bugs4me
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Post by bugs4me on Feb 17, 2015 13:31:27 GMT
I don't believe they will. They have built up a 'head of steam' now and have enough lenders to fund most things hence I do not feel they felt any necessity to put their hands in their pockets over this mini disaster - unlike previous losses. To state the obvious, no P2P investment can ever be 100% secure but the actual value was so far away from the original value that whilst it may have only affected a tiny minority of lenders and the loss is not going to break the bank, nonetheless I feel some clarification from FS would be welcome even if it is they've changed their valuers, etc. I think bugs4me may have misinterpreted my question. I was not asking whether FS might dig into their pocket to cover the loss on this loan in order to preserve their 'no capital lost' track record. If they were going to do that they would have done it before now and not published the disappointing auction results, especially as those have raised such serious questions about the reliability of their valuations. I agree that they have enough support now that they may not feel the need to do that in order to encourage investors. Most loans are funded very quickly -- though I notice that today's £5k loan has been available for over an hour now, and isn't fully funded. What I was asking was how long it will take before FS update the performance statistics shown on their website. That's where they show their 'no capital lost' track record, and that's clearly out of date now. And probably could be described as misleading, since there isn't even a note saying "Data correct as of dd/mm/yy" they could hide behind. - no, heard your question load and clear and my answer remains semi the same although re-reading my response I can see how it was confusing. But I'll change my reply to a 'maybe one day' but I doubt if it will be sooner rather than later. They have traditionally been very slow to make changes to their website whether it's the GUI or the background workings. The point about making good on this loan would have occurred as you correctly point out before the result was posted to the lenders. So your comment 'probably could be described as misleading' is a bit of an understatement as it is misleading - not just probably IMO.
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Post by fundingsecure on Feb 17, 2015 17:10:44 GMT
Valuations
All our valuations are performed by third parties with relevant experience and expertise. However, when the day of sale arrives, valuations may not always be realised due to:
1) Lack of bidders on the day
2) Changes in trends and fashions
3) The valuation itself - which is an art not a science
A key point to note is that shortages cannot be covered by surpluses. Thus, if a high selling price is achieved on a default, the surplus over the debt must be returned to the borrower. However, where a low selling price is achieved, the shortfall cannot be recovered from the borrower.
As a specific example we have recently disposed of two similar assets from different defaulted loans. One was sold for 44% less than the original valuation, one for 66% more.
Nonetheless, on average our track record yields a strong net return of 12.7%
We still strongly recommend that investors spread their investments across a large number of loans to minimise the effect of any one loan failing.
Regards
FundingSecure
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 17, 2015 17:27:32 GMT
Valuations All our valuations are performed by third parties with relevant experience and expertise. However, when the day of sale arrives, valuations may not always be realised due to: 1) Lack of bidders on the day 2) Changes in trends and fashions 3) The valuation itself - which is an art not a science A key point to note is that shortages cannot be covered by surpluses. Thus, if a high selling price is achieved on a default, the surplus over the debt must be returned to the borrower. However, where a low selling price is achieved, the shortfall cannot be recovered from the borrower. As a specific example we have recently disposed of two similar assets from different defaulted loans. One was sold for 44% less than the original valuation, one for 66% more. Nonetheless, on average our track record yields a strong net return of 12.7% We still strongly recommend that investors spread their investments across a large number of loans to minimise the effect of any one loan failing. Regards FundingSecure Thank you for your comments fundingsecure. Your are welcome on the forum any time  With respect to your point 1) above, I was wondering whether you have any plans to use a larger auction house in order to minimise that particular risk?
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11025
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Post by 11025 on Feb 17, 2015 17:33:39 GMT
For some reason , maybe browser problems my posting was not coming out as it should so let me try again :
If it is a very bad day at a particular sale and the bid received is very poor are you able legally to have a reserve set and offer item/s an other day ?
