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Post by charliebrown on May 27, 2017 15:33:43 GMT
When I invest in a FS loan I usually invest pretty big to get the bonus interest etc. My typical plunge is >10k. I've just checked my holdings in this loan and miraculously it's only 300 quid. I'm not sure how I ended up with only 300 quid but I literally punched the air when I realised my personal losses will be "manageable". having seen the pics and read this thread and FS updates I have already mentally written off my 300 quid. The serious part, this is disgraceful. The management of this is gross incompetence by FS. I have significant investment on FS and will be removing all of it as soon as I can. P2p lending is for most of us about trust and confidence. FS has lost all my trust, confidence and respect over this. Not impressed! I think it's pretty much all been said when it comes to this loan. I too am winding down my investment on FS as I like to sleep nights. Five tranches of a loan handed out, only one phase of the work completed and that's the purchase of the site. My guess is the site might be worth £200,000 when we have handed him over half a million with reassurances from FS that work was well advanced and that this loan would not exceed 70 percent of the value of our security. Unreal. I can only hope that the faith shown by FS in this borrower turns out to be justified, but I for one have had my faith in the platform shot to pieces. As one poster has said, we lend on security, not the outcome of court cases and the possibility of the borrower doing the right thing in the future. Like you, my one saving grace is that my holding in this is a small one. i think we're all in agreement. For me this looks like gross negligence and there should be consequences for FS. Whilst I personally don't stand to lose a fortune, that's not really the point. Any positive outcome to this is going to be pure luck and good fortune. Even if this works out ok for us, I'm still getting out of FS after this.
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r1200gs
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Post by r1200gs on May 27, 2017 16:09:52 GMT
Update posted 17 mins ago: The project has fallen behind schedule for 2 reasons. Firstly, the borrower has been involved in a major legal dispute which has taken up a lot of his time. This now appears to be coming to an end to the advantage of the borrower. Secondly there have been construction delays caused by the inability to get the road closed so that the building could be demolished, followed by a dispute over a party wall. The borrower has now appointed a contractor to complete the work. We have received the contractor’s schedule of works. Construction is due to be completed by mid-December. The loan will remain late until work has progressed such that the loans can be renewed. The borrower is adamant that the loans will be repaid from the proceeds of the court case, where the hearing to determine damages is set for June 2. Finished Dec?....what year? So when will FS explain why we were throwing subsequent tranches at the borrower when no work was being done, and why tranche five was sold on the basis that work was well underway and all was tickety boo? That's my problem, and until this question is answered and reassurances given that it won't happen again, I'll continue to wind down on FS. Oh, and if we could have an explanation as to why the borrower was still pulling down tranches and where that money has gone, that would be good too.
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09dolphin
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Post by 09dolphin on May 27, 2017 19:00:33 GMT
From the latest update there seems to be contradictory statements. That the loan(s) will be renewed when sufficient work has been completed (and who would even consider renewing their loan) with the implication that the value of the site is less than the money loaned and that the loan will be repaid from proceeds of the court case.
Which statement is true?
Will the borrower renew or will they repay the loans from the proceeds of the court case? What will happen if the damages in the court case prove to be just a few thousand or even just a hundred thousand?
What level of completion of work is required before the borrower can renew the loan? Will FS accept an assertion from the borrower that work has actually been completed? Photographic evidence has been submitted before to prove progress that is dubious to say the least.
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gibmike
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What is a cynic? A man who knows the price of everything and the value of nothing.
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Post by gibmike on May 27, 2017 19:05:59 GMT
Only £550 invested when my normal is £1,300, happy days!
Also happy to see the back of this loan as and when it is resolved/ paid/ lost.
