warn
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Post by warn on Jul 10, 2014 13:36:40 GMT
FS tell me that they have decided to extend one of my loan investments by a month, without seeking my agreement or authorisation. To my admittedly layman's reading of the T&C (clauses 4.11 and 7.6-8 , for example) this has a whiff of arrogance about it. I have asked them to include me out of this deal, and would welcome an assurance that they do not view this in any precedent-setting light.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jul 10, 2014 13:58:06 GMT
FS tell me that they have decided to extend one of my loan investments by a month, without seeking my agreement or authorisation. To my admittedly layman's reading of the T&C (clauses 4.11 and 7.6-8 , for example) this has a whiff of arrogance about it. I have asked them to include me out of this deal, and would welcome an assurance that they do not view this in any precedent-setting light. Your stance is fair enough warn, but it isn't an unusual event - it's certainly happened to a couple of loans I've been in over the past year. For my part, I welcome such extensions because I have a longer time with money at a good rate that I don't have to find another home for - not always easy. But for anybody who was counting on the money back I can see it would be extremely inconvenient and / or annoying. FS are generally more than reasonable, so I wouldn't have thought they would dismiss your desire to be out of the loan out of hand. I for one would be happy to take up your part of it, and I doubt if I'd be alone, so they might even be able to engineer something for you, especially if you were more than reasonable in your own approach. (Not that I'm suggesting that you wouldn't be  )
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warn
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Post by warn on Jul 10, 2014 15:50:47 GMT
Your stance is fair enough warn, but it isn't an unusual event - it's certainly happened to a couple of loans I've been in over the past year... Yes, some of my loans have come up for renewal in the past, but so far always (i) for an extra six months, and (ii) with an invitation to participate or decline. Some I've embraced, some I've shunned. But this is the first unilateral action of the sort that I've encountered, and I fell victim to a fit of pique. And what are Ts&Cs for, if not to manage expectations? Fact is, I have a reasonably-sized shadow bid in for an August loan, and was expecting my July repayments to help defray. But I suppose it's not such a big deal -- HMRC could always wait a few more weeks. Unless the art defaults, of course (twitches nervously).
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ramblin rose
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Post by ramblin rose on Jul 10, 2014 16:09:22 GMT
Your stance is fair enough warn, but it isn't an unusual event - it's certainly happened to a couple of loans I've been in over the past year... Yes, some of my loans have come up for renewal in the past, but so far always (i) for an extra six months, and (ii) with an invitation to participate or decline. Some I've embraced, some I've shunned. But this is the first unilateral action of the sort that I've encountered, and I fell victim to a fit of pique. And what are Ts&Cs for, if not to manage expectations? Fact is, I have a reasonably-sized shadow bid in for an August loan, and was expecting my July repayments to help defray. But I suppose it's not such a big deal -- HMRC could always wait a few more weeks. Unless the art defaults, of course (twitches nervously). Yes, absolutely understand your expectations. Just to clarify: when I said it had happend a couple of times before, I meant this precise sort of extension. I've actually had a lot of renewals with the option to participate or decline. I'm sort of in two minds about the correctness of it, even though I do tend to like it when it happens. (I would, no doubt, be wingeing for England if I did need / want the money back  ). On the one hand, you've committed to loan your money for a fixed maximum amount of time, so perfectly reasonable to be expecting you have the option to get it back when that maximum time expires. On the other, this is p2p with it's associated risks, and part of why we demand a higher interest rate. Lateness of capital and interest return could be argued to be part of that risk. Thinking of other p2p loans I have made in the past, for example, there are quite a number that have not only paid back late, but have indeed never paid back at all. In that context, an extra month during which we are being paid the full interest rate doesn't seem unreasonable at all. After all, the alternative might be that the loan gets defaulted and there would be a further delay (in this case probably significant) until the security were sold. And then there'd be no guarantee of getting it all back. On balance, my (very personal) view is that FS have taken a very sensible action on this loan.
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Post by mrclondon on Jul 10, 2014 17:30:26 GMT
Of course, if fundingsecure provided a secondary market on the platform, we could all fight over warn 's unwanted share of this fine art loan. Given that a non trivial % of loans will default (current estimate > 3% - see my thread for more details), funds will get tied up in loans for months beyond the expected redemption date whilst sales of the assets are arranged. For specialist items such as this large fine art collection this could be be 3+ months. FS is definately not a platform where cashflows can be predicted with any degree of certainty. Hence a secondary market which allowed for discounting of the capital value of the loan part would offer an exit route for those who find circumstances have changed and they now need urgent access to funds. warn apologies if I'm re-stating the obvious, but this loan would have defaulted on 16th July without the extension granted by FS. The borrower would appear to not have any funds available to either renew or repay the loan at the present time. As ramblin rose has said, a small extension has been made on at least two other loans over the last year - I think it fair to assume that FS would only agree to this where they had a reasonable belief that funds would be forthcoming at the end of the extension period.
