oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Mar 2, 2018 12:41:18 GMT
A couple of good updates posted this morning for the 6 Scottish Pubs and Sw***land (Non-Asset Backed) loans. I assume the offer is for the highest priced unit and, if so, is spookily close to the valuation. Not used to valuations being that accurate. Well done that man, and reassuring for all lenders that valuations don't need to be 30% adrift.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 28, 2018 18:21:17 GMT
That email from them today only made it worse. Why not tell us directly what is going on. Why build up suspense Presumably because they're playing for time - which isn't necessarily a bad thing. They know they can't give the excuse of having server problem indefinitely so I'd like to think that suggests they hope there might be a way to overcome, or at least improve the problem, whatever it might be. Obviously the longer it goes on the more anxious lenders will get. It's understandable that people are worried (I've got five figures with them so not so not especially chuffed myself). In the meantime there's unlikely to be anything gained by pumping up our blood pressure or losing sleep. Save energy for when we know what's happened to decide on the best course for us all to take. Take care.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 27, 2018 19:04:18 GMT
Yes, a 12.3% instant return without the hassle and costs of having to administer, market and dispose of the property. When a lower recent purchase price is available I think the loan should have been based on the this rather than the fictional "true market value", it would encourage borrowers to have more skin in the game if they really wanted to develop it. Not sure I'd recommend it as a business strategy but wouldn't be surprised to see him get out more comfortably than the lenders. That will depend on whether the "true value" of the plot is the £1.32M valuation from the loan details or the £730k he paid for it - after administrator and sales costs. "The borrower was able to act quickly to secure a substantial discount from the site's true value." wasn't an established fact and shouldn't have been stated in MT's sales pitch for the loan. Could be some time before it all pans out and hope it goes well for everyone in the loan. (At least, with his current reputation, the chances of raising the capital for the wheeze of buying it back out of administration don't look too good.)
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 27, 2018 11:05:14 GMT
820k loan, 730k purchase, 112% LtPP. "Please note that the site is being acquired for £730,000. The borrower was able to act quickly to secure a substantial discount from the site's true value." This borrower had a skill at buying below property's true market value, his special contacts allowed the 1st student loan to be bought for c400k which MT loaned against its true value of c1.2M (iirc). According to the agents involved in the sale, speaking in the local paper 17 Jan 2018: “It sold for fairly close to its asking price, about £800,000". If £70k below the full asking price then perhaps not quite the bargain we were led to believe against an £820k loan. Paid £730k, gets a loan for £820k which looks unlikely to be repaid. Not bad, a better return than lending someone money.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 26, 2018 12:22:26 GMT
As soon as i saw the valuation report, I dismissed this loan. I was happy enough with the original valuation of £800k for this site with the benefit of planning, regardless of the valuer. I was less sanguine when I saw how the valuation had suddenly been uplifted by 43% to £1.14m in order to justify a 43% increase in the loan. For a jump of that kind I want to see detail beyond that they've done some sort of drawings and had bit of a sweep up. I'd like a solid explanation of why a buyer might now pay 43% more for this bit of land than they would have done six weeks ago, as so far I'm not convinced.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 21, 2018 11:40:57 GMT
My previous loans with this borrower have all been repaid & I'm in for this loan. Looks like a well run & structured dealership IMO. I'm getting excited about how I'll spend the interest already. If I get the full amount on both, £100 + £85, that's about £5.50 interest (if the loans run to the full 3 months as last time). So maybe a slice of carrot cake to go with my latte?
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 20, 2018 16:04:54 GMT
"All loans offered to the borrower will be up to 70% LTV of the Glass's Retail Guide value; including up to a maximum 90% of the price they purchased the vehicle." Thanks, I saw that too so they do seem to know how much was paid for the cars. Presumably they thought that advertising the loans as being 90% LTV would have less appeal and that a guestimate of retail would look better. It may do but knowing exactly how much was paid and when (i.e. how long they've been held in stock unsold) and most importantly the condition, would have been preferable. With a limit of £85 and £100, ok, it's neither here nor there anyway but as there does seem to be a recent fall in confidence in MT, possibly due to some optimistic valuations, I'd hope a demonstration of maximum transparency would help restore that confidence. Instead this reinforces the impression of being of a mindset of being out to sell loans to lenders rather than acting as agents wanting to inform their lenders as fully as possible.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 20, 2018 15:06:26 GMT
They seem to have a large stock of cars to raise loans on so it's not clear to me why (assuming they feel confident of repaying the loan, as I'm sure they are) they require such a high LTV.
