sapphire
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Post by sapphire on Dec 16, 2017 16:52:54 GMT
Any idea if there have been losses to date (interest; interest and capital) suffered by lenders on FS loans secured against personal assets (watches, jewellery etc)?
Hopefully not, as these can usually be valued with a greater degree of accuracy (compared to property) and sold off pretty quickly in the event of a default?
If losses were indeed suffered on such loans, shouldn't these have been borne by the valuer/ his indemnity insurance / FS?
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stub8535
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Post by stub8535 on Dec 16, 2017 18:04:52 GMT
One word. Trains.☠
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mikes1531
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Post by mikes1531 on Dec 16, 2017 21:45:03 GMT
IIRC, a motorbike was sold for enough to cover the capital but not the accrued interest (1845919867). There was a loan against some Michael Jackson memorabilia that couldn't be sold easily, and I think FS took the assets back onto their own books and repaid their investors' capital and accrued interest (2131040674). There were a couple of loans against paintings by Lubin that couldn't be sold for enough to repay investors (654474218 and 2002084876). The sale of security for a defaulted loan against some jewellery brought in enough to repay investors' capital, but not all the accrued interest (24181978). The sale of security for a defaulted loan against a pair of rings didn't bring in enough to repay investors' capital (572782847). sapphire: If you want more detail, search the list of past FS loans for 'Defaulted'. I just did and came up with a list of 53 loans/tranches. Eight of those have been completed/and closed, and the other 45 are still open. |
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sapphire
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Post by sapphire on Dec 17, 2017 11:53:37 GMT
IIRC, a motorbike was sold for enough to cover the capital but not the accrued interest (1845919867). There was a loan against some Michael Jackson memorabilia that couldn't be sold easily, and I think FS took the assets back onto their own books and repaid their investors' capital and accrued interest (2131040674). There were a couple of loans against paintings by Lubin that couldn't be sold for enough to repay investors (654474218 and 2002084876). The sale of security for a defaulted loan against some jewellery brought in enough to repay investors' capital, but not all the accrued interest (24181978). The sale of security for a defaulted loan against a pair of rings didn't bring in enough to repay investors' capital (572782847). sapphire : If you want more detail, search the list of past FS loans for 'Defaulted'. I just did and came up with a list of 53 loans/tranches. Eight of those have been completed/and closed, and the other 45 are still open. Many thanks mikes1531 For items like memorabilia and paintings where it is more difficult to get an accurate valuation and also the potential market can be limited in the event of a sale, I can somewhat understand the likelihood of a loss in the event of a default. However I would have thought that for jewellery items like a pair of rings (572782847) which can be valued more accurately and also with a wider potential market, the realisation should not be lower than 70% of the valuation, and so should not lead to a loss of capital on a 70% LTV loan. As such I am surprised that the pair of rings (572782847) which were valued at £3,140 when the loan was issued in May 14 only fetched £1,688 in Feb 15 i.e. 46% lower than valued! There is no mention of a valuation report in the FS loan details, so presumably this was an in-house valuation? To my knowledge, there was no 'jewellery price crash' around 2014-15 so this suggests that this valuation was erroneous and so I would have thought that the lenders should have been compensated by FS? Am I missing something? I realise this particular loan is now water under the bridge, but just want to understand if and when FS take responsibility, so that I can decide if I should lend on items like jewellery.
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mikes1531
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Post by mikes1531 on Dec 17, 2017 17:39:43 GMT
sapphire's questions above really can be answered only by FS. The main one, of course, being the source of the valuation. Auction results are bound to be quite variable, and must depend on who's watching the auction and prepared to bid at the time it happens. The usual defence against unreasonably low results is to set a reserve price. IIRC, there was one case where FS failed to set a reserve price and the sale proceeds were quite low. In that case, again IIRC, FS took responsibility and topped up the proceeds to the level they had intended to set the reserve at. If you want to know what happened to that pair of rings (572782847), you'll have to ask fundingsecure. As has been noted, those rings went to auction nearly three years ago. We can hope that FS have learned from incidents like that, and that such results are less likely now, but I have no idea whether that hope is justified.
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Post by df on Dec 17, 2017 20:18:07 GMT
The largest proportion of my "unredeemed" is in trains. It's not a loss yet and some of them are getting partially repaid when they manage to sell one or more, but it is a significant cash drag and the chance of all principal returned (never mind the interest) is very slim.
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stub8535
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Post by stub8535 on Dec 17, 2017 20:26:08 GMT
The largest proportion of my "unredeemed" is in trains. It's not a loss yet and some of them are getting partially repaid when they manage to sell one or more, but it is a significant cash drag and the chance of all principal returned (never mind the interest) is very slim. My own fault for going against the tide. Never listen to train enthusiasts.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Dec 17, 2017 20:34:47 GMT
The largest proportion of my "unredeemed" is in trains. It's not a loss yet and some of them are getting partially repaid when they manage to sell one or more, but it is a significant cash drag and the chance of all principal returned (never mind the interest) is very slim. My own fault for going against the tide. Never listen to train enthusiasts. I didn't invest in these but have been surprised at the seeming difficulty in shifting them. The few Train Nutters I know enthusiastically spend a small fortune on this stuff and I'd have thought they would all go quickly and at very good prices. Perhaps their authenticity is suspect, or something else? But, as is fast becoming the mantra on here, "What do I know?!" 
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mikes1531
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Post by mikes1531 on Dec 18, 2017 3:20:26 GMT
My own fault for going against the tide. Never listen to train enthusiasts. I didn't invest in these but have been surprised at the seeming difficulty in shifting them. The few Train Nutters I know enthusiastically spend a small fortune on this stuff and I'd have thought they would all go quickly and at very good prices. Perhaps their authenticity is suspect, or something else? But, as is fast becoming the mantra on here, "What do I know?!" ISTM that these loans were fine -- in the beginning. But as there were more and more of them and they seemed to keep coming I started to get nervous and stopped renewing. By the time the music stopped, FS had lent something like £250k to this borrower, and now they're trying to dispose of bits with a 'value' of around £0.5M. I suspect it's the sheer volume of what they're trying to sell that's causing a lot of the difficulty finding buyers. But what do I know? 
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Post by df on Dec 18, 2017 12:28:51 GMT
The largest proportion of my "unredeemed" is in trains. It's not a loss yet and some of them are getting partially repaid when they manage to sell one or more, but it is a significant cash drag and the chance of all principal returned (never mind the interest) is very slim. My own fault for going against the tide. Never listen to train enthusiasts. My own fault for mindless strategy. I've invested a little bit in probably all of them thinking that it will be okay because each loan is secured on separate items. Learned my lesson the hard way 
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greenslime
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Post by greenslime on Dec 19, 2017 18:53:32 GMT
I always feel anything whose value is based on its desirability to a collector can be problematic - both for the initial valuation, and selling when it defaults. P2P can be risky anyway and I can do without the added complications of 'memorabilia', medals, most art, etc. YMMV
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