arby
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Post by arby on Aug 9, 2019 10:48:50 GMT
I really don't understand why the administrators can't be made to work for a % of the final recovered amount, rather than by total of hours "worked". There's nothing to incentivise them to do anything with any great speed, when they get paid more to do less, for longer. And the hourly rates are staggering. I can't see much at all coming back from this. You ask what incentivises then to work appropriately if charged by the hour; their ongoing professional reputation is worth much more to them than a few extra hours billed. Charging a fixed fee could be seen as an incentive to cut corners and make more money. Charging a percentage of recoveries means they could be encouraged to focus only on easy cases and only pay lip service to some of the more complex or difficult cases. The fee on recovery would also be hiked to compensate for the other cases where no recoveries were possible. Edit: the hourly rates seem high when looking through the lens of a typical consumer, but they're pretty standard. A previous place of work of mine charged director and partners out at just over £1k/hour. Were they worth it? Of course not, but the customers were paying for the reputation and certainty of professional approach. (Should clarify, I wasn't working directly in this field)
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amwinv
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Post by amwinv on Aug 9, 2019 10:56:46 GMT
So basically lenders get shafted, regardless. Great.
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arby
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Post by arby on Aug 9, 2019 11:01:31 GMT
So basically lenders get shafted, regardless. Great. The alternative is looking for a cut-price administrator. I'm pretty sure that could also lead to lenders getting shafted.
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Post by pmjenkins on Aug 9, 2019 11:11:40 GMT
I really don't understand why the administrators can't be made to work for a % of the final recovered amount <snip>
D'uh! Why would any administrator take on a case if there was a chance they wouldn't get paid a penny!
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carolus
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Post by carolus on Aug 9, 2019 11:15:41 GMT
I will see if we can adjust the update dated 19/06 as it s a bit confusing as it is. No. Just no. The only record lenders have of the history of loans is via the updates. Sounds like you've been caught with your pants down by not doing basic HPI checks on all the vehicles. Don't compound your errors by changing past updates with the benefit of hindsight. I seem to remember another platform thought it would be a good idea to change historic updates to present them in a better light. It didn't end well. No. Just no.
You seem to have gone off rather half-cocked, I'm afraid. As described in the post you have (half) quoted, the 19/06 update on the defaulted loan is simply a copy of the historic updates on the non-defaulted loans. You can see the historic updates on the original loan by navigating to the "Completed Loans" sub-heading, and finding the correct loan.
You would then observe that what has happened is that in the copying process the date of the last update on the original loan was missed off, so that on the default loan it appears superficially as if the date is 19/06
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bramhall17
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Post by bramhall17 on Aug 9, 2019 11:17:27 GMT
I have some sympathy with MT in this situation given that all commerce requires a certain element of good faith. Sadly I entered all these loans and they are collectively my biggest MT holdings left. Even then collectively we are talking less than a thousand.
I took a holistic view in that across platforms most property develpment loans seem problematic in some respect, so cars with an industry standard valuation system , albeit at the now infamous 'LTV 70%' would be a useful bulwark. Furthermore, the company had been working with MT for some 6 years as I understand it. Plus they are real finished physical assets not pieces of land with some still to be build project. " What could possibly go wrong" ----!!! What sensible hedging by me !!
However, sympahy only goes so far. So HPI etc checks are just for retail then ? All these finance providers just take a legal charge and hope that the prestige cars are legally owned by the borrower and unencumbered? Surely there must be some over-arching mechanism that enables finance companies to verify the legitimacy of their security? If not how do we know what a first charge actually means? --- it might be a 'second first charge' --- or a fourth ? You get my drift. This cuts into the whole concept of security for physical assets. Unless a lender can be sure that they have plain sight of all calls on the asset at any time ( like a register) then security is worthless. The assets can disappear ( sold overseas etc) . How can a 'first charge' be enforced amongst competing claims on the asset ?
Bit of a mess that MT really could do without ----- but it is OUR money that has disappeared .................
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amwinv
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Post by amwinv on Aug 9, 2019 11:19:38 GMT
I really don't understand why the administrators can't be made to work for a % of the final recovered amount <snip>
D'uh! Why would any administrator take on a case if there was a chance they wouldn't get paid a penny!
The same reason we invest, knowing we will get shafted and probably lose every penny.
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m2btj
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Post by m2btj on Aug 9, 2019 12:14:54 GMT
Very difficult to recover when systematic fraud is evident. Looks like the directors don't want to play ball. Sadly, the law goes gently on white collar crime.
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invester
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Post by invester on Aug 9, 2019 12:21:59 GMT
Perhaps naively I lent on all these loans surmising that the security was much easier to sell than a development.
Has to be a good outcome here for the sake of the industry I feel, it just seems so easy to do a runner with some assets, reorganise your finances and become bankrupt and not go to jail.
