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Post by gaspilot on Jun 12, 2016 13:03:28 GMT
What happens if a loan is about to renew but a lot of the original investors choose not to re-invest and new investors choose not to invest?
Is the loan stuck in limbo so that the original investors effectively become the new investors until the loan is repaid?
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SteveT
Member of DD Central
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Post by SteveT on Jun 12, 2016 13:09:43 GMT
I asked that of Nigel once. As you'd expect, the "old" lenders remain the current lenders until the old loan has formally completed, which can only happen once a renewal loan has been filled. If an attempted renewal cannot be filled then eventually it has to be cancelled and the borrower asked to repay the loan (with the usual next steps if they cannot).
I reckon the recurring problem is that "new" lenders in a renewal loan don't know when they'll start earning interest and so hold off committing. For larger property loan renewals, FS really need to indicate an interest accrual start date when the renewal loan launches (as they should for new property loans, come to that!)
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fp
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Post by fp on Jun 15, 2016 8:36:03 GMT
I asked that of Nigel once. As you'd expect, the "old" lenders remain the current lenders until the old loan has formally completed, which can only happen once a renewal loan has been filled. If an attempted renewal cannot be filled then eventually it has to be cancelled and the borrower asked to repay the loan (with the usual next steps if they cannot). I reckon the recurring problem is that "new" lenders in a renewal loan don't know when they'll start earning interest and so hold off committing. For larger property loan renewals, FS really need to indicate an interest accrual start date when the renewal loan launches (as they should for new property loans, come to that!) Thanks Steve, you have partially answered a question I have asked on another thread about interest
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Post by scores on Jun 16, 2016 12:13:25 GMT
What happens if a loan is about to renew but a lot of the original investors choose not to re-invest and new investors choose not to invest? Is the loan stuck in limbo so that the original investors effectively become the new investors until the loan is repaid? Good question! And moving further ahead.Can anyone answer how long these renewed loans can stay in limbo? Is there a certain time when FS says,that's long enough,the borrower must repay the full amount? Or,will FS just let these renewals remain in limbo indefinately? And keep the original lenders waiting for their money to be returned.
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