ptr120
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Post by ptr120 on Mar 2, 2018 15:09:20 GMT
I wonder if there are any other loans that can beat this for lateness and excessive forbearance? This loan has been late for more than a year and is currently more than 93 days late. My understanding was that defaulting a loan was mandatory if it was more than 90 days late? Clearly not with this one!
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markr
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Post by markr on Mar 2, 2018 15:28:29 GMT
Defaulting a loan is always discretionary. I'm not in this loan, so can't see the circumstances, but generally FC would prefer to allow a company that is trading and making some payments to continue rather than defaulting the loan.
When FC used external collection agencies (to whom they would have paid significant fees) to manage defaults, there was a definite reluctance to default loans, leading to many downgraded "zombies" that were neither defaulted nor clearing their arrears, but since bringing recoveries in-house, my experience is that they make a considered judgement about what is likely to produce the best outcome for lenders and the borrower.
In this case, if the loan has been late for a year but now is 90-odd days late, it seems the company is able to mostly meet it's repayments, but not able to clear the arrears. It seems right that FC has decided not to pursue the arrears or default the loan if this risks the future of the business, as long as the borrower is open and co-operative. It's the "direct debit cancelled, no further contact" outfits that they tend to lean hardest on.
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ptr120
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Post by ptr120 on Mar 2, 2018 15:56:57 GMT
Defaulting a loan is always discretionary. Except that they have told me it is mandatory, yet have failed to follow their own mandatory policy. How can an investor have any certainty over how a loan will be handled if a mandatory policy isn't in fact mandatory?
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SteveT
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Post by SteveT on Mar 2, 2018 16:22:42 GMT
I wonder if there are any other loans that can beat this for lateness and excessive forbearance? This loan has been late for more than a year and is currently more than 93 days late. My understanding was that defaulting a loan was mandatory if it was more than 90 days late? Clearly not with this one! There are plenty that beat it on Funding Secure!
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Post by munchydave on Mar 2, 2018 17:07:02 GMT
I wonder if there are any other loans that can beat this for lateness and excessive forbearance? This loan has been late for more than a year and is currently more than 93 days late. My understanding was that defaulting a loan was mandatory if it was more than 90 days late? Clearly not with this one! There are plenty that beat it on Funding Secure! Lendy beats FS . Over 500 days on some of my loans
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SteveT
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Post by SteveT on Mar 2, 2018 17:12:32 GMT
There are plenty that beat it on Funding Secure! Lendy beats FS . Over 500 days on some of my loans Ah, but those Lendy loans have all been defaulted. There's a 6 month loan on FS (the fabled Rishton one) that's now been running for 735 days and still hasn't been defaulted. There are at least another 6-8 loans (all 6 months term) that are beyond 600 days and not defaulted, including the power boats, a Norfolk farmhouse and various bits and pieces of Northern Ireland.
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markr
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Post by markr on Mar 2, 2018 17:15:28 GMT
Except that they have told me it is mandatory, yet have failed to follow their own mandatory policy. How can an investor have any certainty over how a loan will be handled if a mandatory policy isn't in fact mandatory? As far as I am aware, that has never been the case, and I can't find anything in their current FAQs or Ts&Cs that suggest it is (just an indication that they *may* default a loan after 90 days). FC regularly grant struggling borrowers payment holidays of 3 months or more; it would seem pointless to do this if they were then forced by their own rules to default the loan. Would you prefer that they did default the loan? This would call in the debt (i.e. the entire loan becomes due there and then), the company will likely then be insolvent and the directors would legally have to wind it up. You'd then join the queue with any other unsecured creditors, or chase the guarantors who you've probably just made unemployed, for any recoveries. Oh, and I'll see your 93 days and raise you: Expansion And Growth Loan (36663) — 205 days late, exposure £19.53 C
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dawn
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Post by dawn on Mar 2, 2018 17:59:37 GMT
Except that they have told me it is mandatory, yet have failed to follow their own mandatory policy. How can an investor have any certainty over how a loan will be handled if a mandatory policy isn't in fact mandatory? As far as I am aware, that has never been the case, and I can't find anything in their current FAQs or Ts&Cs that suggest it is (just an indication that they *may* default a loan after 90 days). FC regularly grant struggling borrowers payment holidays of 3 months or more; it would seem pointless to do this if they were then forced by their own rules to default the loan. Would you prefer that they did default the loan? This would call in the debt (i.e. the entire loan becomes due there and then), the company will likely then be insolvent and the directors would legally have to wind it up. You'd then join the queue with any other unsecured creditors, or chase the guarantors who you've probably just made unemployed, for any recoveries. Oh, and I'll see your 93 days and raise you: Expansion And Growth Loan (36663) — 205 days late, exposure £19.53 C Profits you can bank on (1812) - currently 264 days late (has been more). First went late in Sept 2014, managed to catch up in July 2016, went late again in Oct 2016, received Apr 2017 payment in Oct 17 and May 17 payment in Feb 2018. No idea when Jun 17 will turn up - exposure now £2.91 (B) with 7 payments left (should have paid off in Dec 17 - but who knows when it will). However by not defaulting the loan a large proportion has been repaid albeit it very late.
