Tony
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Post by Tony on Apr 20, 2018 19:31:07 GMT
Has anyone else noted an increase in the number of loans marked as either "Suspended" or the subject of a "Monitoring Event" on AC in recent weeks. Either AC are being bombarded by borrowers failing to meet their commitments, possibly as a result of poor diligence in giving out loans with our money in the first place or there is a hidden agenda post their clarification of the use of the Provision Fund. Simple English question; Do suspended loans qualify for lenders to receive payments via the provision fund ?
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Post by davee39 on Apr 22, 2018 21:39:14 GMT
It seems to be fairly common for this type of loan to fail to pay up on time, this is why the interest rates are high and asset security is taken. The provision fund will not pay out until several steps have been taken. The borrower is usually granted extra time to refinance/sell assets, control may be taken of the assets which then need to be sold and personal guarantees may need to be called in. Most loans should result in a full recovery without recourse to the pf, but it might be many months, or even years before it kicks in if there is a shortfall.
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Post by stuartassetzcapital on Apr 23, 2018 8:46:57 GMT
Has anyone else noted an increase in the number of loans marked as either "Suspended" or the subject of a "Monitoring Event" on AC in recent weeks. Either AC are being bombarded by borrowers failing to meet their commitments, possibly as a result of poor diligence in giving out loans with our money in the first place or there is a hidden agenda post their clarification of the use of the Provision Fund. Simple English question; Do suspended loans qualify for lenders to receive payments via the provision fund ? Hi There is a third reason and the right one ! As per recent lender communications/emails, we have been able to continue to lift the credit team headcount, process and experience (250 man/woman years at last count) as we go through 100 people employed and we are further developing our robustness on non compliant borrowers and doing that earlier and earlier - we could well now be the most robust in the marketplace. This will, as you have noticed, lift credit event loan count numbers but that means you know we are engaged and active on those loans and have a plan developing or being executed. Loans in the Recovery status remains modest versus the £260m loan book as a whole but that too has a story - it is a fact of lending that throwing loans out to administrators or receivers quickly can often destroy the very value you are seeking to recover and we and our advisers are taking a more considered view on a number of loans that could result in higher recoveries in some cases, still subject to lender vote of course. We are also getting more and more intense on the loan monitoring side, particularly some months before the loan expires so that managed processes can be considered rather than sudden arising with loans not repaying when dated to do so in theory. I hope this helps.
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Post by stuartassetzcapital on Apr 23, 2018 8:51:28 GMT
It seems to be fairly common for this type of loan to fail to pay up on time, this is why the interest rates are high and asset security is taken. The provision fund will not pay out until several steps have been taken. The borrower is usually granted extra time to refinance/sell assets, control may be taken of the assets which then need to be sold and personal guarantees may need to be called in. Most loans should result in a full recovery without recourse to the pf, but it might be many months, or even years before it kicks in if there is a shortfall. Hi, I'm not sure what 'this type of loan' is but if its bridging then yes its an industry typical figure for c 25% of bridges to not repay on time but that can be managed and we don't intend to get into loans with weak or non-existent exits when assessing them at the point of origination - but these things do happen and need managing. Some development deals will have sales plans of the properties deviate from that expected and could lead to non-risky modest extensions to finish off the last few sales but to be fair we haven't seen much of that to date. If 'this type of loan' is those just outside of high street banking criteria then yes absolutely the higher risk of default (not loss) is exactly why you can earn so much interest and borrowers are happy to pay it. The time for recovery is intended to be brought down too, provided lenders are happy to do so and it aids recovery levels suitably.
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Post by Butch Cassidy on Apr 23, 2018 8:59:00 GMT
stuartassetzcapital - Why can willing buyers & sellers not still be allowed to trade loans that have been subject to a known & public credit event?
Loan #74 is a specific example that has been subject to refinancing for months & is now rolling up interest but was recently permanently suspended by a nameless, faceless AC staff member who refuses to answer relevant questions as to why?
This used to happen frequently across the loanbook until after months of discussion with andrewholgate lenders were assured it would be stopped & to be fair we have had a couple of years of successful trading - I hope these new recruits are not going to be allowed to fall back into those unwelcome habits. MLIA investors are not children who need to be protected from themselves or told that their betters have made unjustified decisions regarding OUR MONEY that should not be questioned.
