adrian77
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Post by adrian77 on Mar 4, 2019 17:04:26 GMT
Maybe FS have turned over a new leaf but that does not change the basic business model which I am not convinced is sound - not least due to this latest farce. As I see it developers borrow money for one of 4 main reasons
1) they don't have the cash
2) they have a valid project but would normally borrow from the banks at 4% or whatever
3) they have a valid project but FS is quick
4) they have a lame duck on steroids and go to FS as most other institutions won't touch them with a barge pole...
just my opinion and happy to be proven wrong...
here is what my mega league said about this one
7a) south wales hotel £420K loan predicted loss £120K – league 1 loss
actual result about £200K loss (assuming we get it all monies!) correct league 1 loss but I underestimated the loss
7b) south wales hotel £100K loan predicted loss £100K 100% – Premier
correct!
Well yet another brilliant FS result and I make that the third 100% loss...
Only positive thing to say is that ,at least FS have finally cleared this one up (well almost)
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Post by banffy on Mar 4, 2019 17:11:27 GMT
Yet another 100% loss, I don't trust any P2P so not another penny from me it"s all about watching the rest of my loans with not much hope. A note would be that FS are the worst of a certain bad bunch. Funding Disgrace!
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cwah
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Post by cwah on Mar 4, 2019 17:16:14 GMT
I'm absolutely horrified to see 50% cost going to third party. How can that be possible? How can they pay over £30k in security fee? ? How come they have to pay rent? Whats this £50k quantum fee??
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bugs4me
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Post by bugs4me on Mar 4, 2019 17:41:36 GMT
I'm absolutely horrified to see 50% cost going to third party. How can that be possible? How can they pay over £30k in security fee? ? How come they have to pay rent? Whats this £50k quantum fee?? '....I'm absolutely horrified to see 50% cost going to third party....'
I'm not. The longer FS sat on their hands then the costs could only mount up. Of course, don't think there would have been much hand sitting if it was their own money.
'....Whats this £50k quantum fee??....'
Assume that's the receivers - could be Quantuma and as usual wasn't in their interests in bringing things to a speedy conclusion. And who at FS was going to challenge them.
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cwah
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Post by cwah on Mar 4, 2019 18:10:55 GMT
The irony of this is... if the legal fee weren't as high, the recovery could have been quite good.......
I'm considering leaving FS as I don't think they are acting in the interest of investors
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Post by mrclondon on Mar 4, 2019 18:30:44 GMT
The irony of this is... if the legal fee weren't as high, the recovery could have been quite good....... I'm considering leaving FS as I don't think they are acting in the interest of investors But considering leaving FS because the sight of a couple of hundred thousand pounds of recovery costs makes you uncomfortable (as it probably should), is really an admission that high LTV self-select p2p lending is not a good fit for your risk appetite.
Protracted recoveries rack up large costs, irrespective of who is the originator. You've only to look at PBL068 on Lendy, Epp*ng on AC, and any number of loans on TC to see similar (and worse). And BDO haven't started legal measures on any of the COL loans yet AFAIK.
MT are trying their best to progress recovery strategies as rapidly as possible, but its not always going to be possible if there is no demand for the asset (Paisley is perhaps a good example of one that could drag on for years).
We have to remember p2p is lender of last resort to a majority of our borrowers, and some of those are going to leave some horrendous messes behind, that take time and money to resolve.
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bugs4me
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Post by bugs4me on Mar 4, 2019 18:30:56 GMT
The irony of this is... if the legal fee weren't as high, the recovery could have been quite good....... I'm considering leaving FS as I don't think they are acting in the interest of investors I'm not convinced they have been acting in the best interests of lenders for many a blue moon. Once they moved out of bling and into property, speedboats, etc they discovered and so did investors that the pawn model did not scale up. Plus they were simply out of their depth and putting head in the sand rather than monitor loans and act swiftly in the event of a default was not in investors interests but that's the route FS took. FS have made themselves look fools believing whatever they were told by the zero paying borrowers. Sad though they are totally immune to any criticism whether justified or not.
It's all well and good talking about earning 12-13% but all it takes is the turbine loan, a Whitehaven, powerboat, etc and you'll need stacks of those 12% loans to make up the losses. I decided a while ago that doing all the necessary DD simply didn't make it worthwhile especially as there are superior opportunities elsewhere without this nonsense where repayment seems to be optional.
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Post by mrclondon on Mar 4, 2019 20:32:30 GMT
Erm ... the post I was about to reply to has disappeared, but I think its worth adding my thoughts on the origination of this loan anyway.
