jonbvn
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Post by jonbvn on Feb 27, 2015 12:00:17 GMT
As a new lender on FS I thank you all for your views on this loan.
One for me to avoid in this instance......
Edit, but regardless of this I see it is filling up very quickly.
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jonbvn
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Post by jonbvn on Feb 27, 2015 12:29:22 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan. If not this loan will presumably also default unless the borrower can make up the shortfall. Will be very interesting to watch. 5 minutes gone and 81% funded. Now 28 minutes gone & 87% funded. Seems to have slowed down a lot.
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mikes1531
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Post by mikes1531 on Feb 27, 2015 18:40:49 GMT
As the single biggest lender across the 2 loans combined, I'm also hoping to reduce my exposure to this borrower by not renewing. Whether I achieve this depends on whether there are enough new + renewing lenders to re-fill the loan. If not this loan will presumably also default unless the borrower can make up the shortfall. Will be very interesting to watch. Don't worry mrclondon, there will be at least me prepared to face this risk and renewing, and like others, I believe there will then be more than enough with enough appetite for risk or just unthinking new lenders piling in to ensure left over capacity is easily filled. Looks like ramblin rose was spot-on with her prediction. I'll watch this one from the sidelines. It will be most interesting to see how long it takes to find buyers for the first collection of Lubins. Hopefully not too long, and hopefully at prices high enough to repay all lenders' capital and accrued interest.
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Post by mrclondon on Feb 27, 2015 20:28:29 GMT
Looks like ramblin rose was spot-on with her prediction. I'll watch this one from the sidelines. It will be most interesting to see how long it takes to find buyers for the first collection of Lubins. Hopefully not too long, and hopefully at prices high enough to repay all lenders' capital and accrued interest. Indeed. If all capital and accrued interest due is retrieved over the next six months, I'll be quite happy to come back into this loan if it renews again in 6 months time.
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mikes1531
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Post by mikes1531 on Apr 20, 2015 16:55:54 GMT
Don't worry mrclondon, there will be at least me prepared to face this risk and renewing, and like others, I believe there will then be more than enough with enough appetite for risk or just unthinking new lenders piling in to ensure left over capacity is easily filled. Looks like ramblin rose was spot-on with her prediction. I'll watch this one from the sidelines. It will be most interesting to see how long it takes to find buyers for the first collection of Lubins. Hopefully not too long, and hopefully at prices high enough to repay all lenders' capital and accrued interest. Indeed. If all capital and accrued interest due is retrieved over the next six months, I'll be quite happy to come back into this loan if it renews again in 6 months time. It looks like the sale of the original collection of paintings is not going well so far. I don't seem to have made a note of the number of the renewal loan. Can someone please supply that?
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Post by mrclondon on Apr 23, 2015 21:05:51 GMT
It looks like the sale of the original collection of paintings is not going well so far. I don't seem to have made a note of the number of the renewal loan. Can someone please supply that? "not going well so far" is something of an understatement. There have been two updates on the loan this week, the first that they have "sold three paintings, although for somewhat less than the original valuation", and the second "Following the recent sale of three paintings, it now looks unlikely that we will recover all the necessary funds on this particular loan". fundingsecure haven't helped by the ambiguous nature of that second update, as it could imply a partial capital loss and no interest, ranging through to just a loss of some interest. Whilst it will be in no way accurate it is informative to compare the proceeds of the 3 sales against 3/14 of the loan value (£1880 vs £2786) and against 3/14 of the total valuation (£1880 vs £6857 or 27% compared to the loan LTV of 41%). Clearly the 3 sales could be of below average valuation paintings within the collection, but my reading of this is a partial capital loss is all but inevitable. The renewal loan of the other set of Lubin paintings was # 2002084876
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mikes1531
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Post by mikes1531 on Apr 23, 2015 22:23:10 GMT
Whilst it will be in no way accurate it is informative to compare the proceeds of the 3 sales against 3/14 of the loan value (£1880 vs £2786) and against 3/14 of the total valuation (£1880 vs £6857 or 27% compared to the loan LTV of 41%). Clearly the 3 sales could be of below average valuation paintings within the collection, but my reading of this is a partial capital loss is all but inevitable. : Thanks for the loan number. Judging how well or poorly the sale of the first three paintings went really can't be done without more info from fundingsecure. Whereas the PDF for the second loan shows sizes and individual values for each of those 17 paintings, the PDF for the defaulted loan shows only the images and no indication of size or value, so there's no way to tell whether the ones sold were relatively 'low-value' or 'high-value'. For the second lot, the valuations range from £1500 to £3000, and the sizes range from 50x60 to 100x120. (I presume the sizes are in cm.) A quick perusal of the list suggests a rough correlation between size and value. And I should note that the total of the values is £35k, whereas at the time that loan was renewed FS thought it appropriate to reduce the total valuation to £30k. On an average basis, that would reduce the individual values to a range of £1285-£2571. Even in that reduced-value context, selling three of the original collection for total proceeds of £1880 is rather disappointing, to say the least.
