stevio
Member of DD Central
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Post by stevio on Nov 14, 2016 7:56:38 GMT
bengilbertMay I ask, previous updates have said that offers close to the asking price have been received. But the 6 month extension says it is needed to maximize the sale price. There must be a cost to maintaining the loan for up to 6 months. How is any potential increased sale price balanced against the cost of the loan?
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Post by bengilbert on Nov 14, 2016 11:43:02 GMT
Frankly, we agree that the difference between the costs and any potential increase in the sales price is likely to be small, and the costs might even be greater. On the other hand, assuming a sale goes through within the next 3-4 months, which is what we expect, the costs for them will be under 5%, so it's quite possible that it will be worth it for them.
We did ask the borrower the same question, and they felt that possibly paying a few months more interest was worth it in order to feel confident they had maximised the sale price.
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BPF585
Nov 14, 2016 12:04:44 GMT
Post by mrclondon on Nov 14, 2016 12:04:44 GMT
Another question bengilbert - the last update on the previous loan stated that the extension would be granted upon receipt of an updated valuation which had been instructed. The new loan listing has attached the original valuation report of April 16. Can you share with us the extent of the re-valuation undertaken, and the bottom line conclusion as to value ?
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Post by bengilbert on Nov 14, 2016 12:11:01 GMT
Another question bengilbert - the last update on the previous loan stated that the extension would be granted upon receipt of an updated valuation which had been instructed. The new loan listing has attached the original valuation report of April 16. Can you share with us the extent of the re-valuation undertaken, and the bottom line conclusion as to value ? We have had verbal confirmation of the value but not yet received the written report (due today). The valuation does show an increase in value but I feel it should be posted first on the loan details (where all investors would see it) rather than the forum (where some investors may not see it). Let me speak to Ed and see if this info can be added, then I'll report back here.
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Post by bengilbert on Nov 14, 2016 12:34:42 GMT
We have been told by the valuer that the updated valuation is £565,000. The report will be uploaded as soon as we have it (should be today).
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BPF585
Nov 14, 2016 12:35:17 GMT
Post by mrclondon on Nov 14, 2016 12:35:17 GMT
Another question bengilbert - the last update on the previous loan stated that the extension would be granted upon receipt of an updated valuation which had been instructed. The new loan listing has attached the original valuation report of April 16. Can you share with us the extent of the re-valuation undertaken, and the bottom line conclusion as to value ? We have had verbal confirmation of the value but not yet received the written report (due today). The valuation does show an increase in value but I feel it should be posted first on the loan details (where all investors would see it) rather than the forum (where some investors may not see it). Let me speak to Ed and see if this info can be added, then I'll report back here. New valuation of £565k has now been added to the loan listing. That is a REDUCTION of £60k on the GDV of the previous valuation report (£625k). Any explanation, given prices in the area have risen over the last 12 months ? EDIT: The previous loan listing said it was being marketed for £625k/£650k. What has gone so horribly wrong with the development that they have destroyed value ?
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BPF585
Nov 14, 2016 12:41:12 GMT
Post by bengilbert on Nov 14, 2016 12:41:12 GMT
We have had verbal confirmation of the value but not yet received the written report (due today). The valuation does show an increase in value but I feel it should be posted first on the loan details (where all investors would see it) rather than the forum (where some investors may not see it). Let me speak to Ed and see if this info can be added, then I'll report back here. New valuation of £565k has now been added to the loan listing. That is a REDUCTION of £60k on the GDV of the previous valuation report (£625k). Any explanation, given prices in the area have risen over the last 12 months ? We believe the valuer continues to be highly conservative. We will have more details once the report itself is received. At the given value, LTV on the loan is 57.5% (after our first loss holding).
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BPF585
Nov 14, 2016 12:55:08 GMT
Post by mrclondon on Nov 14, 2016 12:55:08 GMT
MoneyThing I'm surprised you took the decision to list the extension without sight of the valuation report that might shed some light on what has gone wrong with this development (build quality issues for example). Any buyer will only be able to get a mortgage for (say) 80% of the actual value as evidenced by the valuation, so marketting at £625k/£650k is an exercise in futility. Now the story of needing time to maximise sale vaule makes sense ... the property isn't worth what the borrower thinks it is (for whatever reason) I had transferred funds in for the release of the limit at 4pm but I'm no longer convinced that 10% is adequate yield.
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Post by bengilbert on Nov 14, 2016 13:40:28 GMT
MoneyThing I'm surprised you took the decision to list the extension without sight of the valuation report that might shed some light on what has gone wrong with this development (build quality issues for example). Any buyer will only be able to get a mortgage for (say) 80% of the actual value as evidenced by the valuation, so marketting at £625k/£650k is an exercise in futility. Now the story of needing time to maximise sale vaule makes sense ... the property isn't worth what the borrower thinks it is (for whatever reason) I had transferred funds in for the release of the limit at 4pm but I'm no longer convinced that 10% is adequate yield. The valuer confirmed to us that build quality is high, and there is no reason at all to think anything has 'gone wrong' with the project. I suggest we wait until the full report is received to see how his value was derived.
