bugs4me
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Post by bugs4me on Feb 11, 2015 10:39:15 GMT
Have just noticed an upcoming property loan which may (or may not) hit the market at 10.5%. Whilst the LTV looks good there has been more than one occasion where the borrower comes back for a second bite a few weeks or months down the road using the same asset. So I'll be giving this one a wide berth and hope the lower return is not a sign of things to come with FS.  |
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 11, 2015 11:08:07 GMT
Unfortunately, with the influx of new lenders, there appears to be a large number who'll accept any rate for any loan. Ref: yesterday's 11% brisk gold jewellery loan at about 72% LTV; utter madness - especially with the price of gold not headed in a healthy direction at the moment. It's not making me feel confident about future rates - and where in the pipeline is there anything other than property? Certainly nothing currently on the horizon to tempt me at the moment here, although of course you never know when something interesting could appear round here  |
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bugs4me
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Post by bugs4me on Feb 11, 2015 12:25:18 GMT
Unfortunately, with the influx of new lenders, there appears to be a large number who'll accept any rate for any loan. Ref: yesterday's 11% brisk gold jewellery loan at about 72% LTV; utter madness - especially with the price of gold not headed in a healthy direction at the moment. It's not making me feel confident about future rates - and where in the pipeline is there anything other than property? Certainly nothing currently on the horizon to tempt me at the moment here, although of course you never know when something interesting could appear round here Couldn't agree more - I gave that one a wide berth. Thought the LTV was a bit too marginal for me plus the 11%. I've already got 3 in default so waiting to see how they pan out.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 11, 2015 12:38:06 GMT
Unfortunately, with the influx of new lenders, there appears to be a large number who'll accept any rate for any loan. Ref: yesterday's 11% brisk gold jewellery loan at about 72% LTV; utter madness - especially with the price of gold not headed in a healthy direction at the moment. It's not making me feel confident about future rates - and where in the pipeline is there anything other than property? Certainly nothing currently on the horizon to tempt me at the moment here, although of course you never know when something interesting could appear round here agree that lately some loans have offered rates below the "norm". I generally don't go for these as interest isn't available for reinvestment until loan is repaid and the rates are lower than those that attracted me to FS. The introduction of, and now the apparent dominance of property loans is concerning. I joined FS for the ability to loan against assets that were not property related. I use SS for that. I also note that the Home page now states that loans have " Annual interest rates from 9% to 13%" so will we start to see a downward trend in loan rates as FS tries to secure new business? The rates of "9% to 13%" were always there from day one. In fact, at the very start, there were a handful of loans at the lower end of that scale. The very few active lenders at the time were able to effectively boycott them and push the rates up, but that's a thing of the past. It's not that the rates are lower than 'the norm' that bothers me - it's the fact that lenders at that combination of LTV and rate might not have priced in the fact that they could easily end up with some unpaid interest or even loss of capital. I don't lend below 13% on the pawn loans precisely because my expected overall return is less than that, being realistic. We've already had unpaid interest on at least one loan, and others are almost bound to follow. If LTVs were habitually above 70% it's a racing certainty. Yes, I too like the alternative to property offered here. Long may it continue? FS have certainly promised it will, so hopefully this is just one of those quiet periods.
