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Post by marek63 on Nov 18, 2015 11:06:37 GMT
Humor is always good. And AC do try very hard to communicate. I know I can trust AH and team even if I don't always agree with their exact decisions on every loan. And they are trying to improve the whole time. And that is the point for me.
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Mike
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Post by Mike on Nov 18, 2015 12:53:25 GMT
This is a bit off topic but the more I think about diversifying my P2P funds across platforms, the more it's not platform solvency that I worry about. Its platform competency.
AC seem pretty competent to me and their sister Assetz operations do a lot to persuade me that platform associated risk (which includes bad legals and duff borrower treatment) is small. And their IT dept. seems well staffed, unlike another platform which recently unimpressed me with their 'beta' preview methods.
Edit: 'well staffed' but more importantly in tune with the non-IT side of the shop.
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shimself
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Post by shimself on Nov 18, 2015 13:00:59 GMT
What is unfair about applying the agreement? It is not sneaky small print it is easy to understand and in fact it is fair on both parties, and it is what other platforms do. It is extraordinarily unfair to lenders not to explain this is a consequence of your proposals (not just the 10% of lenders who come here who will be sick to the back teeth of this) Further you just did apply default interest on an straightforward loan extension less than a week ago, so you can do it when you put your minds to it. We have made our comments and will not comment further. I have asked you privately to stop asking questions on this matter via our Q&A, emails to me and here until the Ombudsman opines on your complaint to them. I am now asking you publicly to do so as this is becoming repetitive and circular. Neither Chris nor I will be responding to any further questions on this. I won't let you have a misleading last word. That's all.
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shimself
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Post by shimself on Nov 18, 2015 14:05:22 GMT
<abbr data-timestamp="1447842720000" class="time" title="Nov 18, 2015 5:32:00 GMT 1">Nov 18, 2015 5:32:00 GMT 1</abbr> andrewholgate said: <abbr data-timestamp="1447836331000" class="time" title="Nov 18, 2015 3:45:31 GMT 1"></abbr>One very final point (breaking my point of not commenting again)..... Default interest is only payable if the loan defaults. Agreeing to vary is not a default. Ergo, default interest can not be charged. This is a clear legal point. The requests made were to vary the loans at the same interest rate and we felt this was reasonable given the information we had, so put this to the lenders. Lenders have agreed, in the overwhelming majority, to accept the variation put forward. The alternative was to let the loan default. This can have terrible knock on effects as in most loan agreements there are clauses that say a default with another lender is also a default with the issuing lender. Thus a domino effect happens, and in the worst case kills a business. You only have to look at the cases Lawrence Tomlinson put forward where banks forcing a default by not allowing a reasonable variation killed businesses because this forced the hands of other lenders. Is that what you want the lenders of AC to be known for? Killing businesses unreasonably? We are often portrayed by a minority as being incompetent yet my credit team has over 150 years of experience in lending, we have an Insolvency Practitioner in the business, we have an insolvency lawyer in the business and I have spent a quarter of my career in that environment. I wrote our loan agreements with our lawyers, DWF. I know what they contain and what they can and can't do. If you feel that I am not doing my job properly, then I will shut up shop and go back to being employed somewhere. However, out of 10,000 lenders around a third are very active with us (their accounts show activity at least every 10 days) and half are active at least once a month. I want to state very clearly, in all these cases the vast majority of lenders have voted for the variations. A small number have voted against and a tiny number have complained. Our T&Cs are very clear, we go with the majority vote. Taking a public pasting for enacting a course of action that the majority of lenders are 100% happy with demoralises my team. This is the same team that has worked hard to get full 100% recoveries on FF, E-T, HBL etc and working hard to do the same on others. the same team that has a credit track record of 0.9% total losses or expected losses on the whole book (0.35% annualised), and is achieving on average above 10% pa return for lenders. Right, I'll get back under my rock. If you want me to shut up on the forum you really shouldn't keep coming up with these faulty assertions: Shylock someone else said - no it's not a pound of flesh, it's an affordable penalty. This isn't some small print means of fleecing the borrower, as written it says to me that if you pay late there is a cost involved (4% on the delayed amount - not the whole balance - until you have caught up in the example I have seen). Under most circumstances for most borrowers that is in my view going to be affordable, and if it were me I wouldn't think it was unfair. Unfortunate, a bit painful maybe, but not disruptive to the business as a whole and not unfair. Nothing to do with killing businesses, that's outrageous. quote The alternative was to let the loan default. Untrue - it was I quote - to ask Assetz Capital to negotiate an alternative. If that was the genuine alternative we absolutely should be told so, but it never was, you are just exaggerating your case beyond all reason. For the latest example, if I had been given a properly explained proposal I too might have voted to waive it. For the last minute M**** WT never ever. AH says Default interest is only payable if the loan defaultsThe agreement says ...If the borrower fails to make any payment due ..on the due date for payment ...Then default interest on the unpaid amount shall accrue from the date of non-payment to the date of actual payment or rectification...One of my pesky questions - asked several times, still unanswered - what is the purpose of this clause if it is not as any ordinary person would understand it, while you are late you pay additional interest.