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ptr120
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Post by ptr120 on Mar 2, 2018 18:21:23 GMT
FC have told me that default is mandatory when a loan goes late beyond 90 days, so I'm not sure if it is good news or not to learn that there are other loans where they have not followed what they have told me is their policy. If a property loan were to go late the interest rate would go up by 2%, but with an SME loan? Nothing happens. Even the FC penalty charge is discretionary. Where is the incentive for the borrower to bring a loan back up to date if the interest rate isn't hiked (and where is the consistency?) when the loan is in arrears?
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rogerthat
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Post by rogerthat on Mar 5, 2018 11:12:38 GMT
I don't invest anymore in FC...but left with a legacy which stands at 145 defaults/late payments/on life support/or RIP
Of those 101 are still classed as RBR ..which is supposed to mean that something is being syphoned out of them each month...albeit pennies in some cases. However as more than a few have final distribution notes attached and are clearly write offs, its difficult to believe any connected information at all.
2 of the 101 are the London Hotel fiasco (dedicated thread) and the Liverpool Hotel which might yet complete..though its already months late now
For those of you who think 1 yr late is appalling let me tell you that that is nothing in the grand scheme of things. I have just been catching up on one loan 1*12 Pr**its Y*u C*n B*nk On... who paid their May 2107 instalment on 28/2/18. Trading on the SM was stopped on 22 April 2014 and they have been paying whatever suits them..and whenever they feel like it.. ever since.
P.s. I must learn to read the whole thread as ive just noticed 'dawn' above has already posted on the same loan (however my outstanding total is £434.10..if that is to be believed)
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blender
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Post by blender on Mar 5, 2018 11:49:52 GMT
FC have told me that default is mandatory when a loan goes late beyond 90 days, so I'm not sure if it is good news or not to learn that there are other loans where they have not followed what they have told me is their policy. If a property loan were to go late the interest rate would go up by 2%, but with an SME loan? Nothing happens. Even the FC penalty charge is discretionary. Where is the incentive for the borrower to bring a loan back up to date if the interest rate isn't hiked (and where is the consistency?) when the loan is in arrears? If they told you that, someone has mis-spoke. Never has been their policy, as various property loan lenders will confirm. For proof, on their own statistics page, the amount of principal which is currently >= 90 days late is £13,764,177
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Mar 5, 2018 14:01:15 GMT
At least if loans default you would be able to get Tax relief on the capital loss
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blender
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Post by blender on Mar 5, 2018 14:14:30 GMT
At least if loans default you would be able to get Tax relief on the capital loss Only temporarily, until all the recoveries flood in. (As the god responsible for mummification and the afterlife, I guess Anubis may have some influence over recoveries).
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Mar 5, 2018 15:29:57 GMT
At least if loans default you would be able to get Tax relief on the capital loss Only temporarily, until all the recoveries flood in. (As the god responsible for mummification and the afterlife, I guess Anubis may have some influence over recoveries).
Not just the Egyptian,Remember in the afterlife you have to pay the ferryman to cross the river Styx. There is the weighing of the soul in Egyptian mythology. How many P2P lenders would pass that test ?
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markr
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Post by markr on Mar 5, 2018 15:45:33 GMT
I don't invest anymore in FC...but left with a legacy which stands at 145 defaults/late payments/on life support/or RIP Of those 101 are still classed as RBR ..which is supposed to mean that something is being syphoned out of them each month...albeit pennies in some cases. However as more than a few have final distribution notes attached and are clearly write offs, its difficult to believe any connected information at all. I think once a loan has been defaulted, the risk band or RBR status doesn't mean anything, it's just how the loan was at the point it was defaulted. Most loans that are defaulted have previously been RBR'ed, but some are taken straight to default and these hang on to their risk band, presumably because there's no point "retrospectively" RBR'ing them. Loans that are RBR but not defaulted are usually making reasonable repayments, but have had a "credit event", to borrow Assetz's terminology, or in some cases the loan has been taken into another company. It is extremely unlikely that these loans will have their risk band reinstated, but there's a reasonable chance that they will keep up repayments roughly in line with the payment schedule. It would be very rare indeed for a loan to have a final distribution without being defaulted, mainly because FC's system can't distribute arbitrary payments for a loan that isn't defaulted.
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