ozboy
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Post by ozboy on Apr 11, 2018 15:18:39 GMT
I think you may find grumbler that it's FS' "Pawn Model" that is the problem/shortcoming here, their model, being pawn based, is different to other Platforms, again AFAIK.
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r00lish67
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Post by r00lish67 on Apr 11, 2018 16:22:41 GMT
I think you may find grumbler that it's FS' "Pawn Model" that is the problem/shortcoming here, their model, being pawn based, is different to other Platforms, again AFAIK. This "pawn model" is not revealed in the Lender's T&C (another deceptive tactic by FS) and honestly is even difficult to understand or accept from a lender's point of view, given how much it differs from any standard procedure by a typical P2p Lending company and how subject would be to fraud. In any case, given the clear shortcomings by FS and their huge errors (first and for all the loan description where they claimed the security was Worth in the bracket 30-40k GBP), and given the really tiny amount of the loan (compared to most), I am convinced that FS is doing a big mistake in passing the lenders a 43% loss. Additionally it is unexplicable how on earth FS keep some loans (easily recoverable) up and running for 600, 700, 800, 900 days and yet they seem to literally throw away in a hurry this painting for less than 15% of their orginal estimate value (and with a private sale, not even easily checkable... again all subject to easy fraud). Talk about a cross to bear... 
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ozboy
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Post by ozboy on Apr 11, 2018 17:07:57 GMT
"they claimed the security was Worth in the bracket 30-40k GBP)," - FS takes a serious bashing on here but we have to be fair and the DD would seem to indicate that the Value was indeed in the correct ballpark. What it Sold for is an entirely different matter.
I'm not entering discussions of how the disposal could have been handled better, etc, etc, but the fact is, and I repeat yet again, that the Valuation does seem to have been reasonably accurate?
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ozboy
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Post by ozboy on Apr 11, 2018 17:33:40 GMT
Perhaps the upshot to all this is that ALL securities (art, model trains, carpets, cars, watches, etc) should have an additional 90 day/Distressed Sale Valuation.
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Post by dan1 on Apr 11, 2018 18:06:18 GMT
/Mod hat off (for the avoidance of doubt) I understand your frustration thegrumbler but if I were fundingsecure and was considering reimbursing lenders from their own pocket then I certainly wouldn't do so now after such an attack on their business. I've not read anything that would suggest the original valuation was not acceptable but, as we know, markets for such items are of relatively low volume and susceptible to huge spreads in supply/demand. It's all part of the risk we take as lenders. |
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r00lish67
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Post by r00lish67 on Apr 11, 2018 18:19:31 GMT
/Mod hat off (for the avoidance of doubt) I understand your frustration thegrumbler but if I were fundingsecure and was considering reimbursing lenders from their own pocket then I certainly wouldn't do so now after such an attack on their business. I've not read anything that would suggest the original valuation was not acceptable but, as we know, markets for such items are of relatively low volume and susceptible to huge spreads in supply/demand. It's all part of the risk we take as lenders. I agree. This isn't really one to target FS for, despite it being a disappointing result. The only slight criticism I would have of FS is that, in hindsight, 10% p.a. seems like an inadequate reward for the risk, in comparison to the mostly 12% for other bling that seem to be less volatile in valuation. I suspect they were as surprised as we were to find the drop to be so significant, though. The only other investor lesson I can see is that low value items that default are especially at threat of further recovery costs attacking their return further. If FS had claimed their costs as is their contractual right, the return for investors could possibly have been zero.
