iRobot
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Post by iRobot on Aug 30, 2020 9:16:01 GMT
yes you are correct (as I understand it) the first charge holder comes first but the thought of being repossessed may just prompt this chap into action...besides he has renegaded on his contract so if he loses the house then tough... There is another - more nuanced - possibility as to why a second charge holder may force a sale knowing full well they wouldn't see any returns from that action. The second charge holder may know or believe the first charge holder is also 'underwater' in terms of its arrangement with the borrower. Forcing a sale would force the first charge holder to realise a loss which they may prefer to avoid. As such, the first charge holder may prefer to negotiate a settlement with the second charge holder. In those circumstances the second charge holder might realise some kind of return. Probably just a small percentage but something is better than nothing ...
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adrian77
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Post by adrian77 on Aug 30, 2020 9:35:31 GMT
interesting view - not saying this doesn't happen but never come across this and I often buy from distressed sellers - interested to hear from somebody in this sort of business. If the first charge holder is underwater then he would be taking a gamble that the property would go up in the longer term - if it goes down then he takes a double hit- firstly on his charge and secondly on the 2nd charge settlement - also hate to think what the legal bill would be for such work. I think such cases show just how useless FS have been - they have got themselves into a very bad position and clearly some borrowers know this and are taking advantage of it. Assuming there is no audit trail for where the FS money has gone then how do we know the money has not been siphoned off and the borrower is banking on the possibility his loan is written off - well it would be good for CG to show such people that they are not going to be messed around..just my opinion
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iRobot
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Post by iRobot on Aug 30, 2020 10:15:09 GMT
interesting view - not saying this doesn't happen but never come across this and I often buy from distressed sellers - interested to hear from somebody in this sort of business. Yeah - you may have missed the point. The rationale is that the property doesn't go to market! I'm guessing you have a firm of (conveyancing) solicitors on retainer - they may have some insights you could tap into. Absolutely. Although, in general terms, the first charge holder needn't be underwater. They may just like the profitability of their current arrangement with the borrower and if the deal with the second charge holder can be done cheaply enough, could chose to negotiate a settlement rather than see their arrangement disrupted. As for legal costs - again, if you have a 'tame' solicitor, ask them. Keep in mind though that FS / CG&Co are going to have to incur some legal costs anyway, so from their perspective it may be no more expensive. (And incurred legal costs may be another incentive for the first charge holders to negotiate.) In general terms, I seem to remember BridgeCrowd being involved in a similar deal* - or at least mooting it as a possibility in an update - so it does happen. Perhaps not frequently - but it happens .... * - might have been in the other direction - they as 2nd charge holders buying out the 1st charge holder to as to take control of the situation and have greater determination over the disposal of the security.
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Post by overthehill on Aug 30, 2020 13:27:17 GMT
All good points I'm sure but I don't have enough expertise to know its relevance with this situation. I'm going to stick with 1) or 2) as I can't see/understand any logical point or any financial recovery from the 2nd property for FS.
1. FS do indeed have a 1st charge on the 2nd property 2. Is it possible in situations like this with multi property security, depending on the agreement, each property can be treated independently with regards to 1st and 2nd charge so the 1st charge holder can't sell all the properties at huge discounts to recover their debt and leave the 2nd charge holder with nil.
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adrian77
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Post by adrian77 on Aug 30, 2020 14:50:32 GMT
you guess right - I will ask their professional opinion next week as I have a meeting with them...I deal with and have known the senior partner for 30 years and she lectures in property law so maybe a good person to ask?
that I have seen - looking at this one out of interest I note the first FC unsatisfied charge was raised in Sept 2015 (I realise CH could be out of date here) - and that FC are charging 2% above the contractural rate so just how much has this clocked up in FC interest at what over 20%? Also the company accounts for last year show a £115K loss with FA of £6K (yes £6k! and current assets of £2.6m - wonder how accurate that figure is? There has been some paper shuffling here and I am too busy to wade through it - but there is a related company which was in profit last year and asssuming I have not lost track off what is going on here the current company that owns this property is under administration and I guess this due to FC but I realise it may not be. I think the chance of the first charge not being underwater is slim. In short this looks another gold-plated horlicks to me and I will be very surprised if FS get 1p back. Well done FS -" organic growth - it's a process"!
