adrian77
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Post by adrian77 on Dec 26, 2019 16:11:19 GMT
Clearly the loan book is going to be sold off either in its entirety or in individual pieces. As I see it - it is worth ,at least, comparing what we would get for a quick total sale with minimum fees and a quick return as opposed to individual sales with higher fees and a longer waiting period.
Believe me all the property developments will be known to local developers and marked as a lemon. Being in this business I have met some very dodgy and not very nice people some of whom are highly intelligent and I wonder just how safe our security is or to put another way I wonder if some of these loans simply aren't worth pursuing - due entirely to FS being so grossly incompetent. What a complete and utter Horlicks all round.
Interested to hear opinions from people who know the administration business but what worries me ,whether justified or not is that the administrators hold too many cards and if some of these loans cost £100K+ to settle we could end-up with a multi million pound settlement being taken out of our recovery. Of course if the FCA had done their job properly we would not be in this mess.
What do I think we could get for the entire loan book - 50% if we are lucky
Ref *otary - I never said all of them were into back-handers- won't say what a few of them were into but here are 2 clues - car-keys and private video showings!
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pip
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Post by pip on Dec 26, 2019 19:41:14 GMT
iRobot - just want to clarify a few things
1) You seem to want to divide lenders between those that have good loans and bad loans. I disagree with this. Apart from loans which have returned and are now sitting as un-withdrawable cash, I would see all loans to be very very dodgy. If you read the administrators initial report who knows what is really the true story with any loan, irrespective of how good the initial prospectus looked.
2) You seem to want to divide lenders between those who have invested a lot and those who haven't, with this idea that investors with large amount will be willing to play the long game and those who are small investors just wanting to get out. I don't get this logic. All investors want the same thing, get the best outcome they can.
3) You seem to want to imply that by playing the long game we will get a better return. I don't see this at all. The longer we wait the more administrator fees will accrue and there is no guarantee that a lot of these loans will ever repay. You seem to indicate that a long winded outcome will return more than a short one, I actually disagree, I think the best outcome will be from a quick solution.
4) You keep asking people what % of loan book people would accept for a fire sale and what % one expects to receive for a long term option. Nobody knows the answer to either of these, so why ask, although as the second involves mammoth administrator fees I prefer the first!
5) You seem to indicate I am somehow opposed to what you also want. I am not, nothing would make me happier than for investors to do nicely out of administration. I just want people to keep their eyes open and not hope for something from this process I think is unlikely at best.
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Post by waryinvestor on Dec 27, 2019 0:26:02 GMT
I wholeheartedly agree on the FCA. Like you I only invested as I trusted that the FCA had done a real check on the company and would ensure that they kept their house in order. Further, I also invested in one loan as I thought it was one loan and not tied to multiple loans to one individual. From my prespective the FCA have either displayed gross incompetence and/or been grossly negligent and should be taken to court over their handling of P2P. ... Do not think I am sticking up for the FCA in any way in this response ......... On the instruction of politicians the FCA work on a 'light touch' policy, couple that with what I perceive to be a lack of understanding of the pitfalls and characters involved in P2P and we have the recipe for a perfect storm. The FCA have responded (late) with new requirements on both platforms and investors. The platform requirements have had some notable effect (most of which we as investors don't see) with several platforms closing doors to retail investors and possibly causing MT to call it a day. The 'checks' on retail investors are however (IMHO) laughable, for example 2 x £100 investments in the past year make you a 'sophisticated investor' On FS in particular, on reading the Administrators report I picked up on certain words and fired off a detailed FOI to the FCA. The response (20 working days) arrived some days ago with words I recognise only to well from my work on Col I now have to sit back and wait for up to a month for the FCA to reply again at which time I will find out if they are prepared to answer my questions or if they will claim Section 31/public interest. Anybody wanting to read Section 31 (and Section 30) they are available here. The new eligibility criteria that was introduced by the FCA, seems to me, was to save their own back so that they can later come back and say that we certified ourselves, so can'tblame anyone else (even if they were grossly negligent).
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foolsgold
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Post by foolsgold on Dec 27, 2019 10:28:33 GMT
Adrian77....when you say at best 50 percent return are you talking about 50 percent of capital or 50 percent of capital and interest ?...(which would be substantially more) and do other members agree with the suggestion of 50 percent at best?
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Post by brightspark on Dec 27, 2019 11:02:57 GMT
It all depends on the loans in which you are involved. Realistically I expect zero return of capital or interest on my 5 small loans. i.e. they are all lemons. You need to look critically and realistically at your own portfolio. Loans that have been stringing things along for any unreasonable time are probably going to return after costs close to zilch. Others well anybody's guess but perhaps 30-50% return on capital would not be too unrealistic. Interest returns - dream on! This is a salvage exercise. All has been lost and the Administrators are on your behalf picking through the remains looking for realisable value. Remove rose-tinted specs now!
