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Post by multiaccountmanager on Sept 25, 2020 16:14:06 GMT
Just to say I have managed 157 participations in 75 CP projects, of which 22 participations have paid back and 12 are partially repaid. The updates covering loans that are behind for some reason seem to me to make sense so far and 10% is welcome.
CP seems to me to be evolving well but I agree the difficult aspect is recovery of a defaulting loan. As far as I can see Bridge Crowd seem to be experts in that department and its business is such that it expects to do that not infrequently. Keeping on top of development projects seems to be CP's aim and I would not expect defaults to be in the normal course of their business.
I am hopeful that CP's DD will have weeded out any "wrong'uns" and believe that a situation such as Funding Secure is unthinkable.
The detailed and frequent progress updates give a good sense that the borrowers are in general carrying on with their developments as agreed.
The long buffer to complete projects could be seen in the context that it allows good time to sell the properties or refinance once the physical work is complete.
Yes of course it would be much better if CP tied together the loans, their phases and updates more coherently. It is not at all easy to see what is going on.
The revised Investment interface with Dashboard and Waterfall presentation was a very good innovation imho. Hopefully something of that calibre will soon be available for project and update monitoring.
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firedog
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Post by firedog on Sept 26, 2020 8:22:50 GMT
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. The other way can be just as frustrating: I had interest sitting available in my standard account that I wanted to switch to my IFISA auto invest. After a good half-hour hunting around for an easy way to do this – and slowly going mad – I ended up withdrawing to my bank then transferring back into the IFISA*! *That said, it was pretty instantaneous.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Sept 27, 2020 7:41:51 GMT
Crowdproperty have the best withdrawal facility I have ever seen among any p2p platforms. It is literally instantaneous! Yes, usually same day but only after you have managed to get your funds out of the ISA account. Maybe CP don't want to make it too easy to move funds out of tax shelter in case someone does it inadvertently and complains, but I think there should be an on line facility with a warning about the tax which you have to acknowledge.
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Post by CrowdProperty Representative on Sept 29, 2020 10:11:43 GMT
Hi All, Many thanks for your comments. As you will have hopefully seen in our most recent lender update, despite a tough refinancing and sales market up until only very recently, we have repaid over £10,000,000 in capital and interest to lenders since lockdown began and have now paid back over £45,000,000. This is down to the close and expertise-based working relationships that we foster with our borrowers to increase chances of individual project success, and of course selecting quality borrowers/projects in the first place. On the lender-side, as others have temporarily closed to retail investors, stopped allowing withdrawals, cut interest rates, introduced lender fees or even had regulatory permissions withdrawn, we have been able to continue funding quality projects which are ready to proceed, with naturally tighter criteria. We have further step-changed our reputation in the market on the borrower-side and direct applications are now c.£200,000,000 per month, with an ever-increasing quality mix. Through over 6 years of lending, we have assessed £3.6bn worth of project applications and funded almost £100m – this sub-3% funding rate is testament to our tough criteria, rigorous due diligence and knowledge that a long-term lending business is only built through quality and track record, which is at the heart of all that we do. We continue to work on a one-to-one basis with our borrowers to support progression and exit of their developments, always ensuring our lenders’ position is well secured. As you have noted, we have deemed it best to extend some loans due to impacts of the pandemic, either directly or indirectly. We have done a lot of work to ensure that LTVs on the first charge security positions are not compromised and that borrowers are not and do not become overly exposed. The majority of loans that have been extended are serviced and therefore pay lenders monthly interest rates which by definition does not increase project LTVs/LTGDVs. In some cases, we have insisted on accrued interest down payments and/or additional security. Furthermore, extensions are usually at an increased lender interest rate as we appreciate the inconvenience this situation may cause. Where we have formally agreed an extension with the borrower, which always comes with very careful consideration of the lenders’ position, they are not moving onto the full penalty interest rate that reflects the additional workload required, so your inconvenience is met by less rewarded hard work on our side. We do not want to place undue timescale stress on borrowers in a market where timescales have been impacted by the pandemic, nor do we ideally want to add to the amount owed and therefore compromise security cover. It is therefore incumbent on us to make the best, expertise-based judgement to ensure each loan is stabilised and the lenders’ capital and security positions are preserved, whilst the borrower is not overly penalised at a time when it is out of their control to resolve. Some borrowers have therefore been placed on new terms that preserve the lenders exposure whilst lessening the borrower’s interest burden. As you will be aware, we place the upmost importance on protecting lenders funds. A non-negotiable criterion of any loan is that CrowdProperty takes first charge security and we lend to modest LTV / LTGDVs. Lending since 2014, our overall averages are 59.7% loan to value (LTV, or initial funds release relative to RICS-assessed market value), 53.5% loan to gross development value excluding interest rollup (LTGDV exc. Interest) and 58.5% loan to gross development value including interest rollup (LTGDV inc. Interest). Our 2020 loan cohort averages 55.8%, 53.7% and 56.4% (vs 61.2%, 53.1% and 59.0% to the end of 2019). Valuations are formal, RICS-assessed current and completed values, by surveyors that meet a long list of criteria, not least local market knowledge requirements and a high level of PI cover. These are then further