11025
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Post by 11025 on Dec 17, 2015 11:46:45 GMT
That is what I was hoping - I have a lot more in Leeds !
cheers
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Post by Butch Cassidy on Dec 17, 2015 11:58:02 GMT
I am a bit puzzled as to the way Assetz behaves sometimes , this loan is suspended yet the L**ds loan which is behind with payment is not - is there a rule regarding these actions or is each case judged on it's on merit ? AC often have a "safety first" attitude - which is admirable, however they then get bogged down & mired in months of investigation & compliance checking so what should be a short term suspension to establish & make all investors aware of the facts of any credit event often turns into months of investors being locked into underperforming but still viable loans. In the process any previous liquidity is often destroyed, Leeds #45 is a casebook study, it got so bad with large portions of the loanbook in this kind of limbo andrewholgate instigated a full scale review which finally returned some sanity to the situation & saw a good number return for trading.
The new IT system by suspending targets & allowing discounts was meant to resolve this problem, as all investors had to acknowledge the latest information before resetting any targets but it appears AC are now reverting to the previous behaviour. In this specific loan the problems are ongoing & the borrower is cooperative & has quite sensibly IMHO prioritised a HMRC payment, with the reasonable view of catching up payments with the benefit of increased Xmas sales. Should this mean a full scale suspension - it's a judgement call, personally as long as all the information is clear & available I would allow trading (& be a buyer). I understand AC want to protect lenders but if they can't make a judgement on the facts in situations like this then they probably shouldn't be lending in a p2p environment.
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11025
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Post by 11025 on Dec 17, 2015 12:14:06 GMT
Yes , I understand what you say and providing the risks and facts are available to be digested and understood then would it not be prudent to allow the choice to trade or not to lie with the individual ?
as the original choice to invest in the first place was theirs .
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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 Dec 17, 2015 14:24:53 GMT
Should also be pointed out that the target system has options to set your instructions to respond to a default or monitoring event so in theory there should be no need to suspend loans at all. That said I suspect that most lenders dont use this or maybe even understand it so a total suspension is probably sensible but only short term so people can assess risks. The only time a longer suspension is necessary is when info takes time to provide or risk is difficult to assess.
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mikes1531
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Post by mikes1531 on Dec 17, 2015 16:22:55 GMT
A significant difference between this loan and L**ds is that this loan is well behind in its payments. It got behind in the summer and lenders were asked to approve a recovery plan where the borrower agreed to catch up on the arrears over the autumn/winter payments. Once that was agreed, loan parts were trade-able again. Then the borrower became unable to keep up with the recovery plan payments and that's when trading was suspended again.
At L**ds, the borrower is behind in their payments but there was a buffer and that has been used to keep up payments to lenders. Until last week, the borrower had been making regular payments early in the month to cover nearly all of the payment due at the end of the month. If the failure of a payment to arrive this month continues long enough that the end-Dec payment ends up completely unpaid, then I'd expect this loan to be suspended from SM trading early in the New Year.
I probably should add that whereas L**ds parts can be traded, there really isn't much activity happening. I decided to reduce my holding and put some parts up for sale a while ago. I still have most of them.
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Bagman
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Post by Bagman on Dec 22, 2015 15:55:03 GMT
I think that they are having a tough time of it this Christmas,
On Dec 3rd we were told
"He has advised that Christams parties have started this week which will increase takings and he has asked for a further 2 weeks to pay the additional £3,500. " (is Christams the taffy word for Christmas?  )
From the repayments tab it looks like 18 days of Christams parties only realised enough to pay us £1500
Also.. "He is then hopeful that Christmas bookings will enable him to pay the entire December payment by the first week in January."
not so confident in that one..
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Post by chielamangus on Dec 23, 2015 11:10:42 GMT
Part of The University of Aberystwyth's problem with student numbers has been the advent of a new Welsh University,
I would have thought that the main problem was location, location, location. You've got to wonder who thought that this was a good place for a university. Nothing wrong with the location - it's been a successful university for over 100 years (founded in the 19th century so you'd have a problem finding someone to blame). The university problems have arisen from the vast expansion of "university" education by the renaming of polytechnics, colleges, etc and the belief that virtually everyone would benefit from a university education. Higher education is now a mess with a few elite universities making a mint, and the rest scrabbling after any and every student no matter what the quality. Many degrees are now worthless - less than worthless as they carry a burden of debt. The sector needs rationalisation but that won't come in these politically correct days. It's ironic that universities, the supposed bastion of freedom of expression and the cultivation of excellence, should be a major victim of lowest common denominator policies and restrictions on free speech. On this particular loan I think the lenders have made life more difficult for themselves and the borrower by increasing the interest to 15 per cent. Yes, I know the borrower made a proposal on these lines, but that was because he was finding things very difficult and needed some breathing space. But what we have given him is more rope ... I would like to see a revised business plan and revised loan terms with a more manageable rate of interest. My fear is that the crowd, chasing the last percentage point, will push him into insolvency, which would benefit no one.
