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Post by eascogo on Feb 26, 2018 19:31:52 GMT
Latest update: "This loan will be put into default overnight tonight on the platform. Please bear with us overnight tonight while we carry out this process. Lenders may notice some unusual activity on their account which lenders should ignore. This is simply part of the technical process and it will be completely resolved once the transfer process has been completed Edit: Similar news for all the Boll loans. Difficult times ahead for MT but at least no attempt to cover up as some other platforms might have done.
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elliotn
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Post by elliotn on Feb 27, 2018 2:29:21 GMT
Latest update: "This loan will be put into default overnight tonight on the platform. Please bear with us overnight tonight while we carry out this process. Lenders may notice some unusual activity on their account which lenders should ignore. This is simply part of the technical process and it will be completely resolved once the transfer process has been completed Edit: Similar news for all the Boll loans. Difficult times ahead for MT but at least no attempt to cover up as some other platforms might have done. OUCH - caught out by MoneyThing again, Birkenhead remained fully tradeable whilst interest was still retained and being paid out to investors whilst LstA was not as it was being serviced by the borrower (except we were never told that it wasn't being).
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elliotn
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Post by elliotn on Feb 27, 2018 3:02:50 GMT
820k loan, 730k purchase, 112% LtPP.
"Please note that the site is being acquired for £730,000. The borrower was able to act quickly to secure a substantial discount from the site's true value."
This borrower had a skill at buying below property's true market value, his special contacts allowed the 1st student loan to be bought for c400k which MT loaned against its true value of c1.2M (iirc).
Whilst I never cared much for this borrower (who had previously stalled on Bolly and cost Ed a lot of chocolate on Ply1), I did allow myself some retained interest on the long dated Ply2* alloyed to robust platform backing of MTAS.
*More fool me.
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keystone
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Post by keystone on Feb 27, 2018 9:45:24 GMT
I think this just proves the point which seems bleeding obvious that the "true market value" is the value someones just gone out and paid for it!
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oik
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Post by oik on Feb 27, 2018 11:05:14 GMT
820k loan, 730k purchase, 112% LtPP. "Please note that the site is being acquired for £730,000. The borrower was able to act quickly to secure a substantial discount from the site's true value." This borrower had a skill at buying below property's true market value, his special contacts allowed the 1st student loan to be bought for c400k which MT loaned against its true value of c1.2M (iirc). According to the agents involved in the sale, speaking in the local paper 17 Jan 2018: “It sold for fairly close to its asking price, about £800,000". If £70k below the full asking price then perhaps not quite the bargain we were led to believe against an £820k loan. Paid £730k, gets a loan for £820k which looks unlikely to be repaid. Not bad, a better return than lending someone money.
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keystone
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Post by keystone on Feb 27, 2018 12:46:43 GMT
Yes, a 12.3% instant return without the hassle and costs of having to administer, market and dispose of the property. When a lower recent purchase price is available I think the loan should have been based on the this rather than the fictional "true market value", it would encourage borrowers to have more skin in the game if they really wanted to develop it.
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seeingred
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Post by seeingred on Feb 27, 2018 14:14:46 GMT
Maybe the disarmingly charming sarahcount put it well on another thread: Yeah right. Property is always changing hands at a discount to market value - rather than the price being agreed between a buyer and a seller determining what the market value really is.
We have seen several examples of this on COL and on MT. Once bitten SophieThing
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Brainer
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Post by Brainer on Feb 27, 2018 14:22:36 GMT
Worth remembering that six months interest was held on account when looking at the numbers. So assuming this was built into the loan and assuming MT also held back their share such that the overall interest rate was 18%, then the borrower only received ~£746k. Potentially minus some arrangement fees, solicitor fees, cost of VR etc. (don't the exact details of it all) then the borrower probably hasn't made anything here vs the £730k purchase price.
Edit: ~6 weeks of this interest should still be remaining on the account and will presumably be distributed?
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Post by trentenders on Feb 27, 2018 14:36:08 GMT
Please don't bring logic and reason into this thread.
