phil
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Post by phil on Oct 14, 2016 1:21:32 GMT
According to Fitch ratings, residential property that has been repossessed goes at about 23% below market value, I should have thought it reasonable to expect the residential offerings from FS to achieve similar sales prices. Even at the depth of the recession in 2008/9 residential repossessions were well under 1% of mortgaged properties, I don't see why residential housing repossesions should be significantly higher than that within FS platform in the current economic climate. Some development loans based on optimistic valuations may turn out to lose a significant amount of capital but I'd generally regard established bricks and mortar properties a reasonably secure investment. : Are the Fitch statistics reporting the top-line price agreed? Or the bottom-line net proceeds? If the former, then by the time the estate agent fees, lawyers' fees, LPA receivers' fees, etc., etc., are included, it wouldn't surprise me in the least if a sale at 23% of market value would produce net proceeds of less than 70% of market value. There's also the issue of accrued interest. A property with a 70% LTV FS loan that managed to produce net proceeds of 70% of the value would allow FS investors to recover their capital but none of the accrued interest. Do the Fitch statistics include any indication of the typical/average time to achieve a sale? Average time to achieve a sale after repossession is around 4 months. Fitch's figures are percentage of the "value" that arbster was referring to in his post. Fitch didn't give a UK average for fees and interest debt. As for the issue of accrued interest with FS, my personal limit with FS property loans is 65% LTV to establish a reasonable buffer to allow for the six months accrued interest.
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mikes1531
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Post by mikes1531 on Oct 18, 2016 9:51:59 GMT
I see that despite offering bonus interest for larger investments and cashback for all investments, this loan still has struggled to obtain support from FS investors. So FS have had to bring in an underwriter to supply £100k.
I guess that means they're ready to draw down the loan. I wonder if they'll leave the underwriter invested for the full term, or whether they'll leave the loan open for funding after they've drawn it down and just not officially activate it.
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vmail
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Post by vmail on Apr 23, 2017 11:51:26 GMT
Repaid
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Liz
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Post by Liz on Apr 23, 2017 12:08:29 GMT
You didn't roll over. It seems to be filling slow.
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vmail
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Post by vmail on Apr 23, 2017 12:38:55 GMT
Looking to buy a house soon and need to be careful not to lock in money more than its term. Currently about 38K with FS
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mikes1531
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Post by mikes1531 on Apr 23, 2017 22:40:51 GMT
It seems to be filling slow. And it seems clear that no more than 25% of the investors in the old loan chose to allow their investment to roll forward into the renewal loan. There must have been a lot of BHs in the original loan because the average interest return was 15.9%, and that's well more than the 13% base rate for that loan. I guess those BHs didn't renew. I don't see anything obvious to explain the loan's lack of popularity. OK, the original loan wasn't funded enthusiastically, but the LTV was only 51% and the money borrowed is reported to have been put toward improving the property, so the LTV appears to be a bit less now. Any thoughts on why it's so slow to fill?
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phil
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Post by phil on Apr 24, 2017 18:47:04 GMT
It seems to be filling slow. And it seems clear that no more than 25% of the investors in the old loan chose to allow their investment to roll forward into the renewal loan. There must have been a lot of BHs in the original loan because the average interest return was 15.9%, and that's well more than the 13% base rate for that loan. I guess those BHs didn't renew. I don't see anything obvious to explain the loan's lack of popularity. OK, the original loan wasn't funded enthusiastically, but the LTV was only 51% and the money borrowed is reported to have been put toward improving the property, so the LTV appears to be a bit less now. Any thoughts on why it's so slow to fill? Hard to say, Mike, personally I'm not very enthusiastic about it, not quite sure why but it could be a knock-on effect from the Whitehaven none-existing building worth £800k and the fact that Knaresborough seems to have been overvalued and is now in default with a bankrupt borrower. Also DD is bit difficult on a holiday park and who knows what the borrower's financial position is, he may be sailing close to the wind and leave us holding a bunter. On the other hand he may be an astute businessman who knows exactly what he's doing, some of these parks make good money on their pitches, and it could be a solid investment at 51%LTV.
