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Post by blackburne99 on May 31, 2016 15:42:55 GMT
For the last few years I've been running down my loan book because I wanted to be able to set my own interest rates and this is no longer possible. As time goes on, the proportion of defaulted loans increases because the up-to-date ones are gradually paid off. I can't sell off loans that have defaulted, so will I be left with a small rump of defaulted loans for ever? Some of them still make small payments from time to time, even if it's just a few pence, but I'd like to get rid of them eventually.
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Post by davee39 on May 31, 2016 16:29:37 GMT
For the last few years I've been running down my loan book because I wanted to be able to set my own interest rates and this is no longer possible. As time goes on, the proportion of defaulted loans increases because the up-to-date ones are gradually paid off. I can't sell off loans that have defaulted, so will I be left with a small rump of defaulted loans for ever? Some of them still make small payments from time to time, even if it's just a few pence, but I'd like to get rid of them eventually. This is an interesting one for executors of estates who would like to close the books without an extended minor dribble of income. Ideally it should be made possible to donate defaulted run off loans to a Zopa managed charity pool which uses the income to pay out an annual award.
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Post by GSV3MIaC on May 31, 2016 18:05:14 GMT
That's a good idea, and not just for ZOPA. Westonkev liked the post, so maybe RS could lead the way? Right now most platforms make it impossible to even give your whole account to someone else (i.e. beneficial owner change), never mind the complexity of gifting away just a few of the loans you'd really like never to hear about again. Some of the 'recovery' positions could drag on for anything up to 10 years (not talking about ZOPA specifically), what with IVAs and interest holidays and rescheduling.
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james
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Post by james on Jun 1, 2016 12:58:06 GMT
This is an interesting one for executors of estates who would like to close the books without an extended minor dribble of income. Ideally it should be made possible to donate defaulted run off loans to a Zopa managed charity pool which uses the income to pay out an annual award. What is the authority of an executor or administrator to make a gift to charity with money that's supposed to be going to the beneficiaries? Unless all of the potential beneficiaries agree, which ultimately they might unless there are adversarial relationships around. Even if there's agreement, donations in the name of the deceased seem more desirable than in the name of one of their financial service providers. HMRC may not agree to give up its rights to tax on recovery from loans where the amount has been deducted from income already. Ten years seems optimistic unless a protection fund is involved or there's some opportunity to sell a defaulted loan. For speedy resolution it's better to stick to the platforms that do allow such sales or to those with protection funds that make suitably comprehensive payments.
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james
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Post by james on Jun 1, 2016 13:00:14 GMT
Westonkev liked the post, so maybe RS could lead the way? What's there for RateSetter to do? There's already a protection fund that will allow runoff in a predictable time, an opportunity to sell the non-defaulted loans and the usual legal rights accruing to an executor or administrator to take over management of accounts. All of that provides a likely exit within a few months at most in the RateSetter case unless there are disputes and delays in getting an executor or administrator.
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jo
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Post by jo on Jun 1, 2016 14:36:01 GMT
For the last few years I've been running down my loan book because I wanted to be able to set my own interest rates and this is no longer possible. As time goes on, the proportion of defaulted loans increases because the up-to-date ones are gradually paid off. I can't sell off loans that have defaulted, so will I be left with a small rump of defaulted loans for ever? Some of them still make small payments from time to time, even if it's just a few pence, but I'd like to get rid of them eventually. I've been banging-on about this on various threads (e.g. p2pindependentforum.com/thread/3160/planning-inevitable) for ages. Unfortunately the consensus seems to fixate on the problems rather than making the very simple principle work.
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Post by propman on Jun 1, 2016 14:45:30 GMT
Westonkev liked the post, so maybe RS could lead the way? What's there for RateSetter to do? There's already a protection fund that will allow runoff in a predictable time, an opportunity to sell the non-defaulted loans and the usual legal rights accruing to an executor or administrator to take over management of accounts. All of that provides a likely exit within a few months at most in the RateSetter case unless there are disputes and delays in getting an executor or administrator. Some providers of financial products waive fees to allow an early exit for executors or the option to reregister in the beneficiaries name. I would have thought the latter might even provide a marketing opportunity.
As for charitable gifts: when discussed in the past, it was suggested that people opt in their wills for the proceeds from any such wills to be given to charity. In any event, AFAIK there is no requirement for an executor to use more than "reasonable endeavours" to collect the amounts due to the estate. If the sales options have been exhausted and the proceeds being paid are pennies I would have thought that they could reasonably argue that there job had been done. Alternatively, it would only be necessary to log on when a significant amount had accumulated and so little effort would be required.
- PM
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Post by GSV3MIaC on Jun 1, 2016 16:18:10 GMT
Westonkev liked the post, so maybe RS could lead the way? What's there for RateSetter to do? There's already a protection fund that will allow runoff in a predictable time, an opportunity to sell the non-defaulted loans and the usual legal rights accruing to an executor or administrator to take over management of accounts. All of that provides a likely exit within a few months at most in the RateSetter case unless there are disputes and delays in getting an executor or administrator. True, RS is much easier to get out of (assuming nothing melted down) than many of the others (there's really no such thing on RS as a 'lender held defaulted loan') .. but last time I looked there was still no way to 'gift' your whole RS account to someone else (whether a charity or a relative).
