Post by andyp on Apr 11, 2016 19:23:27 GMT
Anyone using FC and reading their forum, will know that they are getting an increasing number of property loans running late, sometimes weeks, sometimes months
Their approach to my mind proving utterly amateurish. When loans go over the scheduled repayment date there are a number of approaches
taken
- Some loans get a months interest applied as a penalty.
- Some loans pay interest but no penalty at the whim of a FC minion.
- Some loans pay no interest, and no penalty for no apparent reason. (Can I apply for some free money too?)
- Some loans are arbitrarily extended by several months without consulting lenders and the risk band is removed locking us in, unable to sell. Interest continues at original rate, even when that's as low as 7.5% with no penalty added.
In many cases where cashback applied this becomes an effective reduction of the rate the lender achieves.
The choice is entirely unpredictable. FC do not know what they should do from one day to the next. They don't even seem capable of describing their randomised decisions to lenders in clear unambiguous ways. It seems that at the moment FC are being stress tested by their property borrowers and the are from my perspective being found to be pitifully inadequate.
I fully realise that most, if not all, will eventually repay. The delays are the usual mix of bad weather, planning changes, poor management, changes to schemes, delays in completion, holding out for top dollar prices. In short, run of the mill property development risks rather than financial impropriety which will lead to default. FC however do not seem to have anything in their contract to penalise/incentivise borrowers to repay on time and in the cases where they need arrange and market replacement loans on FC these are usually so late that the original loans pay late anyway.
Personally I think there should be an up-rating of the interest paid by 20% or 25% for those days that the loan is overdue but not in full default. It is simple and understandable, clear for borrowers to know what they are committed to and clear for the lender. Everyone knows where they are.
What I was interested in finding out was the approaches other sites take in such situations? Are they all laissez-faire like FC or do they have firm policies?
Their approach to my mind proving utterly amateurish. When loans go over the scheduled repayment date there are a number of approaches
taken
- Some loans get a months interest applied as a penalty.
- Some loans pay interest but no penalty at the whim of a FC minion.
- Some loans pay no interest, and no penalty for no apparent reason. (Can I apply for some free money too?)
- Some loans are arbitrarily extended by several months without consulting lenders and the risk band is removed locking us in, unable to sell. Interest continues at original rate, even when that's as low as 7.5% with no penalty added.
In many cases where cashback applied this becomes an effective reduction of the rate the lender achieves.
The choice is entirely unpredictable. FC do not know what they should do from one day to the next. They don't even seem capable of describing their randomised decisions to lenders in clear unambiguous ways. It seems that at the moment FC are being stress tested by their property borrowers and the are from my perspective being found to be pitifully inadequate.
I fully realise that most, if not all, will eventually repay. The delays are the usual mix of bad weather, planning changes, poor management, changes to schemes, delays in completion, holding out for top dollar prices. In short, run of the mill property development risks rather than financial impropriety which will lead to default. FC however do not seem to have anything in their contract to penalise/incentivise borrowers to repay on time and in the cases where they need arrange and market replacement loans on FC these are usually so late that the original loans pay late anyway.
Personally I think there should be an up-rating of the interest paid by 20% or 25% for those days that the loan is overdue but not in full default. It is simple and understandable, clear for borrowers to know what they are committed to and clear for the lender. Everyone knows where they are.
What I was interested in finding out was the approaches other sites take in such situations? Are they all laissez-faire like FC or do they have firm policies?
