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Post by Deleted on May 5, 2018 13:00:44 GMT
Hi all, The earliest that the loan could be made available for investment is now end of the next week. There are currently no other loans in the pipeline (several loan offers have been made though and we are awaiting acceptance of the offer(s) prior to proceeding). I will provide a further update in the next week. Have a good weekend. Regards, Filip Hi all, Just a quick update that we are preliminary preparing to make the BTL loan available for view next Monday and make it available for investment the day after (Tuesday). No investment restrictions will apply (loan amount is around £206k). Regards, Filip Hi all, The BTL loan is now scheduled to be made available for view Tuesday next week and for investment the day after due to a delay with obtaining a confirmation from the proposed borrowers (was expected yesterday but still pending). Regards, Filip
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 8, 2018 8:36:09 GMT
I can see why there are no restrictions. 7%, 78% LTV 2nd charge and it doesn't appear to be a typo.
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Post by Deleted on May 8, 2018 8:44:03 GMT
I can see why there are no restrictions. 7%, 78% LTV 2nd charge and it doesn't appear to be a typo. Hi ilmoro, Indeed - it is BTL loan so very different pricing to a bridging loan (borrower servicing fee is 1.49% pa). Regards, Filip
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IFISAcava
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Post by IFISAcava on May 9, 2018 2:18:59 GMT
I can see why there are no restrictions. 7%, 78% LTV 2nd charge and it doesn't appear to be a typo. Doesn't take much of an interest rate rise on the first charge loan or a fall in property prices to get this into trouble over the three years. Feeling a little uneasy on the risk/reward for this one.
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Post by Deleted on May 9, 2018 10:51:43 GMT
Thank you for the feedback. Although my personal opinion is that it is attractively priced loan, we might have to consider to reduce the loan amount (and LTV and rate) depending on how the fundraising goes. This should be clear over next few days.
Regards,
Filip
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IFISAcava
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Post by IFISAcava on May 11, 2018 6:06:54 GMT
Thank you for the feedback. Although my personal opinion is that it is attractively priced loan, we might have to consider to reduce the loan amount (and LTV and rate) depending on how the fundraising goes. This should be clear over next few days. Regards, Filip I think it's pretty clear now that most investors don't think 7% on a second charge at 78% LTV cuts the mustard even for a 3 year BTL loan. What's plan B?
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Post by Deleted on May 11, 2018 6:30:33 GMT
Thank you for the feedback. Although my personal opinion is that it is attractively priced loan, we might have to consider to reduce the loan amount (and LTV and rate) depending on how the fundraising goes. This should be clear over next few days. Regards, Filip I think it's pretty clear now that most investors don't think 7% on a second charge at 78% LTV cuts the mustard even for a 3 year BTL loan. What's plan B? Hi IFISAcava, Indeed, likely options are: (1) reduce the loan amount, or (2) increase the rate to investors (and keep same the loan amount), or (3) withdraw the loan offer. We are exploring option 1 as the LTV seems to be the sticking point and we require the proposed borrowers consent prior to amending the loan amount. I welcome any additional thoughts/suggestions. Regards, Filip
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rs
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Post by rs on May 11, 2018 8:08:12 GMT
How about option 3: reduce LTV & increase interest rate.
