SteveT
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Post by SteveT on Nov 13, 2018 10:40:18 GMT
What happened to "Assetz become first loss payee on the credit insurance policy"? (from their Credit Report)
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iren
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Post by iren on Nov 13, 2018 12:23:54 GMT
I guess this policy is irrelevant. As the company didn't make trade finance loans, there was nothing to insure.
Ablrate managed their loan to a trade finance provider very differently. They structured the loan as a ringfenced, monitored pot of money for use in trade finance deals only, not as a simple loan to the company. While the loan has gone beyond term due to a deal with a funder falling through, there is a pot of money that is now being wound down to make monthly payments.
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Post by mrclondon on Nov 13, 2018 12:31:28 GMT
Does anyone feel AC neglected their monitoring obligations sufficiently to warrant a claim against them from investors? Yes, once the recovery situation is much clearer (so in 1 to 2 years time) I think it will be worth a formal complaint so that any regulatory review of the platform has access to areas of concern. I will be doing this with each loan on every platform where I feel the platform should bear some (moral) responsibility for the failure.
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Post by mrclondon on Nov 13, 2018 12:39:39 GMT
What happened to "Assetz become first loss payee on the credit insurance policy"? (from their Credit Report) I guess this policy is irrelevant. As the company didn't make trade finance loans, there was nothing to insure. Absolutely true, and totally sickening.
I normally steer away from balance sheet / debenture secured loans, as on failure the recovery will normally be poor. But having spent my career in manufacturing industry, I understand some of the issues associated with international supply chains, and that frequently a small amount of additonal working capital directed into the supply chain can make a big difference. I lent on this loan primarily to lend support to the businesses this borrower claimed he would be financing.
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Post by westcountryfunder on Nov 13, 2018 13:16:58 GMT
.............. I lent on this loan primarily to lend support to the businesses this borrower claimed he would be financing.
Presumably that is true of most, if not all, of us. Since the money was used for something different entirely does that not amount to fraud? AC's email hints darkly at the possibility; at least I presume that is the significance of the paragraph in the email headed 'Investigations'. I won't hold my breath that it will make any difference, however.
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Steerpike
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Post by Steerpike on Nov 13, 2018 14:06:27 GMT
To date I am impressed with the communications from Archover regarding these matters, rather less so with those issued by Assetz.
However, what really matters of course is how much we get back and I suspect that it will be a long wait.
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ceejay
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Post by ceejay on Nov 13, 2018 14:47:34 GMT
... What makes you assume that p to p lenders' market is sub-prime? in its infancy p to p claimed to be competing with mainstream institutions. It had the competitive advantage of only willing lenders and platform managers determined to change the face of lending. Ordinary lenders want simply more than the paltry savings rates being offered by mainstream institutions with manageable risk - not dubious 11-13% loans ending all too often in disaster. The lenders aren't subprime (I'm sure we are all splendidly solvent!) but many of the borrowers are, almost by definition. If we are getting 8-12% then borrowers are paying, what, 12-25%? Even more on the ABL loans I've looked at. If the borrowers were able to borrow from high street banks then I'm sure they would, and at lower rates.
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dandy
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Post by dandy on Nov 13, 2018 15:05:12 GMT
... What makes you assume that p to p lenders' market is sub-prime? in its infancy p to p claimed to be competing with mainstream institutions. It had the competitive advantage of only willing lenders and platform managers determined to change the face of lending. Ordinary lenders want simply more than the paltry savings rates being offered by mainstream institutions with manageable risk - not dubious 11-13% loans ending all too often in disaster. The lenders aren't subprime (I'm sure we are all splendidly solvent!) but many of the borrowers are, almost by definition. If we are getting 8-12% then borrowers are paying, what, 12-25%? Even more on the ABL loans I've looked at. If the borrowers were able to borrow from high street banks then I'm sure they would, and at lower rates. I think the point is that not ALL p2p lending involves subprime and clearly not all borrowers are paying those rates. When was the last time you tried to borrow money from a high street bank? It is not all about the rates especially in relatively short term lending - it is also about availability, speed and service. For example, using high street banks would make it difficult impossible to compete when funding is needed to secure a deal quickly
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ceejay
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Post by ceejay on Nov 13, 2018 17:23:28 GMT
I think the point is that not ALL p2p lending involves subprime and clearly not all borrowers are paying those rates. When was the last time you tried to borrow money from a high street bank? It is not all about the rates especially in relatively short term lending - it is also about availability, speed and service. For example, using high street banks would make it difficult impossible to compete when funding is needed to secure a deal quickly Fair point. Although another issue might be that if a potential borrower has, shall we say, less than entirely straightforward intentions then that makes them "sub-prime" in a sense. They may feel that they can get away with less scrutiny at a P2P platform especially if that platform is still in a fledgling grow-at-almost-any-price phase. I don't think AC are in that state now, but they might have been when this borrower first engaged.
