SteveT
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Post by SteveT on Apr 27, 2020 9:29:28 GMT
That is where you are wrong there is some liquidity - however interest & capital payments are being channelled into additional loans. Nobody expects access to all their cash ... just that which has been repaid by borrowers. Not true; AC stated in their email last week that all new lending has been paused. The only funds going to borrowers at the moment are a few stage-payments of existing development loans that were already contractually agreed. (crossed with cb25)
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Post by Harland Kearney on Apr 27, 2020 10:12:15 GMT
This blathering from impatient lenders who seem to have not the faintest idea what they are doing, talking about, or invested in is getting extremely tedious. There has been no decision to remove the "Withdraw All" instruction - you can request a withdrawal any time you like. It's just that, right now, you have a very long wait because there is no liquidity. There aren't enough (well, more likely any) investors wanting to buy from you. The only way you're going to get (most of) your money back is to allow the loans to run out. That's the nature of P2P lending, always has been. BTW, there are plenty of other platforms where exiting is impossible at the moment. GS, for example, is in total lockdown with not even interest being allowed out. And have you tried selling anything on FC recently? That is where you are wrong there is some liquidity - however interest & capital payments are being channelled into additional loans. Nobody expects access to all their cash ... just that which has been repaid by borrowers. AC stopped lending the moment the AA were queued. Only cash is in retention for a number of critical reasons these are drawdowns, interest & I'm assuming a small amount held for the temporary lender fee. A large amount of cash in renetion shouldnt be written off as a critial thing at all in my oppuion. It provides liquidity for the operation of the AA's (not queue), thats just as critical as anything. Arguably more critical because if loans in drawdown go belly up, those loans will become valueless debt overnight. New investor cash is very limited so repayments will be from repaid loans, as is fairly obvious and has been since the start of the forebarance vote.
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cb25
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Post by cb25 on Apr 27, 2020 10:50:50 GMT
This blathering from impatient lenders who seem to have not the faintest idea what they are doing, talking about, or invested in is getting extremely tedious. There has been no decision to remove the "Withdraw All" instruction - you can request a withdrawal any time you like. It's just that, right now, you have a very long wait because there is no liquidity. There aren't enough (well, more likely any) investors wanting to buy from you. The only way you're going to get (most of) your money back is to allow the loans to run out. That's the nature of P2P lending, always has been. BTW, there are plenty of other platforms where exiting is impossible at the moment. GS, for example, is in total lockdown with not even interest being allowed out. And have you tried selling anything on FC recently? That is where you are wrong there is some liquidity - however interest & capital payments are being channelled into additional loans. Nobody expects access to all their cash ... just that which has been repaid by borrowers. See Stuart's entry 27 Apr here, which includes the following: "The Access Accounts are not funding new loans at this time.
Failure to fund development loans would likely lead to very substantial losses in normal times and in these times could be far worse."
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alender
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Post by alender on Apr 27, 2020 11:28:19 GMT
That is where you are wrong there is some liquidity - however interest & capital payments are being channelled into additional loans. Nobody expects access to all their cash ... just that which has been repaid by borrowers. See Stuart's entry 27 Apr here, which includes the following: "The Access Accounts are not funding new loans at this time.
Failure to fund development loans would likely lead to very substantial losses in normal times and in these times could be far worse."
So from what Stuart is saying is that the value of the assets and the LTVs that AC put on these loans is no more than theoretical even in normal times. An asset value is only worth what you achieve in an open market, so AC did not use the expected sale values in normal times let alone plan for a disruption of the market.
This is bad enough if it is a one off loan but compounded by promising future tranches with money AC do not have and are now forced to take lenders capital repayments to put into loans where the risks are unknown. Perhaps best described as some sort of gambling game playing double or quits with someone else's money.
Seems they were a bit too keen to get their fees with little regard for the true value of the security.
Stuart says "Thank you for your patience in these difficult times". Does this include Stuart, is he patiently waiting for funds he has invested in the AAs to be returned? A question I have asked a number of times but never answered or is he just patiently collecting his salary.
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cb25
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Post by cb25 on Apr 27, 2020 11:39:48 GMT
See Stuart's entry 27 Apr here, which includes the following: "The Access Accounts are not funding new loans at this time.
Failure to fund development loans would likely lead to very substantial losses in normal times and in these times could be far worse."
So from what Stuart is saying is that the value of the assets and the LTVs that AC put on these loans is no more than theoretical even in normal times. An asset value is only worth what you achieve in an open market, so AC did not use the expected sale values in normal times let alone plan for a disruption of the market.
This is bad enough if it is a one off loan but compounded by promising future tranches with money AC do not have and are now forced to take lenders capital repayments to put into loans where the risks are unknown. Perhaps best described as some sort of gambling game playing double or quits with someone else's money.
