cb25
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Post by cb25 on Mar 26, 2020 10:13:28 GMT
I suspect many, if not most, borrowers are about to hit problems making repayments on their loans due to the lock-down. Normally my view with Borrowers would be "you signed an agreement to make repayments, if you fail to do so we'll follow the non-payment route laid out in your agreement and if that ultimately means your company folds and/or guarantees get called in, so be it". I'm in P2P to make money and still want to make money but not at the expense of forcing problems on a huge number of companies in what are clearly very unusual times. Otherwise, Lenders could come out of this feeling quite happy on the money they've made, but in a devastated business landscape.
AC have procedures for dealing with missed payments which we're all aware of - 'reservation of rights' letters sent to Borrowers, Lender Votes etc. If AC change nothing, I suspect they'll soon be inundated with that sort of workload on a huge number of Borrowers and we'll spend a lot of our time completing Lender Votes, most of which will be "allow an extension or demand repayment". AC could simplify that by granting some/all Borrowers a repayment holiday, say of 1-3 months, subject to a single Lender Vote on the principle rather than loan-specific.
Giving all Borrowers a repayment holiday would be easiest, Borrowers wouldn't have to prove hardship, minimal paperwork for AC, just do it across the board. Giving only those Borrowers who could 'prove' hardship sounds attractive, but what would 'proof' involve? This option might involve AC in more paperwork than simply following the normal route.
A consequence of some/all Borrowers being given a repayment holiday would almost certainly mean the Access Accounts would pay zero, or much reduced, interest for that period. It could be argued that Lenders won't be losing money, the payments are simply deferred.
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Mikeme
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Post by Mikeme on Mar 26, 2020 10:58:03 GMT
Yes to all for now as there will be too much work to check all of the loans. WE MUST NOT in my opinion force sales. Any government backed loans should be behind our loans the same as PGs that the banks are trying to force borrowers to give .
Under some of the governments measures part of staff costs are covered. I think this will help to keep the platform open so that when normality starts.
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blender
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Post by blender on Mar 26, 2020 13:28:36 GMT
AC is not the lender - how would it have the right to offer payment holidays? There are contracts and T&Cs which define what they can do. Help should come from other sources - gov backed loans - but AC is the agent of the lenders and should follow procedures. The flexibility is in how AC responds to a borrower not making payments - and this should be on a case by case basis as it happens. I would support deferring enforcement in cases of proved hardship.
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cb25
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Post by cb25 on Mar 26, 2020 13:53:29 GMT
AC is not the lender - how would it have the right to offer payment holidays? There are contracts and T&Cs which define what they can do. Help should come from other sources - gov backed loans - but AC is the agent of the lenders and should follow procedures. The flexibility is in how AC responds to a borrower not making payments - and this should be on a case by case basis as it happens. I would support deferring enforcement in cases of proved hardship. I'm well aware that it's our money, which is why I said "AC could simplify that by granting some/all Borrowers a repayment holiday, say of 1-3 months, subject to a single Lender Vote on the principle rather than loan-specific"
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Mikeme
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Post by Mikeme on Mar 26, 2020 14:14:48 GMT
The vast majority of borrowers ARE GOING TO BE or ARE ALREADY in trouble as they can't trade or build!!!!! What's the alternative to payment holiday and INTEREST ONLY forgiveness? The time taken to try to weed out the few that can pay and the unscrupulous would be vast. Probably more costly than the lost interest etc. Well here is the answer to my own question, foreclose let the administrator lawyers have a field day at £300 per hour with their fees taken first. Sold into a market which only has vultures buying. ( I think i've read things here from vultures only interested in their own meal) Vultures you can try to bite me if you like. I'm a tortoise not a hare. Debt for equity should also be on the cards as this is likely to go on for more than a year or even 2. For me having some equity not earning is better than sqiddly doo  |
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cb25
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Post by cb25 on Mar 26, 2020 14:23:52 GMT
The vast majority of borrowers ARE GOING TO BE or ARE ALREADY in trouble as they can't trade or build!!!!! What's the alternative to payment holiday and INTEREST ONLY forgiveness? The time taken to try to weed out the few that can pay and the unscrupulous would be vast. Probably more costly than the lost interest etc. Well here is the answer to my own question, foreclose let the administrator lawyers have a field day at £300 per hour with their fees taken first. Sold into a market which only has vultures buying. ( I think i've read things here from vultures only interested in their own meal) Vultures you can try to bite me if you like. I'm a tortoise not a hare. Debt for equity should also be on the cards as this is likely to go on for more than a year or even 2. For me having some equity not earning is better than sqiddly doo Clearly a poll like this (with just 18 votes cast at the time of writing) isn't going to be remotely definitive. I guess the real test will come when we see Lender Vote after Lender Vote after Lender Vote .. asking "Option A: can the Borrower can a 3-month repayment holiday, Option B: demand repayment, expected returns are NOT expected to cover the loan". Whatever the answer is, I think we'll see most Lender Votes going the same way, but don't currently know which way that'll be. To answer my own poll, I would be in favour of an all-borrowers repayment holiday - subject to a lender vote on the principle - because it's easy to do, helps businesses without favouring some over the others and doesn't really cost me money, just defers it for a while. Seeing the number of No votes (7/18) shows I'm not the business hard-ass I thought I was, I'm just a softie.