Mike
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Post by charliebrown on May 28, 2017 3:39:09 GMT
Only £550 invested when my normal is £1,300, happy days! Also happy to see the back of this loan as and when it is resolved/ paid/ lost. Mike We all want to see this resolved and seems we don't stand to lose too much. However, that's not the point, right? The point is, the borrower has been able to continue borrowing against a development he hasn't been developing. That is gross incompetence by FS. It's shocking. This incompetence has exposed FS investors to loses. Presumably the borrower could walk away right now and make more "profit" than if he actually finishes the build. If he's a fine upstanding citizen and actually continues with the build then that's pure luck for us investors. I personally dont consider any court case relevant at all. We might as well say the borrower has promised to repay when his lottery numbers come up. Not relevant. The relevant point is FS has created this situation. Looking at something like a 400% LTV and all we can do is cross our fingers and hope. i can't continue to do business with FS after this. I'm going to withdraw and favour MT and SS. Or maybe I'll ask FS to lend me 800k against a hole in the ground worth 200k, that seems a simple way to make money (sorry for being facetious, I'm pretty angry about this to be honest).
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on May 28, 2017 18:52:50 GMT
Update posted 17 mins ago: The project has fallen behind schedule for 2 reasons. Firstly, the borrower has been involved in a major legal dispute which has taken up a lot of his time. This now appears to be coming to an end to the advantage of the borrower. Secondly there have been construction delays caused by the inability to get the road closed so that the building could be demolished, followed by a dispute over a party wall. The borrower has now appointed a contractor to complete the work. We have received the contractor’s schedule of works. Construction is due to be completed by mid-December. The loan will remain late until work has progressed such that the loans can be renewed. The borrower is adamant that the loans will be repaid from the proceeds of the court case, where the hearing to determine damages is set for June 2. Finished Dec?....what year? So when will FS explain why we were throwing subsequent tranches at the borrower when no work was being done, and why tranche five was sold on the basis that work was well underway and all was tickety boo? That's my problem, and until this question is answered and reassurances given that it won't happen again, I'll continue to wind down on FS. Oh, and if we could have an explanation as to why the borrower was still pulling down tranches and where that money has gone, that would be good too. These are VERY valid questions.
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sb
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Post by sb on May 28, 2017 22:34:15 GMT
Based on the previous update the work was supposed to restart this week. Does any one knows if this has happened?
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rs
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Post by rs on May 31, 2017 22:03:52 GMT
Based on the previous update the work was supposed to restart this week. Does any one knows if this has happened? anyone made a complaint to the FSA/fav/ or whichever regulator?
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09dolphin
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Post by 09dolphin on Jun 1, 2017 9:33:23 GMT
I only have a relatively small amount in this "investment".
When people are giving advice about how to complain to a regulator I'd guess some people are more than really fed up and, given the information we have available, who can blame them?
My view is FS need to be honest with investors. Tell us why they agreed the extra tranches/loans when the facts apparently don't support the extra investments. FS appear to have acknowledged that the value of the investment doesn't match with the 70% of the maximum LTV in their updates. If they were misled by dishonest photos or updates provided by the borrower tell us and tell us what they propose to do. All we want is information about our money and that's not so unreasonable.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jun 1, 2017 10:11:15 GMT
09dolphin how dare you expect fs to be communicative and honest.😊 Its just not cricket to let people have all the details what!🤓 Next we will expect platforms to comply with all FCA requirements and also to act within the data protection act! What next? Anarchy🤔
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jun 1, 2017 10:16:47 GMT
I only have a relatively small amount in this "investment".
When people are giving advice about how to complain to a regulator I'd guess some people are more than really fed up and, given the information we have available, who can blame them?
My view is FS need to be honest with investors. Tell us why they agreed the extra tranches/loans when the facts apparently don't support the extra investments. FS appear to have acknowledged that the value of the investment doesn't match with the 70% of the maximum LTV in their updates. If they were misled by dishonest photos or updates provided by the borrower tell us and tell us what they propose to do. All we want is information about our money and that's not so unreasonable.
A very fair and very reasonable comment & request 09dolphin. Will FS respond in an equally reasonable manner?
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rs
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Post by rs on Jun 2, 2017 20:28:28 GMT
I only have a relatively small amount in this "investment".
When people are giving advice about how to complain to a regulator I'd guess some people are more than really fed up and, given the information we have available, who can blame them?