quote Default interest is only payable if the loan defaults. Agreeing to vary is not a default. Ergo, default interest can not be charged. This is a clear legal point.The requests made were to vary the loans at the same interest rate and we felt this was reasonableWell which is it? The borrowers ASKED to vary the loans at the same interest rate - ie it was open to us to negotiate vary the loan at a different interest rate, and this lawyerly point about going nuclear or forget enhanced interest is baloney. That is the first time we have been told that borrowers explicitly asked to be let off; we should have been told at the time the vote was called. By withholding this information AC are exerting undue influence on the vote, that is my whole point really.
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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 Nov 18, 2015 14:48:10 GMT
shimself, I was with you in the early days of this thread; valid point worth discussing. Now I feel you have gone way beyond flogging the dead horse and are now kicking seven bells out of what's left of the glue. Should the powers that be decide in your favour you'd be quite justified to come back to this thread and crow about it, but surely enough is enough for now.
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Post by chielamangus on Nov 18, 2015 20:16:20 GMT
shimself, I was with you in the early days of this thread; valid point worth discussing. Now I feel you have gone way beyond flogging the dead horse and are now kicking seven bells out of what's left of the glue. Should the powers that be decide in your favour you'd be quite justified to come back to this thread and crow about it, but surely enough is enough for now. This is a forum. Everyone has a right to express their opinion (providing it is not libelous) for as long as they like. Let me throw this into ring: while I am not keen on penal rates of interest for delays in repayments, I do think we should at least get the full rate of interest to which we originally signed up for. If there are delays in repayments, in some cases serial delays, the borrower should be charged interest on the unpaid interest for every day outstanding. As far as I am aware this is not done and borrowers can catch up months later, and the real return to lenders is reduced. And, in fact, under this approach, there is no incentive for the borrower to make the repayments on the due dates. Similarly, one may have interest owed on suspended loans which never attracts interest even though it is just capital which cannot be accessed. The principal capital in these loans does continue to attract interest though. AC does not seem to understand that there is an opportunity cost for interest owed just as much as principal
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mikes1531
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Post by mikes1531 on Nov 18, 2015 23:22:39 GMT
Shylock someone else said - no it's not a pound of flesh, it's an affordable penalty. This isn't some small print means of fleecing the borrower, as written it says to me that if you pay late there is a cost involved (4% on the delayed amount - not the whole balance - until you have caught up in the example I have seen). Under most circumstances for most borrowers that is in my view going to be affordable, and if it were me I wouldn't think it was unfair. Unfortunate, a bit painful maybe, but not disruptive to the business as a whole and not unfair. Nothing to do with killing businesses, that's outrageous. I have never asked to see a loan agreement, so I know only what has been reported on the forum. So the above description saying that default interest is payable only on the unpaid amount came as news to me. And it strikes me as inconsistent with what's happened before. In the past, when a borrower has significantly missed payments -- say, for a couple of months or more -- and AC have decided to apply 'default' interest, then the interest rate on the whole balance outstanding was increased by 3-6%, and the interest rate displayed on the website increased by that amount. (I can see only the lenders' portion. It was not disclosed whether the AC monitoring interest rate went up as well.) Perhaps I'm misunderstanding things and that in those cases, because of the non-performance of the borrower, AC declared the entire balance due immediately. If so, that could explain why the increased interest was applied to the entire capital outstanding. If a borrower misses a payment and the increased rate is applicable only to the missed payment, then the potential penalty is trivial, IMHO, and certainly would be affordable by the borrower. (So andrewholgate's suggestion that applying it could kill a business is an incredible overstatement.) If the penalty is indeed trivial, then AC is not giving up much at all by waiving the penalty, and the goodwill they earn by making the waiver is probably worth a lot more. So