tonyr
Member of DD Central
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Post by tonyr on Jan 3, 2020 9:31:05 GMT
There's a loan (#986) that's due to repay on 7th January. It hasn't got a hope of making it, the works won't even finish until February and then there is the sales period.
It's at 8% interest and IIRC there is a standard 2% default interest written into the contracts.
So, my question is, what can I do to get this loan onto 10% ASAP? Will it just happen, or, will it be long and drawn out (e.g. AC will do nothing for the first week (grace period) then hold a vote for an extension where option A is to keep the interest at 8% which then gets passed...).
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dead-money
Rocket to the Moon
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Post by dead-money on Jan 3, 2020 10:05:03 GMT
You can do nothing, it's entirely at AC's discretion as monitoring agent.
Yes, likely course as seen with other loans is grace period, promises from lender, another grace period, vote through an extension, vote through another extension, apply default rate, wait, etc, etc.
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ton27
Member of DD Central
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Post by ton27 on Jan 3, 2020 17:55:43 GMT
The imposition of default interest is an ongoing issue with AC. It seems they do not consider Lenders interests to do so and it probably is not in ACs interest as it might jeopardise their own fees. Quite often AC call for a vote to appoint receivers without the option of default interest.
Very annoying. There is a similar issue with late payments.
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Post by Ton ⓉⓞⓃ on Jan 3, 2020 19:32:02 GMT
I think AC always have to act reasonably, the FCA being overseer, I think that might mean that AC must watch out that they are not blamed for a whole raft of things by the Borrower. Besides that there must be another raft of things that the Borrower could accuse them of in law.
It seems to me that AC don't charge default if the Borrower has acted reasonably and done what you might expect, so if the Borrower can point to 3rd parties as a cause etc etc. e.g a loan is moving towards an un-agreed extension, so did the borrower seek a refi, is the Borrower granting access to valuers. Also AC use default interest as a carrot and stick.
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Post by brightspark on Jan 3, 2020 20:09:33 GMT
There's a loan (#986) that's due to repay on 7th January. It hasn't got a hope of making it, the works won't even finish until February and then there is the sales period. It's at 8% interest and IIRC there is a standard 2% default interest written into the contracts. So, my question is, what can I do to get this loan onto 10% ASAP? Will it just happen, or, will it be long and drawn out (e.g. AC will do nothing for the first week (grace period) then hold a vote for an extension where option A is to keep the interest at 8% which then gets passed...). Lenders/platform need to act in a fair and reasonable manner. All developments are a bit of an unknown and subject to circumstances that can blow away the best laid of plans and cause final or interim repayments to be late. By investing in a platform such as AC hopefully the expertise and advice of their experienced property arm sorts matters out to the satisfaction of all parties. A penalty interest rate can create a poor negotiating climate between borrower and platform. I am not suggesting that penalty interest rates do not have a role but they do need to be used judiciously. Presumably as a platform would start to incur extra expenses, once a loan becomes seriously overdue, the additional 2% would/might reasonably be used to offset their additional costs rather than be paid to lenders. Again it is easy to overlook that borrowers are also clients and if their journey through a rough patch is facilitated that they may return to the platform in the future with other suitable loan requests. The loan you refer to relates to a relatively large project where there tends to be more opportunity for timescale estimates to go awry. In forming a view lenders also need to take account of the overall problem loan handling of the particular platform.
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p2pfan
Member of DD Central
Full-Time Investor
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Post by p2pfan on Jan 7, 2020 0:37:18 GMT
The extra interest for borrowers who fail to pay their debts should be applied.
Borrowers often get given a free lunch too readily by AC compared to other platforms. Not enacting this extra interest means borrowers are even less motivated to pay on time while being unfair on lenders who haven't been paid their hard-earned money back.
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Post by davee39 on Jan 7, 2020 11:05:15 GMT
'Hard earned money' should not be in P2P. This is a risk investment and fairness rarely enters the equation.
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Post by capricorn on Jan 7, 2020 22:55:44 GMT
Usually with votes there is an option B which is to reject the borrower's proposal and ask them to come back with a new one. So that would be the option to choose for those hoping for penalty interest as the borrower or AC would need to consider offering a higher rate for an extension to get lenders' agreement. If you are outvoted you'd have to conclude the majority looked at things differently.
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tonyr
Member of DD Central
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Post by tonyr on Jan 23, 2020 10:44:11 GMT
I could have sworn that I checked and there was no update for #986: Pill* Ash* - Refinance Loan this morning. The update was two days overdue, so I prodded and now there is an update which is dated the day it's due. Humm, something is not right, either with AC or me...
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