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baldpate
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Post by baldpate on Apr 24, 2017 19:06:56 GMT
I can tell you why I'm steering clear (of this renewal and the original). It's the valuation, and the way it's built up by valuing innumerable individual elements (mostly pitches of various sorts) spread over an number of fields. No way do I think this bears any resemblance to how much the whole would fetch in a default situation, which is the only valuation I care about. Add to this the "platform musical chairs approach this borrower is adopting to his debt funding", to which mrclondon refers in his earlier post (23rd September), and I think there is ample reason for caution. |
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Liz
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Post by Liz on Apr 26, 2017 17:23:25 GMT
And it seems clear that no more than 25% of the investors in the old loan chose to allow their investment to roll forward into the renewal loan. There must have been a lot of BHs in the original loan because the average interest return was 15.9%, and that's well more than the 13% base rate for that loan. I guess those BHs didn't renew. I don't see anything obvious to explain the loan's lack of popularity. OK, the original loan wasn't funded enthusiastically, but the LTV was only 51% and the money borrowed is reported to have been put toward improving the property, so the LTV appears to be a bit less now. Any thoughts on why it's so slow to fill? Hard to say, Mike, personally I'm not very enthusiastic about it, not quite sure why but it could be a knock-on effect from the Whitehaven none-existing building worth £800k and the fact that Knaresborough seems to have been overvalued and is now in default with a bankrupt borrower. Also DD is bit difficult on a holiday park and who knows what the borrower's financial position is, he may be sailing close to the wind and leave us holding a bunter. On the other hand he may be an astute businessman who knows exactly what he's doing, some of these parks make good money on their pitches, and it could be a solid investment at 51%LTV. All I can say is that I don't understand the valuation and on these types of loans the valuation reports can be well off. I would rather stick to a DFL @ LTV that I understand or a simple resedential property.
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lobster
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Post by lobster on Sept 27, 2017 14:07:12 GMT
Tempted by this , but with an LTV of only 21% , I'd have to ask why the borrower is unable to get cheaper funding from elsewhere ?? Especially given that this loan is now being renewed for the second time. Just seems a bit strange that a mainstream lender wouldn't be prepared to take this on at a much more competitive rate ?
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ashtondav
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Post by ashtondav on Sept 27, 2017 14:17:42 GMT
Borrower's credit history, or other history?
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rogerthat
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Post by rogerthat on Sept 27, 2017 14:19:43 GMT
With a 21%LTV..does it matter ?
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Post by mrclondon on Sept 27, 2017 14:23:50 GMT
lobster, I've merged an earlier thread into the one you started - if you look at the posts on the first page you'll see that the borrower had earlier loans with both Lendy and TC.
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mikes1531
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Post by mikes1531 on Sept 27, 2017 15:56:39 GMT
Tempted by this , but with an LTV of only 21% , I'd have to ask why the borrower is unable to get cheaper funding from elsewhere ?? Especially given that this loan is now being renewed for the second time. Just seems a bit strange that a mainstream lender wouldn't be prepared to take this on at a much more competitive rate ? With a 21%LTV..does it matter ? How real is the 21% LTV? The valuation has gone from £1.2M before to £2.8M now. I accept that the borrower was going to install a few more holiday homes, and I presume they did that, but a more than doubling of the value does seem a bit excessive.
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mikes1531
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Post by mikes1531 on Sept 27, 2017 16:04:26 GMT
Having said that, it will be very interesting over the next year to see how the current plethora of speculative land loans bear out  : Have you continued your FS investment? If so, have you updated the loan performance statistics you provided in this thread about a year ago? I expect people here would be interested in any more up-to-date analysis you've done, and knowing how another year's worth of data has affected your view of FS.
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