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adrian77
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Post by adrian77 on Aug 30, 2020 19:07:48 GMT
good question - I think the first charge holder has a duty not to do this - well on paper anyway - just how would you prove they had done this. Also I think the first charge holder would solely be interested in maximising their recovery and not give a monkey's about the 2nd charge holder either way. Given FS have had at least 3 charges not properly perfected, I don't think covering themselves for complicated deals was their strong point ( I seem to remember 2 property charges not being corrected viz Barnoldswick and Burnley cottage). Also we have to await what the hell is happening with the Golders Green loan. Hopefully some legal beagle can clarify.
I really hope this one is not a mega disaster...
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iRobot
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Post by iRobot on Aug 30, 2020 19:10:12 GMT
you guess right - I will ask their professional opinion next week as I have a meeting with them...I deal with and have known the senior partner for 30 years and she lectures in property law so maybe a good person to ask? If you have that kind of talent available to you, it would seem crazy not to use it whenever possible. Although, as you added in your update, ... ... you may just have answered your own question. I think you may be confusing the two areas of activity here. The FC loan and charge is against the development property. FC are almost certainly underwater on that one, and have accordingly appointed their own receivers and FC lenders will be going through their own version of FC-flavoured dev-loan failings on that. Note FS have similarly appointed their own receivers over charge *004. As mentioned up-thread, boxes need ticking and - FC lenders take note - FS (CG&Co.) appointed their receivers ahead of FC's action. However ...The activity that's being discussed in the last dozen posts or so, starting here, relates to the second property. I don't believe the size of the first charge holder's loan has ever been disclosed, so while it may be likely that first charge holder has outstanding payments owed to them, there may be sufficient equity in the security to make things interesting for both themselves and FS / CG&Co. FS lenders in *8927 need to hope so as it their only chance of seeing anything back whatsoever, IMO. Those in *4876 have no chance, again IMO.
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adrian77
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Post by adrian77 on Aug 31, 2020 13:04:20 GMT
Well I don't - having looked at this bloke and his accounts - he is highly experienced at paper shuffling and that is being diplomatic. I just can't see how he has the cash to repay his loans which may possibly explain why one of his companies is under administration. As I said this one looks like many other of these FS loans - a complete and utter shambles e.g. Wimbledon and I would not be at all suprised if this is yet another mega loss. Of my top 40 - only 2 have repaid all interest and capital so either I am a financial genius within the property world or these loans were so problematic it was blooming obvious FS were clueless - to be honest with myself it is the latter! Unless it was a lucky guess which I tthink is statistically unlikely.
If this one comes good I will admit I was wrong and be genuinely pleased for all investors.
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pfffill
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Post by pfffill on Aug 31, 2020 13:27:29 GMT
Well I don't - having looked at this bloke and his accounts - he is highly experienced at paper shuffling and that is being diplomatic. I just can't see how he has the cash to repay his loans which may possibly explain why one of his companies is under administration. As I said this one looks like many other of these FS loans - a complete and utter shambles e.g. Wimbledon and I would not be at all suprised if this is yet another mega loss. Of my top 40 - only 2 have repaid all interest and capital so either I am a financial genius within the property world or these loans were so problematic it was blooming obvious FS were clueless - to be honest with myself it is the latter! Unless it was a lucky guess which I tthink is statistically unlikely. If this one comes good I will admit I was wrong and be genuinely pleased for all investors. I'll state straight away, I'm not in this one, but I'll agree with the sentiments here and add one further observation; not only were FS clueless in so many of their loans like this one - THEY DIDN'T CARE either. And it's us who have to pick up the pieces.
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iRobot
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Post by iRobot on Aug 31, 2020 14:10:43 GMT
Well I don't - having looked at this bloke and his accounts - he is highly experienced at paper shuffling and that is being diplomatic. I just can't see how he has the cash to repay his loans which may possibly explain why one of his companies is under administration. Let me re-phrase. - Do you acknowledge there are two securities? - Do you acknowledge that the second security (the bungalow & flats) are held separately and have nothing to do with the borrowers companies and is a separate legal entity? - Do you acknowledge that the registered owner of the second security isn't the same as the borrowing entity or even that entity's director(s) If you acknowledge all that, then I again suggest that your 'investigations' into the borrowing entity, it's director and that director's other companies has no actual bearing on the actual subject of the discussion for the past dozen and more posts, which has focused on why FS / CG&Co are still pursuing that second security. Your modus operandi for selecting your so-called 'top-40' was to visit the ICU and look for the sickest patients, weighting the odds of fatality highly in your own favour. Neither genius nor luck.
