09dolphin
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Post by 09dolphin on Mar 2, 2017 8:31:30 GMT
This loan is overdue but has paid partial interest according to the update.
Does anyone know who benefits when partial interest is paid? Exactly how does a partial interest payment benefit lenders who are the people who have lent the money and are at risk of loosing money. (I know FS have this money sitting in their account and I assume they accrue benefit from it).
Why isn't a partial interest payment distributed to lenders rather than being kept by FS.
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SteveT
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Post by SteveT on Mar 2, 2017 8:38:52 GMT
Presumably because the FS system isn't set up to account for interest being paid on loans that are still active (all FS interest is paid at the point that loans complete). A bigger example is the Rishton loan, where a full 6 months' interest for renewal was paid to FS by the borrower back on 3rd Sept 2016 but, because the renewal didn't fill (pre-underwriters!), it still hasn't been paid out to lenders.
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mikes1531
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Post by mikes1531 on Mar 2, 2017 12:54:56 GMT
This case is even less clear than Rishton, in that the updates refer to 'partial' interest having been paid on two occasions. For all we know, the borrower could have sent FS a couple of fivers!
It's probably also worth mentioning that the other loan to this same borrower -- 6 bedroom house in N...... (4045698166) -- is a lot bigger than this one (£350k vs. £150k) and it is in the same overdue position.
Since both loans were taken out at the same time, I'd guess they were set up as separate loans so that the borrower could repay part of what they owed pretty easily by simply closing out one of the two loans, but I'm not sure how that would work because they are cross-guaranteed.
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Liz
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Post by Liz on Mar 2, 2017 13:59:24 GMT
This loan is overdue but has paid partial interest according to the update.
Does anyone know who benefits when partial interest is paid? Exactly how does a partial interest payment benefit lenders who are the people who have lent the money and are at risk of loosing money. (I know FS have this money sitting in their account and I assume they accrue benefit from it).
Why isn't a partial interest payment distributed to lenders rather than being kept by FS.
*Losing. Maybe someone being loose with our money 
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09dolphin
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Post by 09dolphin on Mar 3, 2017 12:25:21 GMT
Where would we be without someone to correct typing errors!
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SteveT
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Post by SteveT on Mar 3, 2017 12:37:56 GMT
Where would we be without someone to correct typing errors! Up the creak without a puddle
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09dolphin
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Post by 09dolphin on May 13, 2017 5:55:59 GMT
Oh dear. The owners of this loan have been seeking refinancing for well over 6 months ( according to the updates we first heard about this on 18/9/16). I know they have made a partial repayment of the interest but isn't it time FS started to get tougher OR give a bit more detail to lenders. I know FS like to give as little information as possible but they need to have some regard to their responsibilities to stakeholders rather than just borrowers.
Reminds me of the Jock boatyard
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09dolphin
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Post by 09dolphin on Aug 12, 2017 13:20:14 GMT
In September last year the updates said the borrower was finalising refinance. After 11 months we now know that FS are considering defaulting the loan- always assuming that the "updates" have some semblance to reality which is in itself would be unusual. What happened to the refinancing activities - well FS choose not to share this information Out of interest would FS like to explain why the majority of their updates bear no relation to fact?
Is it unreasonable to ask why it's taken FS 11 Months to make this decision? FS choose to given minimal information about their discussions with the borrower and make decisions based on the information they have available, and I could accept this if they were not so gullible in their acceptance of excuses.
Obviously FS decide that the veracity of the information they use to make decisions is 100% accurate - and good for them as we expect FS to only make decisions based on accurate information. I'm not sure of the process they use but I'm sure it is 0% reliable - although the evidence suggests otherwise. The information FS used to advance loans in the Whitehead loan where FS assure us that only 65% of the LTV would be advanced is an example of how FS safeguard lenders interests. I am so glad that I can rely on FS to protect borrowers interests!!!
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madpierre
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Post by madpierre on Aug 12, 2017 17:57:58 GMT
There is a huge fall awaiting FS from the increasing desperation of their overdue loan book and to survive it will cost them dearly, but they are delaying that catastrophe with great aplomb |
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Post by snowdrop800 on Nov 21, 2017 11:42:41 GMT
Just had an online chat with FS. Apparently they have no plans to enforce the loan at this time.
Whilst I understand they need to treat the borrower fairly, it can hardly be said this isn't the case with the loan over a year overdue.
This is a perfectly marketable property that could presumably be enforced against and sold, so I don't understand why this isn't done.
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mikes1531
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Post by mikes1531 on Nov 21, 2017 21:15:49 GMT
This loan actually may have a reasonably happy ending for FS investors very soon.
