Lendy In Administration

Yes but the point I was addressing was that a successful claim has to prove that the valuation was wrong at the outset, not years later. This might work for a simple bridging loan but must be harder for a stalled part-completed development project. One of the major problems with valuations on DFLs was that they worked on the basis that the project would be finished when what lenders needed to know was what might be realised on a defaulted firesale. 

Lot of speculation out there so thought I'd put my understanding to the test, fire away if you think of know I have anything wrong.

1. As with all P2P companies, all loans are contained entities with no reliance on the existence of Lendy.
2. As with all P2P companies Lendy were required to ensure that sufficient funds were ring fenced such that a third party administrator could close out all such loans with no reliance on the existence of Lendy, as I understand it it was to ensure this requirement that Lendy moved when they did.
3. All Lendy loans have security and were based on a maximum outlay of 70% of the value of that security.
4. All Lendy valuations required that the valuer had sufficient insurance in place such that if the valuation AT THE TIME OF LOAN EXPIRY proved inaccurate, a claim could be sought against that insurance. This was part of Lendy's due diligence and a route they have exercised on some loans to date with success.

With regards to individual loans, unless it transpires Lendy have operated outwith code then they are no more or less likely to return our capital now than under Lendy, in other words each loan stands on it's own merits.

Security valuations, a major criticism on this forum against Lendy, being insured means that's an avenue the administrators can pursue if they think property was over valued, and even if those valuers were to go into admin, their insurance would still have to man up where there were legitimate claims.



Does anyone know how Lendy funded the contingency fund, was it from their profits or geared to loans, I see the admins are saying it's not clear cut in which case it's not simply Lendy's money available to their own creditors, at least not for now?

Finally, I think one of the big worries is if whether the FCA envisaged this percentage of troubled loans when setting the amount that needed to be ringfenced for this type of collapse, and if given the likely litigation to come, whether any shortfall falls to being paid via return on loans or Lendy assets. 

That's what the administrators are taking advice on. In theory, lenders on new term loans, and probably creditors on old. If you are on LAG FB group there is a comment on a post giving the nature of of the query.

It was not informative, but one shouldn't expect much more at this stage. I think the fact that administrators communicate frequently is positive alone.

So perhaps if this is well understood risk in the sector and it wasn't listed, then it can contribute to the notion for the many, of miss-selling.

I'm saying that any company providing a valuation of a security that was subsequently written into a loan agreement had to have that valuation insured, and that Lendy have already made claims against such insurances successfully, and that it was the valuers responsibility to factor in likely market changes during the loan period or a specified period beyond the loan. This came up when I challenged a Lendy loan which returned hundreds of thousands short of the valuation. Lendy's had taken possession and liquidated the security, once done they made a claim to the valuation company's insurer for the shortfall. I specifically asked about Brexit and it's detrimental effect upon prices and was told again, that it was the responsibility of the valuer to factor in any likely impact of foreseeable shifts in market value including Brexit. I was sighted two other loans which Lendy had made successful insurance claims upon and was told they expected to succeed on the loan I was questioning.