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Brainer
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Post by Brainer on Aug 9, 2019 13:53:30 GMT
Am I correct in thinking that if the other cars prove irrecoverable then any recovery from the Ferrari will be swallowed by the administrators? I don't see how they'd get paid any other way.
I mean it's a grim situation for everyone but it would be particularly galling to have the one loan I'm in see a (hopefully) decent recovery and still end up with zilch.
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boundah
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Post by boundah on Aug 9, 2019 14:11:51 GMT
Seems like a clear-cut case of criminal fraud based on the information we've been given. I'm sure MT will do their best to recover the assets, but even if they do the police should still be called in.
And another thing... yet another argument for using notaries for any large loan, just as many other countries do.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Aug 9, 2019 16:26:23 GMT
Collateral managed a full recovery of 4 cars that went missing, surely MT, FS and Moorfields can work together, and get a good result here. COL's robust approach included warning the borrower that if the cars were not returned they would pursue criminal charges against them.
Platforms generally seem reluctant to do this and I see nothing in MT's update to suggest they are considering this. Unfortunately. Hmmmm, and you have to ask yourself " Why?" Platforms may not pursue this rather simplistic and oh so effective approach? Incestuous business is P2P.
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jester
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Post by jester on Aug 9, 2019 22:37:33 GMT
I could cope with unfinished developments, I could handle failed business plans, I could live with borrowers disputing terms and I could understand sabotaged buildings ....
But now we have your security is unexpectedly shared with other lenders, your security has disappeared off the face of the planet and your security isn't owed by the borrower so we gave it away!
I think I may have reached my comfort threshold with this particular arena of P2P. Just appalling!
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Post by mrclondon on Aug 10, 2019 0:40:53 GMT
I'm still in shock from Thursday's bomb shell. (I had bits in all the loans, but a decent chunk of the boat ... so I'm pretty much guaranteed a major loss if the boat is not actually security) [...] All these finance providers just take a legal charge and hope that the prestige cars are legally owned by the borrower and unencumbered? Surely there must be some over-arching mechanism that enables finance companies to verify the legitimacy of their security? If not how do we know what a first charge actually means? --- it might be a 'second first charge' --- or a fourth ? You get my drift. This cuts into the whole concept of security for physical assets. Unless a lender can be sure that they have plain sight of all calls on the asset at any time ( like a register) then security is worthless. The assets can disappear ( sold overseas etc) . How can a 'first charge' be enforced amongst competing claims on the asset ? [...] But now we have your security is unexpectedly shared with other lenders, your security has disappeared off the face of the planet and your security isn't owed by the borrower so we gave it away! It's now 2 years since I made a very long post on the general board, questioning the ethics of p2p platforms. That post attracted 48 likes from forum members, and a fair few howls of protest (privately) from various platform reps. One paragraph in particular seemed to provoke the greatest concern: The expectations of the average forumite regarding business ethics is, I suspect, WAY above what is the norm in UK business, and given that many p2p borrowers (the platform's actual customers) are sub-prime operating on the boundaries of legality never mind ethics and morality it is hard (perhaps impossible ?) for p2p platforms to live up to the expectations of forumites. [...] A platform rep simply can't square the circle between how lenders expect the platform to operate, and how the platform has to operate in the shady world of sub-prime loans. I was comprehensively criticised for even implying that borrowers might be sailing close to the wind legally. And yet two years on and we have cases of fraud by borrowers affecting loans on a number of platforms.
If self select p2p is to have a future, there needs to be a major shake up in how loans are secured. Both the number of p2p loans that default and the losses on default are simply too high across multiple platforms. The so called lower risk loans at say 6 to 8% are still suseseptible to fraud.
A stocking loan is by neccessity open to abuse (as the security is stock that is for sale), and there was probably little else beyond HPI + audits that could be done to improve matters. But what is irking me is why the boat couldn't have been shackled to some u-bolts in the ground with MT supplied padlocks at the end of some chains. The "3rd party" might have made themselves known a bit sooner.
My post of two years ago suggested that without change, self select platforms would face an existential crisis. "Don't be absurd", they said. I questioned whether any of the major self-select platforms might be willing to take a lead on a more ethical approach. "No because we have to treat all parties fairly - borrowers, platform staff, platform equity/debt funders, as well as lenders."
Platforms have been far too trustng of borrowers for far too long, and in many cases lenders have been far too trusting of platforms.
Most p2p lenders are ordinary people who have worked hard to earn the money that has been thrown away by investing in any manner of dodgy loans promoted by multiple p2p platforms, in part because borrowers have to be treated "fairly".
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7d7
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Post by 7d7 on Aug 10, 2019 3:55:35 GMT
What do platforms mean by treating borrowers fairly? In fact, borrowers have had the advantage right from the word go. Besides disappearing into thin air with our money, they can decide not to cooperate at any stage and even take legal action against other parties. Lenders, however, are bound by Ts and Cs that render them spectators.
A drastic reorganisation of procedures and controls is required if platforms wish to retain my business.
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