I have just realised that this likely is the same property The House Crowd have available on their website (HCF101). They're raising a 6-month, 9% loan of £466k against a Jul.'17 valuation of £650k. The THC loan is 98% funded as I write this, and they're expecting the loan to be made imminently. (They originally thought yesterday. That didn't happen and the website was changed to say it was now expected today. We'll see what it says tomorrow.)
Presuming the borrower isn't too far in arrears on the first charge loan -- I have no info about that possibility -- the £466k new loan should be large enough to cover the £255k first charge, the £150k FS loan, and the roughly £30k of interest accrued by FS investors. Other uncertainties include fees, if any, that THC take off before passing the loan 'proceeds' to the borrower, legal fees etc. that need paying, amounts payable to the first charge holder in addition to the outstanding capital, and amounts that might be due to introducers/brokers, if any, of the FS loan. No doubt there are other items I haven't thought of.
There's also a possible offset of some of those negatives because the FS updates indicate that the borrower has made payments of part of the accrued interest on more than one occasion. AFAIK they've never indicated the amount of such payments.
In short, if you're an investor in the FS loan, keep your fingers crossed!
I sure hope the borrower has their long-term refinance close to being finalised. What I've seen of how THC deal with overdue loans suggests that they don't give borrowers a lot of slack, calling in receivers pretty promptly after a loan isn't repaid on time, and applying for possession of the property pretty much as soon as they can.
If I had noticed the connection between the FS and THC loans earlier, I probably wouldn't have invested in the THC loan. I didn't notice until today, so I have a small investment in the THC loan. I have more confidence in the THC recovery process than I do in FS's, so I still feel comfortable with the THC loan, partly because the VR, produced by a Norfolk valuer, indicates a 90-day sale value for the property of £600k. Whether I'll still feel that way eight months from now is a good question.
PS. As of 2300 Tuesday (21/Nov) the THC loan is now showing as being fully funded.
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Post by snowdrop800 on Nov 22, 2017 9:09:40 GMT
Yes, possibly - albeit the single picture of each property don't look the same to me.
I'm not registered on THC, so can't check the address.
There are 2 FS loans here to this borrower (both long overdue) and they are cross collateralised, with an all monies charge (not sure if I can post loan numbers?).
There would be approaching some £100k of interest outstanding I would imagine across both loans.
Fingers and toes crossed!
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ozboy
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Post by ozboy on Dec 11, 2017 13:37:01 GMT
(1659874045) - Wot, no comment on this?
Finally settled, credit where it is due, Well Done FS!
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mikes1531
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Post by mikes1531 on Dec 16, 2017 19:37:27 GMT
There are 2 FS loans here to this borrower (both long overdue) and they are cross collateralised, with an all monies charge (not sure if I can post loan numbers?). There would be approaching some £100k of interest outstanding I would imagine across both loans. (1659874045) - Wot, no comment on this? Finally settled, credit where it is due, Well Done FS! Speaking of comments, or lack thereof... Have FS indicated whether the proceeds from this refinance were sufficient to pay FS all that they were owed? Since there have been no complaints from FS investors that they didn't receive all they were owed, I presume they suffered no shortfall. The THC loan was for £466k. The FS info says the first charge was £255k, the FS loan was for £150k, and FS investors earned £33k. That totals £438k, and leaves £28k 'left over'. We don't know what FS's share of the proceeds should have been. I'd guess that their share would be about £15k under normal circumstances, but this loan was about 15 months overdue, and there could have been significant legal, and other, expenses run up in the recovery process. I don't think THC retain interest in advance, but there could be other up-front costs which would mean the borrower wouldn't have received the full £466k raised by THC. The amount owing to the first charge holder is a big unknown. If the borrower had been making the payments due on that loan on time, then the balance due would have been less than £255k amount (which was from 21 months earlier) if the loan was amortising. If, however, the borrower was behind in the payments on the first charge loan then the balance due could have been a lot more than £255k due to late payment penalties and/or an increased interest rate because the loan was in default. The bottom line would appear to be that if there were surplus proceeds from the refinance they wouldn't have been very big. The next question for FS would be... What does this mean for the cross-collateralisation? If there was a shortfall in the proceeds for this loan, then I'd presume the remaining obligation could be recovered from the recovery of the other FS loan if the proceeds were to be sufficient. But what if there were surplus proceeds from this loan? Would those go to the borrower now because no loss on the other loan has been crystallised at this time? Or would those automatically go to FS because the other loan is very overdue? What we really need from fundingsecure is a statement regarding of the overall outcome from this loan, and giving us some idea of the impact of this on the cross-collateralisation with the other FS loan. How about it, FS?
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james21
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Post by james21 on Aug 10, 2018 11:20:53 GMT
The first charge holder is House Crowd. 9%
Just to add to the misery its tenanted, we might have guessed!
Described as "single elderly gent" in the HC valuation report
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