VOTE NO - COVID-19 Forbearance Vote

I can safely say you haven’t a clue with a statement like that.

This is an ongoing truth in lending. I worked for a major mortgage lender during the 1990s recession. When borrowers reported financial difficulties, the company met with them and ran through all of their incomings and outgoings, and if they were short of the necessary funds, simply agreed that they could take a payment holiday. In a review of the enormous losses that subsequently materialised, this was determined to be a key problem. We were the only party in the equation that hadn’t insisted on a share of the funds that were available.

May sound a bit simple, do you not thing legal action should take place once Britian is allowed to reopen shops? say 60-90 days from now? At least for those that are closed due to COVID-19 and not running into issues before the start of the lockdown. (As others point out, many borrowers will use this to gain extra time, to possibly even offload assets away from PG ect.)

Never say a recession is *different* to any other, doing so is dangerous. However, in any other recession I've never seen it enforced by Goverment lockdowns. We still have no idea how the economy will cold start itself or what not. But I'm not alone in likely thinking there isn't just gonna be a morning we wake up and its back to normal. Once we get to mid June, I'd want to see AC starting to chass borrowers at that point. (Assuming the world hasnt' collasped in on itself at this point)
 
I know a loan in FS the borrower hadn't paid for 9 months, and now is using the excuse of covid-19! 

Why, to you anyway?

I am not in business, however

      A business chasing debt by way of trade, ie a bill for services or goods supplied, is in a very different position from a business chasing a debt secured on assets.

      The trade lender has no call on the assets and is right to be worried about being at the back of the queue, he will always come after the secured lenders and will often get nothing, so of course an astute debtor will be seeking repayment.

       An asset holder is in a different position, they are at the front of the queue. An asset holder can evaluate strategies that will maximize recovery. Where a business is temporarily short of cash, but has a good long term prospect of recovery, it is sensible to give them time to recover. Often Banks have not taken this position, they dislike showing impaired debt on the Balance Sheet, will have targets to meet and will be keen to hide their mistakes. Losses can also be hidden creatively.

       A/C kindly provided a thread on this forum explaining their treatment of debt, they have a generally good record at recoveries (Except, of course, loan 227). Furthermore, whatever the result of the Lender vote, they are obliged by Law to treat borrowers fairly. No court would consider calling in assets during the current crisis fair treatment - so expect legal action, Banks have been caught out  and prosecuted for wrongly destroying small businesses before.

       Iren - re mortgage lending

              The mortgage lender has the ultimate sanction of re-possessing the property. My understanding is that flexibility is standard practice for secured loans. It is usually more important for a distressed borrower to pay bills such as council tax and utilities first.  
       

Even if everybody who logged into AC during this voting stage went 60% B I doubt it would pass,





Non-response will be counted as agreement as the Government is encouraging lenders to offer forbearance to borrowers and we believe this is fair in the circumstances. (At the bottom of the doc)



Users who don't' login during this period will automatically be counted as A, automatically giving it a large margin advantage. I voted A, but mainly because I wanted to log into my account and only had a few minutes to process the information.

Re-reading the uploaded document, a B vote doesn't mean you disagree with forbearance entirely, it seems like they will just inbox each individual loan for forbearance. Seems like AC just want lenders to vote once, and then leave the rest to purely AC; so they can quickly handout forbearance, or demand payment depending on the individual loans positions. Its a blanket agreement to ensure AC lenders sit back, whilst AC do each individual loan without needing to vote on all of them and await results, which usually takes days at least.

I think that is a bit pessimistic.  I'm expecting to lose 50%.  Unless there is a complete fraud involved I can't see a full write off of everything invested even in a multi year administration.  From what I can see the security on most of these assets is not too far removed from reality.