Seems they were a bit too keen to get their fees with little regard for the true value of the security.
Stuart says "Thank you for your patience in these difficult times". Does this include Stuart, is he patiently waiting for funds he has invested in the AAs to be returned? A question I have asked a number of times but never answered or is he just patiently collecting his salary.
Given that funding building developments is risky at the best of times, including (imo) calculation of LTV is probably only ever possible on day1 (land only) or on completion, why did you choose to invest in AC given it's got a large chunk of development loans?
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alender
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Post by alender on Apr 27, 2020 12:03:58 GMT
So from what Stuart is saying is that the value of the assets and the LTVs that AC put on these loans is no more than theoretical even in normal times. An asset value is only worth what you achieve in an open market, so AC did not use the expected sale values in normal times let alone plan for a disruption of the market.
This is bad enough if it is a one off loan but compounded by promising future tranches with money AC do not have and are now forced to take lenders capital repayments to put into loans where the risks are unknown. Perhaps best described as some sort of gambling game playing double or quits with someone else's money.
Seems they were a bit too keen to get their fees with little regard for the true value of the security.
Stuart says "Thank you for your patience in these difficult times". Does this include Stuart, is he patiently waiting for funds he has invested in the AAs to be returned? A question I have asked a number of times but never answered or is he just patiently collecting his salary.
Given that funding building developments are risky at the best of times, including the fact that calculation of LTV is (imo) probably only ever possible on day1 (land only) or on completion, why did you choose to invest in AC given it's got a large chunk of development loans? I guess I trusted AC, or at least to do the right thing by lenders and had no idea that they would treat lenders differently depending on the size of the investment, no mention of that anywhere on the website.
I wrongly believed AC would do more due diligence on the LTVs (market resale value not a theoretical number) than seems to be the case.
I wrongly believed this is P2P i.e. the loans are owned by the lenders therefore so is the interest and capital repayments and no mater what happens interest and capital repayments of there performing loans would be passed back to me, however the vast proportion of the capital repayments are being placed in loans of unknown risk. I always knew there are risks with non performing loans where only a proportion of the money would be recovered.
I was not aware of the amount AC has promised as this was not shown anywhere I could find, it only comes to light if you look at each of the 500+ loans and sum up all the future commitments, this is not even available in the download of the loan books to analysis in spreadsheets. It is only the technical expertise, time and effort of Irobot that we can see these future commitments which I am thankful.
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TitoPuente
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Post by TitoPuente on Apr 27, 2020 12:10:19 GMT
1) That's not a change in the t&cs that's a change in the operation of the account as permitted by the t&cs. 2) Furthermore, is there any statement that says how the queue should be processed? The change is in what has been practiced previously but I am unaware of anything that specifically defines a FIFO system. 1) The Terms and Conditions, Key Account Info along with other statements and representations on the Assetz website are just a few of the ingredients that collectively form the contractual terms. Ie the offer and the acceptance.
2) Yes, that's the use of the word queue.
2) Actually, a the concept of "queue" is a lot broader than what people here seem to be convinced it should be. I suggest you search for "queueing theory". You will discover that queues are the subject of one of the most interesting areas of operational research. A queue can be defined in multiple ways and calling something a queue is not sufficient to infer its operating model.
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alender
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Post by alender on Apr 27, 2020 12:18:33 GMT
1) The Terms and Conditions, Key Account Info along with other statements and representations on the Assetz website are just a few of the ingredients that collectively form the contractual terms. Ie the offer and the acceptance.
2) Yes, that's the use of the word queue.
2) Actually, a the concept of "queue" is a lot broader than what people here seem to be convinced it should be. I suggest you search for "queueing theory". You will discover that queues are the subject of one of the most interesting areas of operational research. A queue can be defined in multiple ways and calling something a queue is not sufficient to infer its operating model. I am not sure why queueing theory is relevant, it will be the legal definition which is relevant here. If there are no clear legal definition then the "The man on the Clapham omnibus" concept will apply. perhaps it will be the queue he was in before boarding the bus.
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alanh
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Post by alanh on Apr 27, 2020 12:37:03 GMT
See Stuart's entry 27 Apr here, which includes the following: "The Access Accounts are not funding new loans at this time.
Failure to fund development loans would likely lead to very substantial losses in normal times and in these times could be far worse."
So from what Stuart is saying is that the value of the assets and the LTVs that AC put on these loans is no more than theoretical even in normal times. An asset value is only worth what you achieve in an open market, so AC did not use the expected sale values in normal times let alone plan for a disruption of the market.
This is bad enough if it is a one off loan but compounded by promising future tranches with money AC do not have and are now forced to take lenders capital repayments to put into loans where the risks are unknown. Perhaps best described as some sort of gambling game playing double or quits with someone else's money.
Seems they were a bit too keen to get their fees with little regard for the true value of the security.