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BPF585
Nov 14, 2016 13:47:57 GMT
Post by Deleted on Nov 14, 2016 13:47:57 GMT
I'm getting confused. I actually began to try and list why I was getting confused and got so much more confused that I had to stop Seems like the latest valuation is lower than expected and the punter is going to spend another £30k to see if he can find a new mug customer to cough up an extra (30k + 55k) to get his profit back in line. To do that he needs to get into at least March or April to hit house shopping time. Should be interesting. I may have to face up to it, that may be £16 I will not see again.
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woodie
Member of DD Central
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BPF585
Nov 14, 2016 14:46:38 GMT
Post by woodie on Nov 14, 2016 14:46:38 GMT
Bengilbert, wouldn't it be clearer if the original details ... Loan Value 400,000, Asset Value 475,000, LTV = (400,000 - 75,000 (1st loss)) / 475,000 = 68.42% were updated for the purposes of the extension to Loan Value 400,000, Asset Value 565,000, LTV = ( 400,000 - 75,000 (1st loss)) / 565,000 = 57.52% ? Then bobo might feel happier about his £16
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Post by bengilbert on Nov 14, 2016 15:09:03 GMT
Bengilbert, wouldn't it be clearer if the original details ... Loan Value 400,000, Asset Value 475,000, LTV = (400,000 - 75,000 (1st loss)) / 475,000 = 68.42% were updated for the purposes of the extension to Loan Value 400,000, Asset Value 565,000, LTV = ( 400,000 - 75,000 (1st loss)) / 565,000 = 57.52% ? Then bobo might feel happier about his £16 Yes, and we will do this, but only once we've seen the valuation. The initial valuer, who'd been booked to do the updated valuation, was ill, so we had to wait to get one of his colleagues to do it. This has led to the delay in receiving the new valuation. We prefer to be conservative and stay with the initial valuation until we've actually received the new one.
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stevio
Member of DD Central
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Post by stevio on Nov 14, 2016 16:44:26 GMT
Bengilbert, wouldn't it be clearer if the original details ... Loan Value 400,000, Asset Value 475,000, LTV = (400,000 - 75,000 (1st loss)) / 475,000 = 68.42% were updated for the purposes of the extension to Loan Value 400,000, Asset Value 565,000, LTV = ( 400,000 - 75,000 (1st loss)) / 565,000 = 57.52% ? Then bobo might feel happier about his £16 Yes, and we will do this, but only once we've seen the valuation. The initial valuer, who'd been booked to do the updated valuation, was ill, so we had to wait to get one of his colleagues to do it. This has led to the delay in receiving the new valuation. We prefer to be conservative and stay with the initial valuation until we've actually received the new one. This has not been handled very well, I think BO has let down MT on this occasion I clear re-valuation should have been presented when the loan email was sent, not almost 24hrs after bidding
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Post by bengilbert on Nov 14, 2016 16:55:32 GMT
Yes, and we will do this, but only once we've seen the valuation. The initial valuer, who'd been booked to do the updated valuation, was ill, so we had to wait to get one of his colleagues to do it. This has led to the delay in receiving the new valuation. We prefer to be conservative and stay with the initial valuation until we've actually received the new one. This has not been handled very well, I think BO has let down MT on this occasion I clear re-valuation should have been presented when the loan email was sent, not almost 24hrs after bidding Acknowledged. I'm also frustrated by the delays. However, the loan was due to expire on Sunday and, due to the circumstances I've explained, the new valuation was not yet ready at that point. We will always strive to allow lenders to be repaid on the due date when they wish, using our own funds to repay lenders where required, and that's why the extension was launched before receipt of the valuation. We could have delayed things but I would have felt that we were letting down lenders who were expecting repayment on the original due date.
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BPF585
Nov 14, 2016 17:34:06 GMT
Post by mrclondon on Nov 14, 2016 17:34:06 GMT
bengilbert I think you are missing the point ... you've allowed MoneyThing to list a loan that implied the valuation should be in the region of £625k - £650k on the basis of the previous valuation and the updates on the previous loan regarding the marketing at this level when you knew the valuation was actually only £565k. The mis-representation of security values was one of the major topics of discussion when I met with the FCA a couple of months back. This loan should not have been listed without a clear warning that the valuation was £60k (10%) below that expected for reasons as yet unknown. I've now sold the small holding I had that rolled over from the previous loan, and the extra £100 I put in yesterday.
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