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Post by ericandy on Jun 15, 2019 12:25:00 GMT
I don't know why more isn't being made of this.
If shortfalls in loan repayments can be made up by (insurance)claims against inaccurate security valuations, then ultimately it's a question of how long until getting our money back, minus Administrators costs.
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thedog
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Post by thedog on Jun 15, 2019 12:51:40 GMT
I don't know why more isn't being made of this. If shortfalls in loan repayments can be made up by (insurance)claims against inaccurate security valuations, then ultimately it's a question of how long until getting our money back, minus Administrators costs. The answer is it's great in theory but in practice it's not easy to win a case against a valuer. Valuations are hedged around with caveats about subjectivity, valuers can claim the market has moved, the condition of the property has changed, we weren't told about x,y and z and fire-sellers will never achieve the willing-buyer, willing-seller OMV so will argue that's what caused the shortfall. They should be pursued but not easy cases to win - as the valuers, their insurers and their lawyers know.
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Post by rooster on Jun 15, 2019 14:02:59 GMT
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. But who (with any money) might you make a claim for miss-selling to? For sure if you were advised by a financial adviser you might be able to make a claim there, but that won't be true for most people. I asked my financial advisor whether I should invest in Lendy, 18 months ago. He literally said "don't touch it with a bargepole" but I ignored him. More fool me!
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Post by ericandy on Jun 15, 2019 17:02:19 GMT
I don't know why more isn't being made of this. If shortfalls in loan repayments can be made up by (insurance)claims against inaccurate security valuations, then ultimately it's a question of how long until getting our money back, minus Administrators costs. The answer is it's great in theory but in practice it's not easy to win a case against a valuer. Valuations are hedged around with caveats about subjectivity, valuers can claim the market has moved, the condition of the property has changed, we weren't told about x,y and z and fire-sellers will never achieve the willing-buyer, willing-seller OMV so will argue that's what caused the shortfall. They should be pursued but not easy cases to win - as the valuers, their insurers and their lawyers know.
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Post by ericandy on Jun 15, 2019 17:02:50 GMT
I don't know why more isn't being made of this. If shortfalls in loan repayments can be made up by (insurance)claims against inaccurate security valuations, then ultimately it's a question of how long until getting our money back, minus Administrators costs. The answer is it's great in theory but in practice it's not easy to win a case against a valuer. Valuations are hedged around with caveats about subjectivity, valuers can claim the market has moved, the condition of the property has changed, we weren't told about x,y and z and fire-sellers will never achieve the willing-buyer, willing-seller OMV so will argue that's what caused the shortfall. They should be pursued but not easy cases to win - as the valuers, their insurers and their lawyers know.
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sl75
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Post by sl75 on Jun 15, 2019 18:24:01 GMT
An email I sent to RSM a little over a week ago seemed to get escalated for a reponse direct from Mark Wilson.
It confirms that they will indeed be reviewing cases where there appeared to be a shortfall in the distributed funds (with no explanation given to investors about how the amount we received was arrived at), and that monies held on account w.r.t. various loan repayments won't be distributed until they're certain of the correct distribution to lenders (confirming details with lawyers etc.)
I don't think we're reasonably going to be expecting anything significant (besides general platitudes and clarifications) before the initial "within 8 weeks" report, which as the general update indicates "will include a comprehensive review of all key matters".
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adrianc
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Post by adrianc on Jun 15, 2019 19:47:12 GMT
I asked my financial advisor whether I should invest in Lendy, 18 months ago. He literally said "don't touch it with a bargepole" but I ignored him. More fool me! "Hello, Mr IFA. I have money I can invest through you, earning you commission, or I can invest somewhere else entirely, where you don't earn a penny from it. What do you think I should do?"
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Greenwood2
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Post by Greenwood2 on Jun 15, 2019 19:54:11 GMT
I asked my financial advisor whether I should invest in Lendy, 18 months ago. He literally said "don't touch it with a bargepole" but I ignored him. More fool me! "Hello, Mr IFA. I have money I can invest through you, earning you commission, or I can invest somewhere else entirely, where you don't earn a penny from it. What do you think I should do?" I thought IFAs all had to be fee based these days, but I could be wrong.
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adrianc
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Post by adrianc on Jun 15, 2019 20:05:31 GMT
"Hello, Mr IFA. I have money I can invest through you, earning you commission, or I can invest somewhere else entirely, where you don't earn a penny from it. What do you think I should do?" I thought IFAs all had to be fee based these days, but I could be wrong. I haven't dealt with one for a few years. But the point still stands...