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Post by mead187 on Nov 13, 2018 21:51:45 GMT
Really shakes confidence in p to p in general and AC in particular. Not quite Lendy but.........?
What I struggle with this is how a platform can susposedly be monitoring a loan, and not spot the declared business plan is not being implemented in any shape or form. I worry that AC might be a little too eager to blame the apparantly poor recovery prospects on the nature of the balance sheet / debenture security (poor recovery of such is inevitable), and possibly be somewhat guilty of sweeping the failure of the loan monitoring under the carpet.
I think this hit's the nail on the head. At what point did this loan become an investment into a mineral water extraction/mining enterprise? this was raised in another thread but I can't find it - perhaps the pink pages? The info appears in one of the credit reports but I only became aware when it was mentioned on this forum. It was too late to sell up at this point but this should have raised some alarms. Unfortunately I own a part in each of the 4 Midland tranches. Along with the I** loans this year is turning out to be the worst out of my last 5/6 in P2P. What strikes me with both sets of these loans is what appears to be the large scale misuse and disappearance of funds with next to no chance of recovering anything substantial. I left FC years ago (best decision ever) and came to Assetz because they offered a better business model. Upon reflection, these loans didn't fit that model. Lessons learned: Sometimes it's good to go back to the basics, perhaps years of good returns led to some complacency on my behalf. 1) Diversify, diversify & diversify. Don't lend to multiple loans with the same borrower! 2) Only lend to Asset backed loans 3) Spend some time monitoring loans myself - we can all play a part in this. Here's to a better 2019!
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ceejay
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Post by ceejay on Nov 13, 2018 23:39:05 GMT
... Lessons learned: Sometimes it's good to go back to the basics, perhaps years of good returns led to some complacency on my behalf. 1) Diversify, diversify & diversify. Don't lend to multiple loans with the same borrower! 2) Only lend to Asset backed loans 3) Spend some time monitoring loans myself - we can all play a part in this. Here's to a better 2019! Agreed, especially on point 1 and multiple loans to the same borrower. There's a good example of this on ABL at the moment! And here's a place where I think the platforms can do more - make it crystal clear where there are commonalities of borrower. Not just the same legal entity, but related companies and common directors. AC could do much, much better on this. I would like to see a prominent place in the data for a new loan where they list all the loan ID's (numbers, please, not just another slightly mistyped version of a borrower name that's hard to track down) where there is any overlap at all between the borrowers. It wasn't an issue with the loans covered in this thread, of course - they were very clearly linked. But there are still hard-to-spot links between borrowers and I find it hard to be confident that I've found them all. It shouldn't be that hard.
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iren
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Post by iren on Nov 13, 2018 23:39:58 GMT
Having had my fingers burned with mining ventures on the stockmarket, I wouldn’t have gone anywhere near such a loan. So often even the well executed business plans are ruined by the unforseeable and uncontrollable. This is why much of the industry is funded by royalty ventures such as Franco Nevada Corporation. To benefit from financing the industry, there needs to be the prospect of participation in the capital upside when it arrives.
I guess this borrower decided to keep any upside for themselves by misdeclaring the purpose of the loan.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 14, 2018 0:49:45 GMT
... Lessons learned: Sometimes it's good to go back to the basics, perhaps years of good returns led to some complacency on my behalf. 1) Diversify, diversify & diversify. Don't lend to multiple loans with the same borrower! 2) Only lend to Asset backed loans 3) Spend some time monitoring loans myself - we can all play a part in this. Here's to a better 2019! Agreed, especially on point 1 and multiple loans to the same borrower. There's a good example of this on ABL at the moment! And here's a place where I think the platforms can do more - make it crystal clear where there are commonalities of borrower. Not just the same legal entity, but related companies and common directors. AC could do much, much better on this. I would like to see a prominent place in the data for a new loan where they list all the loan ID's (numbers, please, not just another slightly mistyped version of a borrower name that's hard to track down) where there is any overlap at all between the borrowers. It wasn't an issue with the loans covered in this thread, of course - they were very clearly linked. But there are still hard-to-spot links between borrowers and I find it hard to be confident that I've found them all. It shouldn't be that hard. Most AC credit reports clearly identify loans to the same borrower or related parties. The issue is communicating retrospectively where earlier loans are connected to later ones.
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Post by brightspark on Nov 14, 2018 9:58:39 GMT
Does anyone feel AC neglected their monitoring obligations sufficiently to warrant a claim against them from investors? What (legal) monitoring obligations?
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jfh82
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Post by jfh82 on Nov 14, 2018 13:01:24 GMT
to operate with due care and due diligence - not monitoring might constitute negligence - just a thought.
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