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Apr 24, 2015 0:29:59 GMT
Selling the paintings at 27% of valuation is very wrong. IMO fundingsecure should question the valuation and insist that the valuer buys the paintings at half price.
We lenders need to rely on LTV ratios. Fundingsecure obviously took a cautious approach when lending at 40% LTV, but even that doesn't appear to be low enough. The valuer must take some responsibility.
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mikes1531
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Post by mikes1531 on Apr 24, 2015 1:59:45 GMT
Selling the paintings at 27% of valuation is very wrong. IMO fundingsecure should question the valuation and insist that the valuer buys the paintings at half price. We lenders need to rely on LTV ratios. Fundingsecure obviously took a cautious approach when lending at 40% LTV, but even that doesn't appear to be low enough. The valuer must take some responsibility. I think that if I were the borrower I might be upset as well. When taking out the loan, FS said that the security was worth £32k. Having been unable to repay the £13k loan, the borrower likely would expect FS to sell the security, pay off their lenders, cover the FS fees, and return the surplus to the borrower. (That's how pawnbroking is supposed to work.) With such a large difference between the 'value' and the amount owing, the borrower may well be rather disappointed to find that there isn't going to be any surplus at all to be returned. On the other hand, the borrower could be well aware of the state of demand for these paintings and was smiling all the way to the bank with their £13k cheque when they took out the 'loan'. I really don't believe that scenario, however, because if it were the true situation the borrower wouldn't have bothered to pay all the accrued interest and fees to renew the second loan secured on similar security. Which brings up an interesting question... If, as now seems likely, there's a shortfall from this loan, can any of that be recovered from the second loan if by some miracle it were to produce more proceeds than needed if those paintings were to be auctioned following a default? I'm pretty sure the answer would be no, because I think we're dealing with unconnected transactions.
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Bagman
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Post by Bagman on Apr 24, 2015 2:11:59 GMT
I would hope that the chap that valued this deal will never get a valuation job with FS again ..
we can not afford valuations to be this far off as it makes the initial quoted LTV just a rough guess at best .
