Very big house in the country .. 12%

Just spotted this one, but not so sure I want in on a property loan. I got burned by property scams in 2007 (my landlord fraudulently obtained a mortgage on a new build, and as the tenant I ended up getting evicted).

It would be nice to know why the owners want the loan, and why they don't just remortgage (which surely would be a lot cheaper!)

The attached document is not a valuation, but "a letter purely as general marketing advice". Not quite what most lenders would expect. Ah, and the author didn't even "look around at the house itself". Poor chap , he wasn't offered a cuppa coffee or tea.

So shadow bids over 1k won't need to block their money for over a month. The smaller bids would have to.

Ah yes.  Ahem, original post edited accordingly .  I live in a very hopeful 'rose' tinted world you see .

I’m with RR & PP on this. I like FS (also for their different business model) & whilst it’s good to see them bringing on new bigger loans we can deploy on, in addition to RR’s wise comments my take is that I wouldn’t personally wish to encourage platforms too wander off too easily into the property space without 1. being well organised for this 2. providing us lenders with some insight into their plans so we can assess things properly.


The “valuation” letter prepared by the estate agents was done in June without even an onsite visit, so there was plenty of time to get a proper VR drawn up for lending purposes..


No info was provided on who/how FS(?) will get the legals prepared for the loan/charges, & who would be responsible for this & any enforcement if it comes to that. A brief letter from (for example) a solicitor in Scotland contracted by FS for the legals of this loan, would have been a positive step.


Lastly, FS don’t usually provide info on the reasons why a borrower is looking to raise funds, which given the nature of their core business is understandable. In the case of this loan however some insight would have been helpful. Is it a bridging loan (due to the borrower “downsizing” as mentioned in the estate agent’s letter), is it to fund development of the property, or is it for something else? Imho this may not be irrelevant to the risk profile of the loan, low LTV aside.


I’ve made a modest cash bid, but a gentle nudge to FS to perhaps provide us a little more visibility on their plans & organisation for new areas they’re planning to venture into it would perhaps be of benefit to all.


I’m obviously in a minority though, loan already gobbled up!

Nope, it's not the FS official policy hence my use of the ' ' but it does seem to be the trend in a couple of past FS loans requiring renewal rather than simply imposing a default rate which may or may not materialise into our accounts. Hence whilst I look forward to receiving the default interest owed on the outstanding AC loans I'm not convinced it will necessarily materialise. Hope I'm not proved right on that one.

I'm going to expand on what ramblin rose has said.

Loans are 'renewed' at FS only if the borrower pays the accrued interest (to lenders) and fees (to FS) on the maturing loan.  If they can't/don't then -- except for the few cases where FS have granted the borrower a short extension -- the loan is declared to be in default and the security is sold to repay the lenders. 

In the case of relatively small loans -- say less than £4k -- the fees seem to be greater than the interest, so six months' worth might be something in the order of 15-25% of the amount borrowed.  Because the loans are small, the amounts required to renew a loan might be manageable by the borrower, and that's what happens.

The situation would be very different for a substantial bridging loan.  If the borrower of the current bridging loan were to want to renew it, they would have to come up with something in excess of £20k, and that might not be easy.

The good news is that the borrower in this case has a huge incentive not to default, because if they did and the property were to be sold at auction in a foreclosure sale the price achieved likely would be considerably below the 'value' put on it by the estate agent and the borrower would lose a substantial amount of their equity.  This is quite a contrast with the situation of 70% LTV jewellery loans where most of the borrower's equity would be eaten up to pay the accrued interest and fees, so they're unlikely to lose much if they default FS and sell the security.

Finally, echoing what others have said, I'd really appreciate it if fundingsecure would give us a little more info here.  Do they expect the further tranches of this loan to be funded before or after this tranche goes live around the end of November?  Is the borrower taking this loan so that they can do something to the property development-wise or for a completely different purpose?  If the latter, we don't need to know any more than that.  Is the interest on the loan being retained at drawdown as AC and SS often do?