Author Topic: LC lowers rates gain  (Read 22509 times)

BBingo

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LC lowers rates gain
« Reply #30 on: February 06, 2015, 07:58:26 PM »
I wonder if the lower rates on new loans will spur more purchases of older notes on foliofn that are performing at the higher interest rates of old.


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LendingAlpha.com

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Re: LC lowers rates gain
« Reply #31 on: February 07, 2015, 01:06:01 AM »
There probably won't necessarily be more purchases, but prices are supposed to be higher in the secondary market for pre-February 4 notes.
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Fred93

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Re: LC lowers rates gain
« Reply #32 on: February 07, 2015, 05:14:36 PM »
...prices are supposed to be higher in the secondary market for pre-February 4 notes.

What do you mean "supposed to be" ???

Fee

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Re: LC lowers rates gain
« Reply #33 on: February 07, 2015, 06:01:55 PM »
There probably won't necessarily be more purchases, but prices are supposed to be higher in the secondary market for pre-February 4 notes.

Does LC offer any refi options? If so, prepayment risk could somewhat counter upward price pressure.

bobeubanks

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Re: LC lowers rates gain
« Reply #34 on: February 07, 2015, 07:44:59 PM »
There probably won't necessarily be more purchases, but prices are supposed to be higher in the secondary market for pre-February 4 notes.

Does LC offer any refi options? If so, prepayment risk could somewhat counter upward price pressure.

LC is always happy to book another origination fee.

LendingAlpha.com

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Re: LC lowers rates gain
« Reply #35 on: February 09, 2015, 04:30:14 AM »
...prices are supposed to be higher in the secondary market for pre-February 4 notes.

What do you mean "supposed to be" ???

Fixed income prices move in opposite direction as interest rates. Given that the pre-February 4 notes have a fixed rates, the prices starting on February 4 would be higher due to the system-wide rate decrease.
http://www.investopedia.com/ask/answers/04/031904.asp
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Fred93

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Re: LC lowers rates gain
« Reply #36 on: February 09, 2015, 05:08:05 AM »
...prices are supposed to be higher in the secondary market for pre-February 4 notes.

What do you mean "supposed to be" ???

Fixed income prices move in opposite direction as interest rates. Given that the pre-February 4 notes have a fixed rates, the prices starting on February 4 would be higher due to the system-wide rate decrease.

Ok, so "supposed to be" means you think they will be based on the notion that note buyers and sellers will adjust their trading prices for the interest rate change.  I'll bet you can't demonstrate that from data.

RazzleDazzle

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Re: LC lowers rates gain
« Reply #37 on: February 09, 2015, 06:13:19 AM »
It would be interesting to see if previous data supports this. If the interest rates have been coming down per this thread then did the secondary market demonstrate the "bond like" price change in prior quarters?

kya

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Re: LC lowers rates gain
« Reply #38 on: February 09, 2015, 08:13:55 AM »
wsj today reports a group of small banks will be making loans on lc ...wonder how this further squeezes the little guy?

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Re: LC lowers rates gain
« Reply #39 on: February 09, 2015, 02:51:11 PM »
The new partnership means more loans in the marketplace. Though Alliance Partners is also investing in the loans, which could theoretically compete against the "small guys", banks have typically been only interested in lower risk loans (grades A/B), which usually haven't been the popular loan grades for  the "small guys." Therefore, if true, there will be more higher risk loans (grades C-G) for the "small guys" to invest, which is a good thing in my book.
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