rscal
Posts: 911
Likes: 500
|
Post by rscal on Dec 15, 2022 20:14:21 GMT
Here's a question to the crowd. Would ACs lender terms allow it to 'call in' loans under a general exigency [like it entering run off]? They certainly like sending letters asking for early repayment under a wide range of circumstances so should not a loan taken out with a lending platform involve such event specific provisions that would turn the loan into repayable upon demand? [I remember being shocked to learn that all mortgages were made 'repayable on demand' conditions so why would not AltFi loans do also? [Because one way to run-off a balance sheet is to have the power to call in loans just like a bank]
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 15, 2022 20:19:50 GMT
Suspect provision fund will be found lacking for purpose. That is if AC provision board even decide to conciser its use. To paraphrase Warren Buffett We will see if ACs loan team have been Swimming Naked When the Tide Goes Out Unfortunately they will not be the ones who catch a cold
|
|
p2pfan
Member of DD Central
Full-Time Investor
Posts: 740
Likes: 830
|
Post by p2pfan on Dec 15, 2022 20:22:51 GMT
The additional 2.9% pa fees that AC will charge lenders henceforth - on top of all their other costs, fees and charges - are preposterous. AC are saying, "we don't need you retail lenders anymore and are going to screw you out of every penny we can get".
No doubt these fees will be used by Stuart Law to buy himself a second Jaguar in order to fulfil his ambition to ape John 'Two Jags' Prescott.
I would encourage everyone to contact the following to complain about the fees:
- AC - the Financial Ombudsman Service - the FCA - the media - write reviews about AC on review websites
We need to try to get these eye-watering new fees scrapped or at least reduced.
Based on how other "orderly wind downs" by other P2P platforms have gone, this situation is worrisome. As we see with Ablrate, the wind down is going to be anything but orderly.
AC staff, 'working' from home in their pyjamas and onesies, will already be spending more time on Indeed.com looking for new jobs rather than doing their AC work. They certainly won't be sweating over whether borrowers pay back their loans or not. There is no incentive for AC to keep lenders happy anymore.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,851
Likes: 11,078
|
Post by ilmoro on Dec 15, 2022 20:26:41 GMT
There are restrictions on corporate lending under P2P agreements ... Not sure I understand this, I had 2 companies with accounts in AC which I used to put funds into the AAs and could also buy or sell on the secondary market, are you saying that AC should not have let me open these accounts or use them in this way? There are restrictions on lending where the lender is effectively lending as its course of business which institutional funders clearly are. I also believe there are restrictions on the level of lending, max £25k per loan. This is a live issue as the Unbolted case is currently focussed on the issue of whether corporate lending (non-institutional) has polluted & invalidated peer to peer agreement
|
|
alender
Member of DD Central
Posts: 955
Likes: 645
|
Post by alender on Dec 15, 2022 20:41:01 GMT
Not sure I understand this, I had 2 companies with accounts in AC which I used to put funds into the AAs and could also buy or sell on the secondary market, are you saying that AC should not have let me open these accounts or use them in this way? There are restrictions on lending where the lender is effectively lending as its course of business which institutional funders clearly are. I also believe there are restrictions on the level of lending, max £25k per loan. This is a live issue as the Unbolted case is currently focussed on the issue of whether corporate lending (non-institutional) has polluted & invalidated peer to peer agreement Again I do not understand, my companies invested in the AAs and my companies profited from this and it was at the time a large part of the income since stopped work and had money left in my companies which I drain a certain amount down each year. Therefore lendering became a large part of my business. AC were obviously aware they were investing company funds and my accountant never questioned the investment. As everthing was in the AAs I did not have more than £25K in one loan but I had considerably more than £25K invested in the AAs.
|
|
mogish
Member of DD Central
Posts: 1,015
Likes: 500
|
Post by mogish on Dec 15, 2022 20:46:30 GMT
This whole messy situation reminds me of Lending works during covid. Remember the 2% service fee, the loan contributions to the shield etc etc. All the marks of a company going down the pan and sucking the last bits of revenue from investors before the inevitable happens.
I do hope investors get a decent outcome asap and AC cooperate in the debt management recovery.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,851
Likes: 11,078
|
Post by ilmoro on Dec 15, 2022 21:22:32 GMT
There are restrictions on lending where the lender is effectively lending as its course of business which institutional funders clearly are. I also believe there are restrictions on the level of lending, max £25k per loan. This is a live issue as the Unbolted case is currently focussed on the issue of whether corporate lending (non-institutional) has polluted & invalidated peer to peer agreement Again I do not understand, my companies invested in the AAs and my companies profited from this and it was at the time a large part of the income since stopped work and had money left in my companies which I drain a certain amount down each year. Therefore lendering became a large part of my business. AC were obviously aware they were investing company funds and my accountant never questioned the investment. As everthing was in the AAs I did not have more than £25K in one loan but I had considerably more than £25K invested in the AAs. Cant really comment on the specific technicalities, neither a lawyer or an accountant etc (from my experience accountants dont tend to be very familiar with P2P) I just know there are restrictions on the mingling of institutional & retail lending in article 36h loans. Its £25K per loan for company lenders. So if institutions cant take chunks of loans to release retail then they would need to take whole loans. They arent likely to pick up low rate loans in current climate and AA probably cant sell higher rate loans and maintain its operating objectives
|
|
|
Post by overthehill on Dec 15, 2022 21:23:27 GMT
Suspect provision fund will be found lacking for purpose. That is if AC provision board even decide to conciser its use. To paraphrase Warren Buffett We will see if ACs loan team have been Swimming Naked When the Tide Goes Out Unfortunately they will not be the ones who catch a cold Why would any company care about the quality of loan originations if bad loans generate more revenue than good loans. That part of the business model was in plain sight and to be fair AC had a good transparency score in my mind. At the other end of the spectrum of trust, Kuflink invest their own money in all loans.
