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Post by andrewholgate on Sept 25, 2014 10:02:11 GMT
Hi all - it's been about a month since our last Q&A and the last one seemed to be useful. Aware that there's a lot going on at the moment so we'll do another tomorrow at 14:00 on this thread - get your questions up and Chris and I will do our best to respond to all of them.
Thanks,
On behalf of Andrew Holgate
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j
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Post by j on Sept 25, 2014 12:16:05 GMT
I'm sure I reflect other people's views when I say the most disappointing thing recently is loan updates. When an update is promised & repeatedly does not mateialise, it saps confidence a lot more than saying 'we cannot really provide a definite date for an update due to x or y reason'. When davidricketts1 was on holiday recently, there were many issues with a number of loans (especially BLs) & he seems to be the only one who can provide an update as numerous questions went unanswered for a week or two. Surely, someone can deputise in his absence to at least give some acknowledgement to the questions posed ?! The whole issue is taking away from all the positives about AC as a platform & can result in members switching funds, slowly but surely, as this goes on. Something you certainly do not want to happen. |
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thebillet
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Post by thebillet on Sept 25, 2014 12:38:41 GMT
Is it possible to provide a name for each loan regarding who is dealing with it? I might have missed this if it is listed or recorded elsewhere but replies about "he's on holiday" or "I was off sick" makes it difficult to know who is dealing with what.
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Post by Ton ⓉⓞⓃ on Sept 25, 2014 13:59:06 GMT
I wonder if it would help if we had a set Q&A/Update standard? Saying something like, 'All Q's would at least be recognize within two days and if necessary a fuller answer, if possible, within five." Where this can't be done then a date given when it's expected but whatever the timings are can you please stick to them *? Excetions of course being weekends, Christmas and Easter. Perhaps on the New Site for each loan, where necessary, there could be a small calendar of when we can expect an Update, rather than have us constantly asking for one, after all in the Credit Reports of the Development Loans they say MS report update in six months or with each tranche drawn. *Maybe it should be mentioned somewhere on AC (perhaps it is & I've just not seen it) that many(?) answers and updates have to be delayed for a short while for the Legal Team to check compliance and to add exceptions and caveats etc. andrewholgateHaving said all that, I guess behind the scenes you probably already do have standards of how quickly Q's are answered and Updates given, what are they ? |
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unmadem
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Post by unmadem on Sept 25, 2014 14:51:03 GMT
I think just about all of the bridging loans have failed to pay back on the original timeframe. I'd have expected many to default but surprised at the number. Not complaining as the higher interest has been useful but curious if there any consistency/pattern to the reasons given by borrowers ? Also, has the number defaulting been high than you would have expected at the outset.
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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 Sept 25, 2014 14:54:26 GMT
Having said all that, I guess behind the scenes you probably already do standards of how quickly Q's are answered and Updates given, what are they Andrewholgate? Oh Ton ⓉⓞⓃ, you do make me chuckle 
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mikes1531
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Post by mikes1531 on Sept 25, 2014 17:16:53 GMT
Not complaining as the higher interest has been useful ... ISTM that unmadem is counting his chickens before they're hatched. It's all very well to be accruing 18% -- or in one case 24% -- interest, but it means nothing unless the security can be sold for enough to cover all the capital to be returned, all the fees involved in setting up the loan and dealing with the default, and the interest accrued to lenders. And it should be noted that if there's a shortfall, then IIRC the priority is in the order above, so it's the people to whom the interest is accrued that are the first to end up short. This is when we find out how good the valuations are!
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Post by bracknellboy on Sept 25, 2014 17:24:38 GMT
Post deleted: this is the Q&A thread so not wanting to clutter with replies to others posts.
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bugs4me
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Post by bugs4me on Sept 25, 2014 21:31:26 GMT
Not complaining as the higher interest has been useful ... <snip> This is when we find out how good the valuations are! Indeed we will and I would be interested to know Andrew's thoughts on this. Sure they have been professionally valued but is that a fire sale value or in a perfect world. Once an LPA Receiver moves in then effectively IIRC you are looking at auction.
