happy
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Post by happy on Jun 25, 2018 16:21:48 GMT
Is it sensible for someone to lose 60% of their money minus whatever recovery is scraped together and keep with the same company. I don't think so. This may sound harsh, but it wasn’t sensible to invest that sort of sum in a high risk automated lending product without understanding how it worked. The GEA functioned as it always had, constrained only by a dwindling flow of green energy loans, which led to its closure soon after. I’m afraid you arrived very late to the party, after all the decent drinks were gone. Ps. I rather doubt you’ll end up losing anything close to that figure, if at all, but you’re probably going to have to be patient. This was exactly the point I made to the creator of this thread a while back. The bottom line is these accounts did pretty much what they said they would do. Also to compare RS or Zopa diversification where they have tens of thousands of loans compared to ACs few hundred I feel shows a lack of understanding of the different platforms in the P2P marketplace.
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angrysaveruk
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Post by angrysaveruk on Jun 25, 2018 19:58:35 GMT
Since you ask: The following loans, made to a single borrower totaling some £4.4M, were suspended ~June 2017. In the intervening 12 months, AC have not started any formal recovery process. #440 I** #439 I** #438 I** #437 I** The ones you mention for example have an email going out shortly with a proposition that has resulted from intense work carried out by our staff. It is considered very unlikely this proposal for lenders to consider would have transpired if the loans had been put into a formal process. Although I do not have massive exposure to these loans (compared to people in the GEAs) I am going to use them as an acid test for AC's recovery process. The outcome is likely to determine my future investments with AC.
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Post by brightspark on Jun 25, 2018 20:23:08 GMT
Perhaps you should add loan 227 to your list to make 5 errants whose resolution needs to be watched.
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Post by crabbyoldgit on Jun 26, 2018 6:46:39 GMT
Yes the 5 loans are an acid test of the a.c. recovery team, which to be fair has been one of the best in the industry so far. However i think the problem loans resoulved have been reasonably straight forward, these 5 i think are entirely different.
Cannot say I entirely agree that the automated accounts operated in the manner set out in the lender prospective i read when I was in these accounts. It strongly suggested that internal trading within the accounts was to take place so as to reduce the over weight holdings down to nearer the over all percentages which individual loans formed of the overall fund, as on the whole the new funds operate now. This was turned off due to software issues and never resolved until the issue became a hot topic on this forum when the Scottish loan hit trouble. It was the sole reason I pulled out of the automated accounts early on, I am now slowly withdrawing from A.C. due to unease about the risk level of loans relative to interest rates, a successful set of recoveries may change my mind, but I can not see it at present.
One thing is for sure, if these 5 loans fail badly the provision funds would be just about be empty and the effects on lender confidence could be very serious for ac.
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angrysaveruk
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Post by angrysaveruk on Jun 26, 2018 7:00:15 GMT
Perhaps you should add loan 227 to your list to make 5 errants whose resolution needs to be watched. I sold out of that one 3 weeks after the late interest payment so I am not as interested in it 
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ashtondav
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Post by ashtondav on Jun 26, 2018 7:08:57 GMT
Yes the 5 loans are an acid test of the a.c. recovery team, which to be fair has been one of the best in the industry so far. However i think the problem loans resoulved have been reasonably straight forward, these 5 i think are entirely different. Cannot say I entirely agree that the automated accounts operated in the manner set out in the lender prospective i read when I was in these accounts. It strongly suggested that internal trading within the accounts was to take place so as to reduce the over weight holdings down to nearer the over all percentages which individual loans formed of the overall fund, as on the whole the new funds operate now. This was turned off due to software issues and never resolved until the issue became a hot topic on this forum when the Scottish loan hit trouble. It was the sole reason I pulled out of the automated accounts early on, I am now slowly withdrawing from A.C. due to unease about the risk level of loans relative to interest rates, a successful set of recoveries may change my mind, but I can not see it at present. One thing is for sure, if these 5 loans fail badly the provision funds would be just about be empty and the effects on lender confidence could be very serious for ac. Yep, I’m only in QAA until resolution of these loans - an acid test of the PF and recovery ability. I would not expect much for 12 months or so as these things take a long time if playing it the AC and FS way...
