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Post by saintpeter on Jun 16, 2020 21:45:18 GMT
...payment before the loan is considered to have defaulted and the whole amount is repaid to the investor?
I asked one of the RS customer service people this question and I didn't get a clear answer so perhaps someone here knows?
What I mean is that if there is an amortising loan (or interest only for that matter) and I as an investor can call up the loan and see that the provision fund has made a payment on behalf of the borrower, how many times does this have to happen before RS considers that the loan cannot be repaid and the provision fund steps in to repay the loan in full to the investor?
The bloke from RS said that it is normally 3 consecutive months of the payment being covered by the provision fund until they step in and consider it not repayable by the borrower and RS will then pay the loan back in full to the investor. However, he also said that borrowers also have a 3 month payment holiday because of everything that is going on, so as I understand it, a minimum of 6 months of non-payment (being covered by provision fund) until a loan is considered non-repayable. Does anyone know if this is accurate?
Also, on a related point, it would be really helpful if RS showed how many months a specific loan had been covered by the provision fund and whether these were consecutive or not but I guess that would be too much information to show. It would also be helpful to show the loan number rather than contract number in all the RS platforms as the loan number is the only way you can actually track a loan clearly since the contract number changes each month when the loan becomes a new order. I wish they'd make it all a bit less opaque and hard to follow if you are an investor tracking loans. It would also be helpful if there was some way of identifying "interest only" loans in the "existing contracts" tab as these are currently all mixed in with amortising loans, whereas "non-amortising loans" have their own tab (new contracts) which is very confusing.
Thanks in advance for any replies.
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Post by shanghaiscouse on Jun 17, 2020 9:36:42 GMT
according to the contract, they pay you back the entire capital of the loan, but over the same period it was expected to repay. when a loan defaults its ownership is transferred from you to the PF, and any recoveries on it are for the PF (this is the flipside of saying the PF will fund your entire capital loss). However, this is limited up to the ability of the PF to repay, if the PF is exhausted then RS is not dipping into its own capital. What they can do it further cut interest and even cut capital in order to replenish the PF. SO what all this means is that you don't have to worry about how many months it is until they decide the loan has defaulted, as long as the PF is funded, you will get the entire capital back.
Of course, the problem at the moment seems to be that the PF could well be exhausted once the forbearance, furlough, free loans, free grants, free everything schemes come to an end
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robski
Member of DD Central
Posts: 772 
Likes: 462
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Post by robski on Jun 17, 2020 10:40:19 GMT
according to the contract, they pay you back the entire capital of the loan, but over the same period it was expected to repay. when a loan defaults its ownership is transferred from you to the PF, and any recoveries on it are for the PF (this is the flipside of saying the PF will fund your entire capital loss). However, this is limited up to the ability of the PF to repay, if the PF is exhausted then RS is not dipping into its own capital. What they can do it further cut interest and even cut capital in order to replenish the PF. SO what all this means is that you don't have to worry about how many months it is until they decide the loan has defaulted, as long as the PF is funded, you will get the entire capital back. Of course, the problem at the moment seems to be that the PF could well be exhausted once the forbearance, furlough, free loans, free grants, free everything schemes come to an end I dont think this is how it works in practice I think the 3 continuous months is right, at that point the PF pays you the lot, and then the fund goes after the payments and receives all the receipts. Certainly when I look at my repayments that come in in lumps plenty are the PF paying the lot. I think in theory they could revert to the fund covering the payments every month for longer periods, it would certainly make some sense in a time when the fund is low to not return all to investors, but just pay the monthlies
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Post by saintpeter on Jun 17, 2020 12:02:44 GMT
according to the contract, they pay you back the entire capital of the loan, but over the same period it was expected to repay. when a loan defaults its ownership is transferred from you to the PF, and any recoveries on it are for the PF (this is the flipside of saying the PF will fund your entire capital loss). However, this is limited up to the ability of the PF to repay, if the PF is exhausted then RS is not dipping into its own capital. What they can do it further cut interest and even cut capital in order to replenish the PF. SO what all this means is that you don't have to worry about how many months it is until they decide the loan has defaulted, as long as the PF is funded, you will get the entire capital back. Of course, the problem at the moment seems to be that the PF could well be exhausted once the forbearance, furlough, free loans, free grants, free everything schemes come to an end I dont think this is how it works in practice I think the 3 continuous months is right, at that point the PF pays you the lot, and then the fund goes after the payments and receives all the receipts.
Certainly when I look at my repayments that come in in lumps plenty are the PF paying the lot.I think in theory they could revert to the fund covering the payments every month for longer periods, it would certainly make some sense in a time when the fund is low to not return all to investors, but just pay the monthlies This is exactly how it was explained to me by the RS customer service agent. That after 3 months the loan defaults and is paid back in full to the investor from the provision fund and then RS have various methods of going after the loan such as selling it to agencies that will go after the defaulter.
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jane
Posts: 145
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Post by jane on Jun 19, 2020 20:17:26 GMT
I dont think this is how it works in practice I think the 3 continuous months is right, at that point the PF pays you the lot, and then the fund goes after the payments and receives all the receipts.
Certainly when I look at my repayments that come in in lumps plenty are the PF paying the lot.I think in theory they could revert to the fund covering the payments every month for longer periods, it would certainly make some sense in a time when the fund is low to not return all to investors, but just pay the monthlies This is exactly how it was explained to me by the RS customer service agent. That after 3 months the loan defaults and is paid back in full to the investor from the provision fund and then RS have various methods of going after the loan such as selling it to agencies that will go after the defaulter. If this is the case then I hope that all my loans default (just mine, don't want the provision fund running down too much) so I can get my money out in 3 months rather than waiting years.
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Post by areloz on Jun 21, 2020 11:14:15 GMT
In Access I have 3 out of 21 loans marked as "Has the Provision Fund made a repayment on behalf of the borrower?" = Yes
So when RS have paid the interest/capital 3 times, does RS set "Has the borrower defaulted?" to Yes? - I have no loans set to Yes.
And does it also set "Does RateSetter consider that the borrower will repay in full?" to No? - I have no loans set to No
Also, what is the meaning of the Loan Number prefix - L or G - it doesnt correlate with Loan Type or Borrower Category, so what does it correlate with?
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bt
Sir Bufton Tufton, Jean Paul Sartre Zippy, Bungle, Jeffrey Archer Andre Previn and the LSO Hello
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Post by bt on Jun 26, 2020 9:48:34 GMT
I know you can see if the provision fund has made a payment for a loan, but is there a way to see how many times ?
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