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Post by shaunperry on Oct 23, 2020 2:49:35 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark??
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rookey123
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Post by rookey123 on Oct 23, 2020 7:19:23 GMT
In fairness the loans I am mainly in I was very comfortable with the valuations (art and cars being 2 examples). I stupidly didn't factor in the possibility that the platform itself would actively <removed> me, would literally not know what it was doing with taking basic security and that the FCA would approve the site without proper oversight!
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Greenwood2
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Post by Greenwood2 on Oct 23, 2020 7:53:13 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark?? I guess the really savvy people took one look and didn't touch FS with a barge pole.  The rest of us believed in the 'team of expert valuers' for the pawn loans, with 'secure storage' by FS and the 'qualified property valuers', for quite a while anyway. Different people became uncomfortable with different parts of the offerings, but I don't think anyone realised how truly awful the valuations were in general until the defaults started rolling in rapidly.
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r00lish67
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Post by r00lish67 on Oct 23, 2020 8:28:34 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark?? A few things: 1) There was (and still is, generally) a big problem in valuing half-built property loans,. A half built block of flats is not worth half of a fully built block of flats, in the same way that half a chicken does not generate half eggs. Those valuations nonetheless assumed that. 2) As a result, many did swear off those loans, or only invested at the very beginning (esp. in senior tranche loans), avoiding the far riskier dev loans. Though, yes, many obviously carried on. 3) On occasion, they weren't that wide of the mark. I think even some of the loans redeemed in administration have actually fetched their valuation (or at least in excess of the loan) 4) As per posts above - misrepresentation/(removed) by either platform or borrower, or both. Just as with Lendy, some people did do very well out of FS, or at least quickly learned their lessons and escaped only with small flesh wounds.
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aj
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Post by aj on Oct 23, 2020 8:52:39 GMT
I did take the valuations with a substantial pinch of salt, my lending was all well under an alleged 50% LTV. However, FS will likely still have caught me out.
'The D*ll' was supposedly 44% LTV but this still sold with a capital loss. Although there are good grounds to pursue for a negligent valuation here, FS went tits up before this could happen. Further recovery prospects seem poor at the moment.
'Lytham St Annes' land had a frankly ludicrous £5.6M valuation but lending £1M at a 17% LTV seemed a more reasonable prospect. Unfortunately it turned out that FS failed to get a proper legal charge over the land so it is currently unclear whether any recovery can be made.
'Ch*rter house' at 16% LTV is now sold with more than enough money to give me a full capital and interest repayment. However, the borrower believes they have a chance of keeping this money for themselves so are launching legal action. The costs involved in this means another capital loss is possible.
I don't feel I've been caught out by valuations as I didn't believe them to start with. Instead, i've been caught out by:
-Incompetence of FS legal team when writing loans.
-Lack of FS oversight on development progress.
-Lack of enforcement of overdue loans.
-Additional costs incurred due to the administration of FS.
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11025
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Post by 11025 on Oct 23, 2020 9:04:55 GMT
I agree but think you are far too polite in your description , Sadly I think there is somewhat more than genuine incompetence here.
