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Post by Ace on Oct 7, 2020 21:49:03 GMT
Very much so, and to the detriment of the unwary who will be picking up parts of a defaulted loan. With an even greater chance that the PF will be insufficient to repay when the loan ends due to the extra interest payments that it now needs to make. It doesn't really change anything just spreads the defaults and thereby enables RS more chance to collect it back vs just accepting the funds are gone It really does change things. It delays the point at which RS will be forced to admit that the PF won't be sufficient to return all capital. The delay will allow more people to escape prior to the declaration and the extra interest payments will will make the PF position worse in the long run. This will mean that there's a larger deficit to be shared between fewer remainers. Great if you manage to escape, but very poor if you don't. This is all predicated on the assumption that you don't believe RS's forecast that the PF is on track to be restored by Christmas, despite reasonable forecasts that unemployment and defaults are about to rise.
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Post by scepticalinvestor on Oct 9, 2020 11:09:16 GMT
Very much so, and to the detriment of the unwary who will be picking up parts of a defaulted loan. With an even greater chance that the PF will be insufficient to repay when the loan ends due to the extra interest payments that it now needs to make. It doesn't really change anything just spreads the defaults and thereby enables RS more chance to collect it back vs just accepting the funds are gonebeagle Not sure what you mean here. RS never "just accepted the funds are gone" just because a default was declared and the capital repaid by the PF. Even after a loan went into "default" and the PF paid off the o/s capital to lenders, RS continued to work on recoveries and any funds recovered are used to replenish the PF. 
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alanh
Posts: 556
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Post by alanh on Oct 9, 2020 16:49:54 GMT
Just had my September statement from RS. If you bother to read the whole of it and scroll down far enough you will get to the 'Change to provision fund charge-off procedure' section. And on initial reading all seems good, it actually looks like we will get repaid on defaulting loans quicker now than before. Then the sneaky bit arrives. It continues ' Read more in the RateSetter Notices section of your account.'. If you actually bother to log in to your account to read the extra information (a lot of people would not bother, i only happened to notice the full information because i logged in to cancel orders), then you will see the other side to this - that this change now means that you can get matched to loans that are already in default. This probably does not make much difference to most of us on this board as most of us are cancelling our orders. But this does look like another deliberate attempt by RS to screw over the investors that are not aware of this work-around (and hopefully without them even finding out). This is not dissimilar to how the "access accounts" work at Assetz Capital - anyone buying into those is getting a whole load of defaulted and suspended loans thrown into the bargain. As you say, it doesn't matter if you can sell it all on to someone else before the whole thing goes pear shaped or the provision fund runs out of money.
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