Property Loan 20 - Repaid in full after Default

Hi

Am I missing something here?

Bought for £1.47m + Loan £1.7m = 3.17m.
Sold for £1.3m.

Can someone explain what happened to the loan money?

Given that the actual value at the time of the loan was £1.47m and the actual value now is £1.3m where on earth did the valuation of £2.4m come from? What recourse would SS have to the valuer? And most importantly what does this say about all the other valuations that we rely on so heavily?

It is unlikely they will publish the actual purchase price as for a fair few of the loans the assets have been purchased for the amount of the loan not the valuation, I usally never invest in them as it is us taking the risk not the borrorower.

I bought into this loan on the SM when I started at SS (and sold out in March 2016). It seemed a decent enough proposition at the time, and glancing at the VRs with a more experienced eye there's still nothing that jumps out as a red light. (Agricultural land at £12k per acre seems generous, but equestrian land commands even higher prices. On the other hand writing down the agricultural land only has a small effect on the valuation.)

The biggest part of the security was the garden centre, which was valued at more than the residential property and agricultural land put together. The value of the garden centre depends on its profitability, so the value depended on the borrower running it well.

In hindsight problems include the borrower not following his stated intention to refinance the residential property onto a BTL and the garden centre onto a commercial mortgage. (Could Lendy have chivied him about this?) If he had done this the bridging loan would have been repaid. The underlying problem may have been that the borrower was focused on the big prize of planning permission for an "eco-village" and the profits arising from planning uplift, and took his eye of the ball of maintaining the viable business necessary for the refinance. If we are to believe what's been said here he then walked away when the planning upgrade was rejected, which won't have helped the value of the security.

I hope that Lendy can recover some of their losses from a personal guarantee.

In hindsight the difference in the purchase price and the valuation, and the approximately 100% LTC, should have rung alarm bells. But the purchase price wasn't (as far as I recall and know) available to us at the time - I might have misinterpreted the particulars as giving a purchase price in line with the valuation, and thus misestimated the LTC.

Agreed with your overall sentiments am. However my problem with AC was the allocations were too tiny. I tried a new policy of bidding on all AC loans above a certain percentage and then doing DD after the fact.

This didn't work either.

Have things changed?

There seems to be some formatting problems in replying to your post bababill so to try and avoid further confusion

Few people outside of Lendy Ltd, possibly the debtor and possibly the Administrators, know how the £2.841 million is made up, it is possible to make guesses or it might not be correct but it is a matter of public record.  I don't know what "loss" has occurred to the platform, it took them c.2 weeks to decide they would make up the loss to platform lenders from the PF, but have been very vague as to what the amount is or how it has been made up.

The main point of my post was to juxtapose to someone else's post my opinion that the email in fact contained obfuscation rather than disclosing all pertinent information clearly.