wapping35
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Post by wapping35 on Mar 16, 2016 18:47:58 GMT
On the HMIT notes there is the attached on irrecoverable (page 6):
Really HMIT is giving the job to the platform to define irrecoverable.
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When does a P2P loan become irrecoverable?
A loan may be accepted as having become irrecoverable when there is no reasonable prospect of the recovery of the loan. When assessing recoverability, the funds available and potentially available to the borrower must be considered. A claim therefore cannot be established simply because the borrower has insufficient liquidity on the date the loan had been called in.
Whether a loan has become irrecoverable should be judged on a case by case basis, however the following common examples are relevant:
When the borrower has entered formal recovery procedures such as liquidation, administration, receivership or bankruptcy the debt would normally be considered irrecoverable.
If the debt is released by the lender it would normally be considered irrecoverable.
As the loan will be managed by a platform, the platform would usually be in a position to determine when a loan has become irrecoverable. The platform would then inform the lender that the loan had become irrecoverable.
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james
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Post by james on Mar 16, 2016 23:33:23 GMT
What is "no reasonable prospect of recovery" that the platform has to comply with when using its definition?
If I have to use that definition it's something like statute barred consumer debt, that is, six years since the last admission of the debt by the borrower unless a CCJ has been obtained, when that limit doesn't apply and it's until death of the borrower, lender or platform.
Yet for business debt the rules say ignore security that provides very high confidence of recovery (assuming it's not a personal guarantee) and that's a way easier standard.
And for both consumer and business debt it's not simply defaulted because we all know that recovery after default is routine and entirely expected.
I have the impression that the people writing the rules didn't understand what is and isn't normal with P2P so ended up writing rules that are not very practical to comply with, particularly without platform help.
At least with Zopa there's some hope that the platform might come to some agreement with HMRC about what qualifies that is less severe than statute barred or insolvent without payment arrangement. Not a lot of prospect of UK regulated 36(h) platforms not in the UK of doing full UK tax law compliance, though maybe some would get lucky.
This cries out for some sort of long stop at "180 days since last payment" or "360 days since last payment" that a lender and platform can use without spending lots of time making per-loan decisions, something a lender can't do anyway because data protection rules will deny them the required information.
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wapping35
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Post by wapping35 on Mar 17, 2016 8:52:43 GMT
What is "no reasonable prospect of recovery" that the platform has to comply with when using its definition? If I have to use that definition it's something like statute barred consumer debt, that is, six years since the last admission of the debt by the borrower unless a CCJ has been obtained, when that limit doesn't apply and it's until death of the borrower, lender or platform. Yet for business debt the rules say ignore security that provides very high confidence of recovery (assuming it's not a personal guarantee) and that's a way easier standard. And for both consumer and business debt it's not simply defaulted because we all know that recovery after default is routine and entirely expected. I have the impression that the people writing the rules didn't understand what is and isn't normal with P2P so ended up writing rules that are not very practical to comply with, particularly without platform help. At least with Zopa there's some hope that the platform might come to some agreement with HMRC about what qualifies that is less severe than statute barred or insolvent without payment arrangement. Not a lot of prospect of UK regulated 36(h) platforms not in the UK of doing full UK tax law compliance, though maybe some would get lucky. This cries out for some sort of long stop at "180 days since last payment" or "360 days since last payment" that a lender and platform can use without spending lots of time making per-loan decisions, something a lender can't do anyway because data protection rules will deny them the required information. Hi, All good points. One thing to bear in mind is whilst the relief is likely to happen the actual application of the rules is still in draft, pending legislative approval of the Finance Act which usually occurs in June or early July. Lenders who wish to, can provide feed back on the matter in the interim either to their MP or direct to HMIT (both is often good to goad HMIT into action). They actually give an email address to do so. Hope this helps. Cheers W35 ============= If you have any questions about this change, please contact Charlotte Hopwood on Telephone: 03000 585950 or email: charlotte.hopwood@hmrc.gsi.gov.uk
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Post by blanik on Mar 19, 2016 17:58:48 GMT
For those of us with older loanbooks, Zopa have also created a pre-safeguard product.
