adrian77
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Post by adrian77 on Jul 29, 2019 7:10:40 GMT
Thanks for the update
well what's stopping them ? How about starting with the Park Homes and explicitly stating 1) how many of these damn units (2 or it is 5 or whatever) there actually are and 2) status details of each of the individual units
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ashtondav
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Post by ashtondav on Jul 29, 2019 7:29:02 GMT
So, did only one poster on this forum get to attend?
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pip
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Post by pip on Jul 29, 2019 7:39:28 GMT
Thanks for the update well what's stopping them ? How about starting with the Park Homes and explicitly stating 1) how many of these damn units (2 or it is 5 or whatever) there actually are and 2) status details of each of the individual units Adrian believe the answer is. - For the loan for 5 park homes, only two ever existed which have now been sold and the proceeds returned to investors. No further recovery expected. The loan was completely missold imho as they were only going to produce three of the homes once the first two were sold, so the security of 5 homes never existed. As FS said themselves the only things remaining were a few pieces of wood which had no value. - the loan for 2 park homes is still outstanding. This is probably not the answer you are after but as I read it this is the reality.
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adrian77
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Post by adrian77 on Jul 29, 2019 8:18:46 GMT
Thanks for the reply I suspect you are correct if so then my assumptions in my post below are valid and this one is a thumping 94% loss -well a lot of us said it would be a disaster but even I never believed it would be this bad. I don't think FS have been exactly upfront about this one... FS say "they want to engage with us and communicate better via the platform with better more meaningful updates" well how about confirming or refuting my conclusion over this one . One sharp forum member spotted who owned the flat in Reading so the chance of FS pulling the wool over our eyes on this one is exactly zero... p2pindependentforum.com/thread/15335/league-top-mega-failure-comments |
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r00lish67
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Post by r00lish67 on Jul 29, 2019 8:37:15 GMT
Thanks for the reply I suspect you are correct if so then my assumptions in my post below are valid and this one is a thumping 94% loss -well a lot of us said it would be a disaster but even I never believed it would be this bad. I don't think FS have been exactly upfront about this one...
I've not been in either of these loans, but reading the FS updates on the 5 homes loan briefly makes it perfectly clear what happened, which is as pip neatly summarised and the crux of which is in this FS update: 13th Feb: "This loan was secured against five Park Homes to be constructed. As previously advised the funds were used to complete two of the homes. Unfortunately construction of the remaining homes was to have been funded by the sale of the first two. Although some lumber and base chassis were part purchased for the additional homes they have little, if any value." So. questions for you: a) How is that not upfront? b) Why is this so confusing to you? c) Why have you worked out an (incorrect) loss figure when FS publish this themselves on each of the loan tranches: "actual return: -85.4%" (which, don't worry, I have checked and is correct) d) Why do you keep repeatedly asking the same questions, have them answered, and then ask them again the following week? e) Can you now please promise you're going to stop asking where all the sodding park homes are?
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paulb
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Post by paulb on Jul 29, 2019 10:45:06 GMT
Whilst it is perfectly clear now what has happened, I don't think FS were "up front" about it - the second loan is described as being secured against 5 homes all of which were "under construction", and each home is described on the Assets tab, with "current" values of each of the 5 being many thousands of pounds - each one individually having a "current" value of more than the total amount returned. If the three non-complete homes really did have "little, if any value", and the loan was secured only on the two near-complete (now completed) homes, then the LTV was over 200%, rather than the 60% quoted by FS.
The admission that there were only 2 homes came only after the loan was overdue by over a year. The loan description states that the funds from the sales would be used to repay the loan - not to build further units, again giving lenders no reason to believe the latter three homes didn't exist.
I believe Adrian's loss-figures are based on both Park Homes loans to the same borrower, rather than just the "5" homes loan - to be fair, even FS seemed unable to keep the two loans distinct, referring to the 2 homes loans in at least 3 updates to the "5" homes (though one was posted in error). Of course, this figure will be reduced if/when the payment is received, but given it was to be made "straight away" over a month ago, I don't think it's unreasonable to assume those funds aren't forthcoming.
A (non-)disclaimer - I'm not actually in any of these loans, so have been following them just out of morbid curiosity, rather than as having a financial interest.
