but non have been treated as a write off and very few additional penalties have been accrued.