that's a good reason to allow such a waiver. If, as AH stated, the alternative to voting for the deferred capital repayment and waiver of default interest "was to let the loan default", then that is what should have been put on the voting paper. It definitely was not. Option B was "Reject the borrower’s proposal and ask Assetz Capital to negotiate an alternative." And that's what I thought I was voting for. As I think I've already made clear, I was happy to grant the borrower's request to defer the capital payment but I felt they ought to return the favour by paying a small penalty of 1-2% p.a. during the deferral period. And if the loan agreement says default interest is payable only on the missed payment, then even applying the full 4% p.a. to the £200k deferred repayment for the entire seven weeks deferral requested would have meant a penalty of about £1K. In the context of a loan that is paying interest at a rate of £6.4k/month, that's peanuts! Which leads me to wonder why this issue has generated so much heat and debate. The answer, I'm afraid, is simply poor communication. AC did not clearly spell out the consequences of the two options on the voting paper -- neither the relatively small amount of penalty interest they were proposing to waive nor the consequences of voting for Option B. If they had, I think the vote would have gone overwhelmingly in favour of Option A -- and I doubt that people would have become as worked up about the situation as they have. I certainly wouldn't have been.
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ramblin rose
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Post by ramblin rose on Nov 19, 2015 12:05:53 GMT
shimself, I was with you in the early days of this thread; valid point worth discussing. Now I feel you have gone way beyond flogging the dead horse and are now kicking seven bells out of what's left of the glue. Should the powers that be decide in your favour you'd be quite justified to come back to this thread and crow about it, but surely enough is enough for now. This is a forum. Everyone has a right to express their opinion (providing it is not libelous) for as long as they like. Precisely so. Hear hear! Thank goodness I have you to defend my right to express my opinion that something is getting tedious as often as I like. My hero 
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shimself
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Post by shimself on Nov 19, 2015 19:29:57 GMT
shimself, I was with you in the early days of this thread; valid point worth discussing. Now I feel you have gone way beyond flogging the dead horse and are now kicking seven bells out of what's left of the glue. Should the powers that be decide in your favour you'd be quite justified to come back to this thread and crow about it, but surely enough is enough for now. God I know, I actually said something about people getting fed up with it. But when AH comes up with another 5 00 words of half fact it's hard not to respond. Hopefully too he will stop on the forum and we'll see what the ref says. You don't HAVE to read it. It has served the purpose of getting most of the aspects aired so as to give the ref a decent feel.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Nov 20, 2015 0:17:38 GMT
Quickly scanning distressed list and memory #74, #115, #129, #132, #136, #137, #152, #56, #69, #103, #130, #134 #84 all had extensions at enhanced or default rates, #79 has an increased rate due to repayment plan #120, #63 had/have extensions at standard rate, #112, #92, #143, #144, #123, #45, have breached terms/covenants without penalty #114 is about to get extended with increased rate So the answer would appear to be they do, and fairly often. One thing I would like to see is the CR clearly spelling out what are the red lines that if breached will result in default and default rates and what is open to negotiation/variance at AC/lenders discretion. Some clarity on how a loan can be in default but not pay default interest would be helpful just to educate lenders better Thanks for this interesting list The Lending Agreement is very clear - if you are behind with a payment you will pay default interest rate until you catch up. Full stop. Any agreement can be varied if both parties agree - my moan is that AC now seem to be in the habit of waiving this from the outset, even in the case of a badly behaved borrower (M******* WT), and without telling lenders. The paying of default interest looks very fair to me, and consistent - except loan 68. If the borrower maintains monthly payments, then the default rate won't apply, unless the loan is past it's redemption date and the borrower is not planning to refinance with AC. - except loan 68. If covenants are broken the borrower is on a final warning and could face default interest, if it is not corrected. Then there is loan 68 that breaks the rules. Yesterday, I asked a question about default interest for loan 68.
