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Post by skidrow on Sept 7, 2020 8:43:19 GMT
Following on from comments made by rocky1 and ace on another thread, I wondered whether other investors have any insight into this.
I have several dozen loans in CP. Some have paid back in full but several are now overdue. CP sends a message explaining the legals around loan extensions but I have no idea which of them (if any) are actually distressed. As far as I am aware, CP's loan recovery systems have not been mobilised for any of my loans so far but I have no idea whether that is because the loans are all fine, CP are kicking the can down the road, they are working efficiently behind the scenes and finding workable solutions or anything in between.
Any thoughts?
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markyg61
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Post by markyg61 on Sept 7, 2020 17:45:02 GMT
Would be better than the messages currently sent that you cant even search through.
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rocky1
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Post by rocky1 on Sept 16, 2020 14:39:44 GMT
i think that individual loans that were maximum 12/18 months now being extended for a further 12 months is not ideal.the borrower will be looking at lots of penalty fees plus extra interest at CPs rates.kicking cans down the road for another year/s is not good for lenders. accrued interest or not we all know what happens and lenders are the only losers. i know this is very premature but how does CPs waterfall work out or will we only find out when there is a change in T&Cs.there are a lot of loans now late/overdue with talks of extensions and whatever else.
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littleoldlady
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Post by littleoldlady on Sept 16, 2020 15:07:13 GMT
Due to Covid there would have been a lot of projects running late, and an extension is usually the best way of recovering the funds as taking over the asset, incurring big costs, and then selling in a firesale situation will probably result in losses. However CP already had a record of can kicking before Covid. We have seen on other platforms that the extra interest, usually at a penalty rate on CP, can quickly increase the LTV to dangerous levels. The loan book is looking increasingly exposed IMO. It's still one of the safest platforms but that is not saying a lot in current conditions.
Only for the brave.
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Post by Ace on Sept 16, 2020 21:38:10 GMT
Due to Covid there would have been a lot of projects running late, and an extension is usually the best way of recovering the funds as taking over the asset, incurring big costs, and then selling in a firesale situation will probably result in losses. However CP already had a record of can kicking before Covid. We have seen on other platforms that the extra interest, usually at a penalty rate on CP, can quickly increase the LTV to dangerous levels. The loan book is looking increasingly exposed IMO. It's still one of the safest platforms but that is not saying a lot in current conditions. Only for the brave. This year's cohort of loans on CP have an average LTGDV including rolled up interest of 56.3%. Even if half of all these loans were delayed for a whole year on 10% penalty interest (very unlikely IMO) the average LTGDV would not rise to 60%.
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littleoldlady
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Post by littleoldlady on Sept 17, 2020 6:57:22 GMT
Due to Covid there would have been a lot of projects running late, and an extension is usually the best way of recovering the funds as taking over the asset, incurring big costs, and then selling in a firesale situation will probably result in losses. However CP already had a record of can kicking before Covid. We have seen on other platforms that the extra interest, usually at a penalty rate on CP, can quickly increase the LTV to dangerous levels. The loan book is looking increasingly exposed IMO. It's still one of the safest platforms but that is not saying a lot in current conditions. Only for the brave. This year's cohort of loans on CP have an average LTGDV including rolled up interest of 56.3%. Even if half of all these loans were delayed for a whole year on 10% penalty interest (very unlikely IMO) the average LTGDV would not rise to 60%. True, but a LTGDV is just someone's opinion of a future valuation on the assumption that there are no delays or problems with completing the development. L, FS and MT had plenty of similar loans which involved large losses for lenders. A partially completed development in a firesale may bring in not much more than the site value with planning. But IMO CP is less risky than L and FS. I would hope that at least they would not submit to borrower blackmail using that fact.
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Post by overthehill on Sept 17, 2020 21:29:06 GMT
This year's cohort of loans on CP have an average LTGDV including rolled up interest of 56.3%. Even if half of all these loans were delayed for a whole year on 10% penalty interest (very unlikely IMO) the average LTGDV would not rise to 60%. True, but a LTGDV is just someone's opinion of a future valuation on the assumption that there are no delays or problems with completing the development. L, FS and MT had plenty of similar loans which involved large losses for lenders. A partially completed development in a firesale may bring in not much more than the site value with planning. But IMO CP is less risky than L and FS. I would hope that at least they would not submit to borrower blackmail using that fact.
I'm going to take a stab in the dark that you weren't in FundingSecure, I am. There is no credence in trying to compare Crowdproperty to FS but you're pricking their libel lawyers' attention ! Where do you start with what CP do and FS didn't, it's a very long list.
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littleoldlady
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Post by littleoldlady on Sept 18, 2020 11:31:36 GMT
True, but a LTGDV is just someone's opinion of a future valuation on the assumption that there are no delays or problems with completing the development. L, FS and MT had plenty of similar loans which involved large losses for lenders. A partially completed development in a firesale may bring in not much more than the site value with planning. But IMO CP is less risky than L and FS. I would hope that at least they would not submit to borrower blackmail using that fact.
