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Post by Deleted on Oct 13, 2016 17:30:50 GMT
Some of the FC fans know that Funding Circle has a forum, which is used to communicate with FC itself and, lately, used quite massively by lots of people to express their huge concern about some of the FC bad practices.
In fact FC has shown a clear lack of action, lack of communication, lack of interest, lack of planning, lack of management, lack of strategy, lack of execution, particularly in dealing with the 'London' series of property loans.... (over 2 million GBP in total).
Just as an example:
Short Term Property Loan London 1 (14978), which is currently 183 days late after its natural 244 days life (75% overrun!), has not pad a penny of interest for over 7 months, has not been called a default, has not a recovery plan, nor a clear plan to repayment. A similar situation is happening with the Newquay property loans.
And yet FC management, called in multiple times to give precise answers to what is happening with property loans, which seem out of control, stay silent.
These two threads alone on London and Newquay have 35k views and hundreds of very worried posts, totally unanswered by the FC management.
I have been critic towards this slack by FC. I have analysed and reported the problems I see.
Instead of answering the pressing needs of its lenders, FC sent out its 'forum guardians' ... which have now locked me out of their forum for weeks (without any valid explanation as I never attacked or insulted anyone, quite the contrary) to try and stop the criticism...
Nice policy. Instead of acting to improve on the weaknesses, FC try to kill the critics.
My congratulations to FC and those sustaining their actions.
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ben
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Post by ben on Oct 13, 2016 17:46:59 GMT
Zopa basically closed their forum down when had similar issues with members not worshiping them wonder how long the FC will survive like that.
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Post by paul123 on Oct 13, 2016 20:13:33 GMT
That's one heck of a thread on that forum. Out of morbid curiosity, have FC actually said that there will be no interest paid for those months?
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fp
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Post by fp on Oct 13, 2016 20:59:20 GMT
That's one heck of a thread on that forum. Out of morbid curiosity, have FC actually said that there will be no interest paid for those months? I haven't had a good read on FC for a while, and to be honest i'd need a good few hours to catch up now, I think its more a case that it hasn't been paid TBH, when interest is supposed to be paid monthly, then monthly it should be.
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Post by Deleted on Oct 13, 2016 21:02:08 GMT
That's one heck of a thread on that forum. Out of morbid curiosity, have FC actually said that there will be no interest paid for those months? Yes, of course FC confirmed they will NOT pay any interest on a late loan. Even more, they did not pay even the final month interest. So the loan is 183 days late, but we have already 213 days of unpaid interest arrears. (I have money invested in 14978 and the last time interest was paid on it, it was 13th March 2016, it is really CRAZY) What is totally unacceptable in my view is that FC is forcing the situation without asking the lenders if they accept it or not, and without even wanting to consider the default and receivership, which are the obvious choice to protect lenders. They are giving more and more time, accepting all the possible tricks or lies from the borrower.... In making so, given the value of the security is constant (or going down if we consider the initial effects of Brexit) and the sum to be remboursed is growing, every day the situation is getting worse. If the borrower was at the end not able to repay, we would loose the unrecovered capital (if any) PLUS all the lost interest for these months. It is really a CRAZY situation. And it is all caused by the rumored FC 2017 floatation. The FC management does not want to loose business (boosting numbers) and/or have bad publicity from defaults in the secured loans area.... And they decided to sacrifice the lenders, without even telling them! Nice one.... And the icing on the cake is that you ask an intervention from the FC management to rectify this unsustainable situation and you get first verbally assaulted by FC fans/hidden employees and then sent to (virtual) jail for no reason... Certainly FC do not like criticism....
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SteveT
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Post by SteveT on Oct 14, 2016 6:02:32 GMT
That's one heck of a thread on that forum. Out of morbid curiosity, have FC actually said that there will be no interest paid for those months? Interest continues to accrue daily on overdue FC property loans, AIUI, as it does on SS, FS, AC, BC, etc.
