zlb
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Post by zlb on Dec 18, 2017 11:49:49 GMT
Hi, I registered with MT long time ago, not used. Caught up with L and DD on their valuations.
What are MT valuations like? Reliable? Varied?
How important is valuation on MT? In terms of how many are going to default, etc?
Thanks.
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elliotn
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Post by elliotn on Dec 18, 2017 14:15:27 GMT
No problems for MT.
All platforms use RICS which are based on normal market conditions.
Start with 90D value and discount some (10-20%?) for a distressed sale in recovery.
MT are a business that need to offer competitive loans.
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m2btj
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Post by m2btj on Dec 18, 2017 15:47:59 GMT
Estate agents, valuers & developers all work closely together to ensure a good outcome for themselves!
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zlb
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Post by zlb on Dec 18, 2017 16:46:25 GMT
Estate agents, valuers & developers all work closely together to ensure a good outcome for themselves! In this context so that developer can borrow more? How does the developer win if they can't sell at that over-valuation?
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m2btj
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Post by m2btj on Dec 18, 2017 16:56:36 GMT
Estate agents, valuers & developers all work closely together to ensure a good outcome for themselves! In this context so that developer can borrow more? How does the developer win if they can't sell at that over-valuation? On paper over valued property makes for better security & lowers the % LTV. Developers are then able to borrow more than they would if the security was valued at say 20% less.
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stokeloans
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Post by stokeloans on Dec 18, 2017 19:45:10 GMT
No problems for MT. All platforms use RICS which are based on normal market conditions. Start with 90D value and discount some (10-20%?) for a distressed sale in recovery. MT are a business that need to offer competitive loans. What's your view on the new MT Bradford loan where the valuation is £1.5 million yet it changed hands for £1 million only last year and was up for auction this year with a £900,000 reserve. How does that fit in with the valuation ?
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bugs4me
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Post by bugs4me on Dec 18, 2017 19:50:42 GMT
In this context so that developer can borrow more? How does the developer win if they can't sell at that over-valuation? Many developments are under a SPV. So the first hiccup and the 'developer' disappears walks. Then the platform lenders are left holding the 'asset'. Hence in my experience, DD is essential both with the asset being offered and the background of the borrower. Unfortunately, many platforms have tried to convince investors that borrowers backgrounds are irrelevant. Total nonsense in my book.
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bugs4me
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Post by bugs4me on Dec 18, 2017 19:56:56 GMT
What's your view on the new MT Bradford loan where the valuation is £1.5 million yet it changed hands for £1 million only last year and was up for auction this year with a £900,000 reserve. How does that fit in with the valuation ? I would be interested in the £0.5m uplift figure. Maybe there's been some extensive work done since being sold and now perhaps. It's interesting that VR's tend to omit relevant recent purchase prices but spend considerable time investigating and subsequently presenting what they feel are similar properties sold for even though many are several miles away.
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Post by mrclondon on Dec 18, 2017 19:59:30 GMT
Following complaints I've removed a post and two re-quotes of it from public view.
Posting or re-quoting a statement that any individual, company or organisation is corrupt without the poster and requoters personally having evidence that will stand up in court to prove that corruption is potentially libellous.
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sirius
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Post by sirius on Dec 18, 2017 20:18:24 GMT
What's your view on the new MT Bradford loan where the valuation is £1.5 million yet it changed hands for £1 million only last year and was up for auction this year with a £900,000 reserve. How does that fit in with the valuation ? I would be interested in the £0.5m uplift figure. Maybe there's been some extensive work done since being sold and now perhaps. It's interesting that VR's tend to omit relevant recent purchase prices but spend considerable time investigating and subsequently presenting what they feel are similar properties sold for even though many are several miles away. It would be most unusual that MT would omit the fact that work had been done to enhance the 'new' price.
