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Post by scotty on Dec 21, 2022 16:09:02 GMT
Like other lenders, I do not understand why Assetz Capital has suspended the ability to exit using a discount. During the pandemic the ability to exit both the QAA and MLA was maintained, with significant discounts available on some loans. I do not understand why lenders are being denied the ability to exit now.
It is now clear that the plan to repay lenders pro – rata for each loan will make the orderly transfer of ISA holdings impossible, allowing lenders to exit at a discount will make the transfer process far simpler.
Assetz Capital must clearly understand the difficulties now faced by some lenders. Maintaining lenders ability to exit could go some way to addressing current sentiment and in turn the number of complaints directed towards the FCA.
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iRobot
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Post by iRobot on Dec 21, 2022 17:39:30 GMT
Like other lenders, I do not understand why Assetz Capital has suspended the ability to exit using a discount. During the pandemic the ability to exit both the QAA and MLA was maintained, with significant discounts available on some loans. I do not understand why lenders are being denied the ability to exit now.It is now clear that the plan to repay lenders pro – rata for each loan will make the orderly transfer of ISA holdings impossible, allowing lenders to exit at a discount will make the transfer process far simpler. Assetz Capital must clearly understand the difficulties now faced by some lenders. Retaining lenders ability to exit could go some way to addressing current sentiment and in turn the number of complaints directed towards the FCA. In order to allow discounted selling AC would need to provide a marketplace. In order to provide a marketplace AC would need to meet certain regulatory obligations. As per the 15/12 announcement: " Capital value calculations will cease as loan trading has ceased" My view is that AC really don't want have to put a continuously appraised value on their loan book as they run it off. Therefore, no market place and no option to exit at a discount.
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dave2
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Post by dave2 on Dec 21, 2022 17:51:28 GMT
Like other lenders, I do not understand why Assetz Capital has suspended the ability to exit using a discount. During the pandemic the ability to exit both the QAA and MLA was maintained, with significant discounts available on some loans. I do not understand why lenders are being denied the ability to exit now. It is now clear that the plan to repay lenders pro – rata for each loan will make the orderly transfer of ISA holdings impossible, allowing lenders to exit at a discount will make the transfer process far simpler. Assetz Capital must clearly understand the difficulties now faced by some lenders. Retaining lenders ability to exit could go some way to addressing current sentiment and in turn the number of complaints directed towards the FCA. The platform has entered into a different phase now, it is in wind down mode for all retail investors. I fully understand why Assetz Capital has taken the decision to protect the investment of all lenders equally at this stage, rather than giving priority to any specific group of lenders. For me, if Assets Capital manages the wind down well, there will be minimal change. Your third, final, paragraph, is irrelevant.
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Post by scotty on Dec 21, 2022 18:22:43 GMT
Like other lenders, I do not understand why Assetz Capital has suspended the ability to exit using a discount. During the pandemic the ability to exit both the QAA and MLA was maintained, with significant discounts available on some loans. I do not understand why lenders are being denied the ability to exit now.It is now clear that the plan to repay lenders pro – rata for each loan will make the orderly transfer of ISA holdings impossible, allowing lenders to exit at a discount will make the transfer process far simpler. Assetz Capital must clearly understand the difficulties now faced by some lenders. Retaining lenders ability to exit could go some way to addressing current sentiment and in turn the number of complaints directed towards the FCA. In order to allow discounted selling AC would need to provide a marketplace. In order to provide a marketplace AC would need to meet certain regulatory obligations. As per the 15/12 announcement: " Capital value calculations will cease as loan trading has ceased" My view is that AC really don't want have to put a continuously appraised value on their loan book as they run it off. Therefore, no market place and no option to exit at a discount. Assetz have stated that they will continue to monitor and manage the loans, continuing to provide a capital valuation should not require many extra resources.
Just looking through the current discounted loans, it appears that any loans with a sizeable discount to capital value (less 97.5%) are already suspended. I would expect the suspension of loans would continue if the capital value was significantly discounted.
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Post by overthehill on Dec 21, 2022 19:10:30 GMT
It would be pushing it to have a legitimate SM when there is an extra adhoc charge of 3% on top of all the other charges in the contract. All the discounts would need a base level of -3%.
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Post by scotty on Dec 21, 2022 19:20:42 GMT
It would be pushing it to have a legitimate SM when there is an extra adhoc charge of 3% on top of all the other charges in the contract. All the discounts would need a base level of -3%.