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pip
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Post by pip on Dec 27, 2019 11:15:27 GMT
Adrian77....when you say at best 50 percent return are you talking about 50 percent of capital or 50 percent of capital and interest ?...(which would be substantially more) and do other members agree with the suggestion of 50 percent at best? foolsgold - What is the point in continually asking this question, nobody will know?
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adrian77
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Post by adrian77 on Dec 27, 2019 12:21:18 GMT
I with with Pip - as a rough figure I can see us losing 50% ish of the loan book - whatever the final percentage the point I am making is that the final figure will be very poor and hence worth discussing just ditching the loan book and cutting out losses before we move on
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foolsgold
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Post by foolsgold on Dec 27, 2019 13:25:30 GMT
Adrian77....when you say at best 50 percent return are you talking about 50 percent of capital or 50 percent of capital and interest ?...(which would be substantially more) and do other members agree with the suggestion of 50 percent at best? foolsgold - What is the point in continually asking this question, nobody will know? Ive never asked this specific question about interest but others may have.
We all have our reason for posting questions.Mine is that my accrued interest is quite substantial and would have a positive impact in my total return.
Hope that is reason enough
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 27, 2019 14:09:34 GMT
Wishing for something one way or another will not make it happen.
Some people will get 100% interest and capital (less recovery fee)
Others various amounts overall which may be a loss or a gain. There are too many individual investment portfolio variations to make any predictions that apply to everyone except for one nobody will get 100% of predicted returns.
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pip
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Post by pip on Dec 27, 2019 14:28:25 GMT
foolsgold - What is the point in continually asking this question, nobody will know? Ive never asked this specific question about interest but others may have. We all have our reason for posting questions.Mine is that my accrued interest is quite substantial and would have a positive impact in my total return. Hope that is reason enough I have a lot of accrued interest too, none of which I expect to ever get paid to me. The reason it is so much is because the loans were due to get paid back years ago and have been pushed down the road with various different excuses. Reality I am sure for all of them is that something smelly is lurking. That’s before the issue with whether investors actually have any legal entitlement to the loans or when investors can actually withdraw any cash from their accounts and what other deductions can be made from them. As always hoping for the best, expect the worst.
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foolsgold
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Post by foolsgold on Dec 27, 2019 15:14:47 GMT
Its down to the CC to represent us but personally Ive got quite a few loans that are well overdue.
I would be happy to pay a higher rate to the administrators to chase the bad loans rather than sell off the individual loans to asset recovery companies who will offer pennies in the pound.... better to pay the administrators a higher rate on poor quality loans rather than to a debt collection company.
Its all unknown at the end of the day and just speculation but 50 percent return on all the assets lumped together and sold in a job lot is a catastrophe....I understand that Administrators fees are accruing but the fees would be spread over many many loans.
My gut instinct on P2P at the start was it was too good to be true but trusted the FCA to monitor fraud,incompetance and greed
The whole thing is a mess
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pip
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Post by pip on Dec 27, 2019 16:13:45 GMT
Its down to the CC to represent us but personally Ive got quite a few loans that are well overdue.
I would be happy to pay a higher rate to the administrators to chase the bad loans rather than sell off the individual loans to asset recovery companies who will offer pennies in the pound.... better to pay the administrators a higher rate on poor quality loans rather than to a debt collection company.
Its all unknown at the end of the day and just speculation but 50 percent return on all the assets lumped together and sold in a job lot is a catastrophe....I understand that Administrators fees are accruing but the fees would be spread over many many loans.
My gut instinct on P2P at the start was it was too good to be true but trusted the FCA to monitor fraud,incompetance and greed
The whole thing is a mess
Fools I think we agree the whole thing is a mess. I think our difference is that I think the catastrophe has already happened, i.e. most loans are so far gone that a decent return is in my opinion very, very unlikely. This is no matter how much of what proceeds there are we agree to hand over to administrators. In my opinion a 50% return on assets will not happen no matter the route taken from here, no debt collection company will pay that to buy these stinky loans and administrators will never be able to return that much, certainly after their fees. Remember administrators are not debt collection experts, we will likely be paying them to administer contracts with third parties to recover the debts. This is why I think it would be best for all if the loan book was auctioned off and proceeds returned to investors. Personally I slightly question whether you and others here understand how bad the situation is. People talking about 50p in the pound return from here, I personally think anything over 10p would be a surprise! I have been through administrations before and usually its a couple of pence at best. And yes we also agree the FCA's regulation of p2p lenders has been a total joke. I actually think we would have been better with no FCA at all, at least then people would have known that its a wild west of an industry.
