iRobot
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Post by iRobot on Aug 13, 2020 12:27:25 GMT
I'd tend to agree with you but, as has been outlined elsewhere, it's possible the borrower has a contract which sets out the deductions in the circumstances of a disposal. It's possible that FS' five percent is stipulated, but as CG&Co's 2.5% + VAT has (annoyingly) been agreed outside of that 5%, then rather than CG&Co deducting it from the borrowers returns - who would object and cause CG&Co grief - CG&Co have pragmatically taken it from lenders' returns who can't really say much, other than formally challenge the whole process. It's been suggested that the Adminsitrators action in this regard might be taken as an indicator that their 2.5%+VAT should be deducted from FS' 5%. I suspect it will take a court to decide. I am not sure that the 5% comes in to this one. It seems the borrower arranged the auction so no 5% is due apparently according to the lenders T and C's April 2017 Sorry, for clarity, are you suggesting that the 5% admin fee hasn't been deducted or that it shouldn't have been deducted? £18,761.78 does fit within the FS amount shown on breakdown and if not that 5%, then according to the currently published T&Cs 'Administration fees due to FundingSecure' should rank after lenders interest and the sum outlined above has been deducted ahead of lenders interest. Where's the Credit Committee in all this?
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ilmoro
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Post by ilmoro on Aug 13, 2020 12:36:05 GMT
The borrower repaid lenders in full. The lenders then, under a separate contract to which the borrower is not a party & has no obligations under, then paid CG. Its nothing to do with the borrower that FS are in administration so they have no duty to pay for CG to operate the platform. Perhaps if the figures were in a different order it would be clearer. If a courier delivers you something and you then tip the courier, you wouldn't expect to claim the tip from the sender. I think all we need to focus on at the moment is whether the interest has been calculated correctly. 40,896.1 on my non expert calculations based on 260,000 loan 12% interest and 499 days is not quite right. I make that 11.5%. The difference is about £1,758. Not earth shattering but should be corrected in our favour (if my figures are right) There seem to be two other points. Firstly the fact that the 2.5%+VAT is coming from the lenders. That point is well covered in other places and seems may be subject to litigation. The amount is £10,942 Secondly the fact that the 2.5%+VAT is coming from the lenders even though there are surplus funds going to the borrower. £12,854It seems to me bizarre that the borrower can default(he failed to refinance or repay on time) yet his surplus ranks ahead of recovery costs. Can anyone explain the basis in law for that? Thank you EDIT I suppose the argument is that the CG fees etc are not recovery costs from the borrowers' point of view. However if the borrower had repaid on time, those costs would not have been incurred on this loan. It seems to me there might be a legal argument in our favour, depending on the detail of all the documents. Similarly if the platform hadnt gone bust, then the 2.5% wouldnt have been levied on anyone. As the 2.5% didnt exist when contracts/charges were agreed it cant form part of the borrowers obligations. Are FS getting the default interest? Why? Thats probably another thing that could be subject to challenge as there is no entitlement in the terms, in fact no reference to default interest at all.
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Post by multiaccountmanager on Aug 13, 2020 13:17:22 GMT
I am not sure that the 5% comes in to this one. It seems the borrower arranged the auction so no 5% is due apparently according to the lenders T and C's April 2017 Sorry, for clarity, are you suggesting that the 5% admin fee hasn't been deducted or that it shouldn't have been deducted? £18,761.78 does fit within the FS amount shown on breakdown and if not that 5%, then according to the currently published T&Cs 'Administration fees due to FundingSecure' should rank after lenders interest and the sum outlined above has been deducted ahead of lenders interest. Where's the Credit Committee in all this? It seems to me that the 5% may not have been deducted. The caption for £21894.74 is "FS Monthly Accrued Admin Fees" I thought that referred to the extra interest which FS charges over and above the lender's rate. Whether 5% is due is a matter of interpreting the weasel wording of the T and C's. However an indicator in our favour is that the "FS Monthly Accrued Admin Fees" are shown near the bottom of the calculation, which suggests they do not represent the 5% because it would appear to be deducted somewhat earlier according to the T and C's as interpreted by CG to date. Perhaps there are examples from other repaid loans that would cast some light on this? Yes I agree - What is the considered view of the CC?
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Post by multiaccountmanager on Aug 13, 2020 13:29:43 GMT
I think all we need to focus on at the moment is whether the interest has been calculated correctly. 40,896.1 on my non expert calculations based on 260,000 loan 12% interest and 499 days is not quite right. I make that 11.5%. The difference is about £1,758. Not earth shattering but should be corrected in our favour (if my figures are right) There seem to be two other points. Firstly the fact that the 2.5%+VAT is coming from the lenders. That point is well covered in other places and seems may be subject to litigation. The amount is £10,942 Secondly the fact that the 2.5%+VAT is coming from the lenders even though there are surplus funds going to the borrower. £12,854It seems to me bizarre that the borrower can default(he failed to refinance or repay on time) yet his surplus ranks ahead of recovery costs. Can anyone explain the basis in law for that? Thank you EDIT I suppose the argument is that the CG fees etc are not recovery costs from the borrowers' point of view. However if the borrower had repaid on time, those costs would not have been incurred on this loan. It seems to me there might be a legal argument in our favour, depending on the detail of all the documents. Similarly if the platform hadnt gone bust, then the 2.5% wouldnt have been levied on anyone. As the 2.5% didnt exist when contracts/charges were agreed it cant form part of the borrowers obligations. Are FS getting the default interest? Why? Thats probably another thing that could be subject to challenge as there is no entitlement in the terms, in fact no reference to default interest at all. It depends on the documentation and the law. If all the borrowers had repaid on time, FS would not have gone bust! Yes, default interest is a new concept to me as far as FS is concerned and needs addressing. And it is reported that the receiver was appointed after the asset had been sold, so earned his fees merely for collecting the money. No doubt the borrower is mighty peeved about the timing of that appointment as otherwise there would have been more surplus (for the borrower).
