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Post by oppsididitagain on May 20, 2024 14:18:31 GMT
Does anyone know why AC takes over £5000 PM in a monitoring fees on this loan
In fact there are 2 fee's being taken, the total is over £5K - which seems ALOT
Has every loan got a MF attached to it ?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 20, 2024 15:41:37 GMT
Does anyone know why AC takes over £5000 PM in a monitoring fees on this loan In fact there are 2 fee's being taken, the total is over £5K - which seems ALOT Has every loan got a MF attached to it ? Because AC charges the borrower a monitoring fee on all loans to cover their costs of managing the loans - it varies but is 1.99% on this loan. Thats why there are two rates quoted as per FCA regs ... the total rate payable by the borrower (6.99%) and the rate received by lenders (5%) I think there are two fees & interest payments because the system is adjusting the amortisation profile to take account of the annual lump sum capital reduction (£60k) - as the monthly sum being paid remains the same the split between capital and interest (which MF are part of) changes to reflect a small capital payment and more interest ... same thing happens when a DL makes a drawdown. Usually the payments adjust themselves after a few months so just one payment is made but this one seems to not to have done so, perhaps it needs manual intervention and they havent bothered until the next lump sum is due (now) ... only one this month but it will get distorted next month after the next lump sum has been paid Yes
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Post by oppsididitagain on May 21, 2024 13:22:26 GMT
wow, after all these monitoring fee's they still cant seem to run the company properly !!
I thought the MF was only incase of a breach of contract, issuing reservation of rights or something where AC had to step in and do some extra work
I didnt realise it was on every loan
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rscal
Posts: 985
Likes: 536
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Post by rscal on May 21, 2024 14:22:10 GMT
wow, after all these monitoring fee's they still cant seem to run the company properly !! I thought the MF was only incase of a breach of contract, issuing reservation of rights or something where AC had to step in and do some extra work I didnt realise it was on every loan It is pricipally made up of a split in the interest rate paid by the Borrower. But rates vary too so whenever we get a bit more (due to a change in the circumstances like an agreed extension) AC gets a share of that too. And they now also collect 0.9% of the performing seals capital (which is confusing because why not just put that onto the interest rate eh? It allows them to collect more without asking the Borrower to fund it [directly] of course) NOW if I was going 'to advise' the FCA on changes to make it would be to cut out the priority of MF over lender interest. Instead make us 'share' whatever can be extracted from the borrower. That is the correct 'incentive' to not drag things out knowing they will no longer automatcially recieve first dibs.
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