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mikes1531
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Post by mikes1531 on Feb 12, 2015 0:23:31 GMT
Whilst the LTV looks good there has been more than one occasion where the borrower comes back for a second bite a few weeks or months down the road using the same asset. So I'll be giving this one a wide berth and hope the lower return is not a sign of things to come with FS. One critical bit of info that we don't have is whether or not this loan's security is a first charge on the property. If it is, then the low LTV could justify the low interest rate. If it isn't, then the real LTV could be anything. Hopefully this will be made very clear in the email announcing the start time for the bidding, if it progresses that far. I fear that lower interest rates could become more commonplace as the lender base increases, but a lot depends on FS's performance with bad debt and recoveries on defaulted loans. And that's one area where fundingsecure get very low marks from me for transparency. If security goes to auction, we are told what the result was but there's no way to verify what we are told. I'd like to see a link to the auctioneer's website so I could verify that the sale actually happened, and/or a sale confirmation from the auctioneer showing the proceeds. As it is, FS simply tell us that the sale either did or did not produce enough to repay our capital and/or accrued interest and we have to accept that. There's nothing at all to stop FS from digging into their own pocket to top up the proceeds so that lenders do well and their track record stays good. I'd certainly be happy if they did that, but I'd like to know it happened as it will tell me something about how well they're doing with their valuations, etc. And I certainly don't want to feel all comfy because there have been no losses reported if, in fact, recoveries have been poor and we've been subsidised. That's easily enough to do for small loans, but is likely to end in tears if a big loan goes sour. Finally, I'll add that there's another interesting entry in the 'Coming Soon' list -- a £10k loan secured by four 'Other' items with an estimated value of £11.15k. I presume that when a more formal valuation is made either the loan will be smaller or the valuation will be larger. If there's no change in either, the LTV would be 90%, and I certainly wouldn't want to lend on that basis since by the time the interest and FS fees are added there'd be no realistic chance of a full recovery at auction 8-9 months later. I do wonder, however, how many investors would look at the 13% interest rate and sign up without considering the possible consequences.
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bugs4me
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Post by bugs4me on Feb 12, 2015 9:30:30 GMT
Whilst the LTV looks good there has been more than one occasion where the borrower comes back for a second bite a few weeks or months down the road using the same asset. So I'll be giving this one a wide berth and hope the lower return is not a sign of things to come with FS. <snip> Finally, I'll add that there's another interesting entry in the 'Coming Soon' list -- a £10k loan secured by four 'Other' items with an estimated value of £11.15k. I presume that when a more formal valuation is made either the loan will be smaller or the valuation will be larger. If there's no change in either, the LTV would be 90%, and I certainly wouldn't want to lend on that basis since by the time the interest and FS fees are added there'd be no realistic chance of a full recovery at auction 8-9 months later. I do wonder, however, how many investors would look at the 13% interest rate and sign up without considering the possible consequences. That one will be interesting at a 90% LTV assuming the valuation is accurate, there is no way, in the event of a default, after fees that the loan can be repaid. Unless of course FS are operating a hidden provision fund. I expect though you are correct, many will look at the 13% and the scrum will commence.
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ramblin rose
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Post by ramblin rose on Feb 12, 2015 10:07:24 GMT
Finally, I'll add that there's another interesting entry in the 'Coming Soon' list -- a £10k loan secured by four 'Other' items with an estimated value of £11.15k. I presume that when a more formal valuation is made either the loan will be smaller or the valuation will be larger. If there's no change in either, the LTV would be 90%, and I certainly wouldn't want to lend on that basis since by the time the interest and FS fees are added there'd be no realistic chance of a full recovery at auction 8-9 months later. I do wonder, however, how many investors would look at the 13% interest rate and sign up without considering the possible consequences. Let's hope it's a data entry error  At least there are a couple of non-property things in the list now, but with one at 11% and the other at 90% LTV, as things stand, it's still not offering me any hope.
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mikes1531
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Post by mikes1531 on Feb 13, 2015 3:42:30 GMT
Let's hope it's a data entry error At least there are a couple of non-property things in the list now, but with one at 11% and the other at 90% LTV, as things stand, it's still not offering me any hope. Whatever the reason for the 90% LTV, we don't have to think about it any more, because it's disappeared from the Coming Soon list. The good news is that there have been a couple more non-property additions to that list, so now there are three. Two of those are at 13%, and one of those has progressed to the point where it looks very likely to go live quite soon. And it's not a tiddler, either. 
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mikes1531
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Post by mikes1531 on Feb 14, 2015 2:18:46 GMT
The good news is that there have been a couple more non-property additions to that list, so now there are three. Two of those are at 13%, and one of those has progressed to the point where it looks very likely to go live quite soon. And it's not a tiddler, either. One of the two 13% loans will be going live later today. The other seems ready to go, but hasn't been announced officially yet. If I'm not adding two and two and coming up with five, I think this one is going to be a rollover of a loan made back in August that's supposed to end next week. Presuming that most of the existing lenders will roll their investments forward, this won't be the investing opportunity I initially thought it would be. But it'll certainly be better than nothing.
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At least there are a couple of non-property things in the list now, but with one at 11% and the other at 90% LTV, as things stand, it's still not offering me any hope.