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Post by Butch Cassidy on Dec 23, 2015 11:26:32 GMT
I would have thought that the main problem was location, location, location. You've got to wonder who thought that this was a good place for a university. On this particular loan I think the lenders have made life more difficult for themselves and the borrower by increasing the interest to 15 per cent. Yes, I know the borrower made a proposal on these lines, but that was because he was finding things very difficult and needed some breathing space. But what we have given him is more rope ... I would like to see a revised business plan and revised loan terms with a more manageable rate of interest. My fear is that the crowd, chasing the last percentage point, will push him into insolvency, which would benefit no one. I completely agree & argued that very point at the time; I didn't join P2P lending to force viable SME's into insolvency by chasing a few extra ££'s - I would have liked AC to taken a more benevolent approach to this one, as has been the case with plenty of other loans on the book (where it could be argued they have been far too lenient with lenders funds & some borrowers have led them a merry dance!) I hope that there is still time for a new approach, as you outline, but it may take AC to be a bit more proactive - time will tell.
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min
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Post by min on Dec 23, 2015 15:38:38 GMT
On this particular loan I think the lenders have made life more difficult for themselves and the borrower by increasing the interest to 15 per cent. Yes, I know the borrower made a proposal on these lines, but that was because he was finding things very difficult and needed some breathing space. But what we have given him is more rope ... I would like to see a revised business plan and revised loan terms with a more manageable rate of interest. My fear is that the crowd, chasing the last percentage point, will push him into insolvency, which would benefit no one. I completely agree & argued that very point at the time; I didn't join P2P lending to force viable SME's into insolvency by chasing a few extra ££'s - I would have liked AC to taken a more benevolent approach to this one, as has been the case with plenty of other loans on the book (where it could be argued they have been far too lenient with lenders funds & some borrowers have led them a merry dance!) I hope that there is still time for a new approach, as you outline, but it may take AC to be a bit more proactive - time will tell. Also agree. Why not set up a forum poll along the lines of 'AC should re-negotiate the terms of the loan to make it more affordable for the borrower'?
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Post by chielamangus on Dec 23, 2015 17:41:55 GMT
I'm not sure that forumites are representative of all lenders, so a poll may not be appropriate. In any case, at the time of the last negotiation, AC were made aware by at least 2 lenders that foregoing default interest might be a more productive policy in this instance, but default interest was applied anyway. I guess it must (and does) come down to what the biggest investors in this loan want. I kept my exposure on this loan much lower than my average because I could see difficulties, so my voice is correspondingly weaker.
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mikes1531
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Post by mikes1531 on Dec 24, 2015 18:42:57 GMT
In any case, at the time of the last negotiation, AC were made aware by at least 2 lenders that foregoing default interest might be a more productive policy in this instance, but default interest was applied anyway. AIUI, default interest isn't being applied because the borrower has been cooperative. Default interest on a 14% loan would be a lot higher than 15%, wouldn't it?
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Post by chielamangus on Dec 24, 2015 19:20:38 GMT
In any case, at the time of the last negotiation, AC were made aware by at least 2 lenders that foregoing default interest might be a more productive policy in this instance, but default interest was applied anyway. AIUI, default interest isn't being applied because the borrower has been cooperative. Default interest on a 14% loan would be a lot higher than 15%, wouldn't it? I am not aware that there is an automatic set percentage point increase in the event that repayments are not met. I think it is on a case by case basis. And you would not dispute that the current rate is higher than the initial rate (which was proving too heavy a burden). Nor that even the initial rate was much higher than the average. You don't think there is a touch of the Shylock about it all? But what I am doing here on Christmas Eve? I'm off. Happy Christmas one and all!
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mikes1531
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Post by mikes1531 on Dec 24, 2015 21:28:20 GMT
AIUI, default interest isn't being applied because the borrower has been cooperative. Default interest on a 14% loan would be a lot higher than 15%, wouldn't it? I am not aware that there is an automatic set percentage point increase in the event that repayments are not met. I think it is on a case by case basis. And you would not dispute that the current rate is higher than the initial rate (which was proving too heavy a burden). Nor that even the initial rate was much higher than the average. You don't think there is a touch of the Shylock about it all? AIUI, AC's general clause for default interest is +4% overall, 3% of which goes to lenders and the other 1% goes to AC as increased 'Loan Monitoring Fee'. (IIRC this was in the website FAQ, but I can't find it now. Either I'm misremembering or it's been removed.) I thought there was discussion of this in the period leading up to the July vote, but I can't find that now. But the activity reports do make it clear that... Actually, since learning that the default rate clause of the loan agreement, if invoked during the term of a loan, typically applies only to the amount of overdue payments, ISTM that the borrower would have been better off with an extra interest being charged on the missed payments than with an extra interest being charged on the whole of the loan. I don't know what caused them to offer to pay an extra 1% for the remaining life of the loan. Yes, the terms of this loan do look rather harsh. But this has been a very risky loan from the beginning and AFAIK the high interest rate was necessary in order to convince lenders to commit funds at the time. With so much money coming in from investors at the moment, and the scrum for an chance to throw money at a loan opportunity, it might be possible to obtain cheaper funding nowadays. And I was reminded today when looking through the loan info that the value of the main security only exceeds the loan amount if the business is a going concern. The valuer wrote... That produced a LTV of 126% on the original debt, and the LTV would be higher now because of the arrears. I think we all have to hope that the holiday season does wonders for this hotel. Otherwise neither the borrower nor the lenders -- and I include myself -- are going to have a happy new year.
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ben
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Post by ben on Dec 24, 2015 21:43:24 GMT
I see this one not surviving, unless they have a mega turn around which does not look likely.
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Investboy
Member of DD Central
Trying to recover from P2P revolution
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Post by Investboy on Feb 17, 2016 16:11:52 GMT
Got email today about few ideas like decreasing interest rate ect... I've just bought this on SM so not happy  |
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