Stuart says "Thank you for your patience in these difficult times". Does this include Stuart, is he patiently waiting for funds he has invested in the AAs to be returned? A question I have asked a number of times but never answered or is he just patiently collecting his salary.
Pretty obvious what the answer to your last question is. His comment is rather like saying "thank you for your patience" to a bunch of inmates in a prison waiting for their release date. I also note his comment about "imminent release of new functions to allow trading of the access accounts" - we have heard this before, lets hope there is actually something behind it and not just more hot air
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cb25
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Post by cb25 on Apr 27, 2020 12:53:39 GMT
Given that funding building developments are risky at the best of times, including the fact that calculation of LTV is (imo) probably only ever possible on day1 (land only) or on completion, why did you choose to invest in AC given it's got a large chunk of development loans? I guess I trusted AC, or at least to do the right thing by lenders and had no idea that they would treat lenders differently depending on the size of the investment, no mention of that anywhere on the website.
I wrongly believed AC would do more due diligence on the LTVs (market resale value not a theoretical number) than seems to be the case.
I wrongly believed this is P2P i.e. the loans are owned by the lenders therefore so is the interest and capital repayments and no mater what happens interest and capital repayments of there performing loans would be passed back to me, however the vast proportion of the capital repayments are being placed in loans of unknown risk. I always knew there are risks with non performing loans where only a proportion of the money would be recovered.
I was not aware of the amount AC has promised as this was not shown anywhere I could find, it only comes to light if you look at each of the 500+ loans and sum up all the future commitments, this is not even available in the download of the loan books to analysis in spreadsheets. It is only the technical expertise, time and effort of Irobot that we can see these future commitments which I am thankful.
I have also been negligent in my reading of AC's Ts&Cs regarding the (now closed) GBBA investments and assumed they'd invest money a lot more sensibly than they did. I stupidly assumed their "if there were 5 loans..." text only as indicating money would be spread over all available loans, not that 20% could actually go into one loan, so ended up with £5500 in the infamous loan #227. Imo the LTV on that one is a work of fiction as it's a development project but the LTV is calculated based on values at project end, whereas all other development loans that I've seen base LTV on day1 values. We live and learn, often at our cost.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 27, 2020 12:55:11 GMT
Given that funding building developments are risky at the best of times, including the fact that calculation of LTV is (imo) probably only ever possible on day1 (land only) or on completion, why did you choose to invest in AC given it's got a large chunk of development loans? I guess I trusted AC, or at least to do the right thing by lenders and had no idea that they would treat lenders differently depending on the size of the investment, no mention of that anywhere on the website.
I wrongly believed AC would do more due diligence on the LTVs (market resale value not a theoretical number) than seems to be the case.
I wrongly believed this is P2P i.e. the loans are owned by the lenders therefore so is the interest and capital repayments and no mater what happens interest and capital repayments of there performing loans would be passed back to me, however the vast proportion of the capital repayments are being placed in loans of unknown risk. I always knew there are risks with non performing loans where only a proportion of the money would be recovered.
I was not aware of the amount AC has promised as this was not shown anywhere I could find, it only comes to light if you look at each of the 500+ loans and sum up all the future commitments, this is not even available in the download of the loan books to analysis in spreadsheets. It is only the technical expertise, time and effort of Irobot that we can see these future commitments which I am thankful.
Key Account Information - Asset security In order to provide additional protection to our clients’ investments, at Assetz Capital we always take realisable asset security on all our loans. This security takes the form of charges over property, equipment, or other assets professionally valued to be worth more than the value of the loan. Within the loan details, we will quote a Loan to Value (LTV) ( or Loan to Gross Development Value (LTGDV) for construction/development loans) in order to provide investors with an indication of the loan value versus the eventual expected security value. The value of security can vary across the lifetime of a loan. This may be through ordinary course of business during the natural course of a development/construction project or it could be where security is lost or harmed. Details of security taken are provided in each credit report and, wherever possible, any third party independent valuations are also provided. In the case of a development loan/construction project we will provide details of the loan to value when the loan is initially drawn and the forecast end loan to value post completion of all work. The transition of value throughout a development is not, however, linear and will vary according to the development and is also reliant upon continued funding of the development each month. As such, the loan to value during the course of a development/construction project may exceed the maximum opening and closing values quoted.
