adrian77
Member of DD Central
Posts: 3,895
Likes: 4,122
|
Post by adrian77 on Jun 6, 2019 9:16:52 GMT
I am really sorry to hear this - are you proud of yourselves FS?
|
|
jo
Member of DD Central
Posts: 727
Likes: 492
|
Post by jo on Jun 6, 2019 9:19:19 GMT
|
|
sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
Posts: 1,426
Likes: 1,211
|
Post by sqh on Jun 6, 2019 11:44:54 GMT
Based on the last update I expected the next one to be news of the completion. I would love to know what it sold for though I guess we'll find out soon enough. I'm in the D**** as well, 55 percent LTV. Safe as houses then. Well, to quote my last post, it looks like 55 percent LTV is not safe as houses as I seem to have lost all my money, the third time now. Well, an LTV of 16.5 is surely safe as houses? Not going by the information now received about the D*** it's not, because it appears the funds received were less that 10 percent of the valuation. Funding secure? r1200gsNot sure how your figure of less than 10% is derived. I make it 32%.
|
|
Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
|
Post by Godanubis on Jun 7, 2019 8:13:27 GMT
Well, to quote my last post, it looks like 55 percent LTV is not safe as houses as I seem to have lost all my money, the third time now. Well, an LTV of 16.5 is surely safe as houses? Not going by the information now received about the D*** it's not, because it appears the funds received were less that 10 percent of the valuation. Funding secure? r1200gs Not sure how your figure of less than 10% is derived. I make it 32%. Hypothetically if a loan was for x and a second secured property was sold for x to pay loan and it had LTV of 10x then that gives the 10% figure for that I think this could be the case.
|
|
rogerthat
Member of DD Central
Posts: 2,048
Likes: 1,994
|
Post by rogerthat on Jul 2, 2019 15:19:22 GMT
18 mins ago (02/07/19)
After some delays in finalising the sale the receiver expects to be able to complete the process within the next two weeks. A further update will be made as and when additional information is available.
Im trying to remain upbeat but the longer this disclosure is put off..the more pessimistic im getting
|
|
r1200gs
Member of DD Central
Posts: 1,336
Likes: 1,883
|
Post by r1200gs on Jul 2, 2019 17:25:31 GMT
18 mins ago (02/07/19) After some delays in finalising the sale the receiver expects to be able to complete the process within the next two weeks. A further update will be made as and when additional information is available. Im trying to remain upbeat but the longer this disclosure is put off..the more pessimistic im getting This was valued as it stood at 4.17 million pounds, that is how it was sold to investors in tranche five. Money owed is 2.075 million. Safe as houses. But back to reality and away from the whacky world of FS valuations, I suspect this sold for between 1 and 1.5 million and once everyone has taken their fees and with the first £575 loan ranking above all others, there's going to be an awful lot of people getting what I have come to know as the " funding secure feeling". But worry not, after seeing your capital wiped out you might get a nice little update saying you're going to get a breakdown of where all the money went, just as I have on The D*ll. Well that's alright then. If you are in the lower ranking loans here then I would brace myself for the loss and be mighty surprised if I get anything at all. Hey, it might have sold for the money FS said it was worth? What a bloody shower.
|
|
petrichory
Member of DD Central
Posts: 59
Likes: 207
|
Post by petrichory on Jul 2, 2019 19:40:10 GMT
Since this loan is taking some time to complete fall from the sky in a fireball of lies and deceit, let's just take a moment to have a meditative retrospective:
A Tale of two Shell Companies
The borrower manages to purchase an ex-council tower block with 42 apartments for a mere £375,000 on the 15th of May 2017.
That's roughly £9000 per apartment - bargain!
Through the use of what we shall call SC1 going forward (Shell Company 1) the borrower asks FundingSecure for a loan (2807104089) of £575,000 because applying for a loan is hard work and £200,000 of lender money is inconsequential to everyone involved. The director of SC1 doesn't own a single item of clothing or furniture that isn't listed as property of a limited company so naturally everyone is satisfied and content that the borrower is good for the money.
At this point, the borrower could have walked away with an easy £200,000 in his pocket but who are we kidding, there were more unsuspecting fools to part with their savings. Subsequently, the borrower takes out a staggering £2,010,000 in FS loans for the same property purchased at auction for £375,000. Because reasons. Where the money goes is of course a bit of a mystery as two years on, a QS report finds that the property still needs significant investment to complete. Was it spent on other developments that SC1 had in the pipeline? As FS put it, the "developer is focussing [sic] on an additional project nearing completion." Hint: No project was ever completed.
What we do know, however, is that SC1 had loans with other finance companies that were a little less patient. On the 5th of April 2018, a lender unconnected to FundingSecure appoints a receiver to SC1 to reclaim a property that was sold for £550,000 in August 2016. Unperturbed by this appointment, FundingSecure renews loan tranche 7 on the 18th of April and promised a renewal for other tranches. Reasons unclear.