|
|
|
Post by overthehill on Dec 15, 2022 21:31:33 GMT
There are restrictions on lending where the lender is effectively lending as its course of business which institutional funders clearly are. I also believe there are restrictions on the level of lending, max £25k per loan. This is a live issue as the Unbolted case is currently focussed on the issue of whether corporate lending (non-institutional) has polluted & invalidated peer to peer agreement Again I do not understand, my companies invested in the AAs and my companies profited from this and it was at the time a large part of the income since stopped work and had money left in my companies which I drain a certain amount down each year. Therefore lendering became a large part of my business. AC were obviously aware they were investing company funds and my accountant never questioned the investment. As everthing was in the AAs I did not have more than £25K in one loan but I had considerably more than £25K invested in the AAs.
But your business probably wasn't registered as a financial company whose primary income is finance related. A plumbing business who likes to invest operating cash in financial products is not an institutional lender and is the same as a personal lender. I may have missed the point.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,851
Likes: 11,078
|
Post by ilmoro on Dec 15, 2022 21:49:33 GMT
To paraphrase Warren Buffett We will see if ACs loan team have been Swimming Naked When the Tide Goes Out Unfortunately they will not be the ones who catch a cold Why would any company care about the quality of loan originations if bad loans generate more revenue than good loans. That part of the business model was in plain sight. At the other end of the spectrum of trust, Kuflink invest their own money in all loans.
Do they? Need to read the t&cs quite carefully. The word used is 'may' in 'self-select' loans. That would suggest there may be loans they (ie Kuflink Bridging) dont have money in and there is no money in any auto-invest loans. Not that familiar with the platform. Are loans split between auto & self-select or are they totally separate. If the former then would the 5% only relate to the share of the loan that is held by self-select lenders ie 50%, then would KBL only have 2.5% first loss? Also seems a bit muddy on payment priorities ... looks like Kuf are the same as AC when it comes to their fees/costs ie they get paid ahead of lenders (Doesnt help that the clause seems to direct you to itself)
|
|
|
Post by Ace on Dec 15, 2022 22:07:32 GMT
Why would any company care about the quality of loan originations if bad loans generate more revenue than good loans. That part of the business model was in plain sight. At the other end of the spectrum of trust, Kuflink invest their own money in all loans.
Do they? Need to read the t&cs quite carefully. The word used is 'may' in 'self-select' loans. That would suggest there may be loans they (ie Kuflink Bridging) dont have money in and there is no money in any auto-invest loans. Not that familiar with the platform. Are loans split between auto & self-select or are they totally separate. If the former then would the 5% only relate to the share of the loan that is held by self-select lenders ie 50%, then would KBL only have 2.5% first loss? Also seems a bit muddy on payment priorities ... looks like Kuf are the same as AC when it comes to their fees/costs ie they get paid ahead of lenders (Doesnt help that the clause seems to direct you to itself) Yes, some loans have some tranches in self-select and some tranches in auto.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,851
Likes: 11,078
|
Post by ilmoro on Dec 15, 2022 22:26:58 GMT
Do they? Need to read the t&cs quite carefully. The word used is 'may' in 'self-select' loans. That would suggest there may be loans they (ie Kuflink Bridging) dont have money in and there is no money in any auto-invest loans. Not that familiar with the platform. Are loans split between auto & self-select or are they totally separate. If the former then would the 5% only relate to the share of the loan that is held by self-select lenders ie 50%, then would KBL only have 2.5% first loss? Also seems a bit muddy on payment priorities ... looks like Kuf are the same as AC when it comes to their fees/costs ie they get paid ahead of lenders (Doesnt help that the clause seems to direct you to itself) Yes, some loans have some tranches in self-select and some tranches in auto. So its not like say CP where auto will fund some of a listing and self select anything left? Each listing is only available to either self-select or auto, not both so KBL share is clear.
|
|
|
Post by Ace on Dec 15, 2022 22:37:53 GMT
Yes, some loans have some tranches in self-select and some tranches in auto. So its not like say CP where auto will fund some of a listing and self select anything left? Each listing is only available to either self-select or auto, not both so KBL share is clear. I can't be sure of that. All I know for certain is that there are loans that have some tranches that are only in auto and some that are only in self-select. I can't be sure that there are no tranches that are in both.
|
|
|
Post by Ace on Dec 15, 2022 22:42:27 GMT
So its not like say CP where auto will fund some of a listing and self select anything left? Each listing is only available to either self-select or auto, not both so KBL share is clear. I can't be sure of that. All I know for certain is that there are loans that have some tranches that are only in auto and some that are only in self-select. I can't be sure that there are no tranches that are in both. Actually, I think that KBL underwrite the loans anyway, so it must be possible for both KBL and retail lenders to be contributing to the same tranche.
|
|
sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
Posts: 1,426
Likes: 1,211
|
Post by sqh on Dec 15, 2022 23:09:40 GMT
Many loans get extended for various reasons, with lenders typically getting an extra 0.25%. I don't see MLA lenders agreeing to that any longer, so borrowers should get charged default interest. This would cancel out the 2.9% fee for those loans. Alternatively, AC could renew these loans with institutional investors.
There is an active vote on loan #514 which is to agree to a 9 month extension with a 0.5% rate rise split 0.25% to lenders 0.25% to AC. I did vote "A" to approve the extension, I have now changed to "B". The loan is due to end in 2 weeks on 31st December 2022. If the extension isn't approved then 3% default interest should be applied. This would cancel out the 2.9% fee.
|
|