I'm going to take a stab in the dark that you weren't in FundingSecure, I am. There is no credence in trying to compare Crowdproperty to FS but you're pricking their libel lawyers' attention ! Where do you start with what CP do and FS didn't, it's a very long list.
Time to turn on the light. I was in FS, well I still am but do not expect to get anything much back. I did say But IMO CP is less risky than L and FS. The things that both CP and FS do is lend on LTGDVs. It's just that CP do it better and so the risk is lower but not negligible.
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puddleduck
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Post by puddleduck on Sept 18, 2020 13:52:40 GMT
I've said it before, but I think there is far too much complacency with some CP lenders here - in my view the offering from CP has significantly changed - we see many more HMO or multi-phase development loans than we used to, neither of which I'm keen on.
I am funding less than 50% of the offerings on CP nowadays - I don't really trust LTGDV values at all, in the event a development stalls, we pretty much all know how that story will end. I'm not saying these are 'bad loans' per se, but caution is needed. I certainly would not blindly 'auto-invest' into multiple phases of the same loan.
I miss the days when CP loans tended to be straightforward residential, with a sensible LTV.
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littleoldlady
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Post by littleoldlady on Sept 18, 2020 18:00:48 GMT
I've said it before, but I think there is far too much complacency with some CP lenders here - in my view the offering from CP has significantly changed - we see many more HMO or multi-phase development loans than we used to, neither of which I'm keen on. I am funding less than 50% of the offerings on CP nowadays - I don't really trust LTGDV values at all, in the event a development stalls, we pretty much all know how that story will end. I'm not saying these are 'bad loans' per se, but caution is needed. I certainly would not blindly 'auto-invest' into multiple phases of the same loan. I miss the days when CP loans tended to be straightforward residential, with a sensible LTV. I would also prefer to choose my own loans and avoid over half of them, but unless things have changed you can't get anything good that way as autolend takes priority. It's true that it has been a while since I tried and have been on auto ever since.
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ilmoro
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Post by ilmoro on Sept 18, 2020 18:36:59 GMT
Not in CP due to not being able to meet KYC/AML requirements.
How do they handle development cost/time overruns? This has been one of the biggest risks after the company going bust and how platform are able to react to that is important IMO. Just raise another tranche on an increased LTGDV?
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Post by Ace on Sept 18, 2020 20:26:04 GMT
Not in CP due to not being able to meet KYC/AML requirements. How do they handle development cost/time overruns? This has been one of the biggest risks after the company going bust and how platform are able to react to that is important IMO. Just raise another tranche on an increased LTGDV? So far I've lent on 48 CP loans; 7 completed and 41 still live. 2 of the live loans are currently past their scheduled end dates. One of the worst aspects of the CP platform is the ability to keep track of progress on loans. Updates are given in the form of emails. The actual update details are internal to the platform, though there is an external email to notify you that there is an internal one. There's no search facility for the internal emails, and no link from loan info pages to the updates, and no link from one update on a loan to any other updates on the same loan. In short, keeping track of progress for any specific loan is unnecessarily difficult and time consuming, and that's the view of a CP fan with rose-tinted spectacles. From what I've seen they handle time overruns by charging an extra 2% per annum penalty interest to concentrate the borrower's. The penalty interest is paid to the lenders. I'm not aware of any of my loans on CP running into cost overruns (other than that due to the time overruns), so can't be sure on how they would be handled. CP claim to have the in-house expertise and contractual rites to take over any development projects that run into difficulties and see them through to completion. I'm not aware of this having been tested yet; it certainly hasn't on any of my loans. So far the LTGDVs have proven to be reasonable, and are low enough to be able to absorb any likely problems. Or, perhaps my rose-tinted specs are too new to have been tarnished. I've been caught in a minor way by the problems on L and MT, so the glasses are not completely untested. I don't see any sign of the "problems" encountered on L and MT, or those I've read about on FS, cropping up on CP. Perversely, I wouldn't mind one of my loans hitting the buffers to see how CP do handle it (I really hope I don't live to regret that comment).