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Post by westcountry on Feb 27, 2018 15:08:36 GMT
MoneyThing, when loans are defaulted in future, please could you e-mail investors to inform them of this? I only found out that this loan was to be defaulted last night from reading this forum. I do think as a matter of common courtesy investors should be e-mailed when a loan they have invested in is defaulted. As well, as Brainer mentioned, what happens to the remaining 6 weeks or so of interest on account, please? Will it be distributed as an initial payment to investors, so reducing the outstanding balance accruing interest?
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oik
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Post by oik on Feb 27, 2018 19:04:18 GMT
Yes, a 12.3% instant return without the hassle and costs of having to administer, market and dispose of the property. When a lower recent purchase price is available I think the loan should have been based on the this rather than the fictional "true market value", it would encourage borrowers to have more skin in the game if they really wanted to develop it. Not sure I'd recommend it as a business strategy but wouldn't be surprised to see him get out more comfortably than the lenders. That will depend on whether the "true value" of the plot is the £1.32M valuation from the loan details or the £730k he paid for it - after administrator and sales costs. "The borrower was able to act quickly to secure a substantial discount from the site's true value." wasn't an established fact and shouldn't have been stated in MT's sales pitch for the loan. Could be some time before it all pans out and hope it goes well for everyone in the loan. (At least, with his current reputation, the chances of raising the capital for the wheeze of buying it back out of administration don't look too good.)
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Post by SophieThing on Feb 28, 2018 7:52:51 GMT
MoneyThing , when loans are defaulted in future, please could you e-mail investors to inform them of this? I only found out that this loan was to be defaulted last night from reading this forum. I do think as a matter of common courtesy investors should be e-mailed when a loan they have invested in is defaulted. As well, as Brainer mentioned, what happens to the remaining 6 weeks or so of interest on account, please? Will it be distributed as an initial payment to investors, so reducing the outstanding balance accruing interest? Hi westcountry, Apologies, you are quite right we should have emailed lenders to inform them of the defaults and we will make sure this is done in future. We will send out a late email today in case anyone has missed it. We don't pay interest on defaulted loans and at present the pre-paid interest is being held on account. We have not been in the situation previously where a loan has defaulted, but there is interest remaining on account and I am taking advice on this point. As interest is now accruing at a different rate, there are not sufficient funds to pay interest due up to the original intended date in any case. Depending on the advice, it is likely that we will hold the interest and pay out once the recovery is complete. Kind regards Sophie
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elliotn
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Post by elliotn on Feb 28, 2018 8:02:44 GMT
MoneyThing , when loans are defaulted in future, please could you e-mail investors to inform them of this? I only found out that this loan was to be defaulted last night from reading this forum. I do think as a matter of common courtesy investors should be e-mailed when a loan they have invested in is defaulted. As well, as Brainer mentioned, what happens to the remaining 6 weeks or so of interest on account, please? Will it be distributed as an initial payment to investors, so reducing the outstanding balance accruing interest? Hi westcountry, Apologies, you are quite right we should have emailed lenders to inform them of the defaults and we will make sure this is done in future. We will send out a late email today in case anyone has missed it. We don't pay interest on defaulted loans and at present the pre-paid interest is being held on account. We have not been in the situation previously where a loan has defaulted, but there is interest remaining on account and I am taking advice on this point. As interest is now accruing at a different rate, there are not sufficient funds to pay interest due up to the original intended date in any case. Depending on the advice, it is likely that we will hold the interest and pay out once the recovery is complete. Kind regards Sophie Birkenhead was placed in administration and our interest was still paid out. Hopefully, your legal advice would see no problem simply accruing the penalty element from default until term end and then the full amount whilst paying us our own funds back. Seemed to work with Birkenhead and Coll’s defaulted cars.
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jlend
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Post by jlend on Feb 28, 2018 8:12:43 GMT
Hi SophieThing . Also common practice to make interim payments during a recovery process as money is recovered from what I can see. We see this on other platforms where they have gradually recovered money on a loan. So I would be worried if you are saying you would never make any payments on any loan until you deem a recovery is complete.
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nyneil
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Post by nyneil on Apr 10, 2018 13:57:14 GMT
on MT platform website: "Updates 08/03/2018 We will be paying lenders the retained interest held on account when it falls due. We do have some technical development to do to make this possible, so lenders may have to bear with us for a short time while we resolve that. The retained amount is only sufficient to pay out at standard rate and not at default rate and so a partial payment will be made." Well, that's a start
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