Valuations All our valuations are performed by third parties with relevant experience and expertise. However, when the day of sale arrives, valuations may not always be realised due to: 1) Lack of bidders on the day 2) Changes in trends and fashions 3) The valuation itself - which is an art not a science A key point to note is that shortages cannot be covered by surpluses. Thus, if a high selling price is achieved on a default, the surplus over the debt must be returned to the borrower. However, where a low selling price is achieved, the shortfall cannot be recovered from the borrower. As a specific example we have recently disposed of two similar assets from different defaulted loans. One was sold for 44% less than the original valuation, one for 66% more. Nonetheless, on average our track record yields a strong net return of 12.7% We still strongly recommend that investors spread their investments across a large number of loans to minimise the effect of any one loan failing. Regards Funding Secure
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baz657
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Post by baz657 on Feb 18, 2015 17:45:04 GMT
I always thought if an item didn't hit the reserve and was unsold you were free to take it back and try again, somewhere else if need be. If that isn't the case I'd like to put myself forward as the primary outlet of unsold goods. 25% of initial valuation should cover it.
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bugs4me
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Post by bugs4me on Feb 18, 2015 18:57:38 GMT
I always thought if an item didn't hit the reserve and was unsold you were free to take it back and try again, somewhere else if need be. If that isn't the case I'd like to put myself forward as the primary outlet of unsold goods. 25% of initial valuation should cover it. I was thinking along similar lines that defaulted goods could be offered to lenders/investors first before going to auction but there maybe is a legal issue for doing so. Could fundingsecure clarify this point.
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mikes1531
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Post by mikes1531 on Feb 18, 2015 21:22:04 GMT
I always thought if an item didn't hit the reserve and was unsold you were free to take it back and try again, somewhere else if need be. I expect that's true, but if FS have a back-up buyer willing to take the item 'privately' for the reserve price then they might as well sell it at that price so that they can close out the loan and move on -- unless, of course, they know of a good reason for the failed auction and feel a further marketing attempt is likely to produce a better price. The obvious problem with further sale attempts is the additional time involved and costs incurred. That said, I don't see why fundingsecure shouldn't offer to sell any items unsold at auction to lenders willing to buy at the reserve price. Or even to let the lenders know where/when the auction is to be held in case they wish to bid. Surely having more potential bidders is a good thing, isn't it?
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mikes1531
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Post by mikes1531 on Feb 18, 2015 21:29:07 GMT
I always thought if an item didn't hit the reserve and was unsold you were free to take it back and try again, somewhere else if need be. If that isn't the case I'd like to put myself forward as the primary outlet of unsold goods. 25% of initial valuation should cover it. I was thinking along similar lines that defaulted goods could be offered to lenders/investors first before going to auction but there maybe is a legal issue for doing so. Could fundingsecure clarify this point. AIUI, FS are under an obligation to get the best possible price for an item, and a public auction may be the best way to demonstrate that they have. Going to someone -- even a qualified valuer -- and then selling at the recommended reserve price probably wouldn't be enough, as it would appear to be easily manipulatable, even if it is done on an arms-length basis. After all, we know how accurate -- or not -- valuations can be.
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bugs4me
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Post by bugs4me on Feb 18, 2015 22:07:49 GMT
I always thought if an item didn't hit the reserve and was unsold you were free to take it back and try again, somewhere else if need be. ....That said, I don't see why fundingsecure shouldn't offer to sell any items unsold at auction to lenders willing to buy at the reserve price. Or even to let the lenders know where/when the auction is to be held in case they wish to bid. Surely having more potential bidders is a good thing, isn't it? That is along similar lines to my thinking. It would of course though require FS to notify those that participated in the loan in the first place to advise them of the details. There are a couple of other defaults showing on my screen, due for auction early March, I have no idea though exactly when or where.
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mikes1531
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Post by mikes1531 on Feb 18, 2015 22:15:32 GMT
It would of course though require FS to notify those that participated in the loan in the first place to advise them of the details. Why limit it to those who participated in the loan? Why not offer these items to all FS investors?
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bugs4me
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Post by bugs4me on Feb 18, 2015 22:37:30 GMT
It would of course though require FS to notify those that participated in the loan in the first place to advise them of the details. Why limit it to those who participated in the loan? Why not offer these items to all FS investors? - I would agree with you but I suspect - although I have no proof - that FS is not very automated so this would require a great deal of manual intervention on their part. Plus of course, once a loan is drawn down then the particulars are hidden from those that did not participate so these would need to be circulated in full to everyone. I have no idea how practical it would be for them although I'm sure a half decent IT guy/gal could sort that out in a couple of nanoseconds. At least though advising those where/when the auction will take place then you could always make a telephone bid for the item. What I am unaware of are the legalities of this suggestion.
