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Post by rich1000 on Aug 22, 2016 9:59:18 GMT
I've invested in this loan, which is now in default. I contacted FS last week and stated I had cash available to settle anything outstanding on this loan and buy the property, subject to survey and legals. I was told the receivers would contact me. The next I hear is an update on the website that states it's being listed for sale via an estate agent. So for investors who want their capital back they have to wait for listings, viewings, offers etc. The terms at FS state that defaulted assets will be auctioned. This gives me the impression that attempts will be made to return my capital to me asap.
I don't know about anyone else but as an investor this makes me feel very uncomfortable going forward. Exactly why are FS listings items at estate agents rather than doing their best to recoup investor money and interest by the quickest means possible?
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Post by mrclondon on Aug 22, 2016 10:14:57 GMT
Funding Secure and their appointed representatives (e.g. receivers) have a duty of care to the borrower as well as lenders to realise as much as possible for the property within a reasonable time period. What is a reasonsable time is open to question (and depends to an extent on the loan LTV) but upto 12 months would not be unreasonable.
Selling the property to the first private offer received without first establishing market demand by either or both of conventional marketing and auction would be a breach of the duty of care to the borrower.
If you do want to purchase the property, keeping the various parties (FS, receiver, estate agents) "sweet" so they provide you with timely updates is perhaps a better strategy than what appears to be a demand for those tasked with realising this security to act in what could be considered an unethical manner.
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Post by rich1000 on Aug 22, 2016 10:28:06 GMT
No, demand. I've withdrawn my offer as I don't agree with how they have behaved. The amount I was prepared to pay was never disclosed either. I've posted this so I can get some input from other investors on how they feel. I'm appalled at the way this has been handled and will be reducing my holdings at FS substantially as a result. I don't see anything in the terms that states FS has a duty of care to the borrower to sell the asset for anything other than the money outstanding. Please can you provide a link to this?
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Post by mrclondon on Aug 22, 2016 10:47:43 GMT
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Post by rich1000 on Aug 22, 2016 10:52:33 GMT
Excellent, thanks for that. FS did not explain that to me. Is that the case for all assets in receivership or simply limited to property?
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Post by mrclondon on Aug 22, 2016 11:03:44 GMT
Excellent, thanks for that. FS did not explain that to me. Is that the case for all assets in receivership or simply limited to property? Property in England and Wales only. FS will have several completely different sets of legal agreements for use with borrowers. FS started out as a pawn broker and the borrower legals were (and still are for pawn items) "Fixed-Sum Loan Agreement and Pawn Receipt", their site T&C's tend to reflect this history as a pawnbroker and less the reality of property bridging loans and development finance. That said, even the legislation underpinning the "Fixed-Sum Loan Agreement and Pawn Receipt" requires a duty of care to the borrower. The site T&C's tend to reflect lender centric issues as the legislation and regulatory guidance on the lender side is evolving as p2p develops, whereas the boorower side is pretty well entrenched in law already.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Aug 22, 2016 11:07:21 GMT
rich1000I understand your frustration but, this property is secured on a small loan and low LTV%. I wouldn't be surprised if other investors have considered settling the loan to get this property. The thought did cross my mind when it defaulted. It's relatively easy to value the property by comparing sold prices of similar properties in the same road, so it's unlikely to be sold at a bargain price.
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Post by mrclondon on Sept 12, 2016 10:54:37 GMT
I've invested in this loan, which is now in default. I contacted FS last week and stated I had cash available to settle anything outstanding on this loan and buy the property, subject to survey and legals. The wording of your original post rich1000 (my bold) makes me wonder whether you appreciated that there are two FS loans outstanding secured against the Telford property. 2891725647 due 13th May 2016 £30,000 1006792755 due 3rd Sept 2016 £20,000 The 2nd loan (which ranks behind the first) was formally defualted today. rich1000 , if your offer to buy the property was at a level to only cover the first loan's capital + interest you were consigning your fellow FS lenders who happened to be in the 2nd loan to a total loss. My original response to your post referred to the duty of care FS have to their borrower, but they of course also have a duty of care to lenders in other loans with that borrower.
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stevio
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Post by stevio on Sept 23, 2016 17:39:52 GMT
Payback due in May and now 4 months down the line....
If they raise enough from the sale, will they pay investors interest up to the sale date or just the original term of the loan?
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mikes1531
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Post by mikes1531 on Sept 23, 2016 21:02:17 GMT
Payback due in May and now 4 months down the line.... If they raise enough from the sale, will they pay investors interest up to the sale date or just the original term of the loan? Interest shown as accrued on the FS website continues to increase after the maturity date passes, so investors should get that -- if the sale proceeds are sufficient. AFAIK, that's what's happened in the past.
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