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Post by gaspilot on Apr 21, 2016 15:23:38 GMT
The 'Defaults' figure on my dashboard shows one amount but when I click on 'See Break Down' it gives an entirely different amount.
From the rest of the calculations it appears that the dashboard figure is the incorrect one. The break down one appears correct.
I believe this is what is giving me a totally untrue, but flattering, average return.
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Post by danraj on Apr 21, 2016 15:55:57 GMT
Defaults are not a loss until they become a bad debt, which is never if the funds are eventually recovered or a new repayment schedule mutually agreed.
The updated figure now shows your probable loss from defaults, if click the tile you can see the total defaults you have on each loan and an overall total.
Hope that helps
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Post by gaspilot on Apr 21, 2016 18:49:18 GMT
Defaults are not a loss until they become a bad debt, which is never if the funds are eventually recovered or a new repayment schedule mutually agreed. The updated figure now shows your probable loss from defaults, if click the tile you can see the total defaults you have on each loan and an overall total. Hope that helps Nope. The tile says defaults (not probable defaults just defaults). You then can click on the tile to show a breakdown of these defaults. This breakdown is also called defaults - exactly the same. Yet it shows all of the defaults so far. So, either a new tile should be made to show probable defaults or the nomenclature needs altering to make the situation more clear.
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taca
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Post by taca on Apr 27, 2016 22:20:27 GMT
I think it's time to put the honest 'defaults' figure back on the dashboard. The box says 'defaults' not 'projected loss estimate'. Rebs will succeed by demonstrating a robust recovery process, and integrity of security, not by insulting lenders with obfuscatory presentation of figures such as this. Future loans will fill when Rebs have proven they can deal with non-payers. It really does come down to just that.
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Post by dodgeydave on Apr 28, 2016 5:39:39 GMT
This is last update for S***** S*** F******s dated March 24th this year. On my Defaults list it clearly states Recovery probability 10% which differs from the this update. So what is the true story  Dear Lender, I am writing to provide an update in regards to your loan with S***** S*** F******s Limited. In my last email, sent on 2nd March 2016, I informed you that the Guarantor, Mr A*****, was adjudged bankrupt at his Bankruptcy Hearing on 26th February. Following this judgement, the examiner dealing with Mr A*****’s bankruptcy has now interviewed the Bankrupt. Our surveyor has responded with an open market value of £240,000 to £260,000 against Mr A*****’s property. Mr A*****’s mortgage currently stands at £184,000 and there are possible other secured charges that the Official Receiver is currently looking into. As Mr A***** has a total unsecured creditors of around £325,683, it is almost certain that there will be no dividend for unsecured creditors. Other assets of Mr A***** mentioned in the examiner’s report include an insurance policy, however this has no surrender value and a vehicle which is financed and in negative equity. It appears the A***** is fully liaising with the Insolvency Service and as such there does not appear to be any other lines of enquiry. We await the full report of the Insolvency Practitioner after his investigation into other Charges registered against the Bankrupt’s property. I shall be in contact once we have the full report from the Insolvency Practitioner, however at this stage it unfortunately does not look like there will be any dividend from the bankruptcy for our lenders. Best Regards, Michael Lawther Legal and Operations Coordinator
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SteveT
Member of DD Central
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Post by SteveT on Apr 28, 2016 7:37:29 GMT
[Mod hat firmly removed to avoid offending ReBS yet again]
It strikes me there ought to be a common approach taken to reporting annualised return figures across the various P2P SME platforms and that, given FC is the largest of these by several orders of magnitude, adopting the FC definitions would seem sensible
On FC, there are two levels of non-performing loan, "Downgraded" (aka "risk band removed") and "Defaulted". "Downgraded" loans cannot be traded on the SM but have not yet entered formal legal recovery processes and continue to be included in lenders' live loan books (ie. within "Lent" funds). Therefore a lender's "Annualised Return" figure is not affected when a loan is "Downgraded". In ReBS terms, this is no different to suspending microloan trading in a loan that is late or known to have other issues (eg. imminent repayment) but keeping it within "My Loans".
When a "Downgraded" loan is later "Defaulted" by FC, all capital invested in the loan is reclassified as "Bad Debt" and immediately hits the reported "Annualised Return" figure in full. Only if / when sums are recovered from "Defaulted" loans are these reported as "Recoveries" and credited in the "Annualised Return" calculation.
By deciding now to include projected future recoveries in their "My Average Returns" calculation, ReBS are deliberately reducing the impact of defaulted loans on lenders' reported average returns (although ReBS appears to have limited past recovery data on which to base these projections). Most of my current defaulted ReBS loans are listed as "Recovery probability = 40%", which I understand from a previous ReBS reponse is the placeholder figure they are using when they don't know anything else. So a figure of 40% could mean "Expect to recover 40% of this loan" or it could mean "Could be anything between 0% and 100%, we don't know yet".
If FC suddenly decided to boost their reported Annualised Return figures in this way, I reckon there would be a mass outcry from their lenders. Arguably FC have much better grounds than ReBS for trying it because they at least have extensive recovery statistics spanning several years. However, whilst FC are confident in projecting average % recoveries across their entire loan book, they don't pretend they can predict a future % recovery figure for a specific defaulted loan.
I think that ReBS should go back to treating all capital invested in Defaulted loans as Bad Debt until recovery payments are actually recovered. As a minimum, ReBS should stop using 40% as their placeholder figure in recently defaulted loan and instead use 0% until such time as their Recoveries team has specific information that a material recovery in that loan can be expected.
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Post by GSV3MIaC on Apr 28, 2016 7:56:36 GMT
Actually FC do predict 'red amber green', which have some %ages underneath. But yes, they do show it all as bad debt, until recovered.
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Post by captainconfident on Apr 28, 2016 8:34:00 GMT
ReBs I commend the post from SteveT to you for immediate action and request you stop treating us like children.
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SteveT
Member of DD Central
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Post by SteveT on Apr 28, 2016 8:51:14 GMT
Actually FC do predict 'red amber green', which have some %ages underneath. But yes, they do show it all as bad debt, until recovered. Indeed, and all too often an FC "Green" indicator becomes "Amber" or "Red" within a matter of months, which demonstrates the futility of predicting a % recovery figure for an individual loan, let alone including it in a forward projection of future returns. P2P platforms should not be in the business of projecting future returns on specific loans (unless they are willing to back this up with a provision fund), only of reporting actual returns achieved to date.
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Post by dodgeydave on Apr 28, 2016 11:19:01 GMT
But the published default figure look great.
So if you was a new investor you may be misled into thinking all was well.
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brianlom1
Member of DD Central
He's not the Messiah, he's a very naughty boy!
Posts: 387
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Post by brianlom1 on Apr 28, 2016 23:19:02 GMT
Could I just say how refreshing it is to read so many sensible points being made on this forum. Like many other investors, I find the experience of posting on ReBS' own discussion boards to be totally futile.
Brian
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