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Post by bikeman on Jun 27, 2018 15:50:36 GMT
Since you ask: The following loans, made to a single borrower totaling some £4.4M, were suspended ~June 2017. In the intervening 12 months, AC have not started any formal recovery process. #440 I** #439 I** #438 I** #437 I** Thanks for the reply. Yes, I've mentioned this in some other posts, sometimes the quickest way to destroy value is to put a loan into a formal recovery process. If there is deep equity in a defaulted loan i.e. the value of the asset safely well exceeds the loan and there are also no difficulties expected in getting a simple and quick sale then yes a formal process makes sense. But when it is a difficult recovery in some way, such as these and some others and requires help in some way then we have sometimes managed that in house under the lender vote regime. The ones you mention for example have an email going out shortly with a proposition that has resulted from intense work carried out by our staff. It is considered very unlikely this proposal for lenders to consider would have transpired if the loans had been put into a formal process. We are definitely not going to suggest accelerating a formal process if there are credible alternatives to better value recovery without that step. It wouldn't change how we categorise a loan in terms of being 'defaulted' or not though. Also the suspension was January 18, not June last year and we have been working intensely on these recoveries since then. So no, a formal recovery process having not started isn't an indicator of us not doing something, probably the opposite. We have also developed over time an intense loan review process for loans with higher potential risk of issues arising, even if they haven't arisen as yet and may never do. This is a loan strategy review process where we regularly sit down and progress a detailed written strategy on how best to mitigate risks on those loans and seek to achieve good outcomes for our investors. It's all part of our processes. The loans were suspended 1st June 2017 - excerpt from the activity log below: IxxLtd - Urgent Lender Update 1st Jun 2017Dear Lender Given the issues seen above we have taken the decision to temporarily suspend the loan whilst we await further detail from the borrower. This detail is expected by 14 June 2017 and we will report to lenders by 19 June 2017 in this regard. The loan will remain suspended for this period although consideration will be given to lifting the suspension at the next update.
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Post by bikeman on Jun 27, 2018 16:00:15 GMT
This may sound harsh, but it wasn’t sensible to invest that sort of sum in a high risk automated lending product without understanding how it worked. The GEA functioned as it always had, constrained only by a dwindling flow of green energy loans, which led to its closure soon after. I’m afraid you arrived very late to the party, after all the decent drinks were gone. Ps. I rather doubt you’ll end up losing anything close to that figure, if at all, but you’re probably going to have to be patient. This was exactly the point I made to the creator of this thread a while back. The bottom line is these accounts did pretty much what they said they would do. Also to compare RS or Zopa diversification where they have tens of thousands of loans compared to ACs few hundred I feel shows a lack of understanding of the different platforms in the P2P marketplace. That's BS. These accounts have never stated clearly that their diversification was only 20%. It is cited as an example on the website but nowhere does it actually state that this was typical level of diversification or even that 20% was a worst case. Hence why so many are pissed that they've had their investments grabbed by suspended loans within weeks of the loans being formed - if that isn't neglected due diligence by the loan assessors, I don't know what is. AC have weasled their way around how these accounts worked to the point where damage limitation required that they withdraw the GEIA and GBBA. Likewise, the provision funds and how they work is a constant source of misunderstanding and it's detailed workings communicated via reaction to flack they receive on this forum - a situation that offers no real confidence or legal standing of the explanations. AC are a joke and I very much doubt they have a long term future.
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jlend
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Post by jlend on Jun 27, 2018 16:43:09 GMT
Thanks for the reply. Yes, I've mentioned this in some other posts, sometimes the quickest way to destroy value is to put a loan into a formal recovery process. If there is deep equity in a defaulted loan i.e. the value of the asset safely well exceeds the loan and there are also no difficulties expected in getting a simple and quick sale then yes a formal process makes sense. But when it is a difficult recovery in some way, such as these and some others and requires help in some way then we have sometimes managed that in house under the lender vote regime. The ones you mention for example have an email going out shortly with a proposition that has resulted from intense work carried out by our staff. It is considered very unlikely this proposal for lenders to consider would have transpired if the loans had been put into a formal process. We are definitely not going to suggest accelerating a formal process if there are credible alternatives to better value recovery without that step. It wouldn't change how we categorise a loan in terms of being 'defaulted' or not though. Also the suspension was January 18, not June last year and we have been working intensely on these recoveries since then. So no, a formal recovery process having not started isn't an indicator of us not doing something, probably the opposite. We have also developed over time an intense loan review process for loans with higher potential risk of issues arising, even if they haven't arisen as yet and may never do. This is a loan strategy review process where we regularly sit down and progress a detailed written strategy on how best to mitigate risks on those loans and seek to achieve good outcomes for our investors. It's all part of our processes. The loans were suspended 1st June 2017 - excerpt from the activity log below: IxxLtd - Urgent Lender Update 1st Jun 2017Dear Lender Given the issues seen above we have taken the decision to temporarily suspend the loan whilst we await further detail from the borrower. This detail is expected by 14 June 2017 and we will report to lenders by 19 June 2017 in this regard. The loan will remain suspended for this period although consideration will be given to lifting the suspension at the next update. It was one of the 4 loans that was suspended in June. The other 3 were suspended on 2nd Feb according to an email sent on 2nd Feb 2018 from AC.