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Post by carol167 on Apr 11, 2018 18:23:49 GMT
/Mod hat off (for the avoidance of doubt) I understand your frustration thegrumbler but if I were fundingsecure and was considering reimbursing lenders from their own pocket then I certainly wouldn't do so now after such an attack on their business. I've not read anything that would suggest the original valuation was not acceptable but, as we know, markets for such items are of relatively low volume and susceptible to huge spreads in supply/demand. It's all part of the risk we take as lenders. No, I demand serious work by the lending company. Serious means real valuations (I still have not had answers on who was the art expert that valuated this painting 30-40k GBP), honest presentations of loans and REAL work to the advantage of lenders. My frustration is seeing loans like 1205065729 running for almost 700 days without *ANY* action whatsoever by FS (not even taking care of the ground floor shop rent) and yet throw away this painting after only 6 months at 5.6k GBP (in a private sale...) and having valuated the same security few months ago at 30k-40k GBP. If you are competent and honest you cannot value an item at 30-40k and then sell it at less than 15% of its valuw in a rushed private sale just few months onwards. At best this is lack of care and incompetence. This is NOT part of the risk I have assumed. The risk can be having to go for a sale because the borrower can't repay the loan, not seeing the company that should defend your interests throw away the most secure loan presented on the network with a 43% LOSS. With respect, I think we are all clear now on how you feel and I'm sure you are not alone at being unhappy at a poor recovery. But to keep restating the same things over and over and over is not helpful and does not add to your argument.
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Post by polonius on Apr 11, 2018 18:25:53 GMT
Reminds me of the Australian Paintings loan. In that case also, the borrower defaulted and the artwork realised much less than valuation at auction. However FS kindly put their hands in their pockets and paid out in full so that lenders would not lose out. Australian Paintings (869659053) Unfortunately due to an error on our part, the paintings were sold without a reserve. As this was our error, we are completing the loan with capital and interest in full, with FundingSecure funding the shortage.
As a result you will receive a return as follows:
Capital Returned: 100%
Interest Returned: 100%
Effective return: 13% paThere have been other similar instances including loans much bigger than Peter H*****
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adrian77
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Post by adrian77 on Apr 11, 2018 18:39:11 GMT
below is from the Guardian
Can't blame FS for market whims - this sort of thing happens so maybe best to learn and move on...
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Liz
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Post by Liz on Apr 11, 2018 19:32:07 GMT
Rushed sale! They can't win. Did you expect them to wait another 3-6 months, then maybe only achieve £3k and keep paying for costs out of their own pockets?
It was best to sell and move on. The market is clearly soft for this art, you can't blame FS for that.
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Liz
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Post by Liz on Apr 11, 2018 20:22:17 GMT
Err, the loan went live in March 2017, that's not 6 months, but over a year.
Would you have wanted storage costs, insurance, transit costs, recovery costs etc etc to eat into the final recovered amount by dragging it out for months longer? That would just be insane! Even if the painting achieved a higher price later, the costs would wipe out that gain. A lower price could mean lenders get nothing.
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jj
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Post by jj on Apr 11, 2018 20:29:54 GMT
Could this set a bench mark for other art items ? Lets hope not but...
Fine Art - Renewal 313 days -overdue.
Painting by Chagall 307 days -overdue.
Auerbach Painting 289 days -overdue.
Pablo Picasso Etching 266 days -overdue.
Painting by Lowry 260 overdue.
and the lovely Microsculptures 243 days -overdue to name a few.
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Liz
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Post by Liz on Apr 11, 2018 20:33:23 GMT
Could this set a bench mark for other art items ? Lets hope not but... Fine Art - Renewal 313 days overdue. Painting by Chagall 307 days overdue. Auerbach Painting 289 days overdue. Pablo Picasso Etching 266 overdue. Painting by Lowry 260 overdue. and the lovely Microsculptures 243 overdue to name a few. Probably. The trains not doing too well either. I think the rate offered on a lot of these pawn loans is far too low for the risk.
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SteveT
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Post by SteveT on Apr 11, 2018 21:38:08 GMT
You don’t appear to appreciate how the pawn business operates. Under the loan T&Cs, there is no recourse to the borrower if the sum advanced against the pawned item proves to be greater than its realisable value.
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Liz
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Post by Liz on Apr 11, 2018 21:44:06 GMT
You don’t appear to appreciate how the pawn business operates. Under the loan T&Cs, there is no recourse to the borrower if the sum advanced against the pawned item proves to be greater than its realisable value. A voice of reason. Dragging it out would incur more costs and a bigger loss! Would anyone in this loan want that?
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