keith
Member of DD Central
Posts: 118
Likes: 72
|
Post by keith on Nov 24, 2017 4:42:15 GMT
That doesn't alter the fact that the security is possibly worth more than the loan. How low our standards have fallen
|
|
|
Post by dan1 on Nov 24, 2017 11:03:11 GMT
I think all seven tranches were repaid before the consolidated loan went live. In which case, who funded the repayments?
|
|
rogerthat
Member of DD Central
Posts: 2,048
Likes: 1,994
|
Post by rogerthat on Nov 24, 2017 11:18:16 GMT
I think you're correct..I received settlement via £'s & email..b4 the new consolidated loan began. I didn't re-invest...so who did ?
|
|
michaelc
Member of DD Central
Posts: 4,920
Likes: 2,774
|
Post by michaelc on Nov 25, 2017 16:48:44 GMT
That doesn't alter the fact that the security is possibly worth more than the loan. How low our standards have fallen Perhaps but that is partly why the loans are being borrowed at these rates. I have a good friend who used to work for a wealthy money lender who lends directly to developers who also can't raise finance from the banks. This boss had assets well into nine figures. According to my friend, this chap was usually happy when the developer defaulted and would therefore default at the earliest possible opportunity. My friend left that position claiming it was unethical. I still don't fully understand why it could be that a money lender would make more money actively pulling the plug than waiting for a resolution but that was/is the case. I guess the difference here is that the lenders are not in control of the asset which makes us weaker?
|
|
keith
Member of DD Central
Posts: 118
Likes: 72
|
Post by keith on Nov 26, 2017 6:15:22 GMT
I can see the difference in the business models leads to different outcomes. This wealthy chap made a lot of money defaulting the loans early. In contrast, FS leaves them to fester and turns a blind eye to things and hope for the best! Hmmmmm, which works best, I wonder...........
|
|
keith
Member of DD Central
Posts: 118
Likes: 72
|
Post by keith on Nov 26, 2017 6:15:50 GMT
Sorry - connection/server glitch leading to double post. Don’t ban me.
|
|
adrian77
Member of DD Central
Posts: 3,898
Likes: 4,129
|
Post by adrian77 on Nov 26, 2017 7:40:28 GMT
If the loan is of less value of the assets then the lender is quids in. But I think this is not the same situation as FS are a pawn broker operating under a plethora of lending rules e.g. I think any profit realised on the asset has to be passed back to the borrower. Looks to me as if default of most FS property loans won't leave a realisable surplus!
|
|
Liz
Member of DD Central
Posts: 2,426
Likes: 1,297
|
Post by Liz on Nov 26, 2017 11:28:28 GMT
Sorry - connection/server glitch leading to double post. Don’t ban me. If you click on the settings button, next to the "quote" and "like" buttons, you can delete any unwanted posts.
|
|
mikes1531
Member of DD Central
Posts: 6,452
Likes: 2,320
|
Post by mikes1531 on Nov 26, 2017 17:59:03 GMT
I still don't fully understand why it could be that a money lender would make more money actively pulling the plug than waiting for a resolution but that was/is the case. I suspect it's not a case of the lender making more money by pulling the plug quickly but more a case of them losing less. AIUI, if a property is repossessed and sold for more than the outstanding debt any surplus goes to the borrower. So if the sale proceeds are sufficient, the lender gets their recovery costs paid as well as what they are owed on the loan, but that's all. If, OTOH, they don't pull the plug and allow the borrower more time to deal with their default, the debt continues to escalate. If the borrower is successful, then the lender might make a bit more because they're probably charging a higher rate of interest on the loan when it's in default. (I believe we have been told that FS do not do this, though I don't understand why not.) If the borrower isn't successful, however, and the lender pulls the plug at a later date,the escalating debt makes it harder and harder to achieve a full recovery. And that increases the probability of an insufficient recovery and a reduced profit -- or a loss -- to the lender. Unfortunately, FS and Lendy are giving us lots of examples of the second scenario. An argument can be made that the first scenario runs the risk of failing to abide by the principle of treating customers fairly, and every lender has to consider that when deciding when to pull the plug on a borrower. I expect it's not an easy decision to make because what is and isn't fair is a matter of opinion.