Assetz does a huge amount of due diligence of the loans. The valuations use industry wide standards (whether these standards are correct is an another question but not really one for AC independently) You gave AC discretion to invest the funds you placed in the account within the criteria of the account as defined. They continue to invest in line with those criteria. To not do so would actually increase the risk of the funds already invested which would be unfair to all investors. You have presumably never had any knowledge of any of the commitments AC had to fund new loans either. You just trusted whatever was invested in would meet the criteria and AC would manage the loans … that hasn't changed. Interest payments were on the basis defined in the terms. It is pretty clear that interest payments on specific loans would not be passed back to lenders but were pooled and paid out at the capped rate once a month. If it wasnt, it would have been on the first payment. I would agree that in the case of capital repayments the position is less clear and there maybe a case for AC to answer on this point. That said again it would be fairly obvious that individual capital repayments were not being made as no entries appear in the transactions to support such an assumption.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Apr 27, 2020 13:16:11 GMT
1) That's not a change in the t&cs that's a change in the operation of the account as permitted by the t&cs. 2) Furthermore, is there any statement that says how the queue should be processed? The change is in what has been practiced previously but I am unaware of anything that specifically defines a FIFO system.
2) Yes, that's the use of the word queue.
AFAICS There is no reference to a 'queue' in any shape or form in KAI. In fact there is no reference to a system for managing the withdrawal of funds at all. AFAIA AC has always stated that withdrawals should be instant in normal circumstances but not guaranteed. So the existence of a queue is only revealed in an after the fact explanation of how the newly revealed queue is going to work and amending how the never actually referenced before queue wasn't actually working in the first place because there hadn't actually been a queue anyway. I struggle to see the logic in an argument that something has been misrepresented if it hasn't been represented at all.
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Post by ian999 on Apr 27, 2020 13:37:48 GMT
I'm looking at commissioning a legal opinion on the legality of AC's change of policy. There are 2 elements to this: 1) that under the current revised procedures for making withdrawals from the Access accounts and the Property Secured Account, larger Lenders are now disproportionately disadvantaged. As joint Lenders we are all meant to have the same exposure pro-rata to our investments - the new queueing system stops that exposure being shared pro-rata. 2) with larger Lenders only being able to take out tiny percentages of the money that they put in, a yearly management charge of 0.9% being charged on the remainder is unfair. In order for a solicitor to start looking at this, they of course need to see some paperwork. Does anyone have any thoughts on the best source for AC's terms prior to the recent change and AC's terms now? Is there anywhere with a concise summary of what has happened - ie the change in the queuing system? Has anyone already collated this info for their own legal advisors? Thanks in anticipation...... To what end,achieve what ? (Serious Question) Hopefully this answers your question: If the legal opinion was - for example - that Assetz had acted illegally, then I would be instructing the lawyers to write to AC, setting out their reasoning and inviting AC to propose a solution to this issue that is fair and inline with the principle of the Lenders having pro-rata exposure.
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Post by nooneere on Apr 27, 2020 20:34:31 GMT
Hopefully this answers your question: If the legal opinion was - for example - that Assetz had acted illegally, then I would be instructing the lawyers to write to AC, setting out their reasoning and inviting AC to propose a solution to this issue that is fair and inline with the principle of the Lenders having pro-rata exposure. AC have a Chief Regulatory, Compliance and Audit Officer (his name is Andrew Sheppard www.assetzcapital.co.uk/our-story ). They will be ready to rebuff a solicitor's letter on behalf of a single investor, and have probably dealt with such already. A solicitor will cost you money and won't be effective. Have you considered the Financial Ombudsman Service www.financial-ombudsman.org.uk ? At least it won't cost you money and the platform will HAVE to listen. The 4thWay website reviewed the FOS for P2P investors only last month www.4thway.co.uk/candid-opinion/how-the-financial-ombudsman-protects-your-p2p-lending/
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alanh
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Post by alanh on Apr 27, 2020 21:03:54 GMT
Hopefully this answers your question: If the legal opinion was - for example - that Assetz had acted illegally, then I would be instructing the lawyers to write to AC, setting out their reasoning and inviting AC to propose a solution to this issue that is fair and inline with the principle of the Lenders having pro-rata exposure. AC have a Chief Regulatory, Compliance and Audit Officer (his name is Andrew Sheppard www.assetzcapital.co.uk/our-story ). They will be ready to rebuff a solicitor's letter on behalf of a single investor, and have probably dealt with such already. A solicitor will cost you money and won't be effective. Have you considered the Financial Ombudsman Service www.financial-ombudsman.org.uk ? At least it won't cost you money and the platform will HAVE to listen. The 4thWay website reviewed the FOS for P2P investors only last month www.4thway.co.uk/candid-opinion/how-the-financial-ombudsman-protects-your-p2p-lending/I've spoken to the Financial Ombudsman and have used the service before - it was very good last time. They won't really start doing anything until 8 weeks after the event you are complaining about so its not worth contacting them yet. The date is getting closer though - 8 weeks from March 12th is May 7th. I will be submitting my complaint on that date and suggest all other investors who have been impacted by the pool system to do the same. I will be claiming compensation for financial loss, non-financial loss and interest (all within the remit of the FOS). The FOS will conduct a full investigation and, unlike with us, AC can't just ignore them and hope they go away.
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