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hendragon
Member of DD Central
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Post by hendragon on Apr 23, 2018 9:33:08 GMT
It is not just bridging loans that can be a problem. We do not want another loan No 35!
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Tony
Posts: 51
Likes: 36
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Post by Tony on Apr 23, 2018 10:01:19 GMT
Has anyone else noted an increase in the number of loans marked as either "Suspended" or the subject of a "Monitoring Event" on AC in recent weeks. Either AC are being bombarded by borrowers failing to meet their commitments, possibly as a result of poor diligence in giving out loans with our money in the first place or there is a hidden agenda post their clarification of the use of the Provision Fund. Simple English question; Do suspended loans qualify for lenders to receive payments via the provision fund ? Hi There is a third reason and the right one ! As per recent lender communications/emails, we have been able to continue to lift the credit team headcount, process and experience (250 man/woman years at last count) as we go through 100 people employed and we are further developing our robustness on non compliant borrowers and doing that earlier and earlier - we could well now be the most robust in the marketplace. This will, as you have noticed, lift credit event loan count numbers but that means you know we are engaged and active on those loans and have a plan developing or being executed. Loans in the Recovery status remains modest versus the £260m loan book as a whole but that too has a story - it is a fact of lending that throwing loans out to administrators or receivers quickly can often destroy the very value you are seeking to recover and we and our advisers are taking a more considered view on a number of loans that could result in higher recoveries in some cases, still subject to lender vote of course. We are also getting more and more intense on the loan monitoring side, particularly some months before the loan expires so that managed processes can be considered rather than sudden arising with loans not repaying when dated to do so in theory. I hope this helps. Stuart Thank you for your answer, interesting. However you have not answered my question, re Suspended Loans and the Provision Fund
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angrysaveruk
Member of DD Central
Say No To T.D.S
Posts: 1,332
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Post by angrysaveruk on Apr 23, 2018 10:13:59 GMT
stuartassetzcapital - Why can willing buyers & sellers not still be allowed to trade loans that have been subject to a known & public credit event?
Loan #74 is a specific example that has been subject to refinancing for months & is now rolling up interest but was recently permanently suspended by a nameless, faceless AC staff member who refuses to answer relevant questions as to why?
This used to happen frequently across the loanbook until after months of discussion with andrewholgate lenders were assured it would be stopped & to be fair we have had a couple of years of successful trading - I hope these new recruits are not going to be allowed to fall back into those unwelcome habits. MLIA investors are not children who need to be protected from themselves or told that their betters have made unjustified decisions regarding OUR MONEY that should not be questioned. I totally agree there should be a market for the sale of suspended loans at a discount. People dont want to wait for the recovery process could transfer these loans to someone who is willing to do this for a premium. Seems like a win-win situation to me.
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Post by Butch Cassidy on Apr 23, 2018 10:38:02 GMT
I totally agree there should be a market for the sale of suspended loans at a discount. People dont want to wait for the recovery process could transfer these loans to someone who is willing to do this for a premium. Seems like a win-win situation to me. Which is exactly how the AC trading system was supposed to work & how MLIA were assured it would work in the future & indeed why it was designed as it was to facilitate such situations; it appears that a breakdown of communication or intention between the well intentioned senior management & system designers & those who appear to manually operate suspensions, on what appears to be no more than an ad hoc or whimsical basis & then refuse to explain their often perverse decisions.
MLIA investors simply want to have certainty about what system of suspension rules is going to apply both now & in the future, short term suspensions for votes or dispersing new information is no problem but this permanent "AC has decided to suspend this loan" with no further explanation is NOT AN ACCEPTABLE way to operate & if this is going to be the new normal then I for one will certainly be adding to the SM sale queues.
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cb25
Posts: 3,528
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Post by cb25 on Apr 23, 2018 10:41:27 GMT
Has anyone else noted an increase in the number of loans marked as either "Suspended" or the subject of a "Monitoring Event" on AC in recent weeks. I hadn't noticed that, but I see from AC's downloadable loan book that 13.6% (approx 1/8) of loans by value have the 'Is Suspended' flag on. Perhaps stuartassetzcapital can comment on whether that's as expected.
