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Post by mrclondon on Apr 13, 2016 19:40:19 GMT
I lent extensively on FC from launch in 2010 until the end of 2013 but nothing since then. Recoveries on my defaulted loans has currently reached 39% and by the time all recoveries are in for my defaulted loans (at least 5 years off yet) I'd guess my total recovery will be 55-60%.
In terms of time scales it might take 2 to 3 years from the point of default until the first recovery payment is received, and recovery payments might well be a 5 year plan of monthly payments thereafter, with some missed payments along the way. So assuming an 8 year recovery period as the worst case is probably fair.
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Post by Deleted on Apr 14, 2016 3:48:05 GMT
I lent extensively on FC from launch in 2010 until the end of 2013 but nothing since then. Recoveries on my defaulted loans has currently reached 39% and by the time all recoveries are in for my defaulted loans (at least 5 years off yet) I'd guess my total recovery will be 55-60%.
In terms of time scales it might take 2 to 3 years from the point of default until the first recovery payment is received, and recovery payments might well be a 5 year plan of monthly payments thereafter, with some missed payments along the way. So assuming an 8 year recovery period as the worst case is probably fair. Well let's not be so enthusiastic. when they work out well recoveries depend mostly on the honesty of people (and not on FC skills or committment), while when they bring in zero (or similar result) they are probably very much connected to FC missing skills (proper vetting and recovery efforts). I have seen some hard working people sacrificing large part of their (new) salaries after a company failure to get into a repayment plan which is progressing. But I have also seen hugely paid lawyers, selling under disguised names enourmous homes, getting money out of the bankrupcy estate and still not paying a single penny of their 'personal guarantee'... My experience is very bad with FC defaults and recoveries. * Almost 4 years in, over 400 loans in (now of course only selling and reducing day by day), only manual selection and diversification (never more than 2% on any loan). Around 50 defaults already (and some very early). * Losses > 25% of earnings. * Recoveries only around 14% of losses (very slightly improving but stoned by many early 'professionals' who refused to repay a penny and went fake bankrupt) My overall return is 1.4% lower than I was expecting initially, due to the extremly poor FC due diligence first and recovery performance then. Not happy at all with this performance and FC answers and moving onto much better secured loans
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jayjay
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Post by jayjay on Apr 14, 2016 7:05:15 GMT
I have been with FC three and a bit years - my recovery rate is a pleasing 26.2%. No SME loans since Sept last year and this recovery rate is steadily improving. I anticipate it to go up further.
I am less critical of the recovery process which seems, by and large, ok, but I fear for all these newer loans and the fall-out of uncontrolled rapid expansion of the platform. With 21000 loans it is a very different kind of business to a few 100.
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dorset
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Post by dorset on Apr 14, 2016 8:22:50 GMT
19304 defaulted today after only one payment.
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kt
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Post by kt on Apr 14, 2016 8:31:34 GMT
What are the details of that loan?
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blender
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Post by blender on Apr 14, 2016 8:47:32 GMT
I lent extensively on FC from launch in 2010 until the end of 2013 but nothing since then. Recoveries on my defaulted loans has currently reached 39% and by the time all recoveries are in for my defaulted loans (at least 5 years off yet) I'd guess my total recovery will be 55-60%.