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Post by Badly Drawn Stickman on Sept 18, 2020 20:51:38 GMT
Not in CP due to not being able to meet KYC/AML requirements. How do they handle development cost/time overruns? This has been one of the biggest risks after the company going bust and how platform are able to react to that is important IMO. Just raise another tranche on an increased LTGDV? So far I've lent on 48 CP loans; 7 completed and 41 still live. 2 of the live loans are currently past their scheduled end dates. One of the worst aspects of the CP platform is the ability to keep track of progress on loans. Updates are given in the form of emails. The actual update details are internal to the platform, though there is an external email to notify you that there is an internal one. There's no search facility for the internal emails, and no link from loan info pages to the updates, and no link from one update on a loan to any other updates on the same loan. In short, keeping track of progress for any specific loan is unnecessarily difficult and time consuming, and that's the view of a CP fan with rose-tinted spectacles. From what I've seen they handle time overruns by charging an extra 2% per annum penalty interest to concentrate the borrower's. The penalty interest is paid to the lenders. I'm not aware of any of my loans on CP running into cost overruns (other than that due to the time overruns), so can't be sure on how they would be handled. CP claim to have the in-house expertise and contractual rites to take over any development projects that run into difficulties and see them through to completion. I'm not aware of this having been tested yet; it certainly hasn't on any of my loans. So far the LTGDVs have proven to be reasonable, and are low enough to be able to absorb any likely problems. Or, perhaps my rose-tinted specs are too new to have been tarnished. I've been caught in a minor way by the problems on L and MT, so the glasses are not completely untested. I don't see any sign of the "problems" encountered on L and MT, or those I've read about on FS, cropping up on CP. Perversely, I wouldn't mind one of my loans hitting the buffers to see how CP do handle it (I really hope I don't live to regret that comment). I did remove the rose tinted glasses implication post, pretty sure you are not one but some posters currently take offence very quickly. I have only ever auto invested in CP so only have comparatively low investments per loan (though not necessarily borrower), I certainly don't lose any sleep over the platform, but yes they are clearly untested in a full default scenario and it would be interesting to see how it is handled. For me it is not a very intuitive platform and I find navigating it frustrating, but that could just be me. I think it was Funding Circle that constantly promoted the experience and capability of their property management team, that ended well from memory.
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Post by Ace on Sept 18, 2020 21:23:34 GMT
So far I've lent on 48 CP loans; 7 completed and 41 still live. 2 of the live loans are currently past their scheduled end dates. One of the worst aspects of the CP platform is the ability to keep track of progress on loans. Updates are given in the form of emails. The actual update details are internal to the platform, though there is an external email to notify you that there is an internal one. There's no search facility for the internal emails, and no link from loan info pages to the updates, and no link from one update on a loan to any other updates on the same loan. In short, keeping track of progress for any specific loan is unnecessarily difficult and time consuming, and that's the view of a CP fan with rose-tinted spectacles. From what I've seen they handle time overruns by charging an extra 2% per annum penalty interest to concentrate the borrower's. The penalty interest is paid to the lenders. I'm not aware of any of my loans on CP running into cost overruns (other than that due to the time overruns), so can't be sure on how they would be handled. CP claim to have the in-house expertise and contractual rites to take over any development projects that run into difficulties and see them through to completion. I'm not aware of this having been tested yet; it certainly hasn't on any of my loans. So far the LTGDVs have proven to be reasonable, and are low enough to be able to absorb any likely problems. Or, perhaps my rose-tinted specs are too new to have been tarnished. I've been caught in a minor way by the problems on L and MT, so the glasses are not completely untested. I don't see any sign of the "problems" encountered on L and MT, or those I've read about on FS, cropping up on CP. Perversely, I wouldn't mind one of my loans hitting the buffers to see how CP do handle it (I really hope I don't live to regret that comment). I did remove the rose tinted glasses implication post, pretty sure you are not one but some posters currently take offence very quickly. I have only ever auto invested in CP so only have comparatively low investments per loan (though not necessarily borrower), I certainly don't lose any sleep over the platform, but yes they are clearly untested in a full default scenario and it would be interesting to see how it is handled. For me it is not a very intuitive platform and I find navigating it frustrating, but that could just be me. I think it was Funding Circle that constantly promoted the experience and capability of their property management team, that ended well from memory. Zero offence taken here. You're not the first to hint in that direction, and I'm genuinely grateful to receive any posts with alternative viewpoints to myself. Like you, I'm now happy to use autoinvest on CP. I tried doing my own DD in the early days but quickly learnt that my abilities were inferior to those of CP, so I largely leave it to them and focus my DD time on other platforms. You're certainly not the only one to find their platform less than intuitive. I've learnt to do what I need to with it, but struggle when trying to explain it to others. I find that the lack of customer focus applies to many platforms. Why don't they test with some customer focus groups? I get the feeling that many suffer from overly defensive techies (a common problem in my experience. In fact I suspect that I may have been one myself).
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littleoldlady
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Post by littleoldlady on Sept 18, 2020 22:15:23 GMT
I concur with Ace 's useful summary above. I have made loans on 43 properties. The main reason that few loans have over-run is that CP allow a huge buffer after the expected development completion - up to a year. Consequently few loans have reached their end date since the platform launched. (Edit: or at least since I started lending with them 2.5 years ago) One irritation is that there is no withdrawal facility from an ISA account on the platform. You have to email customer services and ask them to transfer cash to your holding account, after which you can go on line and withdraw it. I asked them a couple of years ago if they could put updates on the loan details page but nothing came of it. (Edit: they say it will be in the next release see post below)
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