j
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Penguins are very misunderstood!
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Post by j on Jan 26, 2016 21:34:19 GMT
In other threads we've been talking about #206 & 207 which is nice. But I think 208 is due to be suspended if the first payment is not made by today. Indeed, 208 is a little depressing to have slipped the first payment by so much. I am still hopeful this is just a screw-up rather than a real concern. I'm not panicking, though - security seems OK. I'd still like to see AC include a mostly-completed standing order form when they send the borrower initial paperwork. It's all too common for first payments to be late. I've had a few loans where the first payment went missing for various reasons including DD or banking issues (don't ask me which as there's no chance I'll remember  ). I'd hazard a guess this might be the reason here too I hope as I'm in this one.
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Bagman
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Post by Bagman on Jan 27, 2016 2:16:47 GMT
I have bailed on 208, I might buy it back if they make the payment ..
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Post by lynnanthony on Jan 27, 2016 9:40:54 GMT
I have bailed on 208, I might buy it back if they make the payment .. Mmm. "Unfortunately, the borrower had got confused over the date the repayment was due, thinking it was the 23rd" sounds a bit like BS when we reach the 27th unpaid. Does not bode well for the future. I'm out.
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oldgrumpy
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Post by oldgrumpy on Jan 27, 2016 9:50:50 GMT
Looks like an initial cockup, but we don't know anything about the cause of the partner's previous RBS problems, which are the reason why this person (who may be acting under "advice")is having to "take over". Anyway, security looks reasonable, so I'll stay (for a while).
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Post by davidricketts1 on Feb 1, 2016 16:07:02 GMT
Now unsuspended as the funds have been received.
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investibod
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Post by investibod on Feb 1, 2016 16:40:15 GMT
Is there anything written into the contract with the borrower to automatically trigger penalty interest if the payments are more than a certain amount late?
I think that this might help focus the minds of the borrowers regarding making the payments on time.
It they received a notification that an extra say 3% had come into force on the loan, and would remain so until the payments were up to date, it could be an incentive.
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Post by davidricketts1 on Feb 1, 2016 16:50:55 GMT
Is there anything written into the contract with the borrower to automatically trigger penalty interest if the payments are more than a certain amount late? I think that this might help focus the minds of the borrowers regarding making the payments on time. It they received a notification that an extra say 3% had come into force on the loan, and would remain so until the payments were up to date, it could be an incentive.
A fair question.
There are terms but this is discretionary and it's generally a balancing act between carrot and stick as it were to ensure the repayments are made.
They were told today that they had 7 days to make the repayment or next step would be enforcing the security.
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shimself
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Post by shimself on Feb 2, 2016 23:27:05 GMT
Is there anything written into the contract with the borrower to automatically trigger penalty interest if the payments are more than a certain amount late? I think that this might help focus the minds of the borrowers regarding making the payments on time. It they received a notification that an extra say 3% had come into force on the loan, and would remain so until the payments were up to date, it could be an incentive. Yes there is and contrary to Davee Rickett's reply above it is not discretionary, see p2pindependentforum.com/thread/3722/when-ac-charge-default-interest which is currently the subject of a complaint to higher powers
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happy
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Post by happy on Feb 3, 2016 9:37:04 GMT
Does no one see the "Elephants in the room" here with regards to default penalties!
All AC loans are underwritten before we "retail lenders" get our hands on them. As I understand it these underwriters continue to hold a significant and sometimes majority share in almost all live AC loans. So, it follows that any action AC takes or wants to take with regard to default penalties etc would have to be with underwriters approval.
Evidence provided on this forum suggests that AC do apply penalty interest in many situations but obviously not in all. Surely if the underwriters of AC loans are happy with how AC manages it's loan book and specifically the management of potential default situations (which we would have to accept is the likely case or AC would not be in business any more!) then perhaps their approach is the right one..........
Having said that, I do think some agreed and published guidelines would provide some much needed clarity here. As they say in politics so often now, these are the Red Lines!
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bg
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Post by bg on Feb 3, 2016 10:13:54 GMT
Does no one see the "Elephants in the room" here with regards to default penalties! All AC loans are underwritten before we "retail lenders" get our hands on them. As I understand it these underwriters continue to hold a significant and sometimes majority share in almost all live AC loans. So, it follows that any action AC takes or wants to take with regard to default penalties etc would have to be with underwriters approval. Evidence provided on this forum suggests that AC do apply penalty interest in many situations but obviously not in all. Surely if the underwriters of AC loans are happy with how AC manages it's loan book and specifically the management of potential default situations (which we would have to accept is the likely case or AC would not be in business any more!) then perhaps their approach is the right one.......... Having said that, I do think some agreed and published guidelines would provide some much needed clarity here. As they say in politics so often now, these are the Red Lines! AC do not have to get permission from the underwriters for anything. All votes are conducted on a loan holding weighted basis. Besides the loan in question was underwritten by the QAA (as are most loans these days).