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adrian77
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Post by adrian77 on Jul 29, 2019 11:03:25 GMT
correct - thanks for your comments - I have tried to make my calculations clear - and as stated I agree with the FS loss of -85.4% for the loan of 5 but unsure if there has been double counting here or what regarding the loans for 2 completed units. To me that is a perfectly reasonable question which I am sure a lot of us would like an answer to.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 29, 2019 11:38:42 GMT
Please do let us know how it goes if you're attending. I did attend the meeting, I didn't really get to hold their feet to the fire really! Perhaps I'm a little too soft. The main thrust of what they had to say is that they want to engage with us and communicate better via the platform with better more meaningful updates and they are looking to make progress on the bad loanbook.I spoke to the team in small groups and was very informal I did say that the DD on the loans historically was poor along with valuations and it shouldn't be the forum to find out more about the loanbook as they are the "professionals" I didn't press them enough that they should take responsibility and compensate us for their failings and to take action against valuers, but I'll try to attend another invester meeting to put this better. I think they are backed by Raj Kumar? so they hopefully won't go under which was something I was worried about initially, but I said it is real progress on the zombie loans will prove what the new teams salt. It looks like the new members of the team have lots to do but hopefully they will make progress, we will have to see! Yawn. Now where have I heard all that BEFORE? FS really do take their Lenders for mugs. ( Not having a go at you btw denzilh )
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coop
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Post by coop on Jul 29, 2019 11:52:25 GMT
Whilst it is perfectly clear now what has happened, I don't think FS were "up front" about it - the second loan is described as being secured against 5 homes all of which were "under construction", and each home is described on the Assets tab, with "current" values of each of the 5 being many thousands of pounds - each one individually having a "current" value of more than the total amount returned. If the three non-complete homes really did have "little, if any value", and the loan was secured only on the two near-complete (now completed) homes, then the LTV was over 200%, rather than the 60% quoted by FS. The admission that there were only 2 homes came only after the loan was overdue by over a year. The loan description states that the funds from the sales would be used to repay the loan - not to build further units, again giving lenders no reason to believe the latter three homes didn't exist. I believe Adrian's loss-figures are based on both Park Homes loans to the same borrower, rather than just the "5" homes loan - to be fair, even FS seemed unable to keep the two loans distinct, referring to the 2 homes loans in at least 3 updates to the "5" homes (though one was posted in error). Of course, this figure will be reduced if/when the payment is received, but given it was to be made "straight away" over a month ago, I don't think it's unreasonable to assume those funds aren't forthcoming. A (non-)disclaimer - I'm not actually in any of these loans, so have been following them just out of morbid curiosity, rather than as having a financial interest. At the risk of further marking every bloody thread about these things this is basically it. Not up front at all at the time, they have since come clean about the 5 park homes - seems to me they haven't full come clean about the '2 park homes' loan at all either.
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thedog
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Post by thedog on Aug 5, 2019 18:31:57 GMT
I went to the Investor Event a couple of weeks ago I’ve been mulling whether / how to comment on that given that I fully expect to kick off a barrage of criticism….. This is also to respond to dan1 's thread "Change in ownership but management remains the same?" which has prompted me into commenting (and which I'm not sure how to link to....) There were 6 FS staff / Directors at the event including the new majority owner. All were new since change of ownership (NH was not there). I would describe 4 of the 6 as Directors or ”management”. (As an aside there were only about 20 investors there so I don’t think anyone should be offended at not being invited). So to address dan1 's question - from that event I’d say there has been a change in management as well as ownership but presumably a lot of old junior staff are still in place and learning to do things differently, supplemented by the new folks. It was clear that the new owners/management accepted the book had been mismanaged historically and were trying to (a) resolve those old loans (b) put a new business in place going forward and I was personally impressed with the people I spoke to (5 of the 6, including the owner). Various investors told them in no uncertain terms where issues persisted (comms, new loan structures, connected borrowers, minimums etc) and they acknowledged these. (Doesn’t of course mean that these will change overnight but they listened). So their overall message was – business was poorly managed and changes are still a work-in-progress, there have been improvements but there is still some way to go.
OK - so broader views on what this means for investing in FS and this is where people may disagree with me. Tin hat on, I’m not looking for a fight and this is just my view….
The people I met seemed competent, honest in admitting to problems and committed to improving the platform. In my opinion they are investible.
On the historic “problem loans” I’m not going to comment on redress or what FS “ought” to do for investors as I don’t think I can add anything to or influence either topic.
What I would say on those deals is that the losses were unavoidable as soon as (or not long after) the money went out the door. They were lousy loans, not well described and any opportunity to materially mitigate losses was lost early on under “old” management. Portfolio Management has improved since ownership changed (still some issues such as the points noted above but that's hardly unique to FS) but the damage on these loans had already been done by the old management. If you think these loans have been mismanaged in the last few months that’s a valid criticism of the current business (and I think they’d listen), but mismanagement on origination isn’t. I know it’s easy for someone who is not invested in these loans to be sanguine, but that’s my view. Now I’m going to hide in my basket and whimper while humans shout at me…..