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Post by Deleted on Apr 24, 2015 7:31:31 GMT
FS found the valuer and provided the valuation to us. So the issue for us is; are FS prepared to back their valuations? If not then I'll move my money out over the next six months. That FS may have a claim against the valuers may be interesting to FS but is not part of our contract with FS, it cannot be our responsibility to select valuers for FS or make recommendations of their removal. What the pictures look like and their size is fun but is not focused on FS's responsibility. I couldn't care less if the pictures were all white and 2"x2", FS had them valued, authenticated etc. and then presented that valuation to us. They have the sticky end of the deal, they need to suck it in and resolve it. FS have behaved correctly over other issues like this in the past and I'm assuming they will now and in the future, I suspect they lay off the risk on some insurance company, but again, none of my business. Hugs to all  |
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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 Apr 24, 2015 11:25:58 GMT
FS found the valuer and provided the valuation to us. So the issue for us is; are FS prepared to back their valuations? If not then I'll move my money out over the next six months. That FS may have a claim against the valuers may be interesting to FS but is not part of our contract with FS, it cannot be our responsibility to select valuers for FS or make recommendations of their removal. What the pictures look like and their size is fun but is not focused on FS's responsibility. I couldn't care less if the pictures were all white and 2"x2", FS had them valued, authenticated etc. and then presented that valuation to us. They have the sticky end of the deal, they need to suck it in and resolve it. FS have behaved correctly over other issues like this in the past and I'm assuming they will now and in the future, I suspect they lay off the risk on some insurance company, but again, none of my business. Hugs to all It's been quite a while since FS covered losses for us - more recent losses have been taken by lenders and FS have made it perfectly clear that the risk is ours. We have to accept there is a risk of loss here, and that's why I am exasperated by people accepting much lower interest rates on items that could very easily default and produce a loss at auction. It's why I don't get involved here at 12% and less, because there are equivalent returns on platforms with better lender protection. At 13% many of the loans here are worth the extra risk (to me), but always accepting some might result in some loss. Obviously I don't want losses but at this end of the interest spectrum they are pretty much inevitable, I'm afraid.
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Post by Deleted on Apr 24, 2015 11:58:33 GMT
good points rose.
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mikes1531
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Post by mikes1531 on Apr 24, 2015 14:05:37 GMT
FS found the valuer and provided the valuation to us. So the issue for us is; are FS prepared to back their valuations? If not then I'll move my money out over the next six months. That FS may have a claim against the valuers may be interesting to FS but is not part of our contract with FS, it cannot be our responsibility to select valuers for FS or make recommendations of their removal. What the pictures look like and their size is fun but is not focused on FS's responsibility. I couldn't care less if the pictures were all white and 2"x2", FS had them valued, authenticated etc. and then presented that valuation to us. They have the sticky end of the deal, they need to suck it in and resolve it. FS have behaved correctly over other issues like this in the past and I'm assuming they will now and in the future, I suspect they lay off the risk on some insurance company, but again, none of my business. Hugs to all It's been quite a while since FS covered losses for us - more recent losses have been taken by lenders and FS have made it perfectly clear that the risk is ours. We have to accept there is a risk of loss here, and that's why I am exasperated by people accepting much lower interest rates on items that could very easily default and produce a loss at auction. It's why I don't get involved here at 12% and less, because there are equivalent returns on platforms with better lender protection. At 13% many of the loans here are worth the extra risk (to me), but always accepting some might result in some loss. Obviously I don't want losses but at this end of the interest spectrum they are pretty much inevitable, I'm afraid. I accept that some losses are inevitable, and are part of the process, and are why the seemingly high interest rates are necessary. I also accept that valuations are an art rather than a science and are subject to variations. But when security is sold following a default for something like a quarter of its 'value' IMHO it isn't just a case of 'normal variations' -- there's a significant problem in the valuation system. Some input from fundingsecure would be helpful, and I would hope they'd be asking their valuer for an explanation. I haven't a clue whether it's appropriate to seek redress from a valuer who gets things horrendously wrong, but this looks like an excellent example of when such questions might be raised.
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Post by mrclondon on Apr 24, 2015 18:35:55 GMT
A quick google of Noah Lubin auction 2015 reveals nothing of any relevance. fundingsecure I really do not understand your policy of refusing to provide lenders with details of where and when auctions of defaulted loan items are taking place. Its also a concern that I can see various auctions of Lubin's work have taken place over recent years, but I'm unable to locate either the March or April auctions containing our Lubin's. Which means anyone specifically looking to buy Lubin's work is also not going to find them easily.
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