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happy
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Post by happy on Feb 3, 2016 11:12:35 GMT
I agree with you but the underwriters significant holding in most of ACs loan book means they exert a not insignificant influence on how AC chooses to manage their loan book in most cases and therefore has almost certainly shaped their behavior and policies
I see nothing but constructive engagement and dialogue in on-going monitoring and management of loans and default situations at AC, something that is sadly lacking in most other SME biased sites I invest in or have looked at investing in and I feel strongly from personal experience that imposing penalties just because it says you can in the contract is more often than not the wrong approach, certainly initially. I repeat that I believe clear guidelines of the default protocol that is followed should be published by AC so we all understand it and that is what we sign up to when lending here.
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jjc
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Post by jjc on Feb 3, 2016 11:34:37 GMT
happy , to add weight to bg ’s comments – AC’s panel of underwriters (I am one) have been very rarely invited to underwrite loans over recent (4-5) months. The QAA (we must surmise) is doing the underwriting. So default interest policy is not being influenced by underwriters. More relevant (perhaps) is that new loans that come onto the platform without first going through underwriters (or other “filtering” panel, eg. institutions) do so without any prior “independent” duedil. We have to rely on AC’s good judgement. Whether that’s a good or less good thing is up to you to decide. How effectively AC will be able to keep its eye on the ball (in a new lending world of many many balls flying around) & - perhaps more to the point – price the risk accurately on each loan (in a new lending world of collapsing rates) are other points worth thinking about. How does a loan offering 9% now compare (in terms of risk) to a loan that gave you 9% a few months ago, or one that will offer you 9% next autumn? Issues not unique to AC ofcourse. All part of the big “bad” new world of P2P.
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happy
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Post by happy on Feb 3, 2016 11:48:14 GMT
Thanks jjc, I appreciate your reply, very helpful. It also remains to be seen where P2P lender rates will be post IFISA and how much this new wave of lenders will understand their risk for their return! |
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jjc
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Post by jjc on Feb 3, 2016 12:50:31 GMT
A case in point > upcoming loan 230 (due to draw today & only made visible in last 48 hours). Underwritten by QAA, complex loan requiring careful reading of the accounts (due to cashflow issues, the main but not sole key issue imo), forecasts & understanding of what the principal’s real needs are from the dividends (& actual mood-music/relationship/short-term commitments to funders are.) Little skin in the game (imo) & asymmetric risk to new funder’s detriment (2nd charge, unsupported PG). Substantial (maybe huge) front-end risk (cash negative in M1) due to funding of growth on v limited funds with banks perhaps on their back & no time to play with, a major supplier/contractor that could pull the plug at any time? (the big G) – similar in many ways to the plumber. LTV 98% on 6M RMV. But it’s a small loan, boring (for more established lenders & underwriters) rate coming on the cusp of a much bigger shinier twelve per center, how many people are really going to duedil this loan? 3 questions asked (no replies yet). Small it may be but I sure hope AC have done their home-work on this one. (I like AC but their track record on defaults is not where I was expecting it would be & wouldn’t want them to add to the “pile” too quickly.) Specifics of this loan aside, my main concern is can AC realistically comb through things well keeping their eye on all balls that come through, or are we likely to end up with a platform that becomes increasingly like FC – good deal-flow yes, (hopefully) a higher % of secured loans, but plenty of defaults on many small loans, & a big ask on their duedil capacity never mind monitoring quality? Will AC start charging me for this one day? (yikes)
At what point will the rates offered reflect the flow of money more than the inherent risk of individual loans (do they already)?
happy there are many elephants in the room, P2P is a hairy place & (imo) will become even more so in a world of QE, fast technology & hot new trending items. Invest carefully. Stay with the platforms you trust. Nudge them to keep their standards high. Just my 3-pence. |
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oldgrumpy
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Post by oldgrumpy on Feb 3, 2016 12:55:28 GMT
Invest carefully. Stay with the platforms you trust. Nudge them to keep their standards high. Just my 3-pence. We have all been pessimistic about falling rates recently. It always used to be "just my four penn'th" but even jjc is having to drop'em 
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). I'd hazard a guess this might be the reason here too I hope as I'm in this one.
