adrian77
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Post by adrian77 on Jan 22, 2019 13:15:49 GMT
don't think there is an existing thread for this one.
Yet another disaster - FS loan £94,500K LTV 70% - money realised £32K (less utility bills)
about 33% recovery!
save yer money FS - probably a complete waste of time....
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aj
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Post by aj on Jan 22, 2019 15:48:07 GMT
Auction/Receivers fees of £17K on a £47K sale.  From the history, it looks like FS should have appointed receivers on the basis of them listing it for sale immediately. Allowing them to rack up fees while listening to more borrower dithering has undoubtedly led to a worse outcome for lenders. Hopefully FS are continuing to learn 'on the job' and better outcomes are due in future recoveries. |
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jonno
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nil satis nisi optimum
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Post by jonno on Jan 22, 2019 16:02:40 GMT
Auction/Receivers fees of £17K on a £47K sale. From the history, it looks like FS should have appointed receivers on the basis of them listing it for sale immediately. Allowing them to rack up fees while listening to more borrower dithering has undoubtedly led to a worse outcome for lenders. Hopefully FS are continuing to learn 'on the job' and better outcomes are due in future recoveries. Unfortunately, we're all funding their "learning experience" in spades. This is all becoming seriously eye watering.
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adrian77
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Post by adrian77 on Jan 22, 2019 16:48:29 GMT
Auction/Receivers fees of £17K on a £47K sale
that is 36% - how ****** much!
Hopefully other defaulted properties won't take so much out of what little is left of our original investments...
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kielbasa
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Post by kielbasa on Jan 22, 2019 17:14:38 GMT
I see the valuers on this one were Hard** ***ck (not sure if forum rules allow naming valuers).
Hard** ***ck valued quite a few FS loans, particularly in the North West, a number of which appear to have gone pear shaped. Let's see how well those valuations stack up.
IIRC they were the valuers on the Westbury Castle loans. IIRC the Riding School loan there only fetched 49% of the original valuation at auction.
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Post by bracknellboy on Jan 22, 2019 17:42:12 GMT
I see the valuers on this one were Hard** ***ck ( not sure if forum rules allow naming valuers). Hard** ***ck valued quite a few FS loans, particularly in the North West, a number of which appear to have gone pear shaped. Let's see how well those valuations stack up. IIRC they were the valuers on the Westbury Castle loans. IIRC the Riding School loan there only fetched 49% of the original valuation at auction. Even if they do, there are times when the use of *'s is simply more entertaining.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jan 22, 2019 18:00:21 GMT
It seems wrong to hand defaulted loans over to receivers, but it is a legal requirement. I think that loan contracts should be written in such a way that FS have an option to purchase the property at the loan amount, if the borrower defaults.
This would work well for relatively small loans where receiver costs are disproportionately high.
Lenders would become owners of the property and then dispose of the property at market value, instead of a distressed value. The borrower would be exonerated from future recovery costs and possible bankruptcy.
Some properties may still suffer a loss, but other properties may return a profit.
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bg
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Post by bg on Jan 22, 2019 19:01:08 GMT
It seems wrong to hand defaulted loans over to receivers, but it is a legal requirement. I think that loan contracts should be written in such a way that FS have an option to purchase the property at the loan amount, if the borrower defaults. This would work well for relatively small loans where receiver costs are disproportionately high. Lenders would become owners of the property and then dispose of the property at market value, instead of a distressed value. The borrower would be exonerated from future recovery costs and possible bankruptcy. Some properties may still suffer a loss, but other properties may return a profit. I don't think that would work. It's the sort of thing RBS got into trouble for a few years back (its GRG group). Say you have a liquid property with a loan taken with a low LTV. The borrowers refinance falls through at the last minute so the loan becomes late and is defaulted. The platform can then take possession of the asset and sell at market value at their leisure making a massive profit. The platform would be incentivised to default such loans at the first opportunity which creates a big conflict and also make borrowers reluctant to use the platform. It may also be illegal or at least frowned upon by the FCA (certainly for loans to individuals). What this shows is that defaulting a loan and calling in a receiver often results in a sub optimal outcome as it can lead to a distressed sale and high fees. It is generally better to work with the borrower to avoid this, even if the process drags on for a long time.
