izigor
Member of DD Central
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Post by izigor on May 27, 2019 0:18:13 GMT
Interesting comment on that Times article: "As an actual developer that borrowed from Lendy, I am probably one of the supposed few who are under budget and on target to repay them. Well, we were until the FCA started monitoring them and all payments slowed down.
We are only about 6 weeks from completion, have pre-sold more than 50% of our properties, but now have to wait for the administrators and find out if funding will continue.
If not, I already have alternative funding in place, but the administrators will have to accept a reduced offer, or we will potentially be in trouble.
What fun! :-)"So the choice is: "to accept a reduced offer" OR "developer will potentially be in trouble" It's gonna be the second choice buddy.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on May 27, 2019 0:28:46 GMT
Interesting comment on that Times article: "As an actual developer that borrowed from Lendy, I am probably one of the supposed few who are under budget and on target to repay them. Well, we were until the FCA started monitoring them and all payments slowed down.
We are only about 6 weeks from completion, have pre-sold more than 50% of our properties, but now have to wait for the administrators and find out if funding will continue.
If not, I already have alternative funding in place, but the administrators will have to accept a reduced offer, or we will potentially be in trouble.
What fun! :-)"So the choice is: "to accept a reduced offer" OR "developer will potentially be in trouble" It's gonna be the second choice buddy. To treat a honest borrower with such disrespect may well get us a few extra pence but it would be at the expense of decency and send a message that lenders have no interest in upholding their commitments so why should borrowers? A dangerous road to go down as the margins are slim. We could not in the future castigated borrowers for not abiding by a contract that the lenders disregard. Administration should be fair to all.
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adrianc
Member of DD Central
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Post by adrianc on May 27, 2019 6:59:33 GMT
Interesting comment on that Times article: "As an actual developer that borrowed from Lendy, I am probably one of the supposed few who are under budget and on target to repay them. Well, we were until the FCA started monitoring them and all payments slowed down.
We are only about 6 weeks from completion, have pre-sold more than 50% of our properties, but now have to wait for the administrators and find out if funding will continue.
If not, I already have alternative funding in place, but the administrators will have to accept a reduced offer, or we will potentially be in trouble.
What fun! :-)"No prizes for guessing which project it is.
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Mucho P2P
Member of DD Central
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Post by Mucho P2P on May 27, 2019 8:48:51 GMT
We need a Court sanctioned claw-back from the entire group and UBO. is there a way that money put elsewhere can be reclaimed if it's only been put elsewhere to protect it from being used in such situations? Yes there is, known as claw-back. It ultimately depends where it has been placed. As Wilson from RSM has been appointed, there must be suspicion from the FCA that monies might not be where they ought to be. As Wilson has worked with the SFO in the past, he will clearly have the experience in forensic accounting and claw-back procedures needed.
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sl75
Posts: 2,092
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Post by sl75 on May 27, 2019 9:15:42 GMT
Interesting comment on that Times article: "As an actual developer that borrowed from Lendy, I am probably one of the supposed few who are under budget and on target to repay them. Well, we were until the FCA started monitoring them and all payments slowed down.
We are only about 6 weeks from completion, have pre-sold more than 50% of our properties, but now have to wait for the administrators and find out if funding will continue.
If not, I already have alternative funding in place, but the administrators will have to accept a reduced offer, or we will potentially be in trouble.
What fun! :-)"So the choice is: "to accept a reduced offer" OR "developer will potentially be in trouble" It's gonna be the second choice buddy. ISTM the full choice includes many more options, e.g. I can think of: "release further funds to allow the development to complete on the developers' terms" (whether directly from the "wind-down/administration fund" and thus outranking existing lenders, or by allowing lenders who want to partipate to do so)
"put the developer in touch with a third party who will provide bridging finance on a second charge basis in the circumstances"
"permit the developer to use funds from the initial unit sales to complete the work on later units rather than requiring immediate repayment of the loan from initial unit sales"
"accept a reduced offer of full repayment so the developer can quickly refinance on a first charge basis with their preferred alternative" "the developer (and implicitly those who funded the development) will be in trouble"
... and of course, we can't be sure that the commenter on the times article behind a paywall is really who they say they are... indeed those of us who don't have access behind the paywall can't even verify such a comment exists!
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Post by Deleted on May 27, 2019 9:31:27 GMT
indeed those of us who don't have access behind the paywall can't even verify such a comment exists! Yeah, I'm gonna lie about the existence of such a comment, I clearly have so much to gain by doing so 
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sl75
Posts: 2,092
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Post by sl75 on May 27, 2019 9:54:30 GMT
indeed those of us who don't have access behind the paywall can't even verify such a comment exists! Yeah, I'm gonna lie about the existence of such a comment, I clearly have so much to gain by doing so That was intended more an expression of frustration at not being able to review the context of the comment...
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Post by Deleted on May 27, 2019 10:04:19 GMT
That was intended more an expression of frustration at not being able to review the context of the comment... I can view the comment with a timesonline account but no subscription, so not paying a penny.
