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Post by bikeman on Feb 18, 2018 17:18:09 GMT
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SteveT
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Post by SteveT on Feb 19, 2018 8:33:58 GMT
Lenders should never ever vote or, if they do vote, that they should vote to extract every last penny from every borrower. Actually, since it’s unlikely AC will tell us in a vote which is the correct option in this respect, it’s best just to never vote.Can you expand on this, as I'm struggling to understand the logic. If the majority of "actively engaged" AC lenders were to follow this advice (most who are "disengaged" don't vote anyway, judging by the poll figures), wouldn't you just be handing the decision to remaining few who do vote? I can't imagine ever achieving a total lender boycott and, since the majority view of those who vote determines the decision, even a single lender's vote would carry the day if everyone else abstained.
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Post by Deleted on Feb 19, 2018 8:59:34 GMT
"It's best just to never vote" looking for a picture of an ostrich and a pile of sand ....  |
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Post by vaelin on Feb 19, 2018 16:26:15 GMT
"It's best just to never vote" looking for a picture of an ostrich and a pile of sand .... well I know it seems insane but that’s a rational interpretation of the FAQ might suggest. (I keep looking for a smiley of someone shooting themself in the head on this forum but I can never find one!) Agreed. Incentives are important. From a game theoretic perspective, the best course of action is to always abstain.
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Post by stuartassetzcapital on Feb 20, 2018 9:19:10 GMT
There still seems to be a fair amount of confusion regarding the PF. Some instances it seems to have paid out and in others not so. chris - is there anyway, in straightforward terms, fully explain the PF with possibly a couple of examples when it would pay out and when it wouldn't. I fully appreciate the PF must remain discretionary but feel your input would be appreciated. If this is not your area perhaps one of your colleagues could contribute but please keep it simple. Thanks. Certainly not my area so I wouldn't be able to explain it to you. I can raise it internally though and see if someone else wants to pick up the baton. There is now a further update in the PF wording for the FAQ in progress based upon people's questions here.
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jlend
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Post by jlend on Feb 20, 2018 9:24:54 GMT
Certainly not my area so I wouldn't be able to explain it to you. I can raise it internally though and see if someone else wants to pick up the baton. There is now a further update in the PF wording for the FAQ in progress based upon people's questions here. Please can you highlight what has been changed Thanks
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Post by stuartassetzcapital on Feb 20, 2018 9:31:21 GMT
From AC PF FAQ: The primary goal of each Provision Fund is to provide lenders with an additional layer of protection against the prospect of capital loss. Everything else is secondary to this.The PF has recently been used to compensate lenders with late (?) interest so unless AC have already abandoned their quoted primary goal, AC are confident the PF is of a size to payout for any and all current capital losses. - The initial payout for late interest is capped for this very reason.
Other conclusions from the PF FAQ: It is in AC’s interests to default loans early (so the PF is not depleted by late interest payments) - Hardly, we have public default statistics including the independent analysis from www.altfidata.com/marketdata/ that would record this and we are not exactly in a bad place on this ranking !
It’s in AC’s PR interests to “kick the can down the road” for as long as possible on defaults to delay the PF being used and to enable them to say no lender has “incurred” a capital loss on our platform. - Again, hardly. We do not say this and people quoting this do not have any current source I understand. Happy to be corrected and we in turn would then correct it but I do not know of such a quote. P2P lending has some risks and anyone that thinks or says otherwise is mistaken. There have been some small losses recorded to date in our lending but again our www.altfidata.com/marketdata/ analysis does not support your view on a portfolio view. Our recoveries team is robust and meticulous and if that looks like kicking the can down the road then that is not intended, instead please only compare our recoveries performance over the years to that of the marketplace.
Quoted default interest rates should be ignored (68% anyone?) Lenders should never ever vote or, if they do vote, that they should vote to extract every last penny from every borrower. Actually, since it’s unlikely AC will tell us in a vote which is the correct option in this respect, it’s best just to never vote. - Clearly we cannot allow for moral hazard situations in voting.
(not trying to be mean, just trying a summary) Some answers above in bullet points.
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blender
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Post by blender on Feb 20, 2018 10:27:53 GMT
Fascinating (for an observer). Self interest says that turkeys should not vote for Xmas, but here perhaps we are considering altruistic turkeys? The turkey who believes that, Xmas or not, they are going to be killed and eaten anyway, is free to consider the bigger picture. They can vote for Xmas so that all the turkey chicks in the world are not deprived, by their selfish abstaining, of their Xmas gift from Santa (hopefully).