This was I think the second loan to companies controlled by a single person, the first being the Lancaster Hotel a couple of months before. That was so obviously an asset stripping proposition many gave it a wide berth as it simply didn't make financial sense (although it did redeem in full).
Without knowing the connection to what I regarded as a dubious loan in Lancaster, I evaluated this South Wales loan on its merits and invested a small amount as the high ground rent discussed in the VR was a significant concern to me. The launch of the SM came to my rescue and I off loaded it for a small premium as I recall. Had I known the connection to the Lancaster loan, I would have looked more critically at this one, and probably wouldn't have touched it.
The true nature of the borrower only became apparent at the point the loan was defaulted, and details of the court proceedings by the electricity supplier were published in the local press.
Broadening the discussion, I'll admit to a certain amount of naivity myself in years past with respect to the integrity of borrowers, and somewhere on the Lendy 'tin shed' thread is a post I really wish I'd not made !
The fundamental failing in this loan relates to an inadequate risk assessment on the borrower's approach to business. Whether FS could have forseen the major issue re the botched asset stripping is a mute point, but they could have, should have, identified the borrower so lenders could make their own judgement.
The continuing practise of failing to disclose the identity of borrowers remains a fundamental flaw in the FS model. For lenders to simply moan about the time taken and cost of recovery of such a mess is I fear letting FS off the hook to an extent as there is probably little they could have done significantly better to expedite the recovery of an asset that had been compromised to such an extent by the borrower. In my view to achieve any recovery is a small miracle here. The focus of FS should now be on loan origination and how to prevent such borrowers from being offered loans in the first place.
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cwah
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Post by cwah on Mar 5, 2019 0:14:54 GMT
The irony of this is... if the legal fee weren't as high, the recovery could have been quite good....... I'm considering leaving FS as I don't think they are acting in the interest of investors But considering leaving FS because the sight of a couple of hundred thousand pounds of recovery costs makes you uncomfortable (as it probably should), is really an admission that high LTV self-select p2p lending is not a good fit for your risk appetite.
Protracted recoveries rack up large costs, irrespective of who is the originator. You've only to look at PBL068 on Lendy, Epp*ng on AC, and any number of loans on TC to see similar (and worse). And BDO haven't started legal measures on any of the COL loans yet AFAIK.
MT are trying their best to progress recovery strategies as rapidly as possible, but its not always going to be possible if there is no demand for the asset (Paisley is perhaps a good example of one that could drag on for years).
We have to remember p2p is lender of last resort to a majority of our borrowers, and some of those are going to leave some horrendous messes behind, that take time and money to resolve.
That sounds horrible. I also have a 5 figures loan on Paisley because I trusted the low LTV at 42%. I really don't want to loose money on this one because it would quickly be a big amount!!! If this one get wrong, I may as well quit P2P. If it recovers well, I'd trust way more Monything of course. I've stopped putting any money in until resolution happens. I maybe should have done the same with FundingSecure...
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Post by bracknellboy on Mar 5, 2019 8:55:06 GMT
well my stats for certain platforms are:
MT: 76% in default/non-performing (but I have more confidence in their recoveries than others, fingers crossed) lendy: 100% FS: 100% TC: hands over my eyes due to the significantly higher quantum
AC: not looked recently, but much higher than should be due to GBBA and GEIA issue behaviours (but a recent piece of resolution has helped)
RS: who knows......
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arby
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Post by arby on Mar 5, 2019 9:54:42 GMT
well my stats for certain platforms are:
MT: 76% in default/non-performing (but I have more confidence in their recoveries than others, fingers crossed) lendy: 100% FS: 100% TC: hands over my eyes due to the significantly higher quantum
AC: not looked recently, but much higher than should be due to GBBA and GEIA issue behaviours (but a recent piece of resolution has helped)
RS: who knows......
All this shows is when you stopped investing in each platform. It has zero relevance to the proportion of loans that go into default on each platform. If you haven't invested in FS for 6 months then you are guaranteed to have either 100% or 0% of your loans as non-performing.
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Post by bracknellboy on Mar 5, 2019 10:00:12 GMT
well my stats for certain platforms are:
MT: 76% in default/non-performing (but I have more confidence in their recoveries than others, fingers crossed) lendy: 100% FS: 100% TC: hands over my eyes due to the significantly higher quantum
AC: not looked recently, but much higher than should be due to GBBA and GEIA issue behaviours (but a recent piece of resolution has helped)
RS: who knows......