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mjc
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Post by mjc on Jan 23, 2019 13:56:40 GMT
If lawful, an outfit “FundingSecure Megafailure Recoveries Unit”, funded by crowd funding here, could be formed to have first refusal of any defaulting loan, ie over 90days over expected end that has not been renewed, unless proof of an imminent exit route, before receivers are called in for loan + interest, or an open market warrented minimum valuation.
Clearly borrower’s terms would have to reflect this. The borrower would only have to renew to avoid this.
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adrian77
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Post by adrian77 on Jan 23, 2019 14:33:08 GMT
Maybe I am being a bit thick here but I thought FS had control of any object where the lender had defaulted so not sure why they need receivers in the first place? For property there are already agents for investors who buy quickly for cash (at a price) but why can't FS simply negotiate a trade rate with local auctioneers and slap any defaulted goods or property into the next auction - I mean given that all loans have a maximum of 70% of value, whats the problem!
Being a receiver with an FS contract looks a tasty piece of business to me - now if such a company wanted a p2p loan I would be interested...
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bg
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Post by bg on Jan 23, 2019 15:23:29 GMT
Maybe I am being a bit thick here but I thought FS had control of any object where the lender had defaulted so not sure why they need receivers in the first place? For property there are already agents for investors who buy quickly for cash (at a price) but why can't FS simply negotiate a trade rate with local auctioneers and slap any defaulted goods or property into the next auction - I mean given that all loans have a maximum of 70% of value, whats the problem! Being a receiver with an FS contract looks a tasty piece of business to me - now if such a company wanted a p2p loan I would be interested... No they don't. Generally they have a charge against the asset (ie a charge against a property, like a mortgage in effect). Legally you have to appoint a receiver to recover a debt secured by a charge. The reeciver can then take control of the asset and sell it to recover the debt. Any money recovered in excess of the debt and costs must be returned to the borrower. A minority of FS loans may be pawn loans (although I stand to be corrected on this). In these cases they may well have control of the assets but it is still a regulated area. Any pawn item over the value of £75 that is sold to recover a debt must have excess funds again returned to the borrower.
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Post by beepbeepimajeep on Jan 23, 2019 20:00:23 GMT
an outfit “FundingSecure Megafailure Recoveries Unit” 
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michaelc
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Post by michaelc on Mar 6, 2019 15:12:25 GMT
Partial repayment today.
Asset value as presented and valued: 135K
Sale Price: 47.5K
Fees: 15.9K
Return to investors: 31.6K
No mention of the PG in the update. Have they forgotten about it ?
Thank goodness I didn't have a huge amount in this and certainly feel for anyone who did.
Edit: I see it was good ol' 'ardly Bak who did the 135K valuation. (Can anyone think of a better non-identifying name for them? I've never been good at rhymes and puns ...). Like many others, this I feel is lesson to never look at the platform's value. The absolute maximum should be the "forced sale" or similar price in the valuation - 100k in this case so still miles off.
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r1200gs
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Post by r1200gs on Mar 6, 2019 15:18:55 GMT
Partial repayment today. Asset value as presented and valued: 135K Sale Price: 47.5K Fees: 15.9K Return to investors: 31.6K No mention of the PG in the update. Have they forgotten about it ? Thank goodness I didn't have a huge amount in this and certainly feel for anyone who did. If required, you can be fairly sure a PG is worth about the same as the paper it is printed on. Security fetching a fraction of the valuation followed by receivers, laewyers and auction houses raking the lions share is now an established pattern in P2P. Just wait to see just what lenders get back when Lendy's "external legal and recovery partners" have finished with more than a 100 million pile of rotten loans.
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susan
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Post by susan on Mar 6, 2019 16:09:13 GMT
Additionally, there was a £6000 interest payment that was being held on account which has been included in the payment to investors today, so I think this means that the fees were well over £20,000.
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