Q "This loan has been in default since 16th October, why isn't it paying default interest ?
Lenders were asked to vote on the assumption that "previous" default interest would be paid on 30th October and the loan would be brought up to date. That allowed the borrower 14 days without recent default interest. Normally, the first seven days is waived but is reduced for repeat offenders.(see Answer on 1st Oct 2014).
This borrower is constantly promising to refinance elsewhere, so I see no need for AC to be ultra lenient. Please review and backdate default interest to 30th October or earlier."
The answer is confirmation that rules will be broken, with meaningless justification. It makes no sense to me. A. "Whilst we have been patient here due to the expected imminent full repayment of the loan in line with our update dated 11 November 2015 the borrower has already been set a deadline of 25 November 2015 to either complete the sale, refinance or both otherwise default interest will start to accrue again."Conclusion:If you miss a payment date, You get charged the default rate, But if you own loan 68, Feel free to make your payment late.
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Post by andrewholgate on Nov 20, 2015 12:21:55 GMT
Let me look into that one.
A
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Post by andrewholgate on Nov 23, 2015 10:59:02 GMT
OK, on this one we haven't waived the interest completely but we have said a further small grace period under TCF. If that lapses then default interest will apply and will be back dated.
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mikes1531
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Post by mikes1531 on Nov 23, 2015 21:30:26 GMT
OK, on this one we haven't waived the interest completely but we have said a further small grace period under TCF. If that lapses then default interest will apply and will be back dated. Then it looks like we have only 48 hours to wait until 'put your money where your mouth is' time. Does ilmoro need to prepare his hat's occupant for an outing? (I do hope the borrower has been told about the reinstatement of default interest if they miss this deadline -- and the back dating. Otherwise, if no repayment is made and AC go to apply the 'penalty' as described by AH above, they will find they can't because of their TCF policy.)
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shimself
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Post by shimself on Jan 6, 2016 19:20:29 GMT
On another Loan (place between Bradford and Sheffield) we are told today
A question has been posed on the Q&A tab of this loan asking when default interest will apply. Application of default interest is discretionary and so, pending any proposals from this Borrower, we will not be accruing default interest.
Does it really say that in the loan agreement?
If so at AC's discretion or lenders?
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ilmoro
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Post by ilmoro on Jan 6, 2016 19:51:31 GMT
On another Loan (place between Bradford and Sheffield) we are told today A question has been posed on the Q&A tab of this loan asking when default interest will apply. Application of default interest is discretionary and so, pending any proposals from this Borrower, we will not be accruing default interest.
Does it really say that in the loan agreement? If so at AC's discretion or lenders?
ACs as our agent, its only if they need to amend the Loan Agreement or the Security that they need to seek lenders authority and then only if it alters rate, term, capital repayment schedule or security. In the event of a default they need to consult on enforcement or legal action, relase of security without full repayment, a waiver or restructuring. Therefore much as it frustrates me as long as the loan agreement says applying default interest is discretionary (which I assume it does though never seen one) its their call AFAIUI. However, the vote to allow a one month extension was on the basis that ' during this period, should repayment not be made, default interest would accrue'. Well payment has not be made so I would argue that AC should be charging default interest as that is the mandate they have from lenders. Furthermore, as we are now four months further on from the agreed extension and the loan remains in default that they need a further mandate from lenders.
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