The accuracy of the Glass's Guide retail estimate depends entirely on condition. There is no mention of any inspection so the condition seems to be completely unknown. I notice that one reviewer of the company complains of poorly repaired accident damage that wasn't notified and another of expensive repairs needed to the engine, both of which would substantially effect the retail value. Sensible buyers of second-hand cars of this value wouldn't buy without an expert inspection. I notice that many of the cars on their site they say have had substantial price reductions, several of £10k or more, so even they aren't able to reliably value their own cars.
We would have more of a clue if we could be told how much was paid for the cars - would that be possible? Otherwise, I'd prefer to see loans like these with a lower LTV based on the likely trade price, not on the estimated retail price; even if that meant a slightly lower rate of interest which, assuming the borrower is confident of being able to repay, would both reduce cost to the borrower and reassure the lender. These 3 month loans will end as soon as a car is sold with only one month of interest agreed as minimum.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 20, 2018 13:56:56 GMT
every few months we go though this, "there are too many loans on the SM" then a little later "there are not enough loans on the SM" if you didn't want to invest in the loan why did you? Why are you trying to off load the loan if you wanted it? Maybe a spot of confusion sometimes with 'instant access' accounts. Taking on a loan you don't really like with the intention of off-loading it onto someone else later is fine if aware of the risks in doing that. "The best laid plans of mice and men..." and all that. For most of the loans on the SM nothing has changed other than greater availability. Wanting to sell loans because we can't sell them may not be entirely logical.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 20, 2018 13:01:54 GMT
There was no holiday park on the SM until the details of this new tranche was released. At which point a lot of people tried to sell for 2 reasons. Interest being held in advance and a chance of possible cashback. The secondary market glut is accross several platforms not just MT. I'm happy to take your word for that but the point remains. It's not clear that if loans can be available on the SM at discount how that will effect subsequent tranches. There many be other points that recommend discounting but I don't see benefits to issuing subsequent tranches as one of them.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 20, 2018 12:45:46 GMT
One option is that a bonus is paid to anybody holding the loan at term. I think this would also help to stop some of the inefficiency we're currently seeing. I like the principle. The problems I see are that the cost would have to come from somewhere else and MT wouldn't know the cost until the end of the term. A good loan that had good DD and went to term without any bad news would cost them more than a bad loan where something nasty was uncovered at a later stage.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 20, 2018 12:36:13 GMT
However the current posistion with £3.7m on the SM may stop new loans from filling and that in itself may strongly motivate MT to change their mind. It might, but many MT loans are filled in tranches and there was already a big lump of the holiday development loan on the SM when the latest tranche was issued. I'm not clear how MT would get subsequent tranches away if earlier tranches were available at a discount.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 19, 2018 18:12:24 GMT
The management has been outsourced to an experienced company and judging by the good reviews it's very well run. Of all the current MT loans it's probably the one I'm most comfortable with; but it's a big loan so in the present risk-off mood it might not surprise to see plenty available for sale.
Would be interesting to know the cause of current nervousness right across p2p. Perhaps some carryover from the post Santa sell-off in equities. Even the repayment of the fish-shop loans didn't seem to find it's way onto the SM.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 15, 2018 19:47:42 GMT
Agreed. There were any number of question marks about this borrower even before we knew about the mysterious arson attack on a previous development. The borrower paid well below the value of the loan for the site and we were told he had acquired the site "at substantial discount from the site’s true value" due to "contacts". (Which prompted me to ask at the beginning of this thread whether the borrower had any connection with the previous distressed owners. We were told he hadn't.) Whatever the position, doubts on that, the reluctance of his previous lender, and the prodigious number of new companies set up within a very short period, was enough to ring bells that kept me well away from all of his loans. Collateral likely had a near miss with his fourth attempted loan - which had to be pulled when lenders didn't like the story. The immediate question is how can the maximum be recovered from the mess of these sites apparently all bought below their "true value" due to his fortunate contacts. Particular shame for those who have bought parts of these loans in the past few days. We then need to ask how something that wasn't entirely unpredictable can be prevented from happening again. There needs to be better DD by the platform, more effort in selecting valuers likely to give realist valuations, and a lot more detailed information given well in advance so that lenders can do their own DD. Otherwise the prospects don't look good. Risk we understand but accidents waiting to happen are something else.
|
|
oik
Member of DD Central
Posts: 254
Likes: 349
|
Post by oik on Feb 12, 2018 11:37:39 GMT
Now says:
"You are about to sell a £**** loan part of .....
As this loan has been extended you will continue to receive interest whilst it is for sale on the Secondary Market.
Once your loan parts have been purchased we will credit the balance to your account, however any available funding on the loan will take precedence over your selling loan parts until sold.
Any unpaid interest accrued prior to sale will be credited at the end of the month as usual."
(Only applies if borrower has formally extended the loan and paid interest.)
|
|