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Post by mrclondon on Jan 15, 2020 13:50:23 GMT
Loan #824 has recently been categorised as 'Default' and the 'Capital Valuation' figure reduced from 100% to 65.96% The only other loan with a 'Capital Valuation' of less than 100% is #209 at 98.4%. I asked a question on the Q&A for #824 yesterday That has been deleted today, with the following private response to me The web page they refer me to does not mention 'Capital Valuation' explicitly so that response does not provide me with the clarification I was seeking. I have asked a further question today, this time on #35 (a loan for which recoveries are expected to be £0, i.e. 100% writeoff) stuartassetzcapital I genuinely don't understand what this 'Capital Valuation' is meant to represent given it only applies to 2 loans in the entire loanbook. Deleting my question without answering it was not helpful to my, or others understanding.
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Post by mrclondon on Jan 15, 2020 13:59:33 GMT
This is an extract from the web page AC pointed me at, with what I think they pointing me at.
(My bold)
I *think* that corresponds with my assumption that capital recovery of loan #824 is expected to be c. 66%, but doesn't explain why the recovery on most other defaulted loans is expected to be 100%.
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blender
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Post by blender on Jan 15, 2020 17:31:02 GMT
EL = expected loss? Maybe the figure is given only if there is a defined and unavoidable loss coming. Where the loss cannot be quantified, what figure would they choose?
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Post by mrclondon on Jan 15, 2020 19:38:27 GMT
To add to my uncertainty as to the exact meaning of "Capital Valuation", I note that this afternoon #869 has been increased to "High" risk and the "Capital Valuation" reduced to 98.4% (co-incidentally the exact same pairing of risk & capital valuation as #209)
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Post by crabbyoldgit on Jan 16, 2020 13:24:56 GMT
This is an extract from the web page AC pointed me at, with what I think they pointing me at.
(My bold)
reading the bit in bold I understand this diffferently , ie if this expected loss under default was say 10% and it has increased by 50% the expected loss now is 15% .At least that what i think its says but i think the wording can be made to mean just about anything.The worrying thing is say in the case of the scotttish loan, its still 100% ,AC therfore seem to think a full capital return is likley and hence will have no ringfenced funds in the pf to cover,it would have to have ringfenced funds for the auto funds to opperate if losses were expected to protct new lenders.
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Post by Ton ⓉⓞⓃ on Jan 20, 2020 21:55:35 GMT
I asked a question on this subject (Capital Valuation) with #1060
I should also add that 1060 is suspended/defaulted
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Post by mrclondon on Jan 21, 2020 17:46:00 GMT
For the benefit of those unable to see the Q&A on #35, my question received an answer this morning: Something to keep an eye on until such time that AC finally accept that the status quo of failing to write-down / write-off capital is simply mis-leading / mis-selling. Its now 11 months since my question on loan #57 regarding the need to write off the remaining capital (which like all similiar loans is still accruing interest into the headline figure on our dashbords) on that loan was deleted. I had hoped that the Dec 2019 FCA guidlines would have forced p2p companies to stop the deliberate practise of misleading potential investors. AC persist in telling me I have now accrued nearly £2000 on my £500 slice of #35 .... with the £500 unrecoverable there is no chance of the interest being recovered  This is an issue that I feel is urgently in need of a resolution, and whilst clearly a review of the 'Capital Valuation' values is going to take AC a discrete period of time to achieve, it should, to borrow words from elsewhere "be worked on with pace".
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sapphire
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Post by sapphire on Mar 2, 2020 12:30:13 GMT
Does the action of reducing the capital valuation for a particular loan impact the provision fund balance(s) in any way?
(e.g. Is the reduction amount "earmarked" in the PF towards this loan and so reduce the amount of "free" / "available" PF for other loans?).
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shimself
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Post by shimself on Mar 2, 2020 16:12:47 GMT
Shouldn't a reduction in capital value alter the displayed LTV as well?
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phebas
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Post by phebas on Mar 2, 2020 16:57:29 GMT
I made an inquiry at the weekend regarding the 'Capital value' concept in respect to a loan in default (No 327). Of the original principal of £2.3M there remains £1m to be recovered by the administrator of this loan. The current capital value of 13% reflects the percentage of the remaining £1M they expect to be recovered. So it's a fairly simple concept in practice. But not explained very well.
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shimself
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Post by shimself on Mar 3, 2020 10:06:10 GMT
I made an inquiry at the weekend regarding the 'Capital value' concept in respect to a loan in default (No 327). Of the original principal of £2.3M there remains £1m to be recovered by the administrator of this loan. The current capital value of 13% reflects the percentage of the remaining £1M they expect to be recovered. So it's a fairly simple concept in practice. But not explained very well. um I thought that was 13% of 2.3M
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ceejay
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Post by ceejay on Mar 6, 2020 10:33:35 GMT
Here's another thing. I distinctly remember being taught that giving excessive digits in a calculation is a form of dishonesty - you are claiming a degree of precision that you don't have, or implying that you have more understanding than you really do.
These Capital Valuations are being given to four significant figures (e.g. 79.26%).
Really?
I'd have thought that even two significant figures would be pushing it...
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SteveT
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Post by SteveT on Mar 6, 2020 11:00:11 GMT
Here's another thing. I distinctly remember being taught that giving excessive digits in a calculation is a form of dishonesty - you are claiming a degree of precision that you don't have, or implying that you have more understanding than you really do. These Capital Valuations are being given to four significant figures (e.g. 79.26%). Really? I'd have thought that even two significant figures would be pushing it... Anything less than 10 decimal places counts as a "rough ballpark estimate" in the world of AC 
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shimself
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Post by shimself on Mar 6, 2020 12:23:09 GMT
Here's another thing. I distinctly remember being taught that giving excessive digits in a calculation is a form of dishonesty - you are claiming a degree of precision that you don't have, or implying that you have more understanding than you really do. These Capital Valuations are being given to four significant figures (e.g. 79.26%). Really? I'd have thought that even two significant figures would be pushing it... A Meg Ryan moment YES YES YES
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sl75
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Post by sl75 on Mar 8, 2020 17:11:46 GMT
Here's another thing. I distinctly remember being taught that giving excessive digits in a calculation is a form of dishonesty - you are claiming a degree of precision that you don't have, or implying that you have more understanding than you really do. These Capital Valuations are being given to four significant figures (e.g. 79.26%). Really? I'd have thought that even two significant figures would be pushing it... Well you need at least 2.5 significant figures to know exactly what fair discount to offer on the loans you're not allowed to offer for sale...!
mrclondon : I guess #35 is something of a badge of honour for proving you're a long-term customer - I've not got any of that one, so can't really see anything about it, other than it has 20 months remaining of its 96 month term!
Perhaps a more sensible approach would have been to have left the "capital valuation" column blank for loans where it's not been evaluated, rather than misleadingly showing 100%...?
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