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mikes1531
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Post by mikes1531 on Feb 18, 2015 22:48:39 GMT
Why limit it to those who participated in the loan? Why not offer these items to all FS investors? - I would agree with you but I suspect - although I have no proof - that FS is not very automated so this would require a great deal of manual intervention on their part. Plus of course, once a loan is drawn down then the particulars are hidden from those that did not participate so these would need to be circulated in full to everyone. I have no idea how practical it would be for them although I'm sure a half decent IT guy/gal could sort that out in a couple of nanoseconds. ... What I am unaware of are the legalities of this suggestion. I think they already have the necessary technology. They circulate their newsletter to a wide audience, so they're already set up for mass mailing. All they'd have to do is include a link in the mailing to the appropriate defaulted loan and Bob's your uncle! I'm certainly no expert, but I can't imagine there would be legal problems as long as the auction comes first. If the auction produces no buyer, T&C 7.4 says they can settle the borrower's account at the reserve price and then seek a private buyer.
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bugs4me
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Post by bugs4me on Feb 18, 2015 22:55:59 GMT
mikes1531 - I would agree with you but I suspect - although I have no proof - that FS is not very automated so this would require a great deal of manual intervention on their part. Plus of course, once a loan is drawn down then the particulars are hidden from those that did not participate so these would need to be circulated in full to everyone. I have no idea how practical it would be for them although I'm sure a half decent IT guy/gal could sort that out in a couple of nanoseconds. ... What I am unaware of are the legalities of this suggestion. I think they already have the necessary technology. They circulate their newsletter to a wide audience, so they're already set up for mass mailing. All they'd have to do is include a link in the mailing to the appropriate defaulted loan and Bob's your uncle! I'm certainly no expert, but I can't imagine there would be legal problems as long as the auction comes first. If the auction produces no buyer, T&C 7.4 says they can settle the borrower's account at the reserve price and then seek a private buyer. FS have not always reverted to an auction. I can recall off the top of my head where the lenders have simply been settled - supposedly after the item has been sold. I stand to be corrected but it would appear that all FS need to do is cover the amount borrowed plus fees or the original valuation. I am out of my depth on this I must confess. I'm sure it's covered somewhere in the borrower T&C's.
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mikes1531
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Post by mikes1531 on Feb 19, 2015 4:01:11 GMT
I stand to be corrected but it would appear that all FS need to do is cover the amount borrowed plus fees or the original valuation. I am out of my depth on this I must confess. I'm sure it's covered somewhere in the borrower T&C's. I'm out of my depth, too. But I think the general principle of 'Treating Customers Fairly' would put FS at risk of being sued by a borrower if they simply dumped the security to the first person who came along and offered them enough to cover the capital plus accrued interest and fees. If a sale produces more proceeds than that, the surplus goes to the borrower, so to treat the customer fairly, FS have to make an effort to obtain a fair/market price for the security. And a public auction is probably considered to be representative of the market price of any item. Actually, reading Section 7 of the Ts&Cs seems to indicate that an auction sale is part of the standard procedure.
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bugs4me
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Post by bugs4me on Feb 19, 2015 10:33:32 GMT
I stand to be corrected but it would appear that all FS need to do is cover the amount borrowed plus fees or the original valuation. I am out of my depth on this I must confess. I'm sure it's covered somewhere in the borrower T&C's. I'm out of my depth, too. But I think the general principle of 'Treating Customers Fairly' would put FS at risk of being sued by a borrower if they simply dumped the security to the first person who came along and offered them enough to cover the capital plus accrued interest and fees. If a sale produces more proceeds than that, the surplus goes to the borrower, so to treat the customer fairly, FS have to make an effort to obtain a fair/market price for the security. And a public auction is probably considered to be representative of the market price of any item. Actually, reading Section 7 of the Ts&Cs seems to indicate that an auction sale is part of the standard procedure. The TCF requirements at the FCA can be interpreted differently - depends who's doing the interpreting in my experience. An idea for FS could be that they set the auction reserve at a figure to cover all costs. If the bidding fails to make the reserve then offer the item to fundingsecure lenders. If there are no takers then back to the auction. In this particular instance it's not as though we're dealing with a monthly depreciating asset like a run of the mill car. Appreciate the actual loss on this particular loan would only buy you maybe a couple of coffees and a spongy doughnut from Starbucks. Problem is there are more loans floating around at FS which carry far more meat than this one did and I would have felt it would have been in the interests of FS to set out some guidelines sooner rather than later when disposing of defaulted goods.
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