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pip
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Post by pip on Aug 5, 2019 19:06:00 GMT
I agree the new management are not to blame for past failings. However this in no way means that I have built any where near enough confidence in the new management to invest my hard earned money. The company is in for a barrage of complaints and claims, and investor confidence is totally shot. Platform risk has to be a major concern for any new investor as a result.
Fair play to the new owners for taking on FS. Sure things were worse than they expected. Can’t help thinking that they would have been better starting from scratch and letting FS fold.
I am still of the same position, I have written off all money in FS, anything back will be nice surprise. I have absolutely no intention of giving them another penny, ever. The risk/reward does not stack up....at all.
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r00lish67
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Post by r00lish67 on Aug 5, 2019 21:01:20 GMT
I went to the Investor Event a couple of weeks ago I’ve been mulling whether / how to comment on that given that I fully expect to kick off a barrage of criticism….. This is also to respond to dan1 's thread "Change in ownership but management remains the same?" which has prompted me into commenting (and which I'm not sure how to link to....) There were 6 FS staff / Directors at the event including the new majority owner. All were new since change of ownership (NH was not there). I would describe 4 of the 6 as Directors or ”management”. (As an aside there were only about 20 investors there so I don’t think anyone should be offended at not being invited). So to address dan1 's question - from that event I’d say there has been a change in management as well as ownership but presumably a lot of old junior staff are still in place and learning to do things differently, supplemented by the new folks. It was clear that the new owners/management accepted the book had been mismanaged historically and were trying to (a) resolve those old loans (b) put a new business in place going forward and I was personally impressed with the people I spoke to (5 of the 6, including the owner). Various investors told them in no uncertain terms where issues persisted (comms, new loan structures, connected borrowers, minimums etc) and they acknowledged these. (Doesn’t of course mean that these will change overnight but they listened). So their overall message was – business was poorly managed and changes are still a work-in-progress, there have been improvements but there is still some way to go.
OK - so broader views on what this means for investing in FS and this is where people may disagree with me. Tin hat on, I’m not looking for a fight and this is just my view….
The people I met seemed competent, honest in admitting to problems and committed to improving the platform. In my opinion they are investible.
On the historic “problem loans” I’m not going to comment on redress or what FS “ought” to do for investors as I don’t think I can add anything to or influence either topic.
What I would say on those deals is that the losses were unavoidable as soon as (or not long after) the money went out the door. They were lousy loans, not well described and any opportunity to materially mitigate losses was lost early on under “old” management. Portfolio Management has improved since ownership changed (still some issues such as the points noted above but that's hardly unique to FS) but the damage on these loans had already been done by the old management. If you think these loans have been mismanaged in the last few months that’s a valid criticism of the current business (and I think they’d listen), but mismanagement on origination isn’t. I know it’s easy for someone who is not invested in these loans to be sanguine, but that’s my view. Now I’m going to hide in my basket and whimper while humans shout at me…..
Did the new management comment (or did you infer) as to why the new owners purchased such a tainted brand? Why start with the uphill task of tackling a plethora of litigation and reputational issues and not just ask Ablrate for a reskin in purple and start their own platform? Disregarding that, the moves fully attributable to the new owner include offering new loans in a) very little quantity b) what there is = more of ostensibly the same unappetising DFL's except with c) less interest, d) no interest pending activation and e) no bonuses. Maybe mismanagement would be a strong word, but misguided sounds about right. £40k filled of a £2.25m loan (Romford) - how is that even close to a sustainable business? Due to this and the continued inability to simply provide updates when they say they will, the new management is not exactly winning me back in spades. Ultimately even if they buck up their ideas in origination, as you say, there's a seemingly endless supply of historic issues. Yet ultimately they are now their issues whether they caused them or not - any individual one of which could handily sink their anaemic balance sheet.
