|
Post by MoneyThing on Apr 4, 2016 14:04:58 GMT
With the contractual buy-back agreement it seems to me that the primary risk is failure of the partner. There are roughly speaking 3 failure modes - the borrower defaulting, the borrower defaulting and the partner failing, and the partner failing. In the first case the contractual buy-back agreement means that we get our capital (and interest?) back. What happens in the other two cases? In the 2nd case, has the first charge on the asset been assigned to us, and do we have the right to take possession and sell it to secure what we are owed? (In which case, at a 50% LTV, there would seem to be a good chance of getting it.) In the 3rd case, it seems to me that as the borrower is not in default we have no claim on the asset, and his repayments go into the general funds of the partner, leaving us as unsecured creditors. (Do we have a debenture, and is it any good in those circumstances?) Do we have a director's guarantee. I tried to look into the partner's finances, but the company of the same name seems to be dormant (though its sole director has the same name as the person associated with a business with the same name as the partner) and without assets. Is the partner incorporated under another name? Is it operating as a sole trader? Afternoon, For ease, I will separate the failure modes you have described: 1) Borrower Defaults (the Partner's borrower) 2) Partner Fails 3) Borrower Defaults & Partner Fails Answers:1) Partner buys back the loan from MT. 2) MT step in to take over loan from Partner and security is taken under MTs control. (The loan and the security has already been assigned over to MT and the Partner is retained to manage the loan.) 3) MT step in to take over loan from Partner, takes over security and disposes of it to recover loan, interest & cost (before returning balance to borrower). Kind regards, Ed
|
|
ramblin rose
Member of DD Central
“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
Posts: 1,370
Likes: 857
|
Post by ramblin rose on Apr 5, 2016 14:02:25 GMT
It was watching how this new partner operates that convinced me back in the very early days of FS that their (FS') LTVs on similar items were too high, and long-term forum members might remember I used to harp on about this ad-nauseam for a while. Nothing in the intervening years has made me change my mind on that, and I'm pleased to see we have sensible LTVs on these early loans at least. I think gaining them as a partner is a real coup for MT - well done MoneyThing.
|
|
registerme
Member of DD Central
Posts: 6,208
Likes: 6,013
|
Post by registerme on Apr 5, 2016 14:21:04 GMT
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Apr 5, 2016 15:23:59 GMT
.... long-term forum members might remember I used to harp on about this ad-nauseam ..... And how!!! Blimey. Here's Rose harping on again.Sweet
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Apr 5, 2016 15:49:54 GMT
These loans are flying....
|
|
duck
Member of DD Central
Posts: 2,584
Likes: 5,725
|
Post by duck on Apr 5, 2016 16:11:51 GMT
cars, boats, flying I'm getting confused
|
|
ramblin rose
Member of DD Central
“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
Posts: 1,370
Likes: 857
|
Post by ramblin rose on Apr 5, 2016 16:56:30 GMT
.... long-term forum members might remember I used to harp on about this ad-nauseam ..... And how!!! Blimey. Here's Rose harping on again.Sweet Oh no, outed as a sweetie Thought I'd convinced you of my tattooed lorry driver credentials. (Another diguise foiled - back to the drawing board Muttley...........)
|
|
star dust
Member of DD Central
Posts: 2,998
Likes: 3,531
|
Post by star dust on Apr 5, 2016 17:03:05 GMT
These loans are flying.... sigh... Did I miss the boat ? godamit. Me too, got tied up with something else and had a job finding them just now as there was none available . More soon please Ed MoneyThing .
|
|
ben
Posts: 2,020
Likes: 589
|
Post by ben on Apr 5, 2016 17:39:52 GMT
Nice to see there is still demand on mT even after the large few loans lately hopefully this new partner will bring a bit of variety to the table
|
|
guff
Posts: 730
Likes: 707
|
Post by guff on Apr 5, 2016 17:53:28 GMT
cars, boats, flying I'm getting confused PPW306R
|
|
11025
Member of DD Central
Posts: 718
Likes: 830
|
Post by 11025 on Apr 5, 2016 18:34:31 GMT
cars, boats, flying I'm getting confused PPW306R Keeping all my secrets safe tonight
|
|