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iRobot
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Post by iRobot on Aug 31, 2020 14:18:59 GMT
I'll state straight away, I'm not in this one, but I'll agree with the sentiments here and add one further observation; not only were FS clueless in so many of their loans like this one - THEY DIDN'T CARE either. And it's us who have to pick up the pieces. Yep - no denying it. FS' management have on numerous occasions been found lacking in almost every respect. Seems about the only thing they knew how to do well was enjoy a boozy lunch and, boy, are lenders paying the bill now .... Let's hope CG&Co have made / will make an accurate report to the DBEIS so that body can make the appropriate determinations as to the directors future ability to hold similar positions.
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ozboy
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Post by ozboy on Aug 31, 2020 15:45:59 GMT
I'll state straight away, I'm not in this one, but I'll agree with the sentiments here and add one further observation; not only were FS clueless in so many of their loans like this one - THEY DIDN'T CARE either. And it's us who have to pick up the pieces. Yep - no denying it. FS' management have on numerous occasions been found lacking in almost every respect. Seems about the only thing they knew how to do well was enjoy a boozy lunch and, boy, are lenders paying the bill now .... Let's hope CG&Co have made / will make an accurate report to the DBEIS so that body can make the appropriate determinations as to the directors future ability to hold similar positions. No-one is that stupid, everything the original FS Directors did was deliberate. It was all planned & intended, including the sloppiness, and I strongly suspect that is why Noman got out when he did years ago. This is also why, in the fullness of time, they must swing. Simply just barring Luxmore and Our Nige from future Directorships would be a wrist slapping farce and an insult to Lenders when you look at the nuclear financial damage these two vile tossers created.
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adrian77
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Post by adrian77 on Aug 31, 2020 16:35:18 GMT
totally incorrect and I am not discussing it further - to others interested - all of them were either posted as suspect or flagged up in my database as problematical before posting and well before bad news came in e.g the caravans which I banged on about. If I was only plcking the sick ones then why did I get 2 (or more) completely wrong? Besides if FS had done their job properly we would not have had so many sick ones! I spot trade gold using my simple algorithm ; did I wade in before testing it on a demo account - did I hell! Similarly with FS I did a test run as their business model really worried me and I was interested to see how my accurate my instinct was or wasn't- in fact my top 40 did far worse than I expected so was an interesting exercise- as I said there is only one conclusion you can reach about FS - totally bloody amaterish and clueless cowboys who could not care less (as sat stated above) and that is being generous as I wonder just how independant they were of some of the wide-boy lenders. As I said I stuck my head above the parapet - nobody was forced to read my posts and my main reason was to warn others to validate these idiots before investing so no regrets. As to the remaining loan book - I am sticking to my guess of about 50% being written off - hopefully I am being too negative but somehow I doubt it...I took my own advice and am only going to lose "small change". I feel for those of you you are going to take a mega hit - you have been lied to, cynically conned and cheated so don't beat yourselves up over it. To be honest I grossly under-estimated the number of loans (whether first charge or not is irrelevant) that are going to give a 100% loss - looks like it is going to be over 20 - unbelievable.
If my top 40 had had a very low failure rate I wonder if I would still be accused of pickling sick ones now that the result is in - answers on a digital postcard...
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adrian77
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Post by adrian77 on Aug 31, 2020 16:38:12 GMT
only thing they care about is their 5% which I really hope they don't see a penny of...
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iRobot
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Post by iRobot on Aug 31, 2020 16:42:34 GMT
No-one is that stupid, everything the original FS Directors did was deliberate. It was all planned & intended, including the sloppiness, and I strongly suspect that is why Noman got out when he did years ago. This is also why, in the fullness of time, they must swing. Simply just barring Luxmore and Our Nige from future Directorships would be a wrist slapping farce and an insult to Lenders when you look at the nuclear financial damage these two vile tossers created. Strong assertions, but how will they be proven and appropriate punishments meted out? Are FSAG doing anything? Nothing I've seen here suggests there's anything like the same level of organisation that's on LAG with regard to legal challenges. Maybe I should revisit FaceBook - is there anything of substance there? (I mean specifically around the desire for litigation against the FS directors. I recall a fund-raising to get legal representation for the CC's initial vote meeting - anything since? Figured I'd get an email or something if the donation jar was being passed around again.)
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