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blender
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Post by blender on Oct 14, 2016 8:15:29 GMT
That's one heck of a thread on that forum. Out of morbid curiosity, have FC actually said that there will be no interest paid for those months? Interest continues to accrue daily on overdue FC property loans, AIUI, as it does on SS, FS, AC, BC, etc. Correct. It accrues according to the T&Cs and in property loans that have been repaid late so far the extra interest has been paid - manually and some time after receipt. The real problem is the lack of access to the money for months and the lack of compensation for that and for the delayed interest. On many of these loans FC drew lenders in for larger sums with cash back and they are now imprisoned for as long as it suits the borrower. (FC were probably really keen to find an excuse to try out the imprisonment facility on their forum).
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ptr120
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Post by ptr120 on Oct 14, 2016 8:35:07 GMT
Interest continues to accrue daily on overdue FC property loans, AIUI, as it does on SS, FS, AC, BC, etc. Interest does continue to accrue but it isn't serviced on a monthly basis - as it is on SS, for example (so interest can't be compounded). Furthermore, the additional interest is only ever paid 'in due course' rather than promptly after a late loan has been settled. If these overdue loans were serviced on a monthly basis I'd go away and stop bothering FC. As it stands I don't think I'm far from taking a complaint to the FCA.
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Post by Deleted on Oct 14, 2016 8:40:52 GMT
That's one heck of a thread on that forum. Out of morbid curiosity, have FC actually said that there will be no interest paid for those months? Interest continues to accrue daily on overdue FC property loans, AIUI, as it does on SS, FS, AC, BC, etc. No, no. Completely wrong description. The huge difference is that *any* serious P2P company (e.g. SS, FS for sure) FIRST calls the loan a default (and immediately activates the recovery procedures) and THEN stops paying interest. FC strongly REFUSES to call the loan a default (and hence does not activate the recovery procedures) and at the same time DOES NOT pay any interest. This is a situation unheard of in the P2 industry. And, as I said, FC not only does not pay the interest accrued in the overdue period, but also the interest accrued in the final 30 days of the loan (before going into the ordue period). So the FC Loan 14978, being a 8 months loan, is the first ever active (non-defaulted) loan where the UNPAID interest (now 213 days) is bigger than the paid interest (interest paid for less than 210 days) and we still don't have a repayment plan in place nor a default procedure activated. This is litterally crazy. The accrued unpaid interest is litterally EATING our (potential) recovery capital and in case of default someoby will have to respond for this DISASTROUS DECISION to let this loan running and running.
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Post by Deleted on Oct 14, 2016 8:46:28 GMT
Interest continues to accrue daily on overdue FC property loans, AIUI, as it does on SS, FS, AC, BC, etc. Interest does continue to accrue but it isn't serviced on a monthly basis - as it is on SS, for example (so interest can't be compounded). Furthermore, the additional interest is only ever paid 'in due course' rather than promptly after a late loan has been settled. If these overdue loans were serviced on a monthly basis I'd go away and stop bothering FC. As it stands I don't think I'm far from taking a complaint to the FCA.Unless I see a REPAYMENT for this loan today, I will be writing my full complaint to the FCA this weekend. The situation is incredible, against any basic duty of a P2P lending company and against any right of lenders. I would understand if a company wants to give a small leaway (say a week or two) to help the borrower. But arriving to over 100% overdue interest is total madness. It means to me that FC management is completely out of control and very dangerous.
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Post by paul123 on Oct 14, 2016 9:19:10 GMT
This is strange. On SS, loans get delayed by months and months, as is normal in bridging finance I suppose, but the interest keeps getting paid. Sometimes savingstream make a reference that the borrower has paid for 2 more months interest (and again and again) but sometimes they don't say anything. Is there a suspicion that the monthly interest payments for negative period loans on SS aren't coming from the borrower directly and that they are instead being paid by an additional loan made by SS (to the borrower) to cover the interest or that SS is instead paying the interest on the borrowers behalf somehow? Is this a question I even want to ask?