validated by our own data sources (and we do challenge RICS valuations). Drawdowns for projects are only ever made in arrears to project progress as formally assessed by our appointed Independent Monitoring Surveyor and we have never increased facility sizes, but have on occasion insisted on equity injections from the developer, should we feel that contingency levels are being compromised. All this provides, in our opinion, ample security cover which when coupled with the powers of first charge security (which is not only first in line to be paid back but also very importantly enables control of any recoveries action), therefore offering a solid risk / reward proposition. All these are clearly outlined, alongside other important data for lenders on our award-winning statistics page at www.crowdproperty.com/statistics. We believe that transparency is critically important in this sector and we surpassed the requirements in the operating principles of the P2P Finance Association which outlined requirements of their leading platform members well before further requirements were introduced by the FCA. In particular, we feel that it is critically important for you to know and be clearly presented with the average borrower interest rate (implying the risk you are being exposed to given it’s a fairly efficient borrower-side market) and lender interest rates (implying the proportion of reward for that risk you are receiving). Our lifetime average contract borrower rate is 9.99% and contract lender rate is 7.98%, i.e. we take just c.2%pts interest spread - let’s just say that it’s fascinating unpicking that for other property platforms, if the data to be able to do so is available at all. Our rigorous due diligence criteria, thorough underwriting processes, and expertise-led active loan monitoring mean that there have been only a few occasions where we have deemed it best to enforce our first charge security rights, repossessing and recovering funds through formal legal channels. Our loan terms are realistic assessments of project durations based on our own practical experience on projects, just like those which we lend against. We are very aware of “property entrepreneurs’ bias” for short timescales that are sometimes the optimistic case rather than the realistic case, and therefore we allow for a realistic period of time for projects to start on site, complete and exit and we often challenge applicants on this. Part of the borrower ‘property finance by property people’ proposition is that we work collaboratively with our borrowers to support them to succeed in their projects, because that’s in everyone’s best interest and has delivered a perfect lending track record to date. This relationship/expertise-based approach attracts more quality project applications and retains borrower clients, which is good for lenders. It should also be noted that, again based on our own personal experience, it is usually in the best interests of lenders for the project to continue with the current contractors in place, but we have both formal projects updates via Independent Monitoring Surveyors and direct interactions to monitor project progress and do take action where appropriate – this is different to vanilla bridge lending on non-value-creating projects and part of the reason why property development expertise within a property development lender is critically important to successful outcomes. When we have enforced our first charge security rights and taken through to full resolution through formal legal channels, we have recovered all capital, interest and penalty interest for our lenders – we are tested at this and maintain a 100% capital and interest payback track record through over 6 years of lending. We always appreciate and listen carefully to your feedback on features you would like to see, and we are working on a number of upgrades to help you with your account management. We have been working on several enhancements on the borrower-side, which is also important to you as lenders, as that enables us to close more of the projects that meet our strict criteria, bringing you more quality projects and working towards our aim of funding projects in more like 24 hours rather than 24 seconds to enable everyone to participate, irrespective of their availability through the day (as a side note and contrary to perception because of funding speeds, AutoInvest and Self-Select allocations per projects are roughly equal – it’s important we give both investor segments fair chance of participating). On the lender-side, our next payment upgrade will give you the functionality to both withdraw directly from your IFISA and move funds between your Standard and IFISA accounts. We are also looking at improving our messaging system and we will keep you informed as we release updates to this. We’ve built the best property project lender for small and medium sized developers in the market to attract the very best lending opportunities, taking a long-term, strategic perspective on the business to ensure that it is robust and sustainable and that we continue to deliver exceptionally for all our customers, through all market cycles. We have a strong pipeline of projects that we'll launch when it's right for those projects to progress and we're working hard to bring you more, but we will never compromise on quality, and criteria are even tighter in these times. Thank you for your time to feed back and raise matters for our attention and do also feel free to reach out to our Lender Relations Team at hello@crowdproperty.com or on 0203 012 0161. We also do carry out focus groups on both the lender-side and borrower-side, as part of the reason for setting up CrowdProperty in the first place was our frustration with the lack of customer focus of financial services in general, so we’d welcome expressions of interest to participate. Many thanks and regards, Your CrowdProperty Team
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Post by overthehill on Sept 29, 2020 15:45:04 GMT
Now that is what you call an update if any other p2p companies read this thread. This is going to make the 24s loan fill time shorter not longer...
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rocky1
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Post by rocky1 on Sept 29, 2020 16:49:17 GMT
Yes what an update. Very winston Churchill like,very emotional and sincere,factual and precise.we shall fight them on the beaches etc.etc. lol.
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Post by Ace on Sept 29, 2020 16:52:57 GMT
Now that is what you call an update if any other p2p companies read this thread. This is going to make the 24s loan fill time shorter not longer...