On the 24th of April 2018 - despite the appointment of receivers by another firm - FundingSecure inexplicably allows the borrower to sell one of the 42 apartments (Nr. 35) to SC2, an entity with no contractual obligation to FS. To this day, SC2 has the same registered business address as the home of the SC1 director, with the only difference that now a Ukrainian man in his late 30s is the appointed director. Sell it to yourself, do a little musical chairs with stooge directors and viola only 41 to go. The identity of the Ukrainian and his registration at the home of the primary borrower should be disconcerting for a number of reasons, not least of which is a 1/42 loss of assets to FS lenders.
Tangent
At this point, it might be entertaining to expound on the director of SC2, a man possibly more colourful than even the infamous Arts Loan borrower! Not only did he reside in the Ukraine at the time of his appointment as director of SC2 but it can be assumed that he has never visited the UK due to his criminal record. Coming up as a translator and interpreter in the 2000s, he quickly turned his energy to marriage scams - as one website puts it "where does the translator... get all [his] money from, with more than 30 real estate projects.... The answer is clear - all of the lucrative business of marriage agencies, the money of defrauded foreigners."
He subsequently became involved in a vast criminal conspiracy to sell a fake mining company to a Hong Kong businessman, a decade-long fraud that only came to light when he took his children to the United States without their mothers consent, thus landing him in family court and subsequently, criminal court. The details of the case have to be read to be believed but as of May 2019, he has agreed to forfeit $22 million in global assets and is serving an 8-10 year sentence for wire fraud.
It is possible that apartment Nr. 35 is part of the court-approved forfeiture, hence the delay in getting this property sold by receivers.
Now back to the tower block:
It takes FundingSecure all the way until the 22nd of November 2018 to appoint receivers, seven months after the other lender had appointed their own.
A smaller borrower would have found themselves in hot water a lot sooner but since SC1 had four large projects with FS - all without lenders being told about their connection, of course - it transpires that FS is content with empty promises to keep loans from being defaulted.
FundingSecure continued to extend loans to the borrower even after receivers were appointed for all the other connected properties. Although the borrower repaid loan 1609735433 in full, it appears that FS reinstated the charge over this piece of land on the 21st of December 2018 - a month after appointing receivers. It isn't immediately clear what loan on the platform this corresponds to but it appears true that FS has retained a charge over the same land as loan 1609735433 to this day despite the loan being marked as "loan completed". Another mystery to investigate.
Curiously, this loan was done through SC3 - another investment vehicle registered to the home address of the SC1 director, this time in the name of a German in his 70s who has only ever signed documents electronically. The majority of shares are held by a newly incorporated consultancy in Gibraltar. This consultancy appears to hold a majority of shares in a number of companies that the director of SC1 strategically resigned from.
Oddly, SC1 appears to have a loan over the same piece of land with another lender for the same property - this follows a pattern where various entities connected to the director of SC1 have multiple charges on the same piece of land (the contracts all say "first charge") so lenders are either too inept to check and perfect the charges or there are other nefarious elements at play besides blatant stupidity.
Recovery
Concerning the recovery on the tower block, the real reason the result is so uncertain is not because of all the nuggets of research above but because FundingSecure is a company that does not adhere to their own terms and conditions. As we have already found out in the Art Loan scandal currently before the courts, FS charges fees that are completely inconsistent with the fee structure set out in their terms and conditions, including up-front fees and tiered monthly fees that bear no resemblance to the terms on their website.
Equally, it is clear that they charge all manner of legal and receiver costs before a refund to lenders is made, whereas a plain reading of the terms and conditions (6.2.5) would stipulate that lenders always take precedence. Even if we were to assume that clause 6.2.4 allows FS to charge a 5% premium on any recovery*, this still does not explain the vast discrepancies between sale proceeds and repayments made to lenders.
Some members on this forum still believe that FundingSecure does not take a cut if the sale proceeds are insufficient to cover the principal amount of the loan - the evidence would be very strongly opposed to this notion.
FS makes it deliberately difficult to audit their sales numbers: registry titles are omitted, submitted under names that cannot be found on HMLR, sold in conjunction with other loans or split into separate transactions or deferred payments. Pawn loans can't be audited at all. The hotel in Wales is the only property where I have seen a full receiver cost breakdown but that one was with receivers for three years so the costs were exceptionally high. Below are two loans where, despite a reasonably short receivership, the meek returns do not make sense to me:
Loan 8526896902 - This one was with receivers for less than three months before it was sold (End of June to the 19th of September). Sale proceeds according to Land Registry: £53,000 Money repaid to Lenders: £40,422.43 Difference: £12,577.57 (23.7%)
I very much doubt that the receiver would charge this much for a two and a half month appointment.
Loan 2688914082 / 3125566771 - This was with receivers for 195 days (6 months 14 days) before being sold, however, as an empty plot of land (or bushland at this point) the insurance/monitoring costs should have been minimal. Sale proceeds according to Land Registry: £1,900,000.00 Money repaid to Lenders: £1,181,250.43 Difference: £718,749.57 (38%)
Again, receiver costs in six months could run into the tens of thousands but not hundreds of thousand. This one makes about as much sense to me as building a ski dome on a landfill site /s
*It does not as administration fees other than direct costs are already covered under 6.2.5(iv) and receiver and legal costs "up to the date of sale" are covered under 6.2.5(ii).