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nsinvestor
Member of DD Central
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Post by nsinvestor on May 27, 2019 11:51:09 GMT
Didn't they raise institutional or large private investment at one point? If it could be demonstrated that they were lending to borrowers who no one, in their right mind would lend to, is there a case for fraud? Would an institutional investor have seen this level of detail that p2p lenders weren't party to? If they don't share info on who the borrower is, then one can hypothetically fairly assume, in normal circumstances, that the platform has already done that part of the DD for the lender... Many of the borrowers are so called 'No Status' borrowers - the model is all about the security of the underlying asset, not the borrower's credit worthiness. With PBL, usually the borrower had enough skin in the game so even when the valuations didn't support a 70% LTV, there was still enough in the pot for a decent recovery. With development finance it's all about the GDV i.e. lending against the potential future value. That requires far more planets to align and with slippages in build time lines or cost overruns, the developers profits can quickly disappear. More importantly, most borrowers set up SPVs and have very little skin in the game. Then you get the merry-go round of money lent to one SPV being moved inter-company to finish off another development elsewhere. Big game of musical chairs.
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iainrae
New Member
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Post by iainrae on May 27, 2019 14:38:32 GMT
Interesting comment on that Times article: "As an actual developer that borrowed from Lendy, I am probably one of the supposed few who are under budget and on target to repay them. Well, we were until the FCA started monitoring them and all payments slowed down.
We are only about 6 weeks from completion, have pre-sold more than 50% of our properties, but now have to wait for the administrators and find out if funding will continue.
If not, I already have alternative funding in place, but the administrators will have to accept a reduced offer, or we will potentially be in trouble.
What fun! :-)"No prizes for guessing which project it is.
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iainrae
New Member
Posts: 2
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Post by iainrae on May 27, 2019 14:40:18 GMT
"No prize for guessing which project it is"  Well, if there's no prize why not just tell us?
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cwah
Member of DD Central
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Post by cwah on May 27, 2019 14:45:52 GMT
Didn't they raise institutional or large private investment at one point? If it could be demonstrated that they were lending to borrowers who no one, in their right mind would lend to, is there a case for fraud? Would an institutional investor have seen this level of detail that p2p lenders weren't party to? If they don't share info on who the borrower is, then one can hypothetically fairly assume, in normal circumstances, that the platform has already done that part of the DD for the lender... Many of the borrowers are so called 'No Status' borrowers - the model is all about the security of the underlying asset, not the borrower's credit worthiness. With PBL, usually the borrower had enough skin in the game so even when the valuations didn't support a 70% LTV, there was still enough in the pot for a decent recovery. With development finance it's all about the GDV i.e. lending against the potential future value. That requires far more planets to align and with slippages in build time lines or cost overruns, the developers profits can quickly disappear. More importantly, most borrowers set up SPVs and have very little skin in the game. Then you get the merry-go round of money lent to one SPV being moved inter-company to finish off another development elsewhere. Big game of musical chairs. If the money is diverted to another company to finish another development, then this is called fraud.
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zlb
Member of DD Central
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Post by zlb on May 27, 2019 16:30:48 GMT
Many of the borrowers are so called 'No Status' borrowers - the model is all about the security of the underlying asset, not the borrower's credit worthiness. With PBL, usually the borrower had enough skin in the game so even when the valuations didn't support a 70% LTV, there was still enough in the pot for a decent recovery. With development finance it's all about the GDV i.e. lending against the potential future value. That requires far more planets to align and with slippages in build time lines or cost overruns, the developers profits can quickly disappear. More importantly, most borrowers set up SPVs and have very little skin in the game. Then you get the merry-go round of money lent to one SPV being moved inter-company to finish off another development elsewhere. Big game of musical chairs. If the money is diverted to another company to finish another development, then this is called fraud. would an example be something like money loaned for a PBL, but used for a DFL instead/as well?
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tommytaylor
P2P - The new wild west
Posts: 234
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Post by tommytaylor on May 27, 2019 17:44:25 GMT
No more BS: For over 30 years, Mark has provided corporate insolvency and turnaround advice to management teams, lenders, shareholders and creditors. He has considerable experience dealing with cases where there are allegations of fraud, misfeasance, other financial misconduct or improper behaviour. Mark leads the special investigations team, which focuses on contentious insolvency litigation to successfully recover assets from the UK and overseas. The team also specialises in provisional liquidations, high profile bankruptcies, corporate and personal fraud investigations, and pursuing directors for misfeasance that has caused corporate debts. Your mate Mark should have no worries getting his claws stuck into these <abusive slur removed> then should he
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mary
Member of DD Central
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Post by mary on May 27, 2019 18:00:13 GMT
Many of the borrowers are so called 'No Status' borrowers - the model is all about the security of the underlying asset, not the borrower's credit worthiness. With PBL, usually the borrower had enough skin in the game so even when the valuations didn't support a 70% LTV, there was still enough in the pot for a decent recovery. Check out PBL155, security sold at auction for ~30% of the valuation, ~70% loss to investors!
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