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criston
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Post by criston on Aug 13, 2020 13:57:14 GMT
Sequence of events on the same day.
Property sold early afternoon.
Update; Receivers appointed mid afternoon.
My query to FS by telephone just after update. Lady said she entered update on instruction of administrator.
My query to CG & Co by telephone around 17.00. I had a go & asked what was going on & to ring me back.
CG & Co suggested receiver appointment within a few hours after the sale was a coincidence.
I was telephoned back around 18.00 confirming what I had told them & that there would be an update the following day.
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rocky1
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Post by rocky1 on Aug 13, 2020 14:51:27 GMT
default interest as a concept needs to be sorted out in p2p across the board.once a platform is winding down or enters administration this little golden egg as we are finding out with FS LENDY and MT should not come before lenders capital under any circumstances. financial gains for their incompetance in managing loans and feeding BS month after month while they are looking at their fees costs expenses etc etc mounting up knowing when the sh*t hits the fan they can play the T&Cs card that also default interest and anything else comes before lenders capital. FCA authorised and regulated to screw lenders and borrowers for as much as possible before walking away.any default interest after a platform has thrown in the towel should be used to help pay for the costs of receivers administrators and all the other vultures who jump in.
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iRobot
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Post by iRobot on Aug 13, 2020 15:18:55 GMT
default interest as a concept needs to be sorted out in p2p across the board.once a platform is winding down or enters administration this little golden egg as we are finding out with FS LENDY and MT should not come before lenders capital under any circumstances. financial gains for their incompetance in managing loans and feeding BS month after month while they are looking at their fees costs expenses etc etc mounting up knowing when the sh*t hits the fan they can play the T&Cs card that also default interest and anything else comes before lenders capital. FCA authorised and regulated to screw lenders and borrowers for as much as possible before walking away.any default interest after a platform has thrown in the towel should be used to help pay for the costs of receivers administrators and all the other vultures who jump in. Can't disagree with any of that. Anything that both accrues revenues to a platform as time passes and ranks ahead of lender returns should be considered a 'no no'. Review sites like 4thway might consider providing a ranking mechanism based on a platform's 'waterfall' of payments. FCA could play their part, too - especially in ensuring fairness; eg: a loan historically launched to lenders under one set of T&Cs can't be revised via a subsequent change to those T&Cs.
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ilmoro
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Post by ilmoro on Aug 13, 2020 18:54:57 GMT
default interest as a concept needs to be sorted out in p2p across the board.once a platform is winding down or enters administration this little golden egg as we are finding out with FS LENDY and MT should not come before lenders capital under any circumstances. financial gains for their incompetance in managing loans and feeding BS month after month while they are looking at their fees costs expenses etc etc mounting up knowing when the sh*t hits the fan they can play the T&Cs card that also default interest and anything else comes before lenders capital. FCA authorised and regulated to screw lenders and borrowers for as much as possible before walking away.any default interest after a platform has thrown in the towel should be used to help pay for the costs of receivers administrators and all the other vultures who jump in. Can't disagree with any of that. Anything that both accrues revenues to a platform as time passes and ranks ahead of lender returns should be considered a 'no no'. Review sites like 4thway might consider providing a ranking mechanism based on a platform's 'waterfall' of payments. FCA could play their part, too - especially in ensuring fairness; eg: a loan historically launched to lenders under one set of T&Cs can't be revised via a subsequent change to those T&Cs. The FCA changes in Dec 19 mean that it should no longer be possible for platforms to charge default interest without lenders being aware and being able to assess that as part of the risk as full disclosure of fees/loan pricing is required. The question as ever will be whether FCA does its job and ensures the rules are followed
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criston
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Post by criston on Aug 14, 2020 11:35:26 GMT
When I converted the figures from picture to editable text, I missed/corrected one of the mistakes big time.
Receivers' fees & Disbursements - £ 15,250.00. Should have read £6250.
Original post now corrected.
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Post by multiaccountmanager on Aug 14, 2020 15:11:16 GMT
Email from CG
"This has been reviewed and based on calculations to the date of sale, being 7 July 2020, it is understood that the sum due to investors in respect to interest amounted to £40,896.10 [£260,000 x 12% / 365 x 478.44 days (this being the calculated average days of investments)].
As such, following the deduction of our fee, which is 2.5% plus VAT, the sum paid to investors interest is correct."
So for some reason we only get interest to July 7 when our repayment date is August 12.
Yes I see the borrower should pay only to July 7. But FS surely owe us for thee period after that and should pay it?
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criston
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Post by criston on Aug 14, 2020 15:27:45 GMT
Completion did not happen on 7/7/20
Email to me from FS on 7/8/20 said 'Apologies - 'the completion has now been delayed until early next week'
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ilmoro
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Post by ilmoro on Aug 14, 2020 17:24:08 GMT
Completion did not happen on 7/7/20 Email to me from FS on 7/8/20 said 'Apologies - 'the completion has now been delayed until early next week' I assume 7/7 was the date of the auction, IIRC FS have always counted the auction date as the redemption date with no further interest accruing. Of course, that is when they have been the seller, AIUI the borrower was the seller this time so Im not sure that the same rules should apply.
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criston
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Post by criston on Aug 14, 2020 17:32:13 GMT
Auction was 24/6/20.
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Post by multiaccountmanager on Aug 15, 2020 8:51:17 GMT
According to your earlier post it was on 24th JUNE ??
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criston
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Post by criston on Aug 15, 2020 9:22:33 GMT
According to your earlier post it was on 24th JUNE ?? Sorry. Edited.
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