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mikes1531
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Post by mikes1531 on Sept 25, 2014 23:04:52 GMT
<snip> This is when we find out how good the valuations are! Indeed we will and I would be interested to know Andrew's thoughts on this. Sure they have been professionally valued but is that a fire sale value or in a perfect world. Once an LPA Receiver moves in then effectively IIRC you are looking at auction. AC have one loan where the borrower reported that an offer had been accepted and a sale was imminent. But this has dragged on to the point where AC have given them an ultimatum and have said they'll appoint an LPA receiver next week if the sale doesn't complete by then. (Which I suppose is quite unlikely inasmuch as it doesn't appear that contracts have been exchanged yet.) Once that happens, does the borrower still have the chance to complete their proposed sale if they can do that before the receiver's auction? Or do they lose that chance once the receiver has been appointed?
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sqh
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Post by sqh on Sept 26, 2014 13:01:11 GMT
Hi Andrew
Bridging Loans have been very popular with lenders because they pay a good rate of interest and have a level of security which is easily understood. So why don't AC negotiate new loans with borrowers of bridging loans, rather than sending them into default at punitive rates and sending them to seek alternative finance.
In particular, popular BL no.84 is heading for default in 7 weeks time because the borrower is awaiting planning permission. I would like to see this loan extended at a normal BL rate in order to allow the PP to be sought in a timely manner. I don't think it would create a good image if a 75 year old lady with a 90 year old family business was allowed to fall into default, when the rate being paid is already higher than average for the level of security.
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bigfoot12
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Post by bigfoot12 on Sept 26, 2014 13:13:15 GMT
Hi Chris,
Something you said about regulations starting on October 1st was taken by some to mean that the new site is launching by then. Is that correct?
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Post by andrewholgate on Sept 26, 2014 13:15:56 GMT
The main questions being asked are around the speed of response on the Q&A sections of the loan pages, as well as the updates on where loans are up to. The second theme running from this is regarding bridging loans and their ability to repay. First point first. It seems that our process was working right up until David went on holiday and our fall back plan didn't work very well. There also seems to be an issue with time stamping the messages and updates. Whilst these are done in the back office, it doesn't happen on the website. Also, some of the updates were placed in the wrong section. So what are we doing? - We have a new sales director who will be monitoring these Q&As
- Each update and message will have a date included as to when it went live
- Draw down timescales and actions will be updated regularly
- Major updates will appear on the website and will be emailed to lenders
This is one area that we have let ourselves down with and I can only apologise.
The second point. All the problematic bridging loans have come from one introducer and each loan has been difficult. To that end we are moving away from that introducer and once the loans are exited we will not be entering into more. On other bridging loans we have had much more control on how it exits and these should not be problematic.
Andrew
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Post by andrewholgate on Sept 26, 2014 13:23:10 GMT
Hi Andrew Bridging Loans have been very popular with lenders because they pay a good rate of interest and have a level of security which is easily understood. So why don't AC negotiate new loans with borrowers of bridging loans, rather than sending them into default at punitive rates and sending them to seek alternative finance. In particular, popular BL no.84 is heading for default in 7 weeks time because the borrower is awaiting planning permission. I would like to see this loan extended at a normal BL rate in order to allow the PP to be sought in a timely manner. I don't think it would create a good image if a 75 year old lady with a 90 year old family business was allowed to fall into default, when the rate being paid is already higher than average for the level of security. This is a very good question (sounds patronising but not meant to be). The question comes as to how we deal with these situations. We have a set procedure that follows the principles of: - Breach - Forbearance - Distress - Default - Recovery In many cases, stage 2 (forbearance) is adequate and an extension of the loan is the right way forward. In the case of one of our bridge loans, a sale has been agreed to a prominent premier league footballer and a touch of forbearance is needed while the sale completes. In all cases we prefer solvent solutions to pursuing recovery action as the borrower is probably more willing to work solvently than in a hostile recovery of the assets. Only the FF deal has gone down the hostile route, and as you will have seen we have been successful with a good outcome there.
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Post by chris on Sept 26, 2014 13:24:08 GMT
Hi Chris, Something you said about regulations starting on October 1st was taken by some to mean that the new site is launching by then. Is that correct? We have two options at the moment - one is to press ahead with that launch date and the other is to push back the new site and simply back port the relevant compliance features to the existing site. The new site is agonisingly close to being ready but we are up against it time wise so I'm not ready to commit either way yet.
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