ashtondav
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Post by ashtondav on Sept 11, 2017 12:42:57 GMT
My only MLIA loss, relating to the optician, drags on with a comment 12 months after bankruptcy that chasing for assets continues and there will be an update in six months. This seems to continue indefinitely. There must be a point where a loan can be declared irrecoverable both for (discretionary) provision fund & tax purposes even if there is a remote chance of further tiny recoveries. To be honest, with that delay it is not worth having a PF, even a "discretionary" one. If the PF is so discretionary that you get no payment after 18 months there might as well not be one and lenders should get protection, a la Zopa, by maximum 1% in each loan. Clearly the loan has defaulted. It is disingenuous of AC not to use its (apparently) well covered PF. Based on the complete lack of transparency and clarity about the elusive AC PF, the black box accounts are best avoided until either PF rules become clear or better diversification is available.
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Post by jevans4949 on Sept 11, 2017 13:41:31 GMT
I'm only in the MLIA, but AFAICS, since MLIA investors can nowadays offset bad debt against profits, it would be just as good for us to declare bad debts when there are no more funds obviously available. Don't know how the Provision fund works, but if it can "buy back" dodgy loan parts at par, and then assimilate any subsequent recoveries into the fund ... at some point, Assetz must give up completely.
Others which need attention are the big house on the Welsh island, the block of flats in Scotland, and the plumber. Its looking like Assetz are desperately trying to hang on to the line that they never lost any money yet.
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Post by bikeman on Sept 15, 2017 16:41:45 GMT
The problem with the green energy account is that there is a severe shortage of qualifying loans, so getting invested (and diversified) is a struggle. I assume that when more qualifying loans appear your diversification will improve towards the 20% target. And that's part of the problem, I had no choice in who the money was lent to and now it's stuck in suspended loans with no chance of diversification or withdrawal. I don't think this is a fair way for AC to leave my investment. For a laugh they sent me an email today explaining how wonderful their automated diversification is - what a bunch of jokers
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ashtondav
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Post by ashtondav on Sept 15, 2017 16:44:34 GMT
It has a provision fund. At their discretion the directors will reimburse you.
You don't need diversification if there is a PF. That is why no diversification is automatically available on ratesetter.
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Post by stuartassetzcapital on Sept 15, 2017 16:45:39 GMT
Hi everyone. We will be reverting on this PF point in more detail shortly.
In the meantime, it is important to understand that the PF is not an insurance policy, in the truest sense, as that would require a different set of permissions from the FCA. Payments from the PF are discretionary so as not to be implicitly an insurance policy. It is the intention to pay out on all losses, except where lenders have voted specifically to accept a loss – this is noted on the relevant web pages.
Each of Assetz Capital’s PF’s is intended to be funded to a level that should be more than sufficient to cover any actual capital losses on defaulted loans within the relevant account. The actual capital loss, once all avenues of recovery have been exhausted, should not be the full loan amount as it should be possible to recover some or all of our lenders’ capital through the security pledged in support of the loan.
Our PF’s are not designed to cover the whole loan capital on all defaulted loans as this would require considerable levels of capital in order to fulfil this. We estimate that roughly 6% of loans will default so for every £100m of lending we would need £6m of PF cash to be able to fulfil a requirement to purchase full loans immediately at the point of default. We do not – and could not – promise to do this. Instead, we know that not every default will result in a loss and we make considered calculations as to what the expected losses on defaulting loans will be and hold an acceptable level of cash to be able to cover expected losses at the end of the recovery process. Our PF web page says – and has always said – that the PF will cover “Any possible capital losses if a loan defaults and the security when sold does not cover the loan balance remaining” which defines both what the PF will cover and when it will cover it.
So to summarise, the PF would not be able to 'buy' whole loans from investors at the point of default but we do expect it to cover the final capital loss, if any, once it is known and the recovery process is finished. Our Defaults and Losses page shows the coverage ratio for each PF which is high for the industry but I accept that the page is due a refresh and this is underway.
It also shouldn't be forgotten that I understand that investors can submit losses in their tax return when they judge it is time to do so. It isn't purely down to our notification of final recovery. It can always be corrected afterwards. We are close to issuing our new tax statement which will help you make these decision.
I hope this assists.