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bugs4me
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Post by bugs4me on Aug 5, 2019 21:45:05 GMT
I went to the Investor Event a couple of weeks ago I’ve been mulling whether / how to comment on that given that I fully expect to kick off a barrage of criticism….. This is also to respond to dan1 's thread "Change in ownership but management remains the same?" which has prompted me into commenting (and which I'm not sure how to link to....) There were 6 FS staff / Directors at the event including the new majority owner. All were new since change of ownership (NH was not there). I would describe 4 of the 6 as Directors or ”management”. (As an aside there were only about 20 investors there so I don’t think anyone should be offended at not being invited). So to address dan1 's question - from that event I’d say there has been a change in management as well as ownership but presumably a lot of old junior staff are still in place and learning to do things differently, supplemented by the new folks. It was clear that the new owners/management accepted the book had been mismanaged historically and were trying to (a) resolve those old loans (b) put a new business in place going forward and I was personally impressed with the people I spoke to (5 of the 6, including the owner). Various investors told them in no uncertain terms where issues persisted (comms, new loan structures, connected borrowers, minimums etc) and they acknowledged these. (Doesn’t of course mean that these will change overnight but they listened). So their overall message was – business was poorly managed and changes are still a work-in-progress, there have been improvements but there is still some way to go.
OK - so broader views on what this means for investing in FS and this is where people may disagree with me. Tin hat on, I’m not looking for a fight and this is just my view….
The people I met seemed competent, honest in admitting to problems and committed to improving the platform. In my opinion they are investible.
On the historic “problem loans” I’m not going to comment on redress or what FS “ought” to do for investors as I don’t think I can add anything to or influence either topic.
What I would say on those deals is that the losses were unavoidable as soon as (or not long after) the money went out the door. They were lousy loans, not well described and any opportunity to materially mitigate losses was lost early on under “old” management. Portfolio Management has improved since ownership changed (still some issues such as the points noted above but that's hardly unique to FS) but the damage on these loans had already been done by the old management. If you think these loans have been mismanaged in the last few months that’s a valid criticism of the current business (and I think they’d listen), but mismanagement on origination isn’t. I know it’s easy for someone who is not invested in these loans to be sanguine, but that’s my view. Now I’m going to hide in my basket and whimper while humans shout at me…..
Thanks for reporting back but apart from a few words of 'comfort' most folks are looking for action. The new owners, although appreciate it's not my business, have missed the bus. It's as though it's business as usual with yet more meaningless updates when they appear and of course the (in)famous can kicking.
In my view they should have upped the game of FS immediately - new brooms sweeping clean and all that. Closed off the problem loans as a matter of urgency rather than more of the same nonsense and bitten the bullet. Sure there would have been flak but at least they could have started with a clean slate. At least the flak would have been mostly over by now and their clean start could have a few months under their belts.
Irrespective as to how these problem loans turn out and we all probably accept it's not going to be a happy ending - those lenders have already decided to quit but just maybe if they had seen the new management in action then there was possibly a second chance for FS with a few disgruntled investors.
But 9 months down the road - please give us all a break with that talking (and no action) nonsense. It's business as before with FS and the new owners, although not so new now, are just after inflating their wallets whilst unwary lenders continue to contribute.
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sqh
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Post by sqh on Aug 5, 2019 23:15:34 GMT
I think the new management team are taking legal action against the worst cases, but I don't think the new management are chasing borrowers any faster than previously, in fact I think the situation has got worse because there is a new policy of not renewing loans at any price. The old management often worked with the borrower to get loans renewed, that doesn't happen now. The number of active loans past their renewal date breached 300 at the weekend.
I'm particularly concerned that the quality of the receivers is poor, it shouldn't take months to get vacant possession. I also think FS should be completing some projects rather than letting them sell off at a fraction of their value.
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adrian77
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Post by adrian77 on Aug 6, 2019 8:32:28 GMT
` I think the above is a very good point - clearly some investments are no-hopers e.g. the Park Homes but I agree just ditching them at a massive loss is not ideal. I am no expert in this field but I have come across failed developments where the original lender either finishes the project or retains a stake in them so if the new developer makes a killing (I think some of the buyers of FS developments will do exactly that) then the receivers/FS get a slice of the profit - granted more work and technical legal development expertise required. At the moment I think the FS business model is crazy i.e. a developer borrows short-term against a long-term investment which is based on future and often fanciful projections. When many of these developments fail there is (or was) no audit trail of the money and the developer simply walks away and I suspect laughs all the way to the bank...
The Newspork Hotel development is exactly the sort of thing I do - I think the costs were underestimated and the sales price overestimated and this one is going to run out of money so liable to be sold at a loss to FS investors. Maybe this one could be a candidate to FS to finish either directly or indirectly but that would involve them get a project manager etc and borrowing money to finish it - not sure if that would be in breach of current legislation as they are lenders. A bit of a pickle all round - sadly this one is outside my budget because if not I would definitely be interesting in buying it for a song...
I'm not moaning - I thank you.
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