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happy
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Post by happy on Jun 28, 2018 6:43:07 GMT
This was exactly the point I made to the creator of this thread a while back. The bottom line is these accounts did pretty much what they said they would do. Also to compare RS or Zopa diversification where they have tens of thousands of loans compared to ACs few hundred I feel shows a lack of understanding of the different platforms in the P2P marketplace. That's BS. These accounts have never stated clearly that their diversification was only 20%. It is cited as an example on the website but nowhere does it actually state that this was typical level of diversification or even that 20% was a worst case. Hence why so many are pissed that they've had their investments grabbed by suspended loans within weeks of the loans being formed - if that isn't neglected due diligence by the loan assessors, I don't know what is. AC have weasled their way around how these accounts worked to the point where damage limitation required that they withdraw the GEIA and GBBA. Likewise, the provision funds and how they work is a constant source of misunderstanding and it's detailed workings communicated via reaction to flack they receive on this forum - a situation that offers no real confidence or legal standing of the explanations. AC are a joke and I very much doubt they have a long term future. Considering the tone and content of your post I feel obliged to counter this for the sake of other forum readers, your points in order: 1, Yes 20% was cited as a possible example of how diversification could work and it was clearly explained this could well happen. And you are surprised that it actually did this when you knew this information existed at the time you invested (or should have) So here you are trying to discredit AC when their product did what the example said, now that is BS in my book. I , like many on this forum, invested in the GBBA and GEA, but having an understanding of how it could invest our money limited our investment to amounts we were comfortable being invested in individual loans and also added smaller amounts over a period of time to maximise diversification. Not difficult to do if you take a little time to understand what you are investing in. 2, GBBA1 and GEA were withdrawn for totally different reasons to what you infer in your post, and yet again you are trying to paint a picture of deceit and dubious motives by AC that simply do not exist , again total BS on your part. To be clear here, GBBA1 was withdrawn as the interest rates on offer were too low to support the 7% yield of GBBA1, GBBA2 was launched and at launch worked exactly how the old GBBA1 did, GEA was withdrawn due to the limited future supply of green energy loans. Both these discontinued accounts have since benefited from the improved diversification process which operated across all the automated accounts however the limited supply of new loans to these accounts prior to closure did adversly affect their diversification potential. The provision fund is perfectly well understood and documented. To be totally clear for you again here is how it works: - The PF only protects the automated accounts
- With the exception of the QAA and 30 Day access account defaulted loans are not tradeable.
- With the exception of paying late interest on non-defaulted loans for the automated accounts the AC PF only provides discretionary protection for capital loss AFTER all recovery options have been concluded. So there is no protection provided at the point of default and no protection for loss of interest during this recovery process which may take years, typically 2-3 years is not uncommon. Yes this means you have to wait for your money back, it's not like RateSetter!
- The PF is discretionary for legal reasons and has to be operated in this manner. If AC provided a guarantee of protection from loss through the PF this would constitute an insurance product potentially requiring AC to register as an insurance provider and requiring different legal oversight.
- If you think AC is operating it's PF in a dubious or non-standard way I suggest you go and take a look at the other secured loan SME/Property platforms like Lendy and you will see similar arrangments exist there. It is not the same as the personal loans world of RS or Zopa and everyone has to accept that.
AC are not a joke however your statements here are.
