Collections & Recoveries policy

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Aubrey Warren
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1 Collectios & Recoveries policy The purpose of this policy is to set out the actio Ledy takes to ecourage borrowers to repay their loas withi term. This policy also serves to set out the actio Ledy takes whe a borrower i uable to repay their loa. This policy serves as a guide to actio take by Ledy s recoveries team, ad the actio take o the platform directly impactig upo ivestor experiece. Ledy classificatios of time periods Ledy uses the P2PFA (Peer 2 Peer Fiace Associatio) defiitios to label ad assess its loa book performace. The P2PFA is the idustry body for the peer to peer ledig sector ad the stadards they set reflect best practice i the idustry. Ledy applies the followig classificatios to platform loas: I term: loas for which the due date has ot passed. I term Loa start date Due: loas for which the due date has passed but which are o more tha 45 days past due. Actual arrears: loas which are more tha 45 days past due but less tha 180 days past due. No-performig: loas which are 180 days or more past due. 0 Due Actual arrears Noperformig

2 I term Loas i term are displayed uder the Live loas tab ad are available for trade o the secodary market (Available loas). Iterest accrues o a daily basis ad is paid to ivestors mothly. Due loas Oce a loa becomes due, bous accrual will begi to accrue o the loa. The loa will remai uder the Live loas tab ad will still be eligible for secodary market tradig. Iterest will cotiue to accrue i ivestors favour but mothly paymets will cease. Loas i actual arrears Ledy applies the actual arrears label to loas that are over 45 days past due for the purposes of givig a fair represetatio of loa book performace to the highest stadards i the idustry. This classificatio is for this purpose oly ad the fuctioality of the loa is the same as loas uder the Due classificatio. No-performig loas Oce a loa becomes 180 days past due it will be categorised as o-performig. The loa will o loger be displayed uder the Live loas tab ad istead will be listed uder the No-performig loas tab. No-performig loas will be uable for tradig o the secodary market. Bous accrual will cease to accrue o overdue loas oce they become o-performig, however iterest will cotiue to accrue at the stadard mothly rate agaist the loa, ad be repayable upo successful recovery of the loa. Extesios It is the ature of bridgig fiace that due dates caot be met with certaity. There is plety of scope for delay such as a purchase beig waylaid or approval for a vital plaig permissio takig loger tha foresee. This meas that borrowers are ot ifrequetly grated extesios to their loas made via the Ledy platform to prevet loas fallig past due ad to improve the positio of Ledy ivestors who will cotiue to receive iterest for the exteded period. Ledy is careful to esure that i gratig a extesio it is ot icreasig the risk profile of a particular loa. Whe makig a applicatio for a loa to be exteded case hadlers must complete a credit applicatio form detailig why, i their opiio, a extesio should be grated but also flaggig ay relevat elemets of the loas risk profile. This is submitted to Ledy s Head of Credit who will the review the applicatio. The Head of Credit may determie that further iformatio is required before a determiatio is reached ad the extesio approved. I some circumstaces, the approval of a extesio may be depedet upo special coditios such as the borrower makig partial repaymet or providig specific iformatio by a set date. All extesios must be approved by the Credit Committee which cosists of: A Director The Head of Credit The Head of Legal The Head of Ledig Partial repaymets Where a borrower is uable to repay their loa i full but is able to repay their loa i part Ledy will ecourage ad icetivise a borrower to do this. The key beefit to the partial repaymet of a loa is that it eables the retur of capital to platform ivestors ad reduces the risk profile for the remaiig capital by reductio to the loa to value ratio. A secodary advatage to the partial repaymet of a loa is that it places the borrower i a better positio to exted their loa whilst realisig their exit strategy eablig ivestors to cotiue to receive iterest past the origial due date. Iterest paymets Ledy holds iterest o accout for the term of a loa. Therefore, whe a loa reaches its due date without beig repaid or exteded ivestors will cease to receive mothly iterest paymets. From the due date iterest will begi to accrue i the borrower s favour. Ledy will seek to recover iterest accrued i ivestors favour where there is a viable strategy to accomplish this. The recovery of accrued iterest caot be guarateed.

