awk
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Post by awk on May 27, 2016 15:59:16 GMT
I wonder why it is that SS reckon it is better for them to incur fees with administrator, and lawyers, and estate agents etc. in order to sell the property themselves; rather than to leave the borrower to find a buyer themselves. I guess the only reason that the borrower cannot find a buyer is that the property is not now, for whatever reason, worth enough to cover the debt? That is, the valuation and LTV have proved to be overly generous? My understanding is that SS/Administrators can now dictate the timescales and the administrators can decide to accept a lower offer than the borrower might. The first to be paid from the proceeds will be professional fees (admin, lawyers, estate agents), then SS and then the borrower.
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ben
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Post by ben on May 27, 2016 16:00:07 GMT
I wonder why it is that SS reckon it is better for them to incur fees with administrator, and lawyers, and estate agents etc. in order to sell the property themselves; rather than to leave the borrower to find a buyer themselves. I guess the only reason that the borrower cannot find a buyer is that the property is not now, for whatever reason, worth enough to cover the debt? That is, the valuation and LTV have proved to be overly generous? For whatever reason the borrower does not want to, or they have stopped paying interest if they ever did, or as you said the site is not worth it and they know it so are quite happy to jsut let it go rather then repay the debt themselfs.
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Post by trevxe on May 27, 2016 16:01:47 GMT
My guess is that those folks snapping it up on the SM don't know that it has defaulted. The big red banner is a bit of a clue Their bots might not be able to read that!
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spyrogyra
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Post by spyrogyra on May 27, 2016 16:07:25 GMT
Would the valuation indemnity insurance help in such case? Most likely it would be too much trouble, as with so many other useless "safety" cushions.
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nick
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Post by nick on May 27, 2016 16:07:35 GMT
I found archive copy of the old T&Cs: web.archive.org/web/20150316125147/https://www.savingstream.co.uk/terms - this version dated March 2015 Clause 5 regarding defaults provide the process by which value from loan security is realised (by auction) and that in the event of a failed auction, SS will settle loans at the reserve price (c5.3) and pass on any subsequent value recovered after their 5% administration fee and other costs etc etc. Looks like under the old T&C's there is a risk of some loss, but the bulk of the value (given as the reserve value in auction) is backstopped by SS - admittedly this is redundant if they standby their FAQ stating that they fully stand behind all the old loans... |
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Jeepers
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Post by Jeepers on May 27, 2016 16:09:02 GMT
Surely SS will send an email to warn all investors whether they are invested in this loan or not being as it poses not just a risk to the PF but also the platform being under the old T's and C's.
I'm predicting SS will be sending out a general update email on all loans today and will explain the situation with this defaulted loan in the general update.
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ben
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Post by ben on May 27, 2016 16:10:59 GMT
Would the valuation indemnity insurance help in such case? Most likely it would be too much trouble, as with so many other useless "safety" cushions. Unlikely. I can only see that ever paying out (reasonable) if it turns out that the valuer was not actually qualified to undertake the valuation and stated that they were. Otherwise they will come up with 100s of reasons why it is not valued at that most likely change in cicumstances due to length of time, aslo you do not know what the current owner has done to it.
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Post by GSV3MIaC on May 27, 2016 16:11:31 GMT
I wonder why it is that SS reckon it is better for them to incur fees with administrator, and lawyers, and estate agents etc. in order to sell the property themselves; rather than to leave the borrower to find a buyer themselves. I guess the only reason that the borrower cannot find a buyer is that the property is not now, for whatever reason, worth enough to cover the debt? That is, the valuation and LTV have proved to be overly generous? My understanding is that SS/Administrators can now dictate the timescales and the administrators can decide to accept a lower offer than the borrower might. The first to be paid from the proceeds will be professional fees (admin, lawyers, estate agents), then SS and then the borrower. The nastiest cases are where the would-be buyers decide that if they pull the plug (and force the seller into bankruptcy) they'll get the same thing at a lower price off the administrators. Hopefully this is not on of those.
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Post by meledor on May 27, 2016 16:15:00 GMT
was not trading under the SS given name. Guessing the tenants went pop, triggering this......
M*** R*** was just a trading name of the company that has been put into administration according to its website.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 27, 2016 16:28:17 GMT
Anyone know if the interest I earned up to sale of 020 on 17th May will be paid on 1st June or will I have to wait until the property eventually sells. No, interest on all defaulted loans will accrue until recovery, changed earlier this month We have made a slight change to our operating procedures for ‘loans in default’ (we have only ever had one to date) - once we declare a loan to be in default, instead of crediting interest to investor's accounts monthly, interest will accrue on account and will be paid once the loan capital is recovered. This rule will only apply to the loan in default and not other loans, which will operate as usual. Loans in default can continue to be traded on the secondary market. Our solicitors have advised us to implement this as the FCA perceives Lendy's own covering of the interest as a potential cashflow risk to the sustainability of the platform.
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spyrogyra
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Post by spyrogyra on May 27, 2016 16:39:01 GMT
Would the valuation indemnity insurance help in such case? Most likely it would be too much trouble, as with so many other useless "safety" cushions. Unlikely. I can only see that ever paying out (reasonable) if it turns out that the valuer was not actually qualified to undertake the valuation and stated that they were. Otherwise they will come up with 100s of reasons why it is not valued at that most likely change in cicumstances due to length of time, aslo you do not know what the current owner has done to it. So insurance companies charge valuation companies with obligatory professional insurance with the clear knowledge that if all valuers are qualified, they will never pay out a penny. Nice. As with so many other types of insurance.
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ben
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Post by ben on May 27, 2016 16:45:13 GMT
Unlikely. I can only see that ever paying out (reasonable) if it turns out that the valuer was not actually qualified to undertake the valuation and stated that they were. Otherwise they will come up with 100s of reasons why it is not valued at that most likely change in cicumstances due to length of time, aslo you do not know what the current owner has done to it. So insurance companies charge valuation companies with obligatory professional insurance with the clear knowledge that if all valuers are qualified, they will never pay out a penny. Nice. As with so many other types of insurance. I am sure occasionaly they pay out but by the time they have come up with 100s of excuses and fees been charged hardly likely to get much back. I would not rely on that when deciding to hold onto the loan or not. Personally not had anything in this one as was one of the few loans I have not touched , not particulary due to asset but due to the fact they seemed to have numerous people lined up to fund them but nothing ever came of it.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on May 27, 2016 16:48:04 GMT
That's impossible - unless Lendy buy on the SM.
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boble
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Post by boble on May 27, 2016 17:01:42 GMT
That's impossible - unless Lendy buy on the SM. There may be a financial case for SS/Lendy buying up parts of the loan, particularly if a penalty rate of interest has now kicked; which is most likely. I suspect that the reason the loan has been put into default is that the borrower's advance interest is now exhausted and they aren't currently in a position to service the loan.
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jonah
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Post by jonah on May 27, 2016 17:16:03 GMT
Interesting about the relatively small amount on the SM. I wonder if the fact that the entire loan is smaller than the PF means people think it will be 'safe' due to that and therefore some place to gain accrued interest?
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