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angrysaveruk
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Post by angrysaveruk on Jun 28, 2018 6:59:34 GMT
This was exactly the point I made to the creator of this thread a while back. The bottom line is these accounts did pretty much what they said they would do. Also to compare RS or Zopa diversification where they have tens of thousands of loans compared to ACs few hundred I feel shows a lack of understanding of the different platforms in the P2P marketplace. That's BS. These accounts have never stated clearly that their diversification was only 20%. It is cited as an example on the website but nowhere does it actually state that this was typical level of diversification or even that 20% was a worst case. Hence why so many are pissed that they've had their investments grabbed by suspended loans within weeks of the loans being formed - if that isn't neglected due diligence by the loan assessors, I don't know what is. AC have weasled their way around how these accounts worked to the point where damage limitation required that they withdraw the GEIA and GBBA. Likewise, the provision funds and how they work is a constant source of misunderstanding and it's detailed workings communicated via reaction to flack they receive on this forum - a situation that offers no real confidence or legal standing of the explanations. AC are a joke and I very much doubt they have a long term future. P2P is investing and investing is gambling. At the end of the day you have to take responsibility for your own actions. Yes the diversification in some of the auto invest accounts is a bit low, and that is why I sold out of them in one week and decided to invest manually instead. If you want to just deposit your money and then forget about it and assume everything will just work out, I would stay away from high risk investments like P2P.
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ashtondav
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Post by ashtondav on Jun 28, 2018 7:58:35 GMT
That's BS. These accounts have never stated clearly that their diversification was only 20%. It is cited as an example on the website but nowhere does it actually state that this was typical level of diversification or even that 20% was a worst case. Hence why so many are pissed that they've had their investments grabbed by suspended loans within weeks of the loans being formed - if that isn't neglected due diligence by the loan assessors, I don't know what is. AC have weasled their way around how these accounts worked to the point where damage limitation required that they withdraw the GEIA and GBBA. Likewise, the provision funds and how they work is a constant source of misunderstanding and it's detailed workings communicated via reaction to flack they receive on this forum - a situation that offers no real confidence or legal standing of the explanations. AC are a joke and I very much doubt they have a long term future. Considering the tone and content of your post I feel obliged to counter this for the sake of other forum readers, your points in order: 1, Yes 20% was cited as a possible example of how diversification could work and it was clearly explained this could well happen. And you are surprised that it actually did this when you knew this information existed at the time you invested (or should have) So here you are trying to discredit AC when their product did what the example said, now that is BS in my book. I , like many on this forum, invested in the GBBA and GEA, but having an understanding of how it could invest our money limited our investment to amounts we were comfortable being invested in individual loans and also added smaller amounts over a period of time to maximise diversification. Not difficult to do if you take a little time to understand what you are investing in. 2, GBBA1 and GEA were withdrawn for totally different reasons to what you infer in your post, and yet again you are trying to paint a picture of deceit and dubious motives by AC that simply do not exist , again total BS on your part. To be clear here, GBBA1 was withdrawn as the interest rates on offer were too low to support the 7% yield of GBBA1, GBBA2 was launched and at launch worked exactly how the old GBBA1 did, GEA was withdrawn due to the limited future supply of green energy loans. Both these discontinued accounts have since benefited from the improved diversification process which operated across all the automated accounts however the limited supply of new loans to these accounts prior to closure did adversly affect their diversification potential. The provision fund is perfectly well understood and documented. To be totally clear for you again here is how it works: - The PF only protects the automated accounts
- With the exception of the QAA and 30 Day access account defaulted loans are not tradeable.
- With the exception of paying late interest on non-defaulted loans for the automated accounts the AC PF only provides discretionary protection for capital loss AFTER all recovery options have been concluded. So there is no protection provided at the point of default and no protection for loss of interest during this recovery process which may take years, typically 2-3 years is not uncommon. Yes this means you have to wait for your money back, it's not like RateSetter!
- The PF is discretionary for legal reasons and has to be operated in this manner. If AC provided a guarantee of protection from loss through the PF this would constitute an insurance product potentially requiring AC to register as an insurance provider and requiring different legal oversight.
- If you think AC is operating it's PF in a dubious or non-standard way I suggest you go and take a look at the other secured loan SME/Property platforms like Lendy and you will see similar arrangments exist there. It is not the same as the personal loans world of RS or Zopa and everyone has to accept that.
AC are not a joke however your statements here are. You are, of course, correct. But the level of diversification offered, together with the way the PF functioned meant they were very inadequate, ill thought out products, not really fit for purpose, and bound to result in the scabrous comments seen on this thread. Very silly product design, and very flawed - if not toxic.
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Brainer
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Post by Brainer on Jun 29, 2018 15:30:34 GMT
You are, of course, correct. But the level of diversification offered, together with the way the PF functioned meant they were very inadequate, ill thought out products, not really fit for purpose, and bound to result in the scabrous comments seen on this thread. Very silly product design, and very flawed - if not toxic. Yep, couldn't agree more in the form they first appeared. Originally a complete black box (which has now been fixed). Originally with no automatic PF payments for late interest (now been fixed) – although AC’s explanation of this is as a ‘technical glitch’ felt a little dubious. Originally no complete explanation of how the PFs would work (now fixed). Originally no automatic diversification (now fixed). Originally no clear documentation of the size of the PFs (now fixed). So while there have been improvements in the functionality and transparency of these accounts, unfortunately, all these changes have come too late for many investors. In hindsight, they should never have been released by AC in their original guise.