|
|
|
Post by df on Nov 26, 2017 20:03:00 GMT
If the loan is of less value of the assets then the lender is quids in. But I think this is not the same situation as FS are a pawn broker operating under a plethora of lending rules e.g. I think any profit realised on the asset has to be passed back to the borrower. Looks to me as if default of most FS property loans won't leave a realisable surplus! Yes, this is correct: "In the event of non-repayment (default) by the borrower, FundingSecure will auction the asset at the earliest opportunity. Proceeds from the sale will be used to settle investors' capital, investors' interest and then FundingSecure's fees (in that order). Any surplus is returned to the borrower." This model is not very encouraging for the platform to be proactive with recovery process.
|
|
mikes1531
Member of DD Central
Posts: 6,452
Likes: 2,320
|
Post by mikes1531 on Nov 28, 2017 20:28:49 GMT
"In the event of non-repayment (default) by the borrower, FundingSecure will auction the asset at the earliest opportunity. Proceeds from the sale will be used to settle investors' capital, investors' interest and then FundingSecure's fees (in that order). Any surplus is returned to the borrower." This model is not very encouraging for the platform to be proactive with recovery process. df: I disagree. If FS don't receive any of their fees unless their investors receive all that they are owed, ISTM that FS have an incentive to try to ensure recoveries are large enough that FS receive what they are owed. I suppose it's a bit different in the cases where they can see there's going to be a significant shortfall and they're going to get nothing no matter how much effort they put in.
|
|
ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,161
Likes: 4,841
|
Post by ozboy on Nov 28, 2017 20:40:35 GMT
"In the event of non-repayment (default) by the borrower, FundingSecure will auction the asset at the earliest opportunity. Proceeds from the sale will be used to settle investors' capital, investors' interest and then FundingSecure's fees (in that order). Any surplus is returned to the borrower." This model is not very encouraging for the platform to be proactive with recovery process. df : I disagree. If FS don't receive any of their fees unless their investors receive all that they are owed, ISTM that FS have an incentive to try to ensure recoveries are large enough that FS receive what they are owed. I suppose it's a bit different in the cases where they can see there's going to be a significant shortfall and they're going to get nothing no matter how much effort they put in.Ah, there's the rub!
|
|
|
Post by df on Nov 28, 2017 20:46:39 GMT
"In the event of non-repayment (default) by the borrower, FundingSecure will auction the asset at the earliest opportunity. Proceeds from the sale will be used to settle investors' capital, investors' interest and then FundingSecure's fees (in that order). Any surplus is returned to the borrower." This model is not very encouraging for the platform to be proactive with recovery process. df : I disagree. If FS don't receive any of their fees unless their investors receive all that they are owed, ISTM that FS have an incentive to try to ensure recoveries are large enough that FS receive what they are owed. I suppose it's a bit different in the cases where they can see there's going to be a significant shortfall and they're going to get nothing no matter how much effort they put in. Yes, that's what I meant. In many cases the recovery is not likely to be as fruitful as LTV figure suggests.
|
|
|
Post by mrclondon on Sept 2, 2018 16:20:30 GMT
Photo taken 3pm today (2nd Sept)
Finished, Nos 1, 2 & 3 C***** W*** are occupied, no 4 the righthand one has a sign "reserve and a phone no" in the front window. The properties look smart, and each as a parking space, however the area is a bit run down (some fly tipping), and is predominately terraced houses. The roads to approach the properties are fairly narrow with cars parked both side.
|
|
mullet
Member of DD Central
Posts: 126
Likes: 137
|
Post by mullet on Sept 10, 2018 19:33:51 GMT
This loan is being reduced/renewed tomorrow as 1 of the 4 properties has been sold ...which leads me to a more general question: Even though the size of this loan has been reduced by more or less 25% to reflect the property being sold, there is also a supplemental loan on the property which isn't being reduced. Through the sale of this property the LTV on the supplemental loan is therefore increasing. In this case it is only by about 1.5% by my calculation but that isn't the point. Surely if the asset is partially sold ALL loans secured against that asset should be reduced in size such that none of them experience an increase in LTV. Are FS being a bit naughty here?
|
|