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TitoPuente
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Post by TitoPuente on Dec 18, 2017 20:18:35 GMT
Following complaints I've removed a post and two re-quotes of it from public view. Posting or re-quoting a statement that any individual, company or organisation is corrupt without the poster and requoters personally having evidence that will stand up in court to prove that corruption is potentially libellous. If those are the rules, I respect them. However I stand by my statement and believe that a very basic statistical hypothesis test would result in overwhelming significance that the valuations are overstated beyond random or circumstantial factors. Statistical proof can be used in court.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Dec 18, 2017 20:32:08 GMT
GO titopuente! I like you. Someone with backbone and the strength of their convictions. In fact, we could all do with a few convictions.
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zlb
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Post by zlb on Dec 18, 2017 20:48:49 GMT
In this context so that developer can borrow more? How does the developer win if they can't sell at that over-valuation? On paper over valued property makes for better security & lowers the % LTV. Developers are then able to borrow more than they would if the security was valued at say 20% less. Why do developers need to borrow more? Does building development in the UK take too much money in relation to the gdv then? Meaning that construction isn't worth it for certain parties...? (Perhaps that's too inflammatory a rhetorical question). Repeat valuation errors, in the end, would lead to platform failure? Why would they want that? It would be good to know when/what circumstances an insured valuer could be challenged. Is MT valuation any better than L, (although can see similarity in reasoning on this page). Sounds like they're about the same, despite the recent poll where they came out top...?
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Post by mrclondon on Dec 19, 2017 0:58:23 GMT
I'm not seeing discernible differences in the scope of the valuations being requested by the various p2p platforms, nor in the way the resulting valuations are presented to lenders.
AC is about to embark on no fee / no win legal challenge of one surveyor's effort (loan #330 a 42% capital shortfall after disposal of asset) but I think its going to be an uphill struggle as the VR struck me as being relatively well written. It will be an interesting case to watch.
In my opinion the vast majority of valuations presented to lenders are perfectly good answers to the scope of what they have been asked to do by the platforms (and other similar lenders). Too many contain silly mistakes which should be being picked up and rectified before being presented to lenders, but such mistakes generally don't affect the actual valuations. (And possibly in the case of re-addressed reports they may not be able to request such corrections)
That said, I could probably find a VR report on each platform that I believe is simply not fit for purpose.
The only valuation that matters is what an asset will likely achieve in the event of a firesale by receivers. Put quite simply the LTV's of most p2p loans are too high to be sure capital losses will be minimal. I've said many times on this forum that the 10-13% yield is partly compensation for future capital losses, there is simply insufficient cushion in the typical LTV's for it to be otherwise.
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zlb
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Post by zlb on Dec 19, 2017 8:36:43 GMT
I'm not seeing discernible differences in the scope of the valuations being requested by the various p2p platforms, nor in the way the resulting valuations are presented to lenders. AC is about to embark on no fee / no win legal challenge of one surveyor's effort (loan #330 a 42% capital shortfall after disposal of asset) but I think its going to be an uphill struggle as the VR struck me as being relatively well written. It will be an interesting case to watch. In my opinion the vast majority of valuations presented to lenders are perfectly good answers to the scope of what they have been asked to do by the platforms (and other similar lenders). Too many contain silly mistakes which should be being picked up and rectified before being presented to lenders, but such mistakes generally don't affect the actual valuations. (And possibly in the case of re-addressed reports they may not be able to request such corrections) That said, I could probably find a VR report on each platform that I believe is simply not fit for purpose. The only valuation that matters is what an asset will likely achieve in the event of a firesale by receivers. Put quite simply the LTV's of most p2p loans are too high to be sure capital losses will be minimal. I've said many times on this forum that the 10-13% yield is partly compensation for future capital losses, there is simply insufficient cushion in the typical LTV's for it to be otherwise. Thanks MRCLondon for overview. I think of the higher interest rates to compensate in part for the risk of long term tie up (well over a year for some projects, and one would have to stay a long time in a high risk category if one wanted to make up capital loss), rather than only for the risk of capital loss - if it were to cover this risk then I think the interest paid would have to be higher. Obviously that would lead to other problems. I can see there's a balancing act. Thanks.
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