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mikes1531
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Post by mikes1531 on Jul 10, 2014 20:17:25 GMT
I had a similar situation in late May, when a loan was extended for a month and then renewed. At that time, I commented to FS "... that I do not find it at all reassuring that the renewal was not arranged before the loan became overdue." and asked "What penalties are imposed on borrowers who do not repay or renew their loans on time?" FS's response was ...
I remain surprised that the standard terms for borrowers do not include any penalties for a failure to keep up their side of the contract. And if these situations are going to continue to occur regularly then some lenders are going to end up in awkward situations when expected repayments do not arrive as scheduled. This will make lenders reluctant to place large amounts of funds in any given loan -- I'm certainly becoming less willing to place more than a minimal amount in any given loan -- and this will not help FS at all.
Perhaps FS need to think seriously about allowing lenders to opt out of such extensions, either via FS redeeming their loan parts directly or by allowing them to be passed on to other lenders willing to be more patient with the borrower. In the latter case, however, I expect there would be a limited number of lenders willing to take on an overdue loan part without some sort of 'reward' to cover the increased risk of loss via default.
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warn
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Post by warn on Jul 12, 2014 7:24:08 GMT
warn apologies if I'm re-stating the obvious, but this loan would have defaulted on 16th July without the extension granted by FS. [...] As ramblin rose has said, a small extension has been made on at least two other loans over the last year - I think it fair to assume that FS would only agree to this where they had a reasonable belief that funds would be forthcoming at the end of the extension period. Thanks to both mrclondon and ramblin rose for their (as usual) thoughtful and sensible analysis -- and indeed to Nigel at FS who, in response to my rant, replied with a courteous PM explaining the situation in much more detail. If, like you, I had been previously exposed to a similar situation on the platform, I shouldn't have turned any of my few remaining hairs; it was just the starkness of the original notification that took me aback. Anyway, all is now sweetness and light, and we can get back to matters of real importance. Anyone want to start a book on the number of minutes to Robben's first dive?
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ramblin rose
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Post by ramblin rose on Jul 12, 2014 9:06:48 GMT
Don't worry warn - we've probably all had our reason to rant at FS at some point since last July - I think I did within just a week  . What has been impressive over the entirety of that time is that they always respond quickly, and always in a way that is very professional. It's not that I don't still have my concerns, as noted in other threads, but I have come to trust their motivations and trust that any mess that happens is going to be dealt with equitably - in short my starting point for any situation that arises is that I am dealing with decent guys, and that helps a lot. |
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woodie
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Post by woodie on Jul 13, 2014 13:29:46 GMT
Don't worry warn - we've probably all had our reason to rant at FS at some point since last July - I think I did within just a week . What has been impressive over the entirety of that time is that they always respond quickly, and always in a way that is very professional. It's not that I don't still have my concerns, as noted in other threads, but I have come to trust their motivations and trust that any mess that happens is going to be dealt with equitably - in short my starting point for any situation that arises is that I am dealing with decent guys, and that helps a lot. As usual RR is 100% correct, but it would have been nice to have been provided with the detail that has reassured warn.
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mikes1531
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Post by mikes1531 on Jul 25, 2014 14:42:42 GMT
Thread hijacked; I see the Maserati is up for renewal, it looks as if the LTV at the end of 12 months will be a lot tighter than it is at the moment. The valuation looked reasonably conservative at the time, but seems about right currently. FS-12 x 1.9 ~ 22.8%, us ~ 13% total fees on £10k ~ £3580 = £13,580 (value 6 mths ago 16k). Fine, but 6 months from today is the middle of winter, it wouldn't take too long for any delay in selling to take the LTV to near 100%, given a bit more depreciation on a performance orientated car that has sat around for at least a year. Might stay in, but with a reduced amount. But I thought that in order to renew a loan the borrower has to pay the interest and FS fees incurred for the first term of the loan. So the LTV at the start of the renewal should be the same as it was at the beginning, except insofar as the valuation has reduced because the car is six months older and has been out of service for that period.
