adrian77
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Post by adrian77 on Jul 6, 2019 14:03:16 GMT
I have just about finished trawling through these loans to update my mega 40 list
I agree with the FS summary of 60% recovered but this is ONLY assuming the first charges viz tranche 1 and tranche 2. But there is no reference to tranche 1/2 supplementary loan Thus I get: loan loan K realised K outstanding K recovery
Phase 1 575 420.587 154.413 0.73
Phase 1 supp 115 0 115 0.00
Phase 2 1040 760.682 279.318 0.73
Phase 2 supp 250 0 250 0.00
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1980 1181.269 798.731 0.60
unless I have missed something the first charges have realised 73% and the supplementary charges 0% ! I have sharpened my HB pencil and re-read the valuation - it states £1m within 90 days - considering it appears this one was promptly resold for around this price (if not more!) then I just can't see how the valuer can be sued (well for this site anyway).
in short I just can't see any recovery for the supplementary loans so please tell me where I am wrong - I thank you.
Seems to be a similar situation to the Park Homes - just my opinion
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Godanubis
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Post by Godanubis on Jul 7, 2019 9:43:34 GMT
I have just about finished trawling through these loans to update my mega 40 list I agree with the FS summary of 60% recovered but this is ONLY assuming the first charges viz tranche 1 and tranche 2. But there is no reference to tranche 1/2 supplementary loan Thus I get: loan loan K realised K outstanding K recovery Phase 1 575 420.587 154.413 0.73 Phase 1 supp 115 0 115 0.00 Phase 2 1040 760.682 279.318 0.73 Phase 2 supp 250 0 250 0.00 ------- 1980 1181.269 798.731 0.60 unless I have missed something the first charges have realised 73% and the supplementary charges 0% ! I have sharpened my HB pencil and re-read the valuation - it states £1m within 90 days - considering it appears this one was promptly resold for around this price (if not more!) then I just can't see how the valuer can be sued (well for this site anyway). in short I just can't see any recovery for the supplementary loans so please tell me where I am wrong - I thank you. Seems to be a similar situation to the Park Homes - just my opinion Probably an accurate picture
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petrichory
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Post by petrichory on Jul 7, 2019 18:14:16 GMT
unless I have missed something the first charges have realised 73% and the supplementary charges 0% ! I have sharpened my HB pencil and re-read the valuation - it states £1m within 90 days - considering it appears this one was promptly resold for around this price (if not more!) then I just can't see how the valuer can be sued (well for this site anyway). I believe you have missed something. The two Phases (1 and 2) had separate valuations which have to be added together to get a full picture of the TOTAL valuation. Even though there is only one title in the land registry, FS decided to split the deed into two separate projects. However, when The D*ll was sold by the administrators, they sold both Phase 1 and 2 as a package deal. Phase 1 had a valuation of £1,350,000.00 in the updated valuation Phase 2 had a valuation of £2,350,000.00 in the updated valuation The total valuation for both phases was therefore £3.7 million. MRC and I have both come to the conclusion that, based on the returns to lenders, both phases together sold for only £1.25 million. This would mean the land sold for just 33.8% of the combined valuation for both phases, ample ground to pursue the valuer. Considering the site was valued as-is purely on existing potential with planning permission, barren land with no possible dilapidation or refurbishment costs and no onerous caveats to justify their numbers, I believe this one has an excellent chance of success with an insurance arbitrator. Now, if you were to ignore the updated valuations (you can't) and only go with the 90-day marketing period stipulated in the old valuation, you would come to the following numbers: Phase 1 had a valuation of £1,000,000.00 in the OLD valuation with a 90-day marketing period Phase 2 had a valuation of £1,750,000.00 in the OLD valuation with a 90-day marketing period The total valuation for both phases would therefore have been £2.75 million. Even with this caveat of using the old valuation with a 90-day marketing period from September 2016, the land only sold for 45.5% - still ample ground for a claim on the RICS insurance. On the other hand, the amounts that FundingSecure told us these two phases had sold for is quite different - as I said in my previous post, the sale of both projects/phases was stated in the updated valuation, reiterated in the update from the 12th of April 2017, re-confirmed in the update from the 20th of October and triple-confirmed when the loans were renewed on the 20th of December 2017. This was not a hint, suggestion, supposition or working theory - flat out, it was stated as fact that the projects had been sold. Phase 1 - £2,100,000 for 32 apartments and £200,000 for 3 disabled flats Phase 2 - £3,700,000 for 39 houses. The total sale price for both phases that FS assured us the projects had been sold for was £6.0 million. This is the number that was seen by lenders, the number that lenders had based their investment on as the sale was triple-confirmed by FundingSecure over the course of eight months. Based on that number, The D*ll only sold for 21% of the monstrously fictitious sale that FundingSecure had used to promote these loans on their platform for more months than can reasonably be ascribed to a simple error. Eight months is more than enough time to check a sales contract and revise the loan if it does not pass due diligence, certainly before new lenders are exposed to the risk with a renewal. This meets the classic test for fraud by false representation - 1) making a false claim that they 2) knew might be untrue or misleading with 3) the intent to expose another to risk of loss. I rest my case. Edit: Below is the most recent picture I have of the site. It's basically a nature reserve now. Attachments:
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adrian77
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Post by adrian77 on Jul 7, 2019 19:42:40 GMT
thanks for the reply - as I see it 2 issues
1) question ref the % returned to lenders - looks to me as if this 60% quoted by FS is possibly trying to mask the 100% loss of the 2 additional loans - surely not!