I checked with Zopa - if auto-relend is turned on, repayments from pre-safeguard will be re-lent in Classic.
If loans in pre-safeguard are sold, they will be bought by Classic lenders and will then have a safeguard wrapper applied to them. ( I did mention C&Y loans in my question, but these were not explicitly mentioned in the reply - so not sure if Classic will be picking these up as well.? )
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aju
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Post by aju on Mar 20, 2016 11:28:02 GMT
That doesn't seem to be the case at the moment with my auto-relend I switched it to Zopa Plus to build up some value. I did it last week and its built up nearly £50 all assigned to Zopa Plus. At the moment I haven't checked what loans supplied that re-lend money but I have approx 6% funding in Pre-Safeguard of just over 12000 fund. There seems to be no money in any of the other queues and until I get >1000 there is no lending since I did this.
I guess time will tell ...
I just checked the summary and the queues and I had 8.51 in the classic matching to borrowers. I reset the lending direction and recovered that and have set up Zopa Plus as the recipient of new money. I'll check what happens and see if any money comes into the Zopa Classic.
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Post by blanik on Mar 20, 2016 15:55:29 GMT
That doesn't seem to be the case at the moment with my auto-relend I switched it to Zopa Plus to build up some value. I did it last week and its built up nearly £50 all assigned to Zopa Plus. At the moment I haven't checked what loans supplied that re-lend money but I have approx 6% funding in Pre-Safeguard of just over 12000 fund. There seems to be no money in any of the other queues and until I get >1000 there is no lending since I did this. I guess time will tell ... I just checked the summary and the queues and I had 8.51 in the classic matching to borrowers. I reset the lending direction and recovered that and have set up Zopa Plus as the recipient of new money. I'll check what happens and see if any money comes into the Zopa Classic. Zopa previously told me the money would be auto-relent to the same product that the original loan was in. So our existing loanbooks would be converted to Classic and if auto -relending was turned on this money would be re-offered in the Classic Queue. The only way to get money into Plus is to turn re-lending off, then manually offer it from the holding account when it will be treated as new money and added to the default product ( which would have to be Plus ). So the money from auto-relend could be going to a different product from manual-relending! When the new products were launched and pre-safeguard appeared, I asked Zopa what the processing would be, and their reply that auto-relend of pre-safeguard money would be into Classic. Based on this I have turned auto-relend off [ So can't really comment on how it is actually working ], and am re-lending manually once a week, which is being added to the Plus Queue.
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Post by Ton ⓉⓞⓃ on Mar 21, 2016 11:14:45 GMT
I have money in the Classic queue and the Z+ queue, I switched from ZC to Z+ on the 16th, just before launch date as I thought. Now I've have 6 ZC loans Pending but no Z+ as yet. I think switching queues has made the accounting go awry, After a transfer in of £430 to get me to the 1k I should have £1000.80 in queue, but Zopa have it 200 in the ZC Q and £1000.80 in the Z+ Q
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Greenwood2
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Post by Greenwood2 on Mar 21, 2016 12:15:49 GMT
Repayments will still be going to the ZC queue, unless you have turned off re-lending, so I guess you have had £200 of repayments.
Edit: Only New funds will automatically go to the Z+ queue.
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Post by Ton ⓉⓞⓃ on Mar 21, 2016 16:00:23 GMT
Repayments will still be going to the ZC queue, unless you have turned off re-lending, so I guess you have had £200 of repayments. Edit: Only New funds will automatically go to the Z+ queue. Thanks, I switched to Z+ from ZC on the 16th, before launch I think, I assumed all my money would be switching too, I should perhaps have withdrawn all money from the queue then switched to Z+. But it still looks to me that I'm up by about £200 (maybe (£260). My "Expected repayments schedule" says I should get less than £50 in the middle of the month so i can see how it could be repayments, must be just my error. If I was down that would be another matter...