In terms of time scales it might take 2 to 3 years from the point of default until the first recovery payment is received, and recovery payments might well be a 5 year plan of monthly payments thereafter, with some missed payments along the way. So assuming an 8 year recovery period as the worst case is probably fair. Well let's not be so enthusiastic. when they work out well recoveries depend mostly on the honesty of people (and not on FC skills or committment), while when they bring in zero (or similar result) they are probably very much connected to FC missing skills (proper vetting and recovery efforts). I have seen some hard working people sacrificing large part of their (new) salaries after a company failure to get into a repayment plan which is progressing. But I have also seen hugely paid lawyers, selling under disguised names enourmous homes, getting money out of the bankrupcy estate and still not paying a single penny of their 'personal guarantee'... My experience is very bad with FC defaults and recoveries. * Almost 4 years in, over 400 loans in (now of course only selling and reducing day by day), only manual selection and diversification (never more than 2% on any loan). Around 50 defaults already (and some very early). * Losses > 25% of earnings. * Recoveries only around 14% of losses (very slightly improving but stoned by many early 'professionals' who refused to repay a penny and went fake bankrupt) My overall return is 1.4% lower than I was expecting initially, due to the extremly poor FC due diligence first and recovery performance then. Not happy at all with this performance and FC answers and moving onto much better secured loans Part of this I agree with but part unfair, imo. The main issue is what can be done within the 1% charge, which is becoming the predominant income stream for FC. From that 1% they have to provide the performance from the loan book and make their return, and so the big experiment is to see how much needs to be spent on assessment and recoveries to achieve the loss rates projected. It is only as the business gets larger that they can try to scale back the costs of assessment and recovery to a level which demonstrates a scalable model and a valuable future business. There will be clear limits on what can be spent on assessment and recoveries, and how the resources are divided between the two is key. The computerised assessment is experimental and will have systematic weaknesses that the wrong sort of borrower can exploit. How much do you spend on fixing those weaknesses, or is it better to come down hard on those who exploit weaknesses when the loans default (the dishonest)? If there are problems in the performance of recoveries, I do not think it lies in the quality or commitment of the staff, but rather in the level of resourcing which can be afforded in the model. The practice is clearly not to pursue every default to the limit of what is legally allowed, but rather to target the resource firstly to achieve the target loss rates and secondly to come down hard on those who are judged to have exploited the assessment process, so as to discourage others. A consequent problem of resource limits is that they do not have time to communicated fully with lenders. My experience is that they do come down hard on those who deserve it - look for example at what they are now doing with 4907 after a very weak start. While hard luck stories get more sympathy. But overall it is the loss rates which matter - not individual loans.
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Post by stanley on Apr 14, 2016 16:04:49 GMT
Dear All,
Thanks for all your responses.
What a lovely bunch you (we) are.
Kisses for the girls and firm handshakes to the MEN!
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dorset
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Post by dorset on Apr 14, 2016 17:11:49 GMT
What are the details of that loan? Small West London builder (sounds Polish) who needed the money to buy a new van. With only one payment made out of 36 there could be issues around fraudulent trading which I hope that FC will investigate (live in hope). I'm only in for a small amount so it will not dent my stats but it is a shame that some borrowers spoil the market for the vast majority of borrowers.
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mikeb
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Post by mikeb on Apr 14, 2016 18:14:39 GMT
I lent extensively on FC from launch in 2010 until the end of 2013 but nothing since then. Recoveries on my defaulted loans has currently reached 39% I've been on since Nov 2010, but never quite got to the heady heights of 39% recoveries: A new default usually drops in to scupper that. Currently losses are split as: 26.72% actually recovered, 21.62% definitely irrecoverable, 51.67% "pending" ... could go either way. Recoveries are a delayed dribble, more than a stream of cash.
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min
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Post by min on Apr 14, 2016 18:48:22 GMT
I lent extensively on FC from launch in 2010 until the end of 2013 but nothing since then. Recoveries on my defaulted loans has currently reached 39% I've been on since Nov 2010, but never quite got to the heady heights of 39% recoveries: A new default usually drops in to scupper that. Currently losses are split as: 26.72% actually recovered, 21.62% definitely irrecoverable, 51.67% "pending" ... could go either way. Recoveries are a delayed dribble, more than a stream of cash. How does Financially Carefree become delayed dribble? Same as you roughly- once all live loans gone I have only a delayed dribble to look forward to.
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mikeb
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Post by mikeb on Apr 15, 2016 19:32:28 GMT
"Delayed dribble" was a description of recoveries (not the account as a whole) ... there can be quite a lead time with nothing recovered, then the part-payments start to come in. Slowly. Pennies at a time.
Although there is the occasional highlight of a comment to depress you, e.g. "It has been noted that the Borrower's principal asset ([o]ver which Funding Circle held security) was sold prior to the liquidation with the proceeds of sale being utilised in the payment of various other debts. THe Liquidator is investigating this matter" ...
So Director's Guarantees: Low value. Secured loan with security over assets: Ummm ... possibly worthless too. Now depending on the liquidator to pull back those "cleared debts" into FC's hands.
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