2) the valuation report - I did not realise it was so inaccurate - I mean that's a first for these valuers... not! That said I just can't see a claim being successful here - any legal beagle care to comment? I think FS have been had here and I suspect the land flipped for more than FS received (we will find out soon enough!) and the valuer will claim (rightly or wrongly) FS due to their incompetence failed to attract a realistic buyer. I think the only claim would be negligence and that will be very difficult to prove- not that myself and others said the valuation was far too high. Even if FS won I am not sure how much they would actually win as what is the quantifiable loss?
Update
Here's a shocker this buyer is a shell company set-up in April 2019 and what is the evidence of this pre-sale? Here's what I wrote in oct 2017
even worse than I predicted...
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ilmoro
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Post by ilmoro on Jul 7, 2019 20:06:42 GMT
thanks for the reply - as I see it 2 issues 1) question ref the % returned to lenders - looks to me as if this 60% quoted by FS is possibly trying to mask the 100% loss of the 2 additional loans - surely not! 2) the valuation report - I did not realise it was so inaccurate - I mean that's a first for these valuers... not! That said I just can't see a claim being successful here - any legal beagle care to comment? I think FS have been had here and I suspect the land flipped for more than FS received (we will find out soon enough!) and the valuer will claim (rightly or wrongly) FS due to their incompetence failed to attract a realistic buyer. I think the only claim would be negligence and that will be very difficult to prove- not that myself and others said the valuation was far too high. Even if FS won I am not sure how much they would actually win as what is the quantifiable loss? Update Here's a shocker this buyer is a shell company set-up in April 2019 and what is the evidence of this pre-sale? Here's what I wrote in oct 2017 even worse than I predicted... FS due to their incompetence failed to attract a realistic buyer ... to state the bleeding obvious FS weren't doing the selling that would have been the receiver ... carry on.
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petrichory
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Post by petrichory on Jul 7, 2019 21:36:34 GMT
I just can't see a claim being successful here - any legal beagle care to comment? I think FS have been had here and I suspect the land flipped for more than FS received (we will find out soon enough!) and the valuer will claim (rightly or wrongly) FS due to their incompetence failed to attract a realistic buyer. I think the only claim would be negligence and that will be very difficult to prove- not that myself and others said the valuation was far too high. Even if FS won I am not sure how much they would actually win as what is the quantifiable loss? Update Here's a shocker this buyer is a shell company set-up in April 2019 and what is the evidence of this pre-sale? Here's what I wrote in oct 2017 On the contrary, if there is a loan on this platform that they should pursue the RICS indemnity for, it is this one. It is much easier to progress a claim for a piece of land with no structures that is sold in the same condition as it was back in 2016 - in a sense, the fact that the borrower hasn't touched the land (aside from clearing some weeds from the topsoil) is actually a good thing. Now there is no reason to counter-claim that the developer depreciated the asset through his actions. They may only be able to pursue the valuer based on the original valuation - the updated valuation was contingent on the reported sale of both projects, which clearly never happened. However, it still over-valued the asset by a margin of 100% based on the old report, more than enough to justify a claim. Also, the original valuation was not onerous in the same way that other valuations are. The tower block valuation, for example, had a lot of contingency conditions that were put in to safeguard the valuer in case the refurbishment was not done to a "high standard" - subjective terms that would make it difficult to pursue legally. adrian77 ilmoro - I disagree, FS did not fail to find a realistic buyer in this case. If the property was marketed for 90 days and they approached both local and national developers with a certain threshold of interested parties before picking the best offer, the conditions of the valuation have been met. Remember, this same plot of land was sold by administrators for approx. £650.000 back in 2010/11 so the fact that FS sold it for double that amount is not incompetent in the slightest. The real incompetence was on the part of the valuers, who asserted a £3.7mil valuation, as well as on FS for declaring for eight months that the projects had been sold for £6mil, when clearly this was false. adrian77 - I think you are looking at the wrong R******side Housing on CH, we are not talking about a hotel company in London. The entity in question here is called The R******side Group Limited and it is a Liverpool-based Community Benefit Society (2014 Act).
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ilmoro
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Post by ilmoro on Jul 7, 2019 21:59:41 GMT
Not with me as that was basically my point. The sale would have been conducted by the recievers in the required manner as you describe and then a recommendation made to FS, rejection of which would have likely led to the receivers resigning as unable to carry out their responsibilites.