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Greenwood2
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Post by Greenwood2 on Mar 21, 2016 16:15:29 GMT
Could be early re-payments. Actual re-payments are usually higher than expected and mine have been quite a bit higher since the new product launch.
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wapping35
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Post by wapping35 on Mar 21, 2016 21:42:01 GMT
Well still no matches in Z+ and now I see why, from this in the weekly e:mail:
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We have just launched 3 brand new lending products and we will update the information which is shown in this section in the coming weeks. We are currently allowing liquidity to build up in the Plus and Access products before we start lending, this is because we diversify your money so each loan will be funded by hundreds of lenders.
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Okay I cannot say I am really happy about this being communicated 5 days after I have put in the money....
i.e. We won't get any matches until more Lenders join.. And of course if New Lenders hear they are not getting any matches , well they may be v reluctant to lend given no matches.... (That is kind of circular Zopa)...
I thought they had the liquidity from the Institutional lending which they have been using for D&E lending for the past 12 months ??
I really think this "liquidity" delay in matching should have been communicated by Zopa when Z+ was launched , not 5 days afterwards...
I am sticking with the product for now in the hope of "liquidity" being met before Easter..
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Post by Ton ⓉⓞⓃ on Mar 21, 2016 22:08:12 GMT
I suppose that also says that Retail money (us) & Institutional money are not mixed. So they must be getting whole loans.
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Post by blanik on Mar 21, 2016 23:31:53 GMT
Well still no matches in Z+ and now I see why, from this in the weekly e:mail: ====== this is because we diversify your money so each loan will be funded by hundreds of lenders. ======== Zopa mentioned that they were going to reduce the maximum loan size to 1%. So if the are calculating it by product they will need £1M in the queue before they can satisfied a £10K loan. Presuming a lot of people have funded 1K, that would need 1000 lenders at £10 each. Obviously the number of lenders will be a bit smaller if they have a significant proportion of people offering more.
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aju
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Post by aju on Mar 22, 2016 10:37:32 GMT
Well so much for my re-lend being set to zopa-plus I got £17.70 into zopa-classic I've asked why when I clearly set it to re-lend on the zopa-plus can't easily tell if it was from the pre-safeguard except that the numbers I had yesterday show that I'm now 31p lighter in pre-safeguard summary.
Sadly the summary detail is not that detailed unless you hit it at the exactly the right time. I know this as the zopa classic had the same overview figure as yesterday but no re-lend funds until today. All a bit odd if you ask me but it does look like the re-lend queues seem independant at the moment.
Obviously I'd like this to work but I could turn the re-lend off completely and let it build up and re-assign when it has enough but judging by the others here and the build up needed it seems that one can only lend NEW money into a given queue and not pass re-lend into a given queue. Hopefully that will change as I'd like to be able to send re-lent money where I wanted albeit to one queue at a time but I want some control myself.
Oh well if I get a positive response I'll report it back.
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oldgrumpy
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Post by oldgrumpy on Mar 22, 2016 10:51:15 GMT
Having stopped wasting time on Zopa nearly three years ago because of ineptness, appalling communication (which continues apparently) unfulfilled "projected (low!) rates", I only log in every week or so to withdraw repayments. I have been reading how wonderful the new offerings are (even lower rates, non safeguard account Zopa + in which no lending at all is being done until Zopa says so, leaving lenders money for an unspecified time earning nothing).
I logged in to the new site for the first time today to withdraw a very modest accumulation of repayments; what do I get?
We have a problem - 500
We're really sorry but there's been a problem with the site, and we're not going to be able to let you continue with what you were doing.
We'll look at what went wrong (it will show up in our web logs) and get our best techies to work out a way of stopping it happening again.
Unbelievable.
PS The transfer has registered on the second attempt.
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