3 Bous accrual Oce a loa passes its due date default iterest will begi to accrue o the loa. A portio of this default iterest will accrue i the ivestors favour as bous accrual. Bous accrual is calculated o a daily basis at half the usual iterest rate. Where bous accrual has accrued agaist a loa which is subsequetly exteded, it will i most cases be recuperated ad paid to ivestors as part of the extesio agreemet reached with the borrower. However, the Credit Committee may differ from this policy if they deem this to be ecessary. The recovery of default iterest ad bous accrual is ot guarateed. Suspeded loas I lie with our regulatory requiremets, we will sometimes susped the secodary market (Available loas) tradig for loas which are i term or withi the tolerace period whe we receive, or become aware of, iformatio which we cosider to be material ad which we thik may sigificatly impact upo a ivestor s decisio to purchase relevat loa parts o the secodary market (Available loas). Were this to occur we would give a ad-hoc update to ivestors outliig the situatio. Tradig of the loa o the secodary market would remai suspeded util such time as our ivestigatios covice us that the issue is immaterial, or where a full disclosure could be made to ivestors without prejudicig ay recovery actio agaist the borrower or the security property. Please ote that i the evet of a suspesio of secodary market tradig, those with loas for sale o the secodary market at the poit of suspesio will ot receive or accrue iterest i lie with our usual policy. Ivestors may therefore wish to cacel the sale of suspeded loas. I some circumstaces, we may be limited to the level of iformatio we are able to disclose. This may be because we are uder a regulatory duty or uder a legal obligatio to withhold the iformatio, or because the iformatio is commercially sesitive ad its full disclosure might be harmful to the iterests of ivestors. Priority of paymets Uless Ledy is receivig a paymet from a borrower i coectio with a extesio, the fuds forwarded by the borrower shall be put to the amouts owig with the followig priority: 1. Capital (loa) amout 2. Iterest accrued 3. Bous accrual Ledy will oly take ay portio of iterest or fees owig to them oce all of the above have bee satisfied. Oly oce each tier has bee fully satisfied will fuds be put toward the ext. E.g. the whole capital amout must be paid before fuds are put towards iterest accrued, ad all iterest accrued must be paid before fuds are put towards bous accrual. Eforcemet actio Appoitmet of LPA Receivers Ufortuately, there will be some loas where the borrower is uable to repay their loa. Where this is the case Ledy will eforce leders rights uder the loa agreemet. Ledy will appoit LPA receivers to take charge of ad sell the property. Ledy appoits LPA receivers from top tier atioal firms, such as Allsop ad Savilles, or regioal firms with specialist kowledge. The LPA receiver will the devise a strategy, makig use of their cotacts ad expertise, to dispose of the security property for the greatest value withi a acceptable period of time. Whe a property caot achieve a satisfactory price o the ope market it will be placed ito auctio (Allsop ad Savilles ru two of the largest property auctios ad these are typically held bimothly). Ledy leds at a maximum LTV ratio of 70% so that the proceeds of sale of the security property should be sufficiet to cover ivestor capital let ad other debt owed by the borrower to ivestors. However, there will be some istaces where the proceeds of sale of the security property are isufficiet to cover the total owig to ivestors. I these circumstaces Ledy will pursue further recovery actio. Borrower s Liability ad Persoal Guaratees The borrower will be liable uder the loa agreemet for all debt outstadig followig the sale of the security property, as will ay perso who gives a persoal guaratee agaist the loa. Should a portio of the loa amout remai outstadig followig the sale of the security property, Ledy will pursue the borrower ad ay persoal guarators for the outstadig amout. Appoitmet of Admiistrator / Liquidator If Ledy wish to either liquidate a compay they will appoit a admiistrator or liquidator. The admiistrator / liquidator will the take charge of disposig of ay assets belogig to the idividual / compay, the proceeds of this will the be passed o to the idividual s / compay s creditors i proportio to debts owed to them. Ledy may also eed to appoit a admiistrator if the property that the loa is secured agaist is used as part of a tradig busiess. Professioal Idemity Isurace If Ledy are uable to recover the full loa amout from the disposal of the security property the this may stem from a error made by oe of the third parties who advised Ledy i coectio with the particular loa. Third party advisers who act for Ledy must have professioal idemity isurace at least equal to the value of the loa. If the advice give is egliget, ad this egligece impacts upo Ledy s ability to recover the full loa amout, the Ledy may be able to pursue a claim agaist the isurace carried by its third party.

4 Ivestor votig I some circumstaces Ledy will seek the opiio of the relevat ivestors o the recovery optios available to it. Ivestor opiio will be sought i the form of a vote which will give ivestors the ability to select betwee two or more optios. Please ote that ivestor votig is ot bidig o the actio take by Ledy ad is strictly for the purpose of measurig ivestor opiio. Capital losses Ledy will oly declare a capital loss to have occurred i the evet that a capital amout is still outstadig after all viable recovery optios have bee exhausted, ad a determiatio has bee made that the capital amout outstadig will ot be covered by the Provisio Fud. Irrecoverable iterest ad/or bous accrual I lie with the above, Ledy will oly declare outstadig iterest ad/or bous accrual to be irrecoverable oce all viable recovery optios have bee exhausted, ad a determiatio has bee made that the outstadig iterest ad/or bous accrual will ot be covered by the provisio fud. Provisio Fud The Provisio Fud is a discretioary fud which may be employed o a etirely discretioary basis i the evet of a shortfall i capital, iterest or bous accrual followig the exhaustio of all viable recovery optios. The Provisio Fud may be used to cover a shortfall i whole or i part ad may ot be used to cover a shortfall at all. Ivestors should ot let the existece of the Provisio Fud impact their ivestmet decisios as it is etirely discretioary i ature ad there is o obligatio to cover shortfall i part of i full.

5 Cotact us If you wish to obtai iformatio o a existig Ledy policy or would like to discuss aythig, please cotact: Telephoe support@ledy.co.uk Address Ledy Ltd Brakesmere House Quees Crescet Southsea PO5 3HT ledy.co.uk Ledy Ltd, Brakesmere House, Quees Crescet, Southsea, PO5 3HT. Telephoe: Ledy Ltd ( Ledy ) is a compay registered i Eglad ad Wales uder umber with its registered office ad pricipal place of busiess at Brakesmere House, Quees Crescet, Southsea PO5 3HT. Ledy Ltd is authorised ad regulated by the Fiacial Coduct Authority (FCA), umber , ad is registered with the Iformatio Commissioer s Office (ICO), umber Z August 2018

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