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blender
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Post by blender on Oct 14, 2016 9:30:41 GMT
Hor1997 -Agreed the situation is bad. The question for FCA is whether the loan is not being managed as in the FC T&Cs - including the loan contract - or whether the T&Cs are themselves unfair. You have agreed the T&Cs - by default. The loan contract is between borrower and lender, FC administer it. One question is whether the contract allows FC not to default it under these conditions - they will say they can do this and judge it in the best interest of lenders not to default. You will have to knock holes in that. The other question is the accruing of interest and withholding of payments - are they allowed to do that under the T&Cs? There's no point in just shouting to FCA that the treatment of these few loans is unfair and you don't like it (even though that's probably right).
Paul123, for FC property loans the interest for the term and the fee are included in the borrowed amount, but the interest is not passed on to the borrower. Instead FC keep it in a client account and pay it back monthly. The borrower pays no cash at all until the end of the term, when everything owing is paid in one go. The problem comes when the loan overruns in that there is no cash to pay extra interest, and FC claim to be trapped into a system in which the final scheduled payment of interest and principal must be made in one go, before any extra interest can be distributed manually. There are multiple problems here, which are of FC's making. Noting that all but the last interest payment is pretty safe, the wise lender might choose to exit a little before the end.
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SteveT
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Post by SteveT on Oct 14, 2016 9:52:28 GMT
It's hardly "a situation unheard of in the P2P industry". I have a growing list of long-overdue loans on FS, still "Active Loans" (undefaulted), that have yet to pay a penny of interest since they started. The question a platform must grapple with is whether monies owed to lenders are more likely to be obtained by continuing to work with the borrower, especially if it's an ongoing development, or by calling in Receivers and potentially scuppering the scheme. Not an easy choice to make, however much is typed in capital letters.
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blender
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Post by blender on Oct 14, 2016 10:05:31 GMT
It's hardly "a situation unheard of in the P2P industry". I have a growing list of long-overdue loans on FS, still "Active Loans" (undefaulted), that have yet to pay a penny of interest since they started. The question a platform must grapple with is whether monies owed to lenders are more likely to be obtained by continuing to work with the borrower, especially if it's an ongoing development, or by calling in Receivers and potentially scuppering the scheme. Not an easy choice to make, however much is typed in capital letters. That is the key question - though the inadequacy of contracts and systems should not be excused. On the key question, the concern must be that if a team is charged with growing a business sector, how do you ensure that they are correctly judging lenders' interests on existing loans, when it is easy to just allow late loans to roll on? Hor1997 does seem to have a valid 'moral hazard' point here.
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Post by Deleted on Oct 14, 2016 10:58:56 GMT
It's hardly "a situation unheard of in the P2P industry". I have a growing list of long-overdue loans on FS, still "Active Loans" (undefaulted), that have yet to pay a penny of interest since they started. The question a platform must grapple with is whether monies owed to lenders are more likely to be obtained by continuing to work with the borrower, especially if it's an ongoing development, or by calling in Receivers and potentially scuppering the scheme. Not an easy choice to make, however much is typed in capital letters. I don't have knowledge of any FS loan, whose "Expected End Date" has expired and let roll on without declaring the loan in default and without any interest paid to lenders for 210+ days. If one exist, please pass me the number so I will be able to check the details and ask questions. To my knowledge the FC situation is unique and very worrying, as an entire FC choice which goes against the lender's interest. The key point in brigding loans is the value of the security against what you lend. If you keep the loan rolling and rolling without getting anything back, every extra day you give the borrower you increase the LTV, i.e. you are implicitly changing the contract that the lender has signed. If the change is small (say up to 4-5%) things might be manageable. But for 100%+ overrun, it means you are already adding at least a good additional 12%+ to the amount 'lent', so the LTV is shooting up and the chances to recover everything from the sale of the asset diminuish every day. This is to me unacceptable.
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