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angrysaveruk
Member of DD Central
Say No To T.D.S
Posts: 1,332
Likes: 789
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Post by angrysaveruk on Apr 23, 2018 11:41:04 GMT
Has anyone else noted an increase in the number of loans marked as either "Suspended" or the subject of a "Monitoring Event" on AC in recent weeks. I hadn't noticed that, but I see from AC's downloadable loan book that 13.6% (approx 1/8) of loans by value have the 'Is Suspended' flag on. Perhaps stuartassetzcapital can comment on whether that's as expected. Are some of those old loans that have been settled and no longer outstanding?
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cb25
Posts: 3,528
Likes: 2,668
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Post by cb25 on Apr 23, 2018 11:45:20 GMT
I hadn't noticed that, but I see from AC's downloadable loan book that 13.6% (approx 1/8) of loans by value have the 'Is Suspended' flag on. Perhaps stuartassetzcapital can comment on whether that's as expected. Are some of those might be old loans that have been settled and no longer outstanding? Could be but download was of the 372 Live Loans. How could I check ?
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Post by stuartassetzcapital on Apr 23, 2018 11:46:43 GMT
stuartassetzcapital - Why can willing buyers & sellers not still be allowed to trade loans that have been subject to a known & public credit event?
Loan #74 is a specific example that has been subject to refinancing for months & is now rolling up interest but was recently permanently suspended by a nameless, faceless AC staff member who refuses to answer relevant questions as to why?
This used to happen frequently across the loanbook until after months of discussion with andrewholgate lenders were assured it would be stopped & to be fair we have had a couple of years of successful trading - I hope these new recruits are not going to be allowed to fall back into those unwelcome habits. MLIA investors are not children who need to be protected from themselves or told that their betters have made unjustified decisions regarding OUR MONEY that should not be questioned. It is a question we have asked a few times in the past and we will review the answer to again now. Thanks for the pointer.
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Post by stuartassetzcapital on Apr 23, 2018 11:51:07 GMT
Hi There is a third reason and the right one ! As per recent lender communications/emails, we have been able to continue to lift the credit team headcount, process and experience (250 man/woman years at last count) as we go through 100 people employed and we are further developing our robustness on non compliant borrowers and doing that earlier and earlier - we could well now be the most robust in the marketplace. This will, as you have noticed, lift credit event loan count numbers but that means you know we are engaged and active on those loans and have a plan developing or being executed. Loans in the Recovery status remains modest versus the £260m loan book as a whole but that too has a story - it is a fact of lending that throwing loans out to administrators or receivers quickly can often destroy the very value you are seeking to recover and we and our advisers are taking a more considered view on a number of loans that could result in higher recoveries in some cases, still subject to lender vote of course. We are also getting more and more intense on the loan monitoring side, particularly some months before the loan expires so that managed processes can be considered rather than sudden arising with loans not repaying when dated to do so in theory. I hope this helps. Stuart Thank you for your answer, interesting. However you have not answered my question, re Suspended Loans and the Provision Fund Late interest does create PF payouts (on the usual discretionary basis) yes up to the point of being credit event suspended and indeed late interest could be the driver for the suspension. If an interest payment was due a week before being suspended then it should be paid and if one week after then it would not. I hope this helps.
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Post by stuartassetzcapital on Apr 23, 2018 11:51:39 GMT
stuartassetzcapital - Why can willing buyers & sellers not still be allowed to trade loans that have been subject to a known & public credit event?
Loan #74 is a specific example that has been subject to refinancing for months & is now rolling up interest but was recently permanently suspended by a nameless, faceless AC staff member who refuses to answer relevant questions as to why?
This used to happen frequently across the loanbook until after months of discussion with andrewholgate lenders were assured it would be stopped & to be fair we have had a couple of years of successful trading - I hope these new recruits are not going to be allowed to fall back into those unwelcome habits. MLIA investors are not children who need to be protected from themselves or told that their betters have made unjustified decisions regarding OUR MONEY that should not be questioned. I totally agree there should be a market for the sale of suspended loans at a discount. People dont want to wait for the recovery process could transfer these loans to someone who is willing to do this for a premium. Seems like a win-win situation to me. Agreed
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