james21
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Post by james21 on Dec 29, 2017 10:59:31 GMT
forgot to say - this was also just under £1m spent on finishing these houses. If my maths are correct then there could be a shortfall in the region of £2m - Gordon Bennett! As I said 2018 will be an interesting year and indicate better the actual FS returns. Anybody who has more than one of these problematic property, speedboat, turbine loans etc will be on course for a thumping loss - just 10% of loans that go so badly wrong in a portfolio will drastically reduce the return to a very low figure. If fact if anybody is solely invested in 5 of the worse performers the return could easily be worse than minus 50%! Happy New Year! Thats a fair assessment, I have written off any recovery on this one, unfortunately I put too much into it; wonder who takes the loss on the under recovery as I dont know how it works? I am also in default on 4 others with FS though I expect a good recovery rate (but not 100%) on the others You have to be wary of investing in this platform because on the one hand 13% looks brilliant but you only need a couple of defaults as has been pointed out to knock that return right back. In my case I have not been careful enough in selecting loans but I put that down to experience when I first started and am more selective now. I now do the following; * no second charges * no land without planning * I question why the borrower wants the money if its not obvious * Dont renew where the first loan has already gone well over 6 months or invest first time in over run loans * Dont touch boats cars etc * invest less in more loans
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Post by carol167 on Dec 30, 2017 10:01:16 GMT
forgot to say - this was also just under £1m spent on finishing these houses. If my maths are correct then there could be a shortfall in the region of £2m - Gordon Bennett! As I said 2018 will be an interesting year and indicate better the actual FS returns. Anybody who has more than one of these problematic property, speedboat, turbine loans etc will be on course for a thumping loss - just 10% of loans that go so badly wrong in a portfolio will drastically reduce the return to a very low figure. If fact if anybody is solely invested in 5 of the worse performers the return could easily be worse than minus 50%! Happy New Year! Thats a fair assessment, I have written off any recovery on this one, unfortunately I put too much into it; wonder who takes the loss on the under recovery as I dont know how it works? I am also in default on 4 others with FS though I expect a good recovery rate (but not 100%) on the others You have to be wary of investing in this platform because on the one hand 13% looks brilliant but you only need a couple of defaults as has been pointed out to knock that return right back. In my case I have not been careful enough in selecting loans but I put that down to experience when I first started and am more selective now. I now do the following; * no second charges * no land without planning * I question why the borrower wants the money if its not obvious * Dont renew where the first loan has already gone well over 6 months or invest first time in over run loans * Dont touch boats cars etc * invest less in more loans I would add... * don't touch anything over 60% LTV or close to - especially if at 13% * don't touch anything at more than 13% * don't renew anything on it's 3rd or more renewal
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poppyland
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Post by poppyland on Jan 22, 2018 1:06:58 GMT
<abbr data-timestamp="1514545171000" class="o-timestamp time" title="Dec 29, 2017 10:59:31 GMT">Dec 29, 2017 10:59:31 GMT</abbr> james21 said:Thats a fair assessment, I have written off any recovery on this one, unfortunately I put too much into it; wonder who takes the loss on the under recovery as I dont know how it works? I am also in default on 4 others with FS though I expect a good recovery rate (but not 100%) on the others You have to be wary of investing in this platform because on the one hand 13% looks brilliant but you only need a couple of defaults as has been pointed out to knock that return right back. In my case I have not been careful enough in selecting loans but I put that down to experience when I first started and am more selective now. I now do the following; * no second charges * no land without planning * I question why the borrower wants the money if its not obvious * Dont renew where the first loan has already gone well over 6 months or invest first time in over run loans * Dont touch boats cars etc * invest less in more loans I'm in the same boat as you james21, having put money into this way back in my early days with FS, not realising it was a 3rd charge - how stupid could I get? Like you I've now developed a set of rules for investing with FS. With this loan, and the mishandling of the Whitehaven loan, I'm beginning to see why there's a rush for the door at FS, and how 100% losses are possible. I can't believe FS chose to take on this loan, and I hope they've learnt as much as we have, but then again, all they lose is a bit of reputation and good-will, while we are the ones who lose money.
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adrian77
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Post by adrian77 on Apr 2, 2018 12:26:17 GMT
I notice this one has been on the market now for over 3 months. Given that the asking price is £2.95m and the original FS valuation was £3.8m then that is an instant £0.85x 2 = £1.7m overvaluation. Added to this we don't know how much it cost to finish the properties nor the state of the claim against the contractor who may be deceased? Not good if the completion cost well over £0.5m and the contractor claim results in lost legal fees with zero payout!
Both the first and second charge holders will need their interest and legal fees etc. As noted earlier by several people the London market is cooling and you can buy fantastic and ,in my opinion, better houses in the area for the money so I would guessimate £2.5m maximum each which would leave exactly nothing for FS - and that is assuming the first charge holder holds out for the best price. If they do sell for £2.5m each, it may well be less, then that will be a £2.4m overvaluation which will be incredible!
Not sure for how much longer these will remain unsold - I wonder if there are local developers who are aware of the situation and will be offering 70% or below (about £2m) of the asking price? It looks to me that it is possible the costs could come in at £1m and they sell for £4m in total which will upset a lot of people.
Interesting one this one...
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bfish
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Post by bfish on Apr 2, 2018 12:39:07 GMT
Not to worry(sic), Adrian - I'm sure the following will put your mind to rest(!?) :-
Thank you for your email. We are currently processing an update for this loan and as soon as we have some more information, one will be uploaded to the loan page. I will pass your comments onto the loan manager.