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adrian77
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Post by adrian77 on Oct 23, 2020 9:12:43 GMT
damn right - it fact (generally) nowhere near 50% a lot of developers won't touch such projects as too much hassle with insurance, re-instating the architect etc etc we haven't had the legal bill yet and it is going to be a belter - I am in the second charge and am predicting a 100% loss... I think it is fair to say many of us did comment on these valuations - e.g. I wrote in Jan There is also my top 40 list of expected mega failures.. hereon which I think only 2 are going to show 100% capital and interest recovery as the loan book has been closed for over a year now so the chance of any of these loans coming 100% good is "slim" Numerous people raised alarm bells about the mobile homes, some of us who knew local properties warned about them, Sir Ozboy OBE also saw the light and several boaty people comments upon the boat valuations Many of these property valuations were based on final completed valuations which IMHO is crazy Although over-valuation it totally unacceptable and has been a mega problem and resulting in people losing money I think the biggest problem has been has FS have not been entirely forthcoming in how they portrayed these valuations e.g. it has been reported that the Tower Block had an issue with the roof and we can't see where this was mentioned. Many of us banged out about the speedboats... and we still don't know where the second one is - UK, Canada or a metaphorical Davy Jones' Locker? It is no good having an accurate end valuation if the cost of completion vastly exceeds it (tell me about it!) For whatever reason such valuations have benefited certain developers who have had millions of our money and no proof all the money borrowed has gone on the projects, benefited FS as they took fees for arranging said loans and now it appears FS wanting 5% of total monies lent! What I am politely saying is that by happy coincidence or whatever these valuations have done FS no harm.... Hopefully we can take legal action against these valuations but I really can't see us getting anywhere. Only positive thing (and totally against what I predicted) the UK property market is having a mini-boom at the moment but I am not sure how long it will last so maybe it is a good time to dispose of the remaining properties as 2021 may see a correction - I think it will but have been wrong before... This really has been a shoddy and appalling affair all around.
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Post by defaultinator5000 on Oct 23, 2020 15:56:33 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark?? Some people did point out to inflated valuations, but ultimately the really savvy were borrowing, not lending.
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adrian77
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Post by adrian77 on Oct 23, 2020 16:46:04 GMT
sir - you are so right - looks to me as if at least 2 of these borrowers have come out with over £1m cash and that is nett - give a load a twaddle get a multi-million pound loan, siphon off £1m and default ready to go into a pre-prepared administration - as to the role of FS in this - my lips are sealed! Well done for protecting our investments I don't think!
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Post by df on Oct 24, 2020 15:38:39 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark?? A typical scenario - a loan get renewed for a couple of years, then it defaults, then the recovery process that takes ages. It's only became noticeable when some of the assets were sold.
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Post by Ton ⓉⓞⓃ on Oct 24, 2020 21:19:10 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark??
There might be a degree of group think or echo chamber going on.
Those who disagree go to another platform to invest rather than argue it out.
I'm not saying that's what's happened here, I just don't know.
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Post by dan1 on Oct 24, 2020 22:01:11 GMT
With so many savvy people, of which i'm not one of them, on this forum, why did it seemingly go unnoticed that so many valuations were way wide of the mark??
There might be a degree of group think or echo chamber going on.
Those who disagree go to another platform to invest rather than argue it out.
I'm not saying that's what's happened here, I just don't know.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Oct 25, 2020 11:39:29 GMT
My favourite example of correct/lateral thinking that pic. They couldn't armor the whole plane for obvious reasons, so only armoured the sections where there are no red dots. This obviously being the areas that were vulnerable and sustained catastrophic damage, these planes never returning to be able to be inspected! PS - There's more to the story, they initially armoured the red dot areas and wondered why they were still losing planes. Eventually the penny dropped! PPS - Apologies if y'all already knew this. As an Aussie I find it a fascinating war story. |
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Post by dan1 on Oct 25, 2020 13:07:50 GMT
My favourite example of correct/lateral thinking that pic. They couldn't armor the whole plane for obvious reasons, so only armoured the sections where there are no red dots. This obviously being the areas that were vulnerable and sustained catastrophic damage, these planes never returning to be able to be inspected! PS - There's more to the story, they initially armoured the red dot areas and wondered why they were still losing planes. Eventually the penny dropped! PPS - Apologies if y'all already knew this. As an Aussie I find it a fascinating war story. Remember this image when you next see statistics from the active fund management industry
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Post by multiaccountmanager on Oct 27, 2020 13:16:24 GMT
Dan1 It's time for you to update your political footnote which harks back to May. Has no place on these forums IMHO especially for a Moderator.
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The rest of us believed in the 'team of expert valuers' for the pawn loans, with 'secure storage' by FS and the 'qualified property valuers', for quite a while anyway. Different people became uncomfortable with different parts of the offerings, but I don't think anyone realised how truly awful the valuations were in general until the defaults started rolling in rapidly.