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Post by dualinvestor on Jun 1, 2016 16:22:03 GMT
This is an interesting one for executors of estates who would like to close the books without an extended minor dribble of income. Ideally it should be made possible to donate defaulted run off loans to a Zopa managed charity pool which uses the income to pay out an annual award. What is the authority of an executor or administrator to make a gift to charity with money that's supposed to be going to the beneficiaries? Unfortunately I don't think an executor has any discretionary poerws, except as set out in a will, an adminixtrator almost certainly doesn't as s/he is bound by the intestacy rules. If every benficiary interested in the "residue" agrees to a deed of variation the rights in the run off can of the loan book, subject to the terms of the platform be assigned to anyone, including a charity, if the rights belong to one individual, e.g. because they have a specific bequest, again they can be assigned to him/her subject to the t&cs again. It is not uncommon to have estates last for many years e.g. I would imagine (no pun) John Lennon's estate has not been fully wound up because of continuing royalties, but of course it will be for significantly higher sums.
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jo
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Post by jo on Jun 1, 2016 17:55:31 GMT
It is not uncommon to have estates last for many years e.g. I would imagine (no pun) John Lennon's estate has not been fully wound up because of continuing royalties, but of course it will be for significantly higher sums. Exactly.....the vast majority of p2p account default trickles will be for trivial amounts (in the greater scheme of things). Why not have a 'living' declaration of intent incorporated into the lenders' accounts: 'In the event of my death, I would like to renounce title to defaulted loans beneath the value of xxxx.' Well, something like that, I'm not a legal bod. Add. That's assuming that we're not going to allow price discovery by executors by permitting deep discount sales on defaults (as the majority here think is a problem).
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james
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Post by james on Jun 2, 2016 1:24:24 GMT
Why not have a 'living' declaration of intent incorporated into the lenders' accounts: 'In the event of my death, I would like to renounce title to defaulted loans beneath the value of xxxx.' How would that be transformed into a codicil to the will or to override the law governing intestacy? The will takes precedence over such things unless they are mentioned in the will. In the pension case it would be possible because there the legal owner is the trustees of the pension scheme and they are entitled to act on "expression of wishes" provided to them and do not have to pay any regard to the will because the pension pot is not part of the estate of the deceased.
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Post by westonkevRS on Jun 2, 2016 4:24:03 GMT
I'll hazard a guess that a lot of Zopa lenders are like Manchester Utd (originally named) season ticket holders, already dead. If like me many P2P lenders are quite investment eclectic whose other half hasn't got a clue where all the money is. Without paperwork and a closure of emails, much money will regurgitate ad infinitum. After 10 years of lending, and original P2P lenders did tend to be older, it's a statistical inevitability.
I'm not aware of any regulatory requirement to check your portfolio for dead people, although there are methods and it seems a reasonable thing to do.
For the record, the issue of defaults held by deceased isn't an issue for RateSetter. Our Provision Fund ("original and best"tm), pays out instantly on missed payments and when default occurs, also very quickly relatively.
Kevin.
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jo
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Post by jo on Jun 2, 2016 8:53:16 GMT
Why not have a 'living' declaration of intent incorporated into the lenders' accounts: 'In the event of my death, I would like to renounce title to defaulted loans beneath the value of xxxx.' How would that be transformed into a codicil to the will or to override the law governing intestacy? The will takes precedence over such things unless they are mentioned in the will. In the pension case it would be possible because there the legal owner is the trustees of the pension scheme and they are entitled to act on "expression of wishes" provided to them and do not have to pay any regard to the will because the pension pot is not part of the estate of the deceased. I have no idea but this is a potential near-future problem. Fortunately, the world has a habit of solving problems if sufficient people recognise them in advance.
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Post by propman on Jun 2, 2016 11:48:08 GMT
Why not have a 'living' declaration of intent incorporated into the lenders' accounts: 'In the event of my death, I would like to renounce title to defaulted loans beneath the value of xxxx.' How would that be transformed into a codicil to the will or to override the law governing intestacy? The will takes precedence over such things unless they are mentioned in the will. In the pension case it would be possible because there the legal owner is the trustees of the pension scheme and they are entitled to act on "expression of wishes" provided to them and do not have to pay any regard to the will because the pension pot is not part of the estate of the deceased. If the wording can be made to stand up to legal challenge, I don't see why such a gift couldn't be analysed as a pre-disposition by the account holder and so fall out of the estate. I have always viewed the platforms as acting akin to bare trusts where the loans are held and administered on behalf of the lenders. the only question would be whether the gift of an unknown (but quantifiable after the event) amount of loans to charity prior to death is enforceable or whether the donees clear intentions are over written by the rules of intestate or the will.
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james
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Post by james on Jun 2, 2016 12:00:44 GMT
I'm not aware of any regulatory requirement to check your portfolio for dead people, although there are methods and it seems a reasonable thing to do. Well, the Dormant Bank and Building Society Accounts Act wouldn't apply but there are money laundering issues so after a while I think that there would be an obligation not to just accept instructions to withdraw money if there's been some attempt at communication previously with no response.
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