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adrian77
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Post by adrian77 on Dec 27, 2019 17:01:56 GMT
quite possibly but I wonder if this would be cost-effective - well at least we are all agreed this is a complete and utter Horlicks. As I said I would like the administrators to start updating us with plans for individual loans e.g. the tower block in Formby which must be costing a fortune with maintenance, security etc
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09dolphin
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Post by 09dolphin on Dec 27, 2019 18:51:13 GMT
I accept that any return of my capital will likely be pence rather than the £s I invested. I accepted this some considerable time ago - well before the platform went bust.
What I really don't want to see is the people who borrowed money on assets which were questionable having benefited or continuing to benefit from my "investment" . I would be happy to spend a percentage of the money invested seeing this doesn't happen purely because I feel somewhat outraged.
Does anyone know if the present and recent past directors of FS will be affected or impacted by their abysmal failures, or if they will walk away from a problem of their creating without any impact on them personally.
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iRobot
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Post by iRobot on Dec 27, 2019 19:40:34 GMT
Always good to clarify things especially when it's opinion rather than substantiated fact. Please see my comments below; again, mostly opinion but where factual I've tried to point it out. iRobot - just want to clarify a few things1) You seem to want to divide lenders between those that have good loans and bad loans. I disagree with this. Apart from loans which have returned and are now sitting as un-withdrawable cash, I would see all loans to be very very dodgy. If you read the administrators initial report who knows what is really the true story with any loan, irrespective of how good the initial prospectus looked. Not quite accurate. I would like lenders to remain aligned with the loans they selected and invested, and only those loans. I do not want everyone lumped into one pot. I'd agree what remains is sub-par at best. However, of the remaining loan book, I actively choose not to invest in what I believe will prove to be a significant number of very low returning loans - in the zero to thirty percent rage - and would not wish to see that prudence negated or even diluted by a 'all-for-one and one-for-all' approach. Whilst that may seem selfish, it also has the happy coincidence of being, in my opinion, the best outcome for the average investor.2) You seem to want to divide lenders between those who have invested a lot and those who haven't, with this idea that investors with large amount will be willing to play the long game and those who are small investors just wanting to get out. I don't get this logic. All investors want the same thing, get the best outcome they can.I don't understand when you have go this 'invested a lot' / 'large amount' idea from. If you can quote me on something that may have given you that idea, I will seek to correct it.
Personally, I now have just a few thousands remaining. I also want the best outcome - and my opinion is that the best outcome for me is via loan-by-loan redemption. I also believe that this will ultimately be the best outcome - in percentage terms - for the loan look as a whole as at the time that FS entered administration. This loan by loan approach will certainly not be the best outcome for those who are in a particularly poor subset of the remaining loan book.3) You seem to want to imply that by playing the long game we will get a better return. I don't see this at all. The longer we wait the more administrator fees will accrue and there is no guarantee that a lot of these loans will ever repay. You seem to indicate that a long winded outcome will return more than a short one, I actually disagree, I think the best outcome will be from a quick solution.Yes - that is my opinion. There has to be a limit, of course. Were the process be allowed to continue for many years - say more than three - then it would be expected that a 'law-of-diminishing-returns' would kick in. 4) You keep asking people what % of loan book people would accept for a fire sale and what % one expects to receive for a long term option. Nobody knows the answer to either of these, so why ask, although as the second involves mammoth administrator fees I prefer the first!
I would use 'might expect' rather than 'would accept' but you are quite correct that nobody knows. Nobody. Not me. Not you. But surely everyone has come to a determination as the what they expect from each scenario, otherwise how can one form an opinion?
My opinion here is that the loan book at the time FS entered Administration was possibly worth £40mm (out of a booked-in value of £80mm). I would guesstimate costs to dispose of the loans individually to total another £5mm; with a net return of c. 40-45 pence-in-the-pound. I see that as the best case for the averagely exposed investor.
If the £40mm valuation of loan book is correct, anyone looking to buy it as an entity is likely to want to make a minimum of 2-3 times their investment; this covers time, effort, and risk. Again if that assumption is correct, it would mean an interested party offering £13mm to £20mm resulting in 16- to 25-pence-in-the-pound.
Sure, I may be way off on my £40mm price tag; the loan book may just be worth £20mm. If that were the case £15mm might be returned taking the long route; less than 20p/£. But a buyer would not want to pay more than £5mm to £8mm at a guess; or 6 to 10p in the pound.
In my opinion, realised value of the loan book would have to fall below £10mm for a 'quickie' sale of around £3mm to be beneficial to the average investor.
Could the loan book realise less £10mm? Yes. Can't deny it's a possibility, but I don't think that will be the case; hence the preference for the long game.
5) You seem to indicate I am somehow opposed to what you also want. I am not, nothing would make me happier than for investors to do nicely out of administration. I just want people to keep their eyes open and not hope for something from this process I think is unlikely at best.You are partially opposed; we wouldn't be having this discussion if we were wholly aligned! Whilst we both agree we are united in desiring the best outcome for investors, we are polarised on how to achieve it.
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