Shhhh . I've recently added significantly to my CP investments and all this positivity is not going to help me get it deployed
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Post by nooneere on Sept 29, 2020 18:12:42 GMT
Hi All, Many thanks for your comments. ... Your CrowdProperty Team This is CEO Mike Bristow - not a single spelling error in all that prose. See his blogs if you need confirmation: blog.crowdproperty.com/blog
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Post by multiaccountmanager on Oct 13, 2020 5:41:54 GMT
I had a look at a loan going live soon in the thick of current COVID concerns - it is a Land only loan as a Bridge while PP conditions are satisfied. The loan is for £700,000 and LTV is 53% so the developer equity appears to be about £620k
Looking at the RICS valuation it is for £1.3m (or £1.1m on forced sale in 90 days) and this is based on GDV with a developer profit of £1.1m.
There is a sensitivity analysis which suggests that a 10% drop in the projected sale price for the houses reduces the land value from £1.3m to £0.9m. Projecting from there it seems a 15% drop would result in the land value being the same as the CP loan. i.e. LTV 100% and developer's equity lost (but still 20% profit on cost if the development proceeded)
However the valuation excludes gains from a piece of land which will be mortgaged to CP but is subject to negotiation regarding overage - so there is some contingency there.
The valuation was carried out in May and it seems house prices may be currently higher than May levels.
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sapphire
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Post by sapphire on Dec 12, 2020 15:02:59 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? 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). Where the loan repayment is delayed beyond the initial term agreed, is the borrower *always* required to pay the extra 2% p.a. penalty rate ? If this penalty rate is charged at CP's discretion, in approx. what percentage of delayed projects has this penalty rate been charged (and passed on to the lender)?
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archie
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Post by archie on Dec 12, 2020 15:55:49 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. 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. Where the loan repayment is delayed beyond the initial term agreed, is the borrower *always* required to pay the extra 2% p.a. penalty rate ? If this penalty rate is charged at CP's discretion, in approx. what percentage of delayed projects has this penalty rate been charged (and passed on to the lender)? From the FAQS :- WHAT HAPPENS IF THE BORROWER PAYS MONEY BACK LATE?
Although there is an agreed loan term with the borrower, we cannot guarantee that they may not be late to repay the loan. In this instance, interest rates for lenders increase to 10% p.a. for each day over the loan agreement the borrower goes.
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littleoldlady
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Post by littleoldlady on Dec 12, 2020 16:06:27 GMT
Where the loan repayment is delayed beyond the initial term agreed, is the borrower *always* required to pay the extra 2% p.a. penalty rate ? If this penalty rate is charged at CP's discretion, in approx. what percentage of delayed projects has this penalty rate been charged (and passed on to the lender)? From the FAQS :- WHAT HAPPENS IF THE BORROWER PAYS MONEY BACK LATE?
Although there is an agreed loan term with the borrower, we cannot guarantee that they may not be late to repay the loan. In this instance, interest rates for lenders increase to 10% p.a. for each day over the loan agreement the borrower goes.
On the other hand, from CP's post above (my bold): Where we have formally agreed an extension with the borrower, which always comes with very careful consideration of the lenders’ position, they are not moving onto the full penalty interest rate that reflects the additional workload required, so your inconvenience is met by less rewarded hard work on our side. We do not want to place undue timescale stress on borrowers in a market where timescales have been impacted by the pandemic, nor do we ideally want to add to the amount owed and therefore compromise security cover. It is therefore incumbent on us to make the best, expertise-based judgement to ensure each loan is stabilised and the lenders’ capital and security positions are preserved, whilst the borrower is not overly penalised at a time when it is out of their control to resolve. Some borrowers have therefore been placed on new terms that preserve the lenders exposure whilst lessening the borrower’s interest burden.
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Post by Ace on Dec 12, 2020 16:16:07 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). Where the loan repayment is delayed beyond the initial term agreed, is the borrower *always* required to pay the extra 2% p.a. penalty rate ? If this penalty rate is charged at CP's discretion, in approx. what percentage of delayed projects has this penalty rate been charged (and passed on to the lender)? I'm not sure if the penalty rate is always applied, but from memory of the loans I've invested in, it is common. Again, it's virtually impossible to determine the current state of loans on CP. This info isn't displayed with the loan details, and the status in the portfolio list would just say "live". Nor is it shown in the loan's factsheet. The factsheet does say " The extension or penalty interest due to you will be shown in the Loan Portfolio section of your account.", but this promise does not seem to be adhered to. The only way to find out that I'm aware of would be to trawl through all of ones messages on the platform. For me that would be 18 pages of messages with 15 message summaries per page, with no way of filtering or searching those messages. So, not really practical. This is clearly a very poorly designed area of the platform. Your best bet would be to ask the question directly to their customer support. I've found them to be very responsive and helpful. EDIT: Crossed with above 2 posts.
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