I see your point, however, there was also a lender fee during the pandemic and lenders were still allowed to exit at a discount. The 2.9% lender fee is higher than lender fee imposed previously, however, this is expected to reduce to 1.4% in 6 months
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rscal
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Post by rscal on Dec 21, 2022 19:50:38 GMT
What I don't understand is how AC can claim we're insignificant on the one had (Retail 'was' down to 20% of loan business) YET we require orderly run-off and elaborate (and never before undertaken) exercise and we are now responsible for paying for the service of repaying out loans in a way that it's top-priority fees structure can't sustain. They aren't going out of business, they're going into the Undertaking business. And there is no time limit. This could drag on indefinitely.
Given the interminable nature of this chosen process - other than 'informing' the FCA and conducting previously unknown polling of customers does AC not have some other strategy to get our loans paid back sooner?
For instance, they could pick up the phone and canvas the current performing borrowers on exiting by seeking earlier refinance. They could even [holds breath] offer them some fee refund to do so. Of course that would make it worse for the remaining loan book but I fear they lack proper incentive to return our money when it appears as though they are writing their own cheques here. Where does the Regulator fit in?
I suppose if discounts were only allowed up to some modest extent [such as 5%] and not unlimited as previously that would make only the better loans traded in practice [e.g. 12-18 months remaining @7%] so I can see why it is more practical to shut up shop altogether - but in that case we need the proper oversight/leverage/incentive structure in place to make return of capital happen that doesn't seem to be there at present.
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Post by crabbyoldgit on Dec 21, 2022 22:34:41 GMT
The problem here could be regularity in that I believe because loans are pooled in the access accounts ac needs to reasonably believe that all expected future losses are covered by the provision fund in loans which are traded . In the present conditions that may be hard to justify. Loans which may incure losses not covered by ringfenced funds would have to be separated and could not be traded.ps and that could easily be the entire loan book in administration.
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pikestaff
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Post by pikestaff on Dec 22, 2022 8:18:06 GMT
I'm sure the exit process will have been agreed with the FCA. The FCA will have insisted on all lenders being treated equally, hence no SM, hence no sales at a discount.
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Post by crabbyoldgit on Dec 22, 2022 9:01:29 GMT
All lenders treated fairly, this raises questions over the provision funds.Ok in 80ish days the 30 and 90 day accounts will cease to exist,so what happens to their provision funds.
The funds are ac property and retained to fund the wind down,or bugger a Bentley,give me a Roller.
Transferred to the instant access account with the loan parts,money.But the provision fund ratio in these accounts is lower than the instant account,hence the security of the existing instant access count holders will be unfairly diluted after its closure as its provision fund ratio will be lowered by the transfer.
Or ac top up the transferred provision fund moneys to the same ratio as the instant account at transfer.In the future transactions this will not be problem as all loan part payments will contribute the same to the fund,but at transfer no.
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Post by crabbyoldgit on Dec 22, 2022 9:01:40 GMT
double post sorry this a delete
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Post by scotty on Dec 22, 2022 9:14:42 GMT
The problem here could be regularity in that I believe because loans are pooled in the access accounts ac needs to reasonably believe that all expected future losses are covered by the provision fund in loans which are traded . In the present conditions that may be hard to justify. Loans which may incure losses not covered by ringfenced funds would have to be separated and could not be traded.ps and that could easily be the entire loan book in administration. The same conditions existed during the pandemic and lenders were not denied the ability to exit loans then.
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Post by crabbyoldgit on Dec 22, 2022 10:40:38 GMT
sorry i do not believe so ,in the pandemic the imposition of non normal trading conditions was seen as temporary,in the future new loans would enter the fund and contribute funds to the provision fund which would enable ac to say sufficient funds would exist in the provision fund to cover future expected defaults. That is not the case now , conditions are unfortunately completely different. The only new funds will come from existing loans and the level of expected losses must have increased.
It must be harder to argue sufficient funds will exist to cover losses,the only condition in which sales of loans parts can take place in.
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Post by scotty on Dec 22, 2022 11:05:26 GMT
sorry i do not believe so ,in the pandemic the imposition of non normal trading conditions was seen as temporary,in the future new loans would enter the fund and contribute funds to the provision fund which would enable ac to say sufficient funds would exist in the provision fund to cover future expected defaults. That is not the case now , conditions are unfortunately completely different. The only new funds will come from existing loans and the level of expected losses must have increased. It must be harder to argue sufficient funds will exist to cover losses,the only condition in which sales of loans parts can take place in. Understand your point about future new loans contributing funds to the provision fund.
However, at present, all capital value discounts have been covered by the provision fund. I'm not sure how much the provision fund has changed since the last update, there was £0.97m remaining, after the deduction of expected losses, in the fund at the end of October.
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Post by crabbyoldgit on Dec 22, 2022 21:02:11 GMT
Interesting on your figures re provision coverage,if ac do or do not open trading will inform us what ac consider the future outcome may be I guess. I for sure would need 25 percent at least before even starting to think of buying.
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