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mikes1531
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Post by mikes1531 on Jul 26, 2014 20:39:15 GMT
It will be interesting to see what proportion of lenders from the first term opt to participate in the second term, and how much isn't taken up and therefore can be offered to new investors. The deadline for lenders to say whether or not they wanted to invest in the renewal was this afternoon.
This loan is due on Tuesday, so I presume any further investing will be invited on Monday or Tuesday -- so keep watch on the website and your email.
From past experience, is it fair to presume that if the remainder that's available has an investment limit, and a lender has rolled over at least that much from the first term, that the lender is ineligible to invest anything further? Or can they make an additional investment of up to the new maximum allowed?
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Post by mrclondon on Jul 27, 2014 18:38:13 GMT
From past experience, is it fair to presume that if the remainder that's available has an investment limit, and a lender has rolled over at least that much from the first term, that the lender is ineligible to invest anything further? Or can they make an additional investment of up to the new maximum allowed? The unwritten rules they apply have changed over time, partly as a result of the steadily growing lender base. Recently, lenders rolling over to the renewed loan have found that the one investment per loan restriction (aka software fudge) blocks any further investment for 24 hours, but if you ask on the chat session once the loan goes live they will normally increase your rolled over investment upto the new limit. If you are already above the new limit, forget it for 24 hours. Other than the very large Italian books if that comes up for renewal, it is very unlikely that there will be any crumbs left after 24 hours.
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mikes1531
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Post by mikes1531 on Jul 27, 2014 19:13:10 GMT
From past experience, is it fair to presume that if the remainder that's available has an investment limit, and a lender has rolled over at least that much from the first term, that the lender is ineligible to invest anything further? Or can they make an additional investment of up to the new maximum allowed? The unwritten rules they apply have changed over time, partly as a result of the steadily growing lender base. Recently, lenders rolling over to the renewed loan have found that the one investment per loan restriction (aka software fudge) blocks any further investment for 24 hours, but if you ask on the chat session once the loan goes live they will normally increase your rolled over investment upto the new limit. If you are already above the new limit, forget it for 24 hours. Other than the very large Italian books if that comes up for renewal, it is very unlikely that there will be any crumbs left after 24 hours. Thanks for the info. I also expect Tuesday's car loan renewal will have nothing left after 24 hours. The loan I'm most curious about is the art loan that was due 19/Jul. fundingsecure have said that since the borrower has seven days grace to settle the loan, they won't say anything until after that has elapsed. Inasmuch as it's now 27/Jul, we ought to get an update tomorrow. If a borrower wants to renew, I'd expect them to start the process before the maturity date, as was done with Tuesday's car loan. I take the fact that FS have said nothing about the art loan to be bad news. I do hope I'm wrong. If it turns out that the art loan is to be renewed, it's £20k size might be sufficient that there might be something still available after 24 hours.
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mikes1531
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Post by mikes1531 on Aug 28, 2014 9:49:10 GMT
Watch and necklace renewal email: "You also have the option to include the interest in the roll-over."Does this mean fundingsecure are rolling up the fees that are normally due at the point of renewal? I sure hope not! That would increase the LTV significantly, and pretty much guarantee a loss if the borrower doesn't pay off the loan in six months' time.
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Post by fundingsecure on Aug 29, 2014 15:29:04 GMT
Hello,
We just wanted to clarify that a loan is never renewed unless all interest (and charges) are paid in full. We offered savers the opportunity to reinvest their interest in response to a number of requests from savers. I hope that clarifies.
Richard
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)
). On the one hand, you've committed to loan your money for a fixed maximum amount of time, so perfectly reasonable to be expecting you have the option to get it back when that maximum time expires. On the other, this is p2p with it's associated risks, and part of why we demand a higher interest rate. Lateness of capital and interest return could be argued to be part of that risk. Thinking of other p2p loans I have made in the past, for example, there are quite a number that have not only paid back late, but have indeed never paid back at all. In that context, an extra month during which we are being paid the full interest rate doesn't seem unreasonable at all. After all, the alternative might be that the loan gets defaulted and there would be a further delay (in this case probably significant) until the security were sold. And then there'd be no guarantee of getting it all back.
. What has been impressive over the entirety of that time is that they always respond quickly, and always in a way that is very professional. It's not that I don't still have my concerns, as noted in other threads, but I have come to trust their motivations and trust that any mess that happens is going to be dealt with equitably - in short my starting point for any situation that arises is that I am dealing with decent guys, and that helps a lot.