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Post by Deleted on May 11, 2018 8:26:25 GMT
How about option 3: reduce LTV & increase interest rate. Hi rs, There is limited possibility to increase interest rate as we cannot price it higher than what the broker could get elsewhere (or what has been agreed). Per option 1, we are seeking the proposed borrowers consent to reduce the loan amount (and LTV) with a very minor reduction in interest rate to investors, essentially reducing our borrower annual servicing fee to 0.1% from 1.49%. This solution may still not be satisfactory, or accepted by the proposed borrowers, but we are doing what we believe could benefit all parties (without any view on the proposed borrowers willingness or ability to service or repay the loan). Regards, Filip
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Post by Deleted on May 11, 2018 17:14:19 GMT
How about option 3: reduce LTV & increase interest rate. Hi rs, There is limited possibility to increase interest rate as we cannot price it higher than what the broker could get elsewhere (or what has been agreed). Per option 1, we are seeking the proposed borrowers consent to reduce the loan amount (and LTV) with a very minor reduction in interest rate to investors, essentially reducing our borrower annual servicing fee to 0.1% from 1.49%. This solution may still not be satisfactory, or accepted by the proposed borrowers, but we are doing what we believe could benefit all parties (without any view on the proposed borrowers willingness or ability to service or repay the loan). Regards, Filip Hi all, Per discussions with the proposed borrowers, the loan amount will be decreased tomorrow to around £153,000 and the annual rate will be 6.9%. Have a great weekend. Regards, Filip
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Post by bobbobbob on May 13, 2018 10:20:49 GMT
For me the biggest issue is not the LTV, as this is still less than some BTL LTV of high street lenders, my question is why are they coming here? This highlights a level of risk. With prevailing market forces on a downward direction (at least in London). The possibility for 3 years is that if this continued year on year we are almost in the position that tossing keys back could be possible.
If this went illiquid with with short term leasehold could take additional time to possess and possible more exposure.
In my opinion the reduced LTV is still not enough, the borrower has many properties, why another cannot be added as additional security; albeit another second charge. This would demonstrate a commitment with reduced risk.
For C level bridging normally for smaller amounts and higher returns and shorter terms but similar LTV. On a like for like comparison this BTL does not represent good value, at least relatively speaking. The only thing to differentiate is security, and this needs to demonstrably better for the reduced return.
I would be interested to hear what other form members think or parts they agree with me on? Or am on my own with this?
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IFISAcava
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Post by IFISAcava on May 13, 2018 10:27:30 GMT
For me the biggest issue is not the LTV, as this is still less than some BTL LTV of high street lenders, my question is why are they coming here? This highlights a level of risk. With prevailing market forces on a downward direction (at least in London). The possibility for 3 years is that if this continued year on year we are almost in the position that tossing keys back could be possible. If this went illiquid with with short term leasehold could take additional time to possess and possible more exposure. In my opinion the reduced LTV is still not enough, the borrower has many properties, why another cannot be added as additional security; albeit another second charge. This would demonstrate a commitment with reduced risk. For C level bridging normally for smaller amounts and higher returns and shorter terms but similar LTV. On a like for like comparison this BTL does not represent good value, at least relatively speaking. The only thing to differentiate is security, and this needs to demonstrably better for the reduced return. I would be interested to hear what other form members think or parts they agree with me on? Or am on my own with this? I'm not investing in this one, and I have skin in most other LLI live loans, and a bit of uninvested ISA cash I could use. I like the platform, just don't like this loan's risk/reward ratio even on revised terms. There's a high chance this one won't fill, so may need underwriting or be pulled.
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bababill
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Post by bababill on May 14, 2018 2:46:55 GMT
you are not alone on this bobbobbob. One of my issues not mentioned on this loan is the interest coverage ratio. Yes maybe it is 1.49% currently but if the property rents for the market price then the ICR drops to 1.11%.... Still LLI has the best secondary market out there. Well done.
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Post by Deleted on May 15, 2018 14:22:13 GMT
Hi all,
Thank you for your comments, discussion and suggestions - it is highly appreciated. It is difficult to find loans that suit everyone's risk profile and we're trying to balance this as good as we can. Protecting capital whilst offering good risk adjusted returns is our main priority.
In any event, there are up to three additional loans scheduled to go live this month: a first charge BTL (LTV up to 50%) and refinancing of two platform loans.
I will provide further updates nearing the loans launch dates.
Regards,
Filip
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baldpate
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Post by baldpate on Jun 8, 2018 11:01:16 GMT
Hi Filip,
anything in the pipeline you can tell us about?
Thanks
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