adrianc
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Post by adrianc on Jun 9, 2019 10:50:45 GMT
The option to withdraw is still available, does it mean we can withdraw or not? I still have not understood that part A cash balance on your account? AIUI, you can ask to withdraw, but no payments will be approved or transferred until after the client cash account has been reconciled fully.
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Mucho P2P
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Post by Mucho P2P on Jun 9, 2019 20:47:58 GMT
The option to withdraw is still available, does it mean we can withdraw or not? I still have not understood that part You can put in a request, but it will be effected once the reconciled cash balance has been approved by the FCA. I requested a withdrawal 30 mins before Lendy went into receivership (great timing eh?), and I am still waiting for it to arrive!
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sl75
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Post by sl75 on Jun 10, 2019 8:15:11 GMT
Why are property loans always such a complete disaster? First Funding Circle, now Lendy. Are the companies not doing due diligence? You would think with the security of an asset they would be able to recoup losses.
I certainly will never ever invest in property loans again, and now I am worried that the same thing will happen on a smaller platform I have more property loans with. It has become clear to me that for some reason, property is just a disaster and nobody in the UK is apparently able to pay off a loan they have used for building or renovating property.
How many Ly property loans have repaid just fine...? There's quite a long list at lendy.co.uk/loans/repaid (rather than a raw count, will probably need to open up and review details depending on how you're defining "just fine" - all of the loans on that page were repaid in full, some with no fanfare or fuss at all, some after semi-protracted recovery processes, and some simply by refinancing to another Lendy loan)
For me, the biggest risk right now is of disruption to ongoing recovery processes / legal actions / claims as a result of the appointment of administrators.
I would hope that the administrators and wind-down operators have enough experience and common sense not to allow any ongoing claims with good prospects of success fail simply due to their appointment, but at present that's all it is - a hope...
Edit: it's perhaps also the biggest opportunity, as the administrators may be able to put more clout behind a claim.
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thedog
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Post by thedog on Jun 10, 2019 9:20:34 GMT
Why are property loans always such a complete disaster? First Funding Circle, now Lendy. Are the companies not doing due diligence? You would think with the security of an asset they would be able to recoup losses.
I certainly will never ever invest in property loans again, and now I am worried that the same thing will happen on a smaller platform I have more property loans with. It has become clear to me that for some reason, property is just a disaster and nobody in the UK is apparently able to pay off a loan they have used for building or renovating property.
Couple of (non-exhaustive) thoughts:
Some of the disasters are in land for development. As the land value is the residual of GDV less development cost it can be volatile and hard to value.
"Optimistic" valuations of land therefore get through much more easily.
Many others are in developments which have failed during construction. These are a nightmare to sell - few potential buyers so they can low-ball and since they didn't undertake the original build they factor in negative assumptions about build quality (which are likely to be right as the original developer has failed and was running out of cash). Essentially land of 10 + build cost of 5 may well be worth 12. Or 8......
In these cases Banks would often either
(a) lend additional funds to "protect" what they have but that's difficult in P2P (new lenders have no reason to "protect" existing loans unless incentivised to do so by high margin - not impossible but not easy to organise) or
(b) take the project in house and appoint own developers to complete - again difficult in P2P as again needs new money so same problem as (a) and also expertise which the platforms don't always have.
A lot of failures during development are caused by developers not properly factoring in the much higher funding cost of P2P compared to bank funding. Add in that as we all know a P2P funded property developer is P2P funded because they couldn't get bank funding and you have the classic paradox of debt - those with the greatest risk of failure are charged the highest interest rate and are therefore even more likely to fail.
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Mucho P2P
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Post by Mucho P2P on Jun 10, 2019 9:39:43 GMT
Why are property loans always such a complete disaster? First Funding Circle, now Lendy. Are the companies not doing due diligence? You would think with the security of an asset they would be able to recoup losses.
I certainly will never ever invest in property loans again, and now I am worried that the same thing will happen on a smaller platform I have more property loans with. It has become clear to me that for some reason, property is just a disaster and nobody in the UK is apparently able to pay off a loan they have used for building or renovating property.
Couple of (non-exhaustive) thoughts:
Some of the disasters are in land for development. As the land value is the residual of GDV less development cost it can be volatile and hard to value.
"Optimistic" valuations of land therefore get through much more easily.
Many others are in developments which have failed during construction. These are a nightmare to sell - few potential buyers so they can low-ball and since they didn't undertake the original build they factor in negative assumptions about build quality (which are likely to be right as the original developer has failed and was running out of cash). Essentially land of 10 + build cost of 5 may well be worth 12. Or 8......
In these cases Banks would often either
(a) lend additional funds to "protect" what they have but that's difficult in P2P (new lenders have no reason to "protect" existing loans unless incentivised to do so by high margin - not impossible but not easy to organise) or
(b) take the project in house and appoint own developers to complete - again difficult in P2P as again needs new money so same problem as (a) and also expertise which the platforms don't always have.
A lot of failures during development are caused by developers not properly factoring in the much higher funding cost of P2P compared to bank funding. Add in that as we all know a P2P funded property developer is P2P funded because they couldn't get bank funding and you have the classic paradox of debt - those with the greatest risk of failure are charged the highest interest rate and are therefore even more likely to fail.
