kielbasa
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Post by kielbasa on Sept 12, 2018 11:32:19 GMT
Any idea why the receiver was appointed twice?
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kielbasa
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Post by kielbasa on Sept 12, 2018 11:48:58 GMT
sure am - just very busy at the moment and going through related loans before I post my next update 30 days - more like 30 months - if we take interest at 2% pcm that is over £8K pcm or £240K in late interest alone - mounts up doesn't it ! And that is not including legal fees etc This one started in 07/08/2015 ie over 3 years ago so if we take 36 months at 2%
that is £288K. I think the lowest rate is 1.8% pcm and not sure if the interest is compounded? Here is my original prediction maybe this one will go the way of the cinema - I hope so but I doubt it - to be honest this looks, to me, that the second charge will be the second 100% loss. These second charges, especially those behind other FS charges, are far more risky than many inexperienced investors think they are. I expect a lot of perhaps smaller investors do not consider the possibility of a total wipeout.
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adrian77
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Post by adrian77 on Sept 12, 2018 13:57:24 GMT
totally agree - they will soon learn!
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arby
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Post by arby on Sept 12, 2018 14:14:10 GMT
These second charges, especially those behind other FS charges, are far more risky than many inexperienced investors think they are. I expect a lot of perhaps smaller investors do not consider the possibility of a total wipeout. I'm on the hedge about this. I actually think the second facility of an FS loan (so a second charge) is possibly more secure than a traditional second charge as at least FS will be trying to recover funds for all facilities, whereas an independent first charge holder has no real incentive to push hard to make sure the second charge holder makes a recovery (yes, they have to show they got the best price possible, but that's very hard to prove otherwise). On the flip side, there could be more risk a a second charge behind another FS charge, as what sort of person requires multiple high-interest p2p loans? A second charge behind a small residential mortgage isn't always such a bad thing. As with all of this, got to assess each one on its merits, but I totally agree that the risk of a total loss with just a 30% reduction in realised value of the asset should be understood.
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kielbasa
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Post by kielbasa on Sept 12, 2018 14:37:24 GMT
I wonder if the presence of a lower ranking FS loan doesn't help the higher ranking FS investors in some cases as FS may try to defer as long as possible the dreaded day of reckoning (total wipeout) on the lower ranking loan and the higher ranking FS investors just see unrecoverable interest mounting up.
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adrian77
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Post by adrian77 on Sept 12, 2018 15:09:45 GMT
very good point and any delay of posting a loss in the FS summary probably doesn't concern them too much.
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littleoldlady
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Post by littleoldlady on Sept 13, 2018 7:26:54 GMT
I wonder if the presence of a lower ranking FS loan doesn't help the higher ranking FS investors in some cases as FS may try to defer as long as possible the dreaded day of reckoning (total wipeout) on the lower ranking loan and the higher ranking FS investors just see unrecoverable interest mounting up. Does interest on the 'first charge' rank before capital on the 'second charge' then?
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kielbasa
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Post by kielbasa on Sept 13, 2018 8:10:36 GMT
I wonder if the presence of a lower ranking FS loan doesn't help the higher ranking FS investors in some cases as FS may try to defer as long as possible the dreaded day of reckoning (total wipeout) on the lower ranking loan and the higher ranking FS investors just see unrecoverable interest mounting up. Does interest on the 'first charge' rank before capital on the 'second charge' then? I ought to know this. I guess it will be in the Ts and Cs. What I was thinking was that with loans that go on for years, beyond a certain point the interest rolling up at 20% a year or whatever is very unlikely to be paid beyond a certain figure so the earlier you liquidate the asset, the greater the percentage recovery of the total amount owed including interest. Investors get whatever money is recovered and they can then re-invest it. Money tied up in delinquent high LTV loans for years has a high opportunity cost in terms of loss of investment returns.
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paulb
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Post by paulb on Sept 13, 2018 9:22:24 GMT
Does interest on the 'first charge' rank before capital on the 'second charge' then? I suspect it would, however, I also suspect that most first charge holders would be collecting interest during the course of the loan, rather than attempting to collect three years of unpaid interest all at once. For lower-ranking FS loans, I believe it is the case that the higher-ranking loans must be fully repaid (capital + interest) before anything is repaid.
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littleoldlady
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Post by littleoldlady on Sept 17, 2018 11:06:26 GMT
"In the meantime FundingSecure have continued to pay for the ground rent, insurance and security to ensure the property is correctly maintained."
Yes, but they will doubtless repay themselves out of any recovery, further reducing the return to lenders.
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empirica
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Post by empirica on Sept 17, 2018 12:14:46 GMT
"In the meantime FundingSecure have continued to pay for the ground rent, insurance and security to ensure the property is correctly maintained." Yes, but they will doubtless repay themselves out of any recovery, further reducing the return to lenders. According to the Ts&Cs, only once the lenders' principal has been considered: Based on that, in a situation where there'll unlikely be a full return of principal (if this turns out to be the case), FS are unable to recoup their ongoing costs, and you'd expect them to put this one to bed asap. (Well, I would.)
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littleoldlady
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Post by littleoldlady on Sept 24, 2018 21:46:10 GMT
It all depends on the interpretation of the first word ("Net") in clause 6.2.5
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btc
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Post by btc on Oct 27, 2018 11:24:59 GMT
Exciting news, only 1000 days overdue
To be followed by
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adrian77
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Post by adrian77 on Oct 27, 2018 12:28:33 GMT
I presume the buyers have not (yet) pulled out?
Assuming they haven't, has anybody any idea how much this Welsh version of Trump Towers sold for?
update - I have re-read the VR etc - this one is leasehold with a ground rent of £18,750.
This one owes over 3 years interest so if we take £520K at 20% that is 520K x 60% = over £300K interest alone - the latest asking price was £350K!
Be interesting to see just how close to £520K + 300K = £820K this one sells for. I am glad I don't hold the second charge on this one.
I deal in property but I have not and will never deal in anything which is leasehold and especially one with a ground rent of nearly £19K.
Prove me wrong FS...
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littleoldlady
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Post by littleoldlady on Oct 27, 2018 16:31:00 GMT
My guess: no interest and a 25% haircut (but I am an optimist on this one) on the 1st charge, nothing on the 2nd.
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