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Post by overthehill on Sept 21, 2021 19:25:12 GMT
There was something bugging me about the New* loan pay back, we were paid 50% of the exit fees.
We didn't get a share for the Ips* Refinance loan pay back in June despite it also having a 1% exit fee. Nor did we get a share for the New* Development loan pay back because it had no exit fee. In fact I think we've never had a share of a triggered exit fee before.
My earlier guess about the criteria for a loan having an exit fee was wrong because I thought the New* Development loan would have an exit fee as it wasn't generating an income. So I've no idea what circumstances mandate an exit fee.
Interestingly that leaves three possibilities:
Proplend has shared it by mistake. Proplend has generously changed the T+C's/policy in favour of us lenders Proplend has been forgetting to share it with us for all previous late loans with a triggered exit fee !
I have never expected to get a share of the exit fee for a loan from any platform.
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bababill
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Post by bababill on Sept 23, 2021 4:50:27 GMT
Proplend has shared it by mistake.
Highly unlikely since the exit fee is mentioned several times in FLR "Exit Fee 1% - only incurred if the loan is not fully redeemed within the agreed 6-month term." "Risk that the Borrower stops making monthly interest payments to Lenders due to loss of lease income and or tenants whose leases had ended, had exercised a lease break or have gone into receivership." "They are keen though to avoid incurring the 1% Exit Fee." Also many other loans have exit fees Liverpool hotel Redditch commercial Derbyshire South Harrow mixed use Bath Southwark etc etc etc 2) "We didn't get a share for the Ips* Refinance loan pay back in June despite it also having a 1% exit fee" Ips Warehouse Refinance??? If yes I can not comment as was not in this loan. 3) None of my loans that I have a record of contained an exit fee; having said that I only recently started keeping records.
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bababill
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Post by bababill on Sept 27, 2021 22:16:11 GMT
overthehillcheck out the Peter land refinance FLR Under Exit Fee--..... interesting.. I have never seen this before....
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Post by uksoul on Sept 27, 2021 23:02:35 GMT
overthehill check out the Peter land refinance FLR Under Exit Fee--..... interesting.. I have never seen this before.... The fee acts as an incentive to complete a loan on time
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Post by overthehill on Sept 28, 2021 11:47:05 GMT
overthehill check out the Peter land refinance FLR Under Exit Fee--..... interesting.. I have never seen this before....
Yes, they've made changes to apply the exit fee only if the loan doesn't repay on time and share it. It's hard to tell how long this change has been active and how many loans apply because I don't think they've documented it on the loan FLR before. Some have exit fees and some don't and we don't see the conditions. I'm pretty certain this is an inaugural payment and there will be more ! As someone else mentioned the motive is likely incentive for the borrower to repay on time but PL definitely didn't need to share it as late payment creates more work for them. Any P2P precedents for sharing the exit fee ? I doubt it.
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Post by overthehill on Oct 4, 2021 12:10:13 GMT
Straight from the horses mouth.
We had a couple of Lenders contact us directly following the repayment of the Newmarket Loan stating they noticed they received a percentage of the Loan Exit Fee and was this new or had we made a mistake? It is new, and this loan is the first loan where this Exit Fee has been applicable. Here is how the exit fees work:
if the Loan incurs a compulsory Exit fee, then 100% of that fee is due to Proplend. This fee could be attached to any Loan type.
if the Loan incurs an Exit fee which is only payable if the loan is not redeemed within the expected loan term or a default fee, then this fee is split 50:50 between Proplend and the Lenders. Proplend does not charge any Lender fees on the Lenders 50% share. This is a relatively new fee and would usually be attached to a Bridge Loan.
going forward, we will look to communicate the Exit Fee type more clearly on the FLR’s
Separately a Loan could incur an Early Redemption Charge, this is self-explanatory and is charged if a loan is redeemed early. 100% of this charge is due to the Lenders and then Proplend charge’s it’s usual 10% Lender fee.
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liso
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Post by liso on Oct 4, 2021 12:16:32 GMT
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