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kielbasa
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Post by kielbasa on Aug 15, 2019 22:00:09 GMT
Over six weeks ago we were told "We are currently waiting for a breakdown of the costs from the receiver."
Either the receiver needs a kick up the a*se or FS do. Perhaps the receiver is too busy enjoying himself on his yacht to send the breakdown.
(PS I think of this loan as "The Sm*ll".)
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Post by mrclondon on Oct 3, 2019 13:43:19 GMT
Over six weeks ago we were told "We are currently waiting for a breakdown of the costs from the receiver." Either the receiver needs a kick up the a*se or FS do. Perhaps the receiver is too busy enjoying himself on his yacht to send the breakdown. (PS I think of this loan as "The Sm*ll".) Now over three months. I'm guessing the lack of comment here means FS haven't emailed the breakdown to lenders as promised, nor any attempt to explain what appear to be an immediate resale by the buyer to a group company at a higher price.
There are far too many overdue loans that haven't been updated in the last 3 months despite the supposed improvement in lender communications.
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adrian77
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Post by adrian77 on Oct 3, 2019 16:29:05 GMT
this is exactly what I suspected i.e. FS have been had yet again (OK if we are being the receivers but FS weren't forced to use them and I am not sure if they were forced to accept their recommendations). Point is myself and many others feel very badly let down yet again. There is nothing to stop FS explaining exactly what happened here if they choose to do so...
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sundown
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Post by sundown on Oct 29, 2019 10:03:12 GMT
Are we going to get a breakdown of the costs from the receiver that we were promised back in July now that administrators have been appointed?
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Post by mrclondon on Oct 29, 2019 10:10:58 GMT
Are we going to get a breakdown of the costs from the receiver that we were promised back in July now that administrators have been appointed? I think that extremely unlikely.
We should, in time, learn what the actual sale price was via filings at CH by the receiver, and deductions made by the receiver.
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kielbasa
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Post by kielbasa on Oct 29, 2019 16:38:51 GMT
Are we going to get a breakdown of the costs from the receiver that we were promised back in July now that administrators have been appointed? I think that extremely unlikely.
We should, in time, learn what the actual sale price was via filings at CH by the receiver, and deductions made by the receiver.
Do you think that it is deliberate hiding of the facts on the part of FS or just laziness, poor admin etc?
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Post by mrclondon on Oct 29, 2019 17:25:23 GMT
I think that extremely unlikely.
We should, in time, learn what the actual sale price was via filings at CH by the receiver, and deductions made by the receiver.
Do you think that it is deliberate hiding of the facts on the part of FS or just laziness, poor admin etc? What a difficult question to answer.
Firstly to make the obvious point given the line you've boldened ... the issue of a breakdown in how the partial payment for this loan was derived is a historical matter, and not one that the administrators will address. The public domain info from the receivers of this loan (possibly to be filed at CH in January) should be enough for lenders to confirm what we already suspect regarding the subsequent sale to a group company being done to generate an instant paper profit. (Rest assured it will be documented here when it appears at CH).
Almost everyone involved in business today will be aware of Ratner's infamous own goal, to admit you are selling cr*p is just madness. Forget FS for a minute, an argument can be made that selling p2p in some of its variants to prospective lenders is essentially selling cr*p. The directors of some p2p platforms may still be in denial, but most must surely recognise that the number of defaults and the magnitude of lender capital losses on default are far higher than might have been expected given the relatively benign economic climate of the last 6 years.
No platform is going to willingly publish info that suggests they have been out manouvered by borrowers and as a consequence lenders have got a raw deal (for the blindingly obvious reason that it will be harder to sell the next loan). So to an extent, yes, deliberate, but not neccessarily in a deceitful manner. Many p2p platforms treat lenders as they would any raw material supplier (which is what we are in the buisness model), and forget that in general those in the UK with money to invest are intelligent, well educated people who can form their own judgements.
It is also important to recognise that there may be legal claims ongoing in the background for this loan which may have prevented any comment being released.
p2p platforms would have (and can) benefit by being more open and transparent with lenders, instead of hiding behind the "we must treat borrowers fairly" mantra which annoys me greatly, as well as the ongoing battles with some platforms who wish to silence discussion of their loans on this forum.
However, many of the FS updates baffled me, as they contradicted facts that are in the public domain. If this was being done delibrately in an attempt to spin bad news, then we are in dangerous terrority given this is regulated financial services. The other explanation is simply incompetence. Whatever the reason, it was this aspect of the FS business that caused me to reduce my exposure over the last 12 months by 50%.
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kielbasa
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Post by kielbasa on Oct 30, 2019 9:22:22 GMT
Sorry for posing such a difficult question, mrc, but thanks for your detailed answer.
I hadn't really considered it, but I now realise that adminstration may well mean we never get the answers to lots of the questions we have been waiting for.
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