Only pity is this was written 23rd March . . . but 'currently' may have a completely different definition from your dictionary and mine !!
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Post by mrclondon on Apr 28, 2018 20:33:38 GMT
The administrators progress report for the six months to 13th March 2018 is now available at CH (link and more analysis on DD Central for those with access). The scanning / pdf creation has messed the page order up quite badly but I think all the pages are there, just in the wrong order and/or duplicated.
My reading of it is that it is very bad news for FS lenders, and I suspect the 1st charge holder is going to struggle to cover all the accrued interest on their original loan plus the additional funding they provided to complete the build (which ended up c. 2 x budget). Which has all too predictable consequences for both the 2nd and 3rd charge holders.
[mod hat on]
Some care is needed in discussing an aspect of this on this public board - there is an outstanding legal claim which could be compromised if the details thereof are published.
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adrian77
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Post by adrian77 on Apr 29, 2018 13:22:22 GMT
damn right it is - this is even worse then I said it was going to be!
FS told us remedial work would be £810K including contingency and what did it come in - £1.4m! Not sure if I have found the correct accounts for the builder being sued but that is not looking good to me and a £1.4m loss there alone is on the cards.
FS told us the LTV was 67.8% - well that was a tad off wasn't it?
I would guess this is going to come it an overall 50% loss and may even nudge -67.8%!
They also said
so that wasn't very clever was it! I wonder if this £350K will be recovered from the lender - answers on a digital postcard...
Not sure which lender will take the biggest hit but I saw one at £20K - however all FS lenders on this are looking at a 100% loss, the developer walks away with £350K, the administrators are on a roll and I wonder if FS will apologise over this disaster.
I (and a lot of others) was worried about this one but am even more worried about Suffolk - tell will tell but in the meantime we can all look forward to the Whitehaven update.
FS - ever wondered if you are going to be faced with a class action sooner or later?
Gordon Bennett!
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adrian77
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Post by adrian77 on Aug 22, 2018 8:11:29 GMT
Have had a quick look to see what has been happening with this one - not a lot except first and second charges and legal work clocking up fees like no tomorrow.
This one was due to be repaid in January 2017.
However they are still on the market at £2.65m each (original FS valuation £3.8m) - to be honest I thought they would sell at that price so not sure why they haven't? Maybe a sign of the cooling London market which is a tad worrying, for me, as I have other FS loans based on expensive London property.
Considering the prior charges are for £4.8m and it appears £1.4m was needed to correct the bodged work then the figures are so bad there is no need to even compute the likely loss on this one (and that is even if the contractor is successfully sued).
I think this is the first time a third charge has been defaulted by FS - should the third charge for the cinema go the same way as this one then I can't see any other third charges being funded.
Hopefully these houses will sell before the end of the year?
Here is an extract from the original loan
Well I would politely posit that this is not exactly FS's finest hour...
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empirica
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Post by empirica on Aug 22, 2018 8:55:00 GMT
Have had a quick look to see what has been happening with this one - not a lot except first and second charges and legal work clocking up fees like no tomorrow. This one was due to be repaid in January 2017. However they are still on the market at £2.65m each (original FS valuation £3.8m) - to be honest I thought they would sell at that price so not sure why they haven't? Maybe a sign of the cooling London market which is a tad worrying, for me, as I have other FS loans based on expensive London property. Considering the prior charges are for £4.8m and it appears £1.4m was needed to correct the bodged work then the figures are so bad there is no need to even compute the likley loss on this one (and that is even if the contractor is successfully sued). I think this is the first time a third charge has been defaulted by FS - should the third charge for the cinema go the same way as this one then I can't see any other third charges being funded. Hopefully these houses will sell before the end of the year? Here is an extract from the original loan Well I would politely posit that this is not exactly FS's finest hour... adrian77 - did I imagine it or did the first 'cut' of this post state your were int it and were worried about it and the other London property loans you are in?
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adrian77
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Post by adrian77 on Aug 22, 2018 9:34:55 GMT
bit personal - never realised my posts were so interesting - Yes I was in it but I ditched it - ahything else?
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empirica
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Post by empirica on Aug 22, 2018 9:53:18 GMT
bit personal - never realised my posts were so interesting - Yes I was in it but I ditched it - ahything else? Thanks for confirming, appreciated. Not sure why personal? You're the one that originally posted on a public forum in that post that you were, to paraphrase, 'worried as you are in it and other London loans' and then subsequently retracted that statement. Personal would be to ask what other London loans you are actually in. (Or not.)
My original reason for asking was a) to confirm I hadn't overdone it on the double-espressos and b) to express surprise to read that you are / were in it after the posts I'd read further up the thread how glad you were to have 'missed this one' back in Sept 2017.
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technik
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Post by technik on Oct 7, 2018 20:33:57 GMT
Has anyone heard anything more about this one from FS even if they haven't added an update themselves? Even by FS standards, last update in May is a very long time.
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jcm9000
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Post by jcm9000 on Nov 2, 2018 14:52:54 GMT
....and there it goes. Byebye £150.
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SteveT
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Post by SteveT on Nov 2, 2018 14:58:58 GMT
....and there it goes. Byebye £150. Let alone the other £349,850 !!
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arby
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Post by arby on Nov 2, 2018 15:25:35 GMT
Yep, this is one of those occasional (regular?!) reminders of the dangerous gearing of 2nd charges. Pretty awful result for those in it.
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