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Mikeme
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Post by Mikeme on Mar 26, 2020 14:35:47 GMT
cb Can you clarify about lender votes as I have never read all the terms :-
Do AC compelled to ask lenders to vote on these things? This also might be covered under "under normal market conditions"
Do MLA lenders have a vote proportional to lent?
Do access accounts have a vote?
If access accounts don't normally vote in this situation should they be given a vote based upon holdings?
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cb25
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Post by cb25 on Mar 26, 2020 15:12:25 GMT
cb Can you clarify about lender votes as I have never read all the terms :- Do AC compelled to ask lenders to vote on these things? This also might be covered under "under normal market conditions" Do MLA lenders have a vote proportional to lent? Do access accounts have a vote? If access accounts don't normally vote in this situation should they be given a vote based upon holdings? Lender Votes tend to be called when a borrower hits significant difficulty, e.g. multiple missed payments, needs long extension to the loan term. Sometimes AC extend a loan for a couple of weeks without recourse to a Lender Vote. Access Accounts (QAA, 30DAA, 90DAA) do not get votes. This taken from a Q&A Answer by AC on loan 227 "The 30-Day Access Account, 90-Day Access Account and Quick Access Account are not eligible to vote"
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blender
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Post by blender on Mar 26, 2020 17:55:17 GMT
AC is not the lender - how would it have the right to offer payment holidays? There are contracts and T&Cs which define what they can do. Help should come from other sources - gov backed loans - but AC is the agent of the lenders and should follow procedures. The flexibility is in how AC responds to a borrower not making payments - and this should be on a case by case basis as it happens. I would support deferring enforcement in cases of proved hardship. I'm well aware that it's our money, which is why I said "AC could simplify that by granting some/all Borrowers a repayment holiday, say of 1-3 months, subject to a single Lender Vote on the principle rather than loan-specific" I'm sorry but there is a limit to what they can do, even with a lender vote. There could be a lender vote on a loan-by-loan basis for businesses in trouble - but we can't all vote to give all borrowers a repayment holiday, whether they need it or not. I do not remember being offered a vote on how the cash from QAA should be allocated. I think they know how to handle this problem consistent with the contracts and the T&Cs, and we should let them get on with it without this sort of poll - which personally I do not think is helpful. Clearly it is well intentioned.
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cb25
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Post by cb25 on Mar 26, 2020 18:01:23 GMT
I'm well aware that it's our money, which is why I said "AC could simplify that by granting some/all Borrowers a repayment holiday, say of 1-3 months, subject to a single Lender Vote on the principle rather than loan-specific" I'm sorry but there is a limit to what they can do, even with a lender vote. There could be a lender vote on a loan-by-loan basis for businesses in trouble - but we can't all vote to give all borrowers a repayment holiday, whether they need it or not. I do not remember being offered a vote on how the cash from QAA should be allocated. I think they know how to handle this problem consistent with the contracts and the T&Cs, and we should let them get on with it without this sort of poll - which personally I do not think is helpful. Clearly it is well intentioned.
I have absolutely no problem with your comment, which you have the right to make. Likewise, I believe I have the right to see how people feel on this subject.
If we did without every thread/poll that at least one of us found unhelpful, I think the forum would be pretty sparse
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blender
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Post by blender on Mar 26, 2020 20:37:04 GMT
I'm sorry but there is a limit to what they can do, even with a lender vote. There could be a lender vote on a loan-by-loan basis for businesses in trouble - but we can't all vote to give all borrowers a repayment holiday, whether they need it or not. I do not remember being offered a vote on how the cash from QAA should be allocated. I think they know how to handle this problem consistent with the contracts and the T&Cs, and we should let them get on with it without this sort of poll - which personally I do not think is helpful. Clearly it is well intentioned.
I have absolutely no problem with your comment, which you have the right to make. Likewise, I believe I have the right to see how people feel on this subject.
If we did without every thread/poll that at least one of us found unhelpful, I think the forum would be pretty sparse You have every right to put up this poll and to ask for opinions. I'm just giving mine. No disrespect.
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cb25
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Post by cb25 on Mar 27, 2020 14:09:07 GMT
Just saw this in an AC Lender Update "In the prevailing Coronavirus pandemic conditions, we are receiving an unprecedented number of requests from Borrowers for forbearance on monthly payments due under their loans and/or actual non-payments. ... It is realistic to assume that many Borrowers will breach loan covenants for the foreseeable future until such time as normal trading conditions resume. "
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Mikeme
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Post by Mikeme on Mar 27, 2020 14:36:00 GMT
Where is this found please?
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cb25
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Post by cb25 on Mar 27, 2020 14:39:22 GMT
Where is this found please? AC have been putting the same update in many loans today, e.g #924
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blender
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Post by blender on Mar 27, 2020 14:52:32 GMT
Just saw this in an AC Lender Update "In the prevailing Coronavirus pandemic conditions, we are receiving an unprecedented number of requests from Borrowers for forbearance on monthly payments due under their loans and/or actual non-payments. ... It is realistic to assume that many Borrowers will breach loan covenants for the foreseeable future until such time as normal trading conditions resume. " And, for the avoidance of doubt, I would agree if you thought that AC should be reasonable in the cases where the breaches resulted from genuine difficulties (rather than maximising cash held or paying others rather than us). But I do think they have to breach first and then be helped.
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