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Post by Financial Thing on Nov 24, 2015 17:20:01 GMT
chris Mark From a transparency standpoint, it would be nice if AC noted in the flag area if a loan was being paid from the interest buffer. I know it's a lenders responsibility to read through all the notes and docs, but it's time consuming work and sometimes this info isn't easy to find. Nothing worse than finding you invested into a loan that was in trouble.
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Post by chris on Nov 24, 2015 17:22:37 GMT
chris Mark From a transparency standpoint, it would be nice if AC noted in the flag area if a loan was being paid from the interest buffer. I know it's a lenders responsibility to read through all the notes and docs, but it's time consuming work and sometimes this info isn't easy to find. Nothing worse than finding you invested into a loan that was in trouble. I agree but we don't currently have a mechanism via which we know as it's managed entirely internally within the credit aspect of the business. Our new CRM system is coming together now and in Q1 will cover all credit functions of the business, so I'd expect I'd be able to automate it during that period.
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Post by chris on Nov 24, 2015 17:24:48 GMT
The other thing to take into account is that it's perfectly normal for a borrower to use the interest buffer on many loans. They're there for a reason, to help smooth cash flow for things like rental properties that will have occasional dead periods, and it's also usual for borrowers to use the buffers towards the end of the loan so that they're zero by the time the loan is repaid. So in some instances a big flag would be appropriate but in others it would not and could spook the less informed lenders into an unnecessary exit from a good loan.
There's a careful balance to be found.
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Post by Financial Thing on Nov 24, 2015 17:31:36 GMT
The other thing to take into account is that it's perfectly normal for a borrower to use the interest buffer on many loans. They're there for a reason, to help smooth cash flow for things like rental properties that will have occasional dead periods, and it's also usual for borrowers to use the buffers towards the end of the loan so that they're zero by the time the loan is repaid. So in some instances a big flag would be appropriate but in others it would not and could spook the less informed lenders into an unnecessary exit from a good loan. There's a careful balance to be found. Thanks for your comments and completely agree on showing the big issues versus normal situations. So how is a lender supposed to know when a borrower is using the interest buffer for normal actions versus out of desperation?
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Post by chris on Nov 24, 2015 17:42:05 GMT
The other thing to take into account is that it's perfectly normal for a borrower to use the interest buffer on many loans. They're there for a reason, to help smooth cash flow for things like rental properties that will have occasional dead periods, and it's also usual for borrowers to use the buffers towards the end of the loan so that they're zero by the time the loan is repaid. So in some instances a big flag would be appropriate but in others it would not and could spook the less informed lenders into an unnecessary exit from a good loan. There's a careful balance to be found. Thanks for your comments and completely agree on showing the big issues versus normal situations. So how is a lender supposed to know when a borrower is using the interest buffer for normal actions versus out of desperation? I don't know, outside my area of expertise. If you could ask that question of our customer service team and give them the context of this thread I'm sure they'd be able to get an explanation from those in the business who would know.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 24, 2015 19:05:25 GMT
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Post by Financial Thing on Nov 24, 2015 19:22:42 GMT
Thanks, that is very helpful
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unmadem
Member of DD Central
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Post by unmadem on Nov 24, 2015 19:54:29 GMT
chris Mark From a transparency standpoint, it would be nice if AC noted in the flag area if a loan was being paid from the interest buffer. I know it's a lenders responsibility to read through all the notes and docs, but it's time consuming work and sometimes this info isn't easy to find. Nothing worse than finding you invested into a loan that was in trouble. And made much worse since AC now refuse to answer if a lender asks in Q&A the size of the buffer, since as you point out it is hard to piece together from other sources !
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Post by chris on Nov 25, 2015 6:53:09 GMT
chris Mark From a transparency standpoint, it would be nice if AC noted in the flag area if a loan was being paid from the interest buffer. I know it's a lenders responsibility to read through all the notes and docs, but it's time consuming work and sometimes this info isn't easy to find. Nothing worse than finding you invested into a loan that was in trouble. And made much worse since AC now refuse to answer if a lender asks in Q&A the size of the buffer, since as you point out it is hard to piece together from other sources ! As far as I'm aware this isn't company policy and I've asked the director responsible for the credit team to investigate. He is doing so.
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unmadem
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Post by unmadem on Nov 25, 2015 11:23:08 GMT
And made much worse since AC now refuse to answer if a lender asks in Q&A the size of the buffer, since as you point out it is hard to piece together from other sources ! As far as I'm aware this isn't company policy and I've asked the director responsible for the credit team to investigate. He is doing so. That is positive chris. I do understand that AC don't want to be pestered on a daily basis but I don't see any evidence of this, just lender asking occasionally when it is not clear and usually triggered by some other change on the loan.
Also I hope the director will take into account that there were a number of issues a few months ago with buffers not being at the level they should have been without the knowledge of lender. So lender interest is perhaps slightly higher than normal, but it is part of the process of rebuilding our confidence.
I haven't checked all loans with buffers but if you want an example 45 - leeds prop has had a couple of lenders asking the question as not clear from activity log.
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unmadem
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Post by unmadem on Dec 10, 2015 18:27:24 GMT
And made much worse since AC now refuse to answer if a lender asks in Q&A the size of the buffer, since as you point out it is hard to piece together from other sources ! As far as I'm aware this isn't company policy and I've asked the director responsible for the credit team to investigate. He is doing so. Any news on this from the director responsible, ?
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Post by chris on Dec 10, 2015 20:50:49 GMT
As far as I'm aware this isn't company policy and I've asked the director responsible for the credit team to investigate. He is doing so. Any news on this from the director responsible, ? I'll chase them up again
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