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sydb
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Post by sydb on Jun 15, 2019 20:50:29 GMT
fire-sellers will never achieve the willing-buyer, willing-seller OMV so will argue that's what caused the shortfall Surely this point is invalid when a 90-day sale valuation is given, as has been the case with every Lendy loan valuation I have seen. If not, what is the point of a 90-day sale valuation? Of the security sold I have looked at so far, the sale price has been well below the 90-day valuation amount.
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thedog
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Post by thedog on Jun 15, 2019 21:47:49 GMT
It's a help of course, but valuers would argue that even a willing seller seeking to sell quickly is better placed than a distressed seller. The arguement will be that the best price you can get in 90 days which you might still choose to reject isn't the same as the best price you can get when you have no choice but to sell. As I said, they should certainly be pursued and there will probably be some successes - just don't expect this to be a generalised silver-bullet.
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travolta
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Post by travolta on Jun 16, 2019 8:32:39 GMT
They invested in a local property that had been stuck on the market for over 20 years, but ignored my email when I advised them of the local value. It folded (was overvalued) and returned borrowers a 50% loss. I also mailed L @ Financial Thing who thanked me for the heads up. This site didn't exist then … otherwise you all could have jumped ship (at some other poor s*ds expense) .
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ilmoro
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Post by ilmoro on Jun 16, 2019 9:27:37 GMT
They invested in a local property that had been stuck on the market for over 20 years, but ignored my email when I advised them of the local value. It folded (was overvalued) and returned borrowers a 50% loss. I also mailed L @ Financial Thing who thanked me for the heads up. This site didn't exist then … otherwise you all could have jumped ship (at some other poor s*ds expense) .
. Sorry what is this referring to? Seems to be a non-sequiter in the thread. Who are they? Doesn't seem to be Lendy as they didn't do property before this site existed.
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adrianc
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Post by adrianc on Jun 16, 2019 9:45:39 GMT
They invested in a local property that had been stuck on the market for over 20 years, but ignored my email when I advised them of the local value. It folded (was overvalued) and returned borrowers a 50% loss. I also mailed L @ Financial Thing who thanked me for the heads up. This site didn't exist then … otherwise you all could have jumped ship (at some other poor s*ds expense) . Sorry what is this referring to? Seems to be a non-sequiter in the thread. Who are they? Doesn't seem to be Lendy as they didn't do property before this site existed. TBF, it may have been before travolta joined this merry throng in spring 2018 - one of her very first posts was... Aren't valuer a profession ? And if it's an independent valuation, it should sometime under value and sometimes overvalue. Why do we see so much difference between the advertised LTV and the sell price? 70% LTV should be fairly safe in a normal world! Interestingly they carried a property in my area that was a COMPLETE DOG and had been for decades. When I pointed this out I was informed that they had passed on the info . Predictably it crashed and burned and they are pursuing legal methods to scrape up the remnants. I guess you can sue valuers...? I wonder which loan we're talking about...?
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sydb
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Post by sydb on Jun 16, 2019 11:53:35 GMT
It's a help of course, but valuers would argue that even a willing seller seeking to sell quickly is better placed than a distressed seller. The arguement will be that the best price you can get in 90 days which you might still choose to reject isn't the same as the best price you can get when you have no choice but to sell. As I said, they should certainly be pursued and there will probably be some successes - just don't expect this to be a generalised silver-bullet. Such an argument assumes disclosure to the market has occurred regarding why the seller wants to sell. The fact is that until a development is within the last few days/weeks of completion, that land it is on might not be worth more than the land before any development started. I think this should be one of the strong warnings P2P agents must declare in big bold letters to their clients next to the declared LTV/GDV of every loan. Assuming all else being equal, it may even be worth less due to disposal costs. Part way through a development, it is impossible to hide the reason the thing has come on the market (distress). It's the massive risk with development loans and yet another fundamental I am only now realising about the meaningless of LTV declared by a P2P agent for property development when LTV is based on the developed valuation (GDV). It could mean absolutely nothing until the development is complete. LTV based on GDV does not represent a measure of security. There should be massive red bold font declaring valuation BEFORE development. Loan agents should be forced to declare two LTV, one based on value now and one based on the fictional developed value. In fact, maybe they should only be permitted to declare LTV based on undeveloped valuation. I think this kind of thing would be a simple constructive step (pun intended) the FCA could be pushing for to disuade Joe Bloggs from P2P, rather than telling Joe Bloggs what he can't do and then shrugging when he loses 10% of his savings. (Of course, this assumes the FCA and government want investors to be educated to the risks.) Once you get LTVs declared as 200%, 300%, 400%, or whatever it is, instead of 70%, it might make a difference to whether the average punter slaps their cash down. The valuation declared by Lendy for DFL004, for example, had no mention at all of what the land was worth without a fully completed development.
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