Which begs the question, why did I invest in the first place? Firstly, I have only a toe dip in the GEA (3% of my total p2p exposure) and slightly more in the GBBA (~6%). I don’t have the time or expertise to do the quantity and quality of DD as many on this forum, so automated accounts appealed to me and I wanted to test them out. Secondly, the general consensus is that AC is (one of) the most professional, well-run p2p platforms, so there was an element of blind trust (I suppose it had to be blind given the original complete black box situation), for which I can only blame myself. Thirdly, the chatter about the PFs ‘not being guaranteed only because it would then be called insurance’ gave me the belief, naively it seems, that the PFs were extremely well backed and would only fail in extreme circumstances - in a similar fashion to how people treat the instant access of the QAA now. Had the size of the PFs, especially for the GEA, been clearly documented at the time, I definitely wouldn’t have invested.
Personally, I have over 60% of my GEA in the turbine loans (a failing in borrower diversification if not a technical breach of the 20% rule). It’s hard to even guesstimate the return from these but the updates don’t make good reading to my inexpert eye. I’m bracing myself for potential capital losses way above and beyond the (IMO inadequate) PF. If so, and despite only being a toe dip, I’m looking at investing in the GEA as being one of the worst investment decisions I’ve made in p2p.
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IFISAcava
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Post by IFISAcava on Jun 29, 2018 16:11:42 GMT
You are, of course, correct. But the level of diversification offered, together with the way the PF functioned meant they were very inadequate, ill thought out products, not really fit for purpose, and bound to result in the scabrous comments seen on this thread. Very silly product design, and very flawed - if not toxic. Yep, couldn't agree more in the form they first appeared. Originally a complete black box (which has now been fixed). Originally with no automatic PF payments for late interest (now been fixed) – although AC’s explanation of this is as a ‘technical glitch’ felt a little dubious. Originally no complete explanation of how the PFs would work (now fixed). Originally no automatic diversification (now fixed). Originally no clear documentation of the size of the PFs (now fixed). So while there have been improvements in the functionality and transparency of these accounts, unfortunately, all these changes have come too late for many investors. In hindsight, they should never have been released by AC in their original guise.
Which begs the question, why did I invest in the first place? Firstly, I have only a toe dip in the GEA (3% of my total p2p exposure) and slightly more in the GBBA (~6%). I don’t have the time or expertise to do the quantity and quality of DD as many on this forum, so automated accounts appealed to me and I wanted to test them out. Secondly, the general consensus is that AC is (one of) the most professional, well-run p2p platforms, so there was an element of blind trust (I suppose it had to be blind given the original complete black box situation), for which I can only blame myself. Thirdly, the chatter about the PFs ‘not being guaranteed only because it would then be called insurance’ gave me the belief, naively it seems, that the PFs were extremely well backed and would only fail in extreme circumstances - in a similar fashion to how people treat the instant access of the QAA now. Had the size of the PFs, especially for the GEA, been clearly documented at the time, I definitely wouldn’t have invested.
Personally, I have over 60% of my GEA in the turbine loans (a failing in borrower diversification if not a technical breach of the 20% rule). It’s hard to even guesstimate the return from these but the updates don’t make good reading to my inexpert eye. I’m bracing myself for potential capital losses way above and beyond the (IMO inadequate) PF. If so, and despite only being a toe dip, I’m looking at investing in the GEA as being one of the worst investment decisions I’ve made in p2p. Why would you face a capital loss when there is a PF that has yet to be used? The issue is more that until the loans are recovered or declared irrecoverable, the money is stuck.
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Brainer
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Post by Brainer on Jun 29, 2018 17:13:27 GMT
Why would you face a capital loss when there is a PF that has yet to be used? The issue is more that until the loans are recovered or declared irrecoverable, the money is stuck. Because the size of the PF was recently revealed to be only £116k. With the closure of the account to new investment, this isn't going to rise a significant amount before the loans close out. I'm (pessimistically?) predicting the losses to be larger than this, although as I said, this is hard to gauge with any degree of accuracy.
If so, then the fact the money is stuck is just the fly on the turd.
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