My view is FS need to be honest with investors. Tell us why they agreed the extra tranches/loans when the facts apparently don't support the extra investments. FS appear to have acknowledged that the value of the investment doesn't match with the 70% of the maximum LTV in their updates. If they were misled by dishonest photos or updates provided by the borrower tell us and tell us what they propose to do. All we want is information about our money and that's not so unreasonable.
A very fair and very reasonable comment & request 09dolphin. Will FS respond in an equally reasonable manner? i have faith in fs that this will be paid so just wait till Dec 2017.
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sb
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Post by sb on Jun 3, 2017 9:44:30 GMT
A rather cheeky update from FS
"As has been detailed below, this property has been severely delayed but is now progressing. We have received a number of questions from investors on what basis tranches 4 and 5 were released.
As a point of principle, since on most development projects we are funding 100% of construction costs (assuming there is sufficient GDV within our LTV guidelines), we release funds once we are satisfied that work funded by earlier tranches has been completed.
Tranche 4 was to fund the timber frames. This was released on the basis that the funds advanced on tranches 2 and 3 for the demolition and substructures had been completed. Tranche 5 was then advanced on receipt of evidence that the timber frames had been paid for."
1. How does this reconcile with the condition on the loan general information tab?
"At no stage will cumulative tranches exceed 70% of current value"
Does FS claim that the value of the site is now 770k?
2. Why does FS claim that the demolition and substructures had been completed? It is apparent from the photos of the site that this is not the case.
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rs
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Post by rs on Jun 3, 2017 10:29:17 GMT
A rather cheeky update from FS "As has been detailed below, this property has been severely delayed but is now progressing. We have received a number of questions from investors on what basis tranches 4 and 5 were released. As a point of principle, since on most development projects we are funding 100% of construction costs (assuming there is sufficient GDV within our LTV guidelines), we release funds once we are satisfied that work funded by earlier tranches has been completed. Tranche 4 was to fund the timber frames. This was released on the basis that the funds advanced on tranches 2 and 3 for the demolition and substructures had been completed. Tranche 5 was then advanced on receipt of evidence that the timber frames had been paid for." 1. How does this reconcile with the condition on the loan general information tab? "At no stage will cumulative tranches exceed 70% of current value" Does FS claim that the value of the site is now 770k? 2. Why does FS claim that the demolition and substructures had been completed? It is apparent from the photos of the site that this is not the case. [ I suppose the pictures are old. I hope! I expect there will be a loss as this loan won't be ready to be paid until Dec 2017.
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SteveT
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Post by SteveT on Jun 3, 2017 11:16:47 GMT
I'm one of those that have been prodding FS repeatedly (without success) to respond to the questions I emailed on 24th April, as follows:
"Regarding the long-overdue Whitehaven loans, the 4th tranche, which was intended to fund the timber frame, was activated in early July 2016, shortly after "A site visit by FundingSecure was performed on June 6, 2016." At that point, the valuation was put at £500k, supporting £330k funds advanced, and there was a very clear statement that "At no stage will cumulative tranches exceed 70% of current value".
A 5th tranche of another £200k, intended to fund "external masonry, roof and windows" apparently was activated in mid-November 2106, based upon an increased valuation put at £800k. However, there is no mention of a further site visit in the loan description, only reference again to the one made back in June.
As someone who was persuaded to put some funds into the 4th tranche, please can you tell me what evidence FS obtained to support a £300k increase in valuation in November and so justify advancing a further £200k (on parri pasu terms). The "current value" web-link next to the 5th tranche £800k figure only reveals the 4th tranche figures again (ie. the £500k valuation from 2nd July) so I'm none the wiser there.
What is your current assessment of the value of the unfinished development, which was photographed recently as still little more than a demolition site?
Where has the £530k advanced to the borrower gone?
Has FS retained title of the timber frame, external masonry, roof and windows that it was claimed the 4th and 5th tranches were going to pay for?"
This latest update in no way answers these questions, nor addresses the core issue of how release of Tranche 5 was consistent with FS's assurance that "At no stage will cumulative tranches exceed 70% of current value". Suffice to say that, if this loan ends up with a loss and FS choose to pass it on (rather than absorbing it themselves), the Ombudsman will be hearing from me.
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