Edit: I was going to post this into a separate thread but I hate making threads
|
|
rogerthat
Member of DD Central
Posts: 2,048
Likes: 1,994
|
Post by rogerthat on Jul 2, 2019 20:07:00 GMT
Having just read this post I have to say that other than sheer admiration at the level of diligence evident in the previous post, Im lost for words. I sincerely hope the poster sends it verbatim to fundingsecure for a response. I have 4 figures invested over several tranches based purely on information presented, including the RICS valuation but if what ive read is fact then like much of my LB, the outcome looks extremely bleak.
|
|
syalith
Member of DD Central
Posts: 62
Likes: 102
|
Post by syalith on Jul 2, 2019 20:20:02 GMT
Thank you for your post, petrichory.
I stupidly have £50k in the first tranch of this one. I've been lying to myself for months, telling myself it'll be fine and I'll surely at least get my capital back. Now I know that won't be the case.
If the property sold for £375k in 2017 and the borrower is a complete conman then I doubt any real work has been carried out on the property and it will still be worth about the same as it was back then. Once you factor in the receivers cut, it looks like I'll be lucky to get half my money back.
A costly lesson learned.
|
|
petrichory
Member of DD Central
Posts: 59
Likes: 207
|
Post by petrichory on Jul 2, 2019 22:13:12 GMT
Thank you for your post, petrichory. I stupidly have £50k in the first tranch of this one. I've been lying to myself for months, telling myself it'll be fine and I'll surely at least get my capital back. Now I know that won't be the case. If the property sold for £375k in 2017 and the borrower is a complete conman then I doubt any real work has been carried out on the property and it will still be worth about the same as it was back then. Once you factor in the receivers cut, it looks like I'll be lucky to get half my money back. A costly lesson learned. When you say first tranche, do you mean 2938283517 or 2637081380? 2938283517 is the only "safe" tranche at this point that should see a full recovery. Everyone else is royally buggered.
|
|
syalith
Member of DD Central
Posts: 62
Likes: 102
|
Post by syalith on Jul 2, 2019 23:25:05 GMT
When you say first tranche, do you mean 2938283517 or 2637081380? 2938283517 is the only "safe" tranche at this point that should see a full recovery. Everyone else is royally buggered. I'm in 2938283517. You think this one will see a full recovery even though the property previously sold for £375k?
|
|
r1200gs
Member of DD Central
Posts: 1,336
Likes: 1,883
|
Post by r1200gs on Jul 2, 2019 23:32:46 GMT
When you say first tranche, do you mean 2938283517 or 2637081380? 2938283517 is the only "safe" tranche at this point that should see a full recovery. Everyone else is royally buggered. I'm in 2938283517. You think this one will see a full recovery even though the property previously sold for £375k? There has been money spent on it, work has been done. An "independent" survey valued it at significantly more though in this den of thieves it might have been the borrowers brother.
|
|
adrian77
Member of DD Central
Posts: 3,895
Likes: 4,122
|
Post by adrian77 on Jul 3, 2019 6:42:44 GMT
True but spending money in itself is no guarantee of an uplift in value. I just hope there was a suitable architect involved who ensured fire and structural issues were addressed because if not the price is going to be extremely low.
OK done for the initial flats but what about the rest?
Forum members have estimated £0.85m - £1.5m I suspect they are in the right area (as per the park homes) hopefully they are wrong but the above update is nearly 1 year old
|
|
sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
Posts: 1,426
Likes: 1,211
|
Post by sqh on Jul 3, 2019 10:40:34 GMT
True but spending money in itself is no guarantee of an uplift in value. I just hope there was a suitable architect involved who ensured fire and structural issues were addressed because if not the price is going to be extremely low. OK done for the initial flats but what about the rest? Forum members have estimated £0.85m - £1.5m I suspect they are in the right area (as per the park homes) hopefully they are wrong but the above update is nearly 1 year old There was a valuation in March 2018 when the final loan was made. That valued the building at £4.17m with £170k needed to complete and a GDV of £4.4m excluding one flat that was under offer for £135,000. The more recent valuation of £3.5m seems fairly conservative. If there is a significant shortfall then another RICS valuer's indemnity insurance premium will be going skyward.
|
|
adrian77
Member of DD Central
Posts: 3,895
Likes: 4,122
|
Post by adrian77 on Jul 3, 2019 11:05:28 GMT
I hope so as I am in this one...
I have read the valuers report - he has 11 "opt-out" conditions
He also clearly states Clearly this valuer is not stupid and I just can't see a successful claim being made against him "sorry m'Lord but the UK housing market is in temporary free-fall due to the UK expected to leave the EU and not my fault..."
I really hope FS have had a structural report done ! If there is asbestos in this building then that will be a kicker!
So another £400K+ to finish the development and £1m difference between finished and current state.
I am still worried about my first charge realising 100% but hopefully I am over-reacting and FS will soon put my mind to rest.
|
|