Lendy should, in the interests of its lenders, scrutinise the cash flow projections prior to accepting the loan. If the cash flow projections do not add up, Lendy should not place the loan on the platform and risk lenders capital.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 10, 2019 9:54:40 GMT
Couple of (non-exhaustive) thoughts:
Some of the disasters are in land for development. As the land value is the residual of GDV less development cost it can be volatile and hard to value.
"Optimistic" valuations of land therefore get through much more easily.
Many others are in developments which have failed during construction. These are a nightmare to sell - few potential buyers so they can low-ball and since they didn't undertake the original build they factor in negative assumptions about build quality (which are likely to be right as the original developer has failed and was running out of cash). Essentially land of 10 + build cost of 5 may well be worth 12. Or 8......
In these cases Banks would often either
(a) lend additional funds to "protect" what they have but that's difficult in P2P (new lenders have no reason to "protect" existing loans unless incentivised to do so by high margin - not impossible but not easy to organise) or
(b) take the project in house and appoint own developers to complete - again difficult in P2P as again needs new money so same problem as (a) and also expertise which the platforms don't always have.
A lot of failures during development are caused by developers not properly factoring in the much higher funding cost of P2P compared to bank funding. Add in that as we all know a P2P funded property developer is P2P funded because they couldn't get bank funding and you have the classic paradox of debt - those with the greatest risk of failure are charged the highest interest rate and are therefore even more likely to fail.
Lendy should, in the interests of its lenders, scrutinise the cash flow projections prior to accepting the loan. If the cash flow projections do not add up, Lendy should not place the loan on the platform and risk lenders capital. More importantly the appointed IMS should review & sign off the cash flow projections which they will be responsible for monitoring. A good IMS should inform the lender where their are issues in the budget which need to be rectified before the loan goes ahead e.g. the contingency budget is sufficient
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thedog
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Post by thedog on Jun 10, 2019 12:15:57 GMT
Yes, wouldn't disagree with either of those replies.
Was setting out some thoughts addressing the earlier question of how property loans failed when they (appeared to be) asset backed and I think funding costs are part of that. Certainly true this SHOULD be picked up in DD and monitoring, so yes I guess that it sometimes isn't reflects weaknesses in those processes rather than the developers themselves (and a thinner margin of safety on high rate developments?)
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Post by billy169 on Jun 10, 2019 14:09:06 GMT
Just been on another platform.(BC)..and they are making me do a tick box survey .making sure I understand the risk and there are no guarantees.
. there's panic out there.!??
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Greenwood2
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Post by Greenwood2 on Jun 10, 2019 15:56:33 GMT
Just been on another platform.(BC)..and they are making me do a tick box survey .making sure I understand the risk and there are no guarantees. . there's panic out there.!?? I think it's just in line with the new FCA rules, I also had to do one on another platform a while ago.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Jun 10, 2019 17:02:28 GMT
Just been on another platform.(BC)..and they are making me do a tick box survey .making sure I understand the risk and there are no guarantees. . there's panic out there.!?? As BC aren't article 36h P2P & are offering unregulated bridging loans they probably should have always been doing suitability checks etc.
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Greenwood2
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Post by Greenwood2 on Jun 10, 2019 17:14:25 GMT
Just been on another platform.(BC)..and they are making me do a tick box survey .making sure I understand the risk and there are no guarantees. . there's panic out there.!?? As BC aren't article 36h P2P & are offering unregulated bridging loans they probably should have always been doing suitability checks etc. I think there was something you had to do when I first joined. I think they are going for P2P FCA authorisation in preparation for new products as well.
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Post by billy169 on Jun 10, 2019 17:34:11 GMT
Brave in the current climate.
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Post by mot on Jun 10, 2019 18:58:41 GMT
Lendy should, in the interests of its lenders, scrutinise the cash flow projections prior to accepting the loan. If the cash flow projections do not add up, Lendy should not place the loan on the platform and risk lenders capital. More importantly the appointed IMS should review & sign off the cash flow projections which they will be responsible for monitoring. A good IMS should inform the lender where their are issues in the budget which need to be rectified before the loan goes ahead e.g. the contingency budget is sufficient C property look like they’ve got it sussed !!!
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Post by patright on Jun 11, 2019 5:52:52 GMT
Brave in the current climate. that's for sure, this late in the economic cycle, staying in P2P seems unwise to me A crash is inevitable despite all desperate attempts by central banks around the globe...time for precious metal holding
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lobster
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Post by lobster on Jun 11, 2019 7:35:10 GMT
Brave in the current climate. that's for sure, this late in the economic cycle, staying in P2P seems unwise to me A crash is inevitable despite all desperate attempts by central banks around the globe... time for precious metal holdingMmmm , that advice has been on offer for the last 20 years, but it never seems to work out in the modern era. In relatively recent times of crisis (eg. the 2007 crisis), there was much more of a flight to the US Dollar than to Gold (or Silver). To all physical gold holders who feel they are "protected" , I ask them this : If the Armegeddon they are predicting (ie. a total financial meltdown) actually happens, how exactly are they going to profit from their gold holding ? Best of luck when you try paying for your Tescos shopping with a Gold sovereign .... ok that's flippant, but if there is a total loss of confidence in fiat currency there will literally be blood on the streets, and there won't be any way of actually using Gold coins as a medium of exchange. How could the recipient trust them , value them, weigh them etc etc.
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