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Post by bikeman on Sept 15, 2017 16:57:10 GMT
For the 'black box' accounts (GEIA etc) I think you should seriously consider:
1. Publishing time limits for when the PF pays out. It is unreasonable to expect investors to wait years for recovery - you could fob investors off indefinitely.
2. Spread losses across all the accounts investors. It is patently unfair that unlucky investors take the hits when they have no influence over where they invest.
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Post by stuartassetzcapital on Sept 15, 2017 17:04:11 GMT
Re 1 some defaults are handled quickly and its only a special case that would drag out that long. We have posted on this in great detail a few minutes ago on other threads.
Re 2 this is indeed how it works as even if an investor currently has a substantial exposure to a single defaulted loan (soon to be improved though) the provision fund fully covers that at present for example so no unfairness. The Defaults and losses webpage shows coverage and coverage is a multiple (>1) of known and expected losses on that investment accounts' holdings as of today and indeed ever since launch.
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registerme
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Post by registerme on Sept 15, 2017 17:58:37 GMT
It is the intention to pay out on all losses, except where lenders have voted specifically to accept a loss – this is noted on the relevant web pages. hhmmmm.
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greatmarko
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Post by greatmarko on Sept 15, 2017 19:03:41 GMT
For a laugh they sent me an email today explaining how wonderful their automated diversification is - what a bunch of jokers Interestingly, their email also said of their automatic diversification accounts that "you can still manually opt of our individual loans"!? How do you do that? How can an investor "exclude" individual loans from being included within their GBBA/GEIA holdings?
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jlend
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Post by jlend on Sept 15, 2017 20:39:25 GMT
It is the intention to pay out on all losses, except where lenders have voted specifically to accept a loss – this is noted on the relevant web pages. hhmmmm. I have an email from AC stating they will make it clear when this clause applies in a vote so we don't inadvertently fall foul of it. I have not seen this pointed out yet. Will keep an eye out as it will be interesting to see how it is applied and what if any impact it has on voting.
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jonah
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Post by jonah on Sept 15, 2017 20:54:31 GMT
stuartassetzcapital Firstly good news on providing more details on the PF. I await them with anticipation. However the AC website currently says... (when you click more on the GBBA tab on the dashboard)... Should I read anything into the fact that you have used the word capital a number of times in your post, but I can't see interest mentioned once?
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Post by stuartassetzcapital on Sept 15, 2017 21:14:27 GMT
The provision fund webpage rules are the correct and full ones yes.
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greatmarko
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Post by greatmarko on Sept 19, 2017 14:25:48 GMT
For a laugh they sent me an email today explaining how wonderful their automated diversification is - what a bunch of jokers Interestingly, their email also said of their automatic diversification accounts that "you can still manually opt of our individual loans"!? How do you do that? How can an investor "exclude" individual loans from being included within their GBBA/GEIA holdings? Finally had an email reply from AC (some 4 days later) on this point: " Unfortunately you wouldn't be able to 'opt out' of loans in the automated accounts.
This was an admin error on the email you received.
Please accept our apologies"
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SteveT
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Post by SteveT on Sept 19, 2017 14:58:25 GMT
That's quite some "admin error", sending out a mass email claiming something palpably untrue. Funnily enough, I've not yet received the follow-up email explaining that the first one is tripe.
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Post by bikeman on Sept 22, 2017 21:37:59 GMT
Re 1 some defaults are handled quickly and its only a special case that would drag out that long. We have posted on this in great detail a few minutes ago on other threads. Re 2 this is indeed how it works as even if an investor currently has a substantial exposure to a single defaulted loan (soon to be improved though) the provision fund fully covers that at present for example so no unfairness. The Defaults and losses webpage shows coverage and coverage is a multiple (>1) of known and expected losses on that investment accounts' holdings as of today and indeed ever since launch. Is the provision fund going to payout on the suspended loan that I am now substantially invested in? Can I sell my holding in that suspended loan that I had no choice in 'investing' in? Will AC diversify my holding in that suspended loan? No? Thought not. As to your answer to 2, It is BS that all GEIA investors equally share the exposure to suspended loans. I know of other investors in the GEIA that are not invested in the suspended loans I have. I am fed up with hearing about a provision fund which never pays out and a system that locks my money into bad loans with no means of exiting from them.
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