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jlend
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Post by jlend on Feb 20, 2018 10:32:37 GMT
There still seems to be a fair amount of confusion regarding the PF. Some instances it seems to have paid out and in others not so. chris - is there anyway, in straightforward terms, fully explain the PF with possibly a couple of examples when it would pay out and when it wouldn't. I fully appreciate the PF must remain discretionary but feel your input would be appreciated. If this is not your area perhaps one of your colleagues could contribute but please keep it simple. Thanks. Certainly not my area so I wouldn't be able to explain it to you. I can raise it internally though and see if someone else wants to pick up the baton. Thanks chrisSome examples would really help all lenders understand. It would be useful if these were posted on the website. I see you are director of the separate provision fund company so I am sure the examples and new FAQs will be useful to you and the other directors when doing any reviews etc. If there is any doubt you don't understand what is going on then there is little chance for me and some of the other investors. stuartassetzcapital would it be possible to have some examples? Thanks
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happy
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Post by happy on Feb 20, 2018 16:23:32 GMT
Fascinating (for an observer). Self interest says that turkeys should not vote for Xmas, but here perhaps we are considering altruistic turkeys? The turkey who believes that, Xmas or not, they are going to be killed and eaten anyway, is free to consider the bigger picture. They can vote for Xmas so that all the turkey chicks in the world are not deprived, by their selfish abstaining, of their Xmas gift from Santa (hopefully). I don't think that's quite right and I don't want to labour this point but perhaps an example might help. Let's say after 2 years of no payments £100,000 was owing and the borrower offered £90,000 (consisting of £50,000 from him and £40,000 from his brother) and AC sent out an email saying to choose between: A) accept the £90,000 in full and final settlement, or B) take the borrower to court and bankruptcy. and lets say that the majority vote is for "B" and the borrower is bankrupted, other debts arise, and AC get £20,000 from him. Any lender, who lent via a PF account, who chose A, because they thought they would have got a better recovery won't get any compensation from the PF. This kind of result means the lender shouldn't vote according to what they think is the right thing to do or what they think will get them the best recovery but should vote according to what they think the majority vote will be for. i.e. vote tactically, just like a general election. Or they could just choose to not vote at all. As an aside, I always used to vote "A" because I think that AC used to put their most reasonable option first. I'm not sure they actually do. I'm mostly MLIA currently so the above doesn't really apply to me but it certainly applies to various people I've suggested should open a "passive" AC account/ISA and I've told them all to never vote. I thought that AC indicated that they would make it clear if any vote situation arose where potential PF payout would be potentially affected by voting one way of another. So AIUI until AC tell me to factor the PF protection into my thinking I don't have too. On the subject of Turkeys voting for Christmas, what I don't think has been mentioned so far in this discussion is that many of us will be both the turkey and Santa Claus when voting if we have both MLA and automated account holdings in any loan being voted on. Could get tricky working that one out come the time.
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blender
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Post by blender on Feb 20, 2018 17:24:15 GMT
The rules of a provision fund ought to be laid out fully when you sign up and not be subject to an arbitrary decision on who qualifies by the platform on a case by case basis after the default. Assuming the rule is that those who voted 'Mr Nice Guy', also exclude themselves from the PF, which makes sense for the fund, there will need to be provision for exceptional cases. Suppose Mr X is the main director and essential manager of a borrower company, and he has an argument with a bus and loses. Suppose the Widow Mrs X, with numerous children, was joint director/guarantor for the failed family business, and could only offer Y%. (We can swap the roles of husband and wife or choose some other spousal relationship). Unless you vote to drag them through the courts and into bankruptcy, the PF will not pay out. A bit 'pound of flesh'. Note: I am not a member of AC at present.
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ashtondav
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Post by ashtondav on Feb 20, 2018 18:50:27 GMT
Insanity. Utter insanity, I was hoping for clarification and clear guidance from AC this month. I am simply confused. Why make it so damn complex. I remain in QAA and RS.
KISS!
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jlend
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Post by jlend on Jul 18, 2018 8:05:24 GMT
Hi The directors of Assetz Provision Funding Limited review regularly those loans which are in recovery and close to realisation of the assets pledged in support of the loan. When realisation is complete (or when the prospect of further realisation becomes extremely unlikely) the directors can exercise their discretion to trigger the provision fund, provided sufficient funds are available. We have cases which are approaching this threshold and expect shortly to make payments in accordance with the provision fund terms. I can also confirm that the email update has gone to a wide base and everyone ever invested in GEA, GBBA1, GBBA2, PSA and the Access Accounts will have received this email. Hi stuartassetzcapital On the 13th Feb in response to lender queries you stated that the PFs were expected to shortly be making some payments to cover capital losses. Can you provide details of which loans have now had capital losses covered by the PFs in the gbba, geia and property accounts?
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jlend
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Post by jlend on Jul 18, 2018 8:27:22 GMT
Hi The directors of Assetz Provision Funding Limited review regularly those loans which are in recovery and close to realisation of the assets pledged in support of the loan. When realisation is complete (or when the prospect of further realisation becomes extremely unlikely) the directors can exercise their discretion to trigger the provision fund, provided sufficient funds are available. We have cases which are approaching this threshold and expect shortly to make payments in accordance with the provision fund terms. I can also confirm that the email update has gone to a wide base and everyone ever invested in GEA, GBBA1, GBBA2, PSA and the Access Accounts will have received this email. Hi stuartassetzcapital1. How often do the directors meet? Monthly? 2. Is a minimum number of directors required to make a decision ? 3. How does any voting work? 4. Is voting by a simple majority? 5. Do any directors have more seniority in votes? 6. Are there any published rules for the meetings? 7. Can minutes of the meetings be distributed to lenders impacted, if necessary with redacted info if deemed necessary?
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dandy
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Post by dandy on Jul 18, 2018 8:50:25 GMT
I only use access accounts and I would also like to have this data for the PF. The PF for the access accounts are ~ 2% according to website. AC have confirmed that this covers all expected losses on all loans (else they would not be trade-able). Would be nice if AC can back that up by telling us: 1. How much of the access accounts is in loans that have had trading suspended elsewhere 2. How much of the PF has been "ring fenced" to cover expected losses and how much “buffer” is then left to cover unexpected losses chris seeing as AC already have these figures – can we have them too?? |
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