All this shows is when you stopped investing in each platform. It has zero relevance to the proportion of loans that go into default on each platform. If you haven't invested in FS for 6 months then you are guaranteed to have either 100% or 0% of your loans as non-performing. Yes, rather obviously. If I was actively inveting on the 100% ers then they wouldn't be ......100%. However, it does tell a story: namely that I have stopped on Lendy, FS and TC, and precisely because of the default and recovery position. And yes statement of the obvious that a net result of that is a gradual trend towards 100% (and then eventually, maybe, 0%).
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adrian77
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Post by adrian77 on Mar 5, 2019 14:08:18 GMT
Well this has been an interesting one On the plus side I think FS have done the right thing in ditching it...
But I notice 1) It will be about 3.5 years late when lenders get the final payment...
2) like others I am concerned about some of the costs- £600 to drain a swimming pool £33K for security and who exactly is Mr J "£5,450" Fr***, £2,235 for gardening etc etc
3) I think this buyer is a very smart cookie - he has about 3 months to prepare marketing etc before he finally pays for what is a lot of property with TV cameras already installed etc etc I am sure he has plans for this property and wish him well.
4) yet another over-optimistic valuation viz £700K which realised £358,213 gross and a staggering £179,327 net! Thus a massive hair cut for the first charge holders I think (420,000 - 179,327)/ 420,000 = 57% loss. As for the second charge holders - Goodnight Vienna!
I have never bought in installments but happy to give it a go!
Sadly this shambles is typical of several FS recoveries to date and just shows how difficult it can be to sell a problematic property. I just hope future ones go better but I am not holding my breath...plenty of other belters to look forward to, Park Homes, Art Works, CH etc etc
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r1200gs
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Post by r1200gs on Mar 5, 2019 14:26:26 GMT
Well this has been an interesting one On the plus side I think FS have done the right thing in ditching it... But I notice 1) It will be about 3.5 years late when lenders get the final payment... 2) like others I am concerned about some of the costs- £600 to drain a swimming pool £33K for security and who exactly is is Mr J "£5,450" Fr***, £2,235 for gardening etc etc 3) I think this buyer is a very smart cookie - he has about 3 months to prepare marketing etc before he finally pays for what is a lot of property with TV cameras already installed etc etc I am sure he has plans for this property and wish him well. 4) yet another over-optimistic valuation viz £700K which realised £358,213 gross and a staggering £179,327 net! Thus a massive hair cut for the first charge holders I think (420,000 - 179,327)/ 420,000 = 57% loss. As for the second charge holders - Goodnight Vienna! I have never bought in installments but happy to give it a go! Sadly this shambles is typical of several FS recoveries to date and just shows how difficult it can be to sell a problematic property. I just hope future ones go better but I am not holding my breath...plenty of other belters to look forward to, Park Homes, Art Works, CH etc etc Is anyone still surprised at these outcomes? For me, the real shocker would be a loan that payed back on time, or even one that paid back in full!
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bugs4me
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Post by bugs4me on Mar 5, 2019 16:46:25 GMT
I don't feel anyone is really surprised at the financial outcome. Apart from the possible rose-coloured glasses approach that FS had when dealing with this borrower in the first instance, the fact remains that after it became apparent to most lenders that the loan had defaulted, FS preferred to continue with the lazier easier approach of believing the continuous meaningless feedback promises offered by the borrower. An always jam tomorrow attitude.
It has often been mentioned that platforms go through a learning curve. Not fine in my book as I suggest that as it's not their own money that 'learning curve' does seem to take on an extended term of can kicking. After the totally FS mismanaged turbine loan you would have thought that things in their heads would have kicked into place. But no, this loan, the oldest as far as I'm aware on FS books was just placed on the back burner. A Grade 2 listed building with water ingress could do nothing but deteriorate in value.
If the next two payments are made on time, then my IRR since 2013 with FS will be 5.40%. That will be the end of my experience with them. On paper it was worth it but after the time spent doing DD it wasn't. Plus I no longer have confidence in this particular platform and no, I'm not prepared to give yet another 'turning over a new leaf' management a chance. There are far superior returns to be had elsewhere without the associated dereliction towards lenders funds.
Hopefully others in FS will have had a better experience than myself. But for all those 12%'s, it only takes a couple to go sour and those returns look anything but healthy. Plus of course it's serves no purpose counting accrued interest which is still being shown for this loan even though there is zero chance of it ever being received.
Just my ramblings. As this is my final loan with FS I will refrain from any further postings about them but wish all those involved with them a better experience than myself.
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