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Post by Deleted on Aug 14, 2016 10:01:07 GMT
Does the AC provision fund work similarly to the RS and Zopa ones?
In other words, so long as there are sufficient funds in the fund will lenders receive their money back?
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warn
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Post by warn on Aug 14, 2016 14:12:11 GMT
The AC Provision Fund is discretionary, just like those of RS and Zopa. So in the event of a shortfall in borrower repayment, you'll get back the amount that the platform decides, at its discretion, to reimburse you with. Just like RS and Zopa.
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jonah
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Post by jonah on Aug 14, 2016 14:21:57 GMT
RS PF 'buys' any loans in default and pays them off to you with interest accrued to date.
AC PF isn't as clear. I've not seen it pay anything yet... But it could be that no AC loan has gone bad enough to trigger a payment. I've seen late interest on my GBBA loans though, but always paid by the borrower before I got around to asking AC customer services about it.
neither are guarantees. Both could only pay out if they have money to do so etc.
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Post by andrewholgate on Aug 15, 2016 9:29:05 GMT
We don't take the defaulted loan into the PF but lenders are protected by it. There are some lenders affected under the Scottish loan that has gone bad and I calculate the risk to the PF at about £14.
No-one has suffered a loss in one of the accounts protected by the PF.
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SteveT
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Post by SteveT on Aug 15, 2016 10:01:16 GMT
We don't take the defaulted loan into the PF but lenders are protected by it. There are some lenders affected under the Scottish loan that has gone bad and I calculate the risk to the PF at about £14. No-one has suffered a loss in one of the accounts protected by the PF. What % is that £14 of the total (capital + unpaid accrued interest) in that loan that is held by the PF-protected accounts? A while back (2015?) I recall you emailed affected lenders with your views of the recovery prospects for a number of long-suspended loans. Do you plan to repeat this exercise?
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Post by andrewholgate on Aug 15, 2016 10:25:50 GMT
Too many decimal places to think about. There are hundreds of thousands of pounds in the PF and as our webpage on them show, there is 3x cover of the BoE 2016 stress test outcomes.
Yes, I will do that.
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SteveT
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Post by SteveT on Aug 15, 2016 10:35:33 GMT
Too many decimal places to think about. There are hundreds of thousands of pounds in the PF and as our webpage on them show, there is 3x cover of the BoE 2016 stress test outcomes. Yes, I will do that. My question was about your % expectations for potential loss in the Scottish Property loan, not the robustness of the PF!
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Post by andrewholgate on Aug 15, 2016 10:43:22 GMT
Ah!
It could be 0%, worst case is a few %. Internally I always look to absolute disaster and mark that to manage the possible impact on PF etc. I honest opinion is that from what I've seen I think a loss might be avoided but so much comes down to what a buyer is prepared to pay. We will do all we can to minimise the impact to lenders.
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