arby
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Post by arby on Mar 13, 2019 14:39:41 GMT
Analysis is always good, but everyone should take the time to understand what they're looking at before jumping to any conclusions. For example, the chosen methodology guarantees that a large chunk of FS's book is classed as 'bad' simply because it is between 5 and 6 months old. Equally, anyone trying to sell at 1% discount at 4/5 months, even though that may be very favourable for them from a tax perspective, determines the loan as being 'bad' I don't disagree that FS has a lot more loans overdue than I would like, but I went in knowing that property development doesn't complete in 6 months and do not automatically class an overdue loan as 'bad'. I note that the methodology for determining a defaulted loan is very different for FS compared to the other platforms in the analysis. However, looking for a fixed metric in a very subjective area is tough, so I can understand why that would be chosen. Over running loans are potentially very bad especially long over running because the interest payable on redemption is 30% or more in their business model which compromises the ability to refinance or repay by other means. Inability to refinance is a principal reason for over running in itself just look at the updates for many loans saying they are in the process of refinancing, it does not happen and the can goes down the road, large development loans are most at risk as well as the large ones without planning, never touch supplemental loans on the developments the risk of 100% loss is significant. For what its worth I think Adrian's views have a lot of merit though they cant fully analytical because not all information is disclosed by FS I was simply replying to a post that was comparing a lot of the main p2p platforms in terms of % of bad loans, and pointing out that the methodologies were very different for each platform so everyone should do their own thinking before just jumping to a conclusion. I don't think that is one of my most controversial statements... 
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james21
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Post by james21 on Jun 13, 2019 7:24:31 GMT
number 21 on list development plot liverpool says first charge, it was but became a second on part repayment Sept 2018, now £322k second and £100k third, borrower linked to a number of other sites doubt if any work has been done except clearing site (to get planning permission extended) Dont know what first value is. Given borrower is bust plus the details above, I say 100% loss on third loan and 80% loss on second
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adrian77
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Post by adrian77 on Jun 27, 2019 14:56:24 GMT
thanks will update when I do my next update = hopefully over the weekend
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kielbasa
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Post by kielbasa on Jun 28, 2019 9:49:29 GMT
number 21 on list development plot liverpool says first charge, it was but became a second on part repayment Sept 2018, now £322k second and £100k third, borrower linked to a number of other sites doubt if any work has been done except clearing site (to get planning permission extended) Dont know what first value is. Given borrower is bust plus the details above, I say 100% loss on third loan and 80% loss on second Lenders were never consulted on the decision to demote the first charge to a second charge and the second charge to a third charge. It never sounded like a good idea to me. (I appreciate that lenders did get paid some of their money back, I think (percentage?).) The first charge holder gets all of his interest, fees, default fees, default interest and other costs and charges before FS lenders get a penny. I fear that the final result will show that allowing the demotion of the charges (especially the first charge) was a mistake. I hope I am wrong and I will be the first to say "well done" to FS if it turns out fine.
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