Post by sl75 on Jan 20, 2015 18:33:01 GMT
sl75 The whole sentence reads:
Following the assignment of loans to the Provision Fund, the Provision Fund Trustee will wait for all the loans to fully run down in order that it can collect all monies owing under the outstanding loan contracts, after which it shall distribute the Assigned Funds to lenders on a pro rata basis.
[emphasis added]
I don't think this bears any other interpretation, and I'd assumed the subsequent bit about multiple distributions was there to deal with recoveries after the five years are up. I agree that in theory the trustee could start making distributions sooner, but they might not be able to distribute all of the funds received because this could put them at risk of not sharing out losses evenly once interest is taken into account. In any event I'd be amazed if they paid out as often as once a month.
Even if the trustee paid out in instalments as soon as possible, lenders on all markets would have to wait at least 5 years to get all of their money back and it would be a real shock to those in the shorter term markets.
"wait for all the loans to fully run down" - i.e. as opposed to only waiting for some of the loans to run down, or waiting only until they've run down partly before enacting some other procedure such as selling the tail end of the portfolio to a debt management company. It confirms that they will indeed wait for ALL of them to FULLY run down.
Interpretation of ", after ..." hinges on whether the word "after" applies to the immediately-preceding phrase "collect all monies owing under the outstanding loan contracts", or to the phrase before that about allowing the contracts to fully run down.
As you appear unable to see the other interpretation, try reading it with the words "in order that it can" replaced with ". The Provision Fund Trustee will continue to". In starting a new sentence, it puts a clear break between the word "after" and the phrase you currently believe you should be applying it to.
If you really do believe the PFT would be holding on to several million pounds of our money for up to 5 years, can I ask what purpose you believe this serves?
Regarding having to wait at least 5 years to get all money back, this seems a natural consequence of an inadequate provision fund, although it may still be divided pro-rata based on when payments were originally due, rather than the total amount owed (e.g. start off paying 80% of all payments due "by now", and work from there?)
Considering those in the shorter-term markets, and the monthly market in particular (where the money that really expects to be available in a relatively short time would be residing) - I can see only two possibilities
1. The deteriorating situation would have been abundantly clear 1 month prior to the resolution event, at the point the lender chose to [re-]invest their money there. In particular it is likely that a substantially higher rate would have been demanded by the market than is demanded today.
2. The situation deteriorated so suddenly, that it would probably be attributable to a widespread plague or the loss of a large UK city to a major disaster, or an event on a similar scale, in which case the RateSetter investment is probably the least of your worries...