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Post by GSV3MIaC on Jul 3, 2015 20:53:56 GMT
Interest withheld by FC and dribbbled out (usually on time) .. I believe that is correct for the majority of them - certainly the 'property development xxx', interest only, type loans. The 'Commercial mortgage' property loans (x year loan, but amortised over 3x or so) may be different - go read the financial summaries on any you are interested in. AFAIK none of them (even the commercial mortage loans) have gone 'unpayingly' late, except when Fumbling Credit managed to mess us a payment (takes real skill when you already have the money).
None have "defaulted" - true so far. Harrogate is running late, later, latest, but not actually defaulted. Several others (3?) have repaid early or on time, but actually the majority of them have not come up to the 'bullet' payment at the end yet. Given the apparently higher security vs the faillure rate of As and A+s in the general loan market, you have to wonder why these property loans are not graded AAA+ or similar (the recent 'lets have a new risk band called E' should have been an opportunity to do so).
ooops, crossed in the post with blender .. good job we seem to be in agreement...
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jonah
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Post by jonah on Jul 3, 2015 21:30:09 GMT
Thank you both. I'm continuing to consider dipping a toe in with FC but trying to make I understand as much as possible before I do. The new E's seem a little complex currently hence continuing my focus here.
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blender
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Post by blender on Jul 3, 2015 22:07:40 GMT
Yes, I think GSV's advice fine. I think to get involved with the early E loans it is best to have a good knowledge and experience of how FC works, and to know how to maximise the return from the high rate while minimising the inherent risk. We do not know how the Es will go and 'knowing the ropes' of FC would help in making decisions as the future unfolds. I don't think I would buy and hold to term. If considering the property loans and wishing to buy and hold (or get out just before the repayment date) then you could look for the A+ loans which give an annualised rate (interest and cash back) of 10% plus, before fees and tax. The cash back should not count as taxable income - which may help.
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am
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Post by am on Jul 4, 2015 21:08:59 GMT
Interest withheld by FC and dribbbled out (usually on time) .. I believe that is correct for the majority of them - certainly the 'property development xxx', interest only, type loans. The 'Commercial mortgage' property loans (x year loan, but amortised over 3x or so) may be different - go read the financial summaries on any you are interested in. AFAIK none of them (even the commercial mortage loans) have gone 'unpayingly' late, except when Fumbling Credit managed to mess us a payment (takes real skill when you already have the money). None have "defaulted" - true so far. Harrogate is running late, later, latest, but not actually defaulted. Several others (3?) have repaid early or on time, but actually the majority of them have not come up to the 'bullet' payment at the end yet. Given the apparently higher security vs the faillure rate of As and A+s in the general loan market, you have to wonder why these property loans are not graded AAA+ or similar (the recent 'lets have a new risk band called E' should have been an opportunity to do so). ooops, crossed in the post with blender .. good job we seem to be in agreement... 2 have been refinanced - one due to misselling by FC and one due to scope creep. (I think that the latter would have defaulted if not refinanced.) I think at least 4 others have been repaid, and at least two others have repaid some tranches.
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Post by loanstar on Jul 4, 2015 21:29:49 GMT
Could you share the names of the ones that have repaid or part repaid, I do not seem to have any.
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am
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Post by am on Jul 4, 2015 23:40:04 GMT
refinanced - Brighton, Fulham repaid - Croydon, London, Oxfordshire, Barrowby partially repaid - Ealing, Ramsgate, Essex
Oxfordshire repaid very early on the basis of advance sales.
I wasn't exposed to Essex, but there's an announcement on the in house forum that the first 2 of 3 tranches had been repaid; as there are no parts on the secondary market for this possibly the 3rd tranche has subsequently been repaid.
I missed several of the early loans because they sold out before I saw them, so there might be others that have paid back some or all of the capital.
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fasty
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Post by fasty on Jul 6, 2015 12:08:30 GMT
13883 has vanished with about two days left. They must have thought it wouldn't fill. What now? Nothing that a 3% splashback wouldn't cure
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SteveT
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Post by SteveT on Jul 6, 2015 16:19:19 GMT
13883 has vanished with about two days left. They must have thought it wouldn't fill. What now? It's been chopped up, starting with 13984 (£135k)
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kt
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Post by kt on Jul 6, 2015 21:37:36 GMT
This is confusing. A large loan can not be covered. Split that into a set of smaller loans, are they all listed at the same time? If they are 1st, then a month delay then 2nd etc, is that not a larger risk that the last 4th or 5th loans won't be filled and the project will fail at a much later date?
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blender
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Post by blender on Jul 6, 2015 21:50:41 GMT
Their options are very limited. This is the fifth tranche and as they start it they need about another £1M for this project and are committed to fund it on their balance sheet if it will not go with lenders/underwriters. They took a chunk of the fourth tranche, also with 2% cash back. I think the idea is just to spin it out with smaller sequential loans and hope to get more lender cash later, or delay taking it on their balance sheet. It may not work, but they have very little alternative.
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jonah
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Post by jonah on Jul 7, 2015 4:47:13 GMT
Their options are very limited. This is the fifth tranche and as they start it they need about another £1M for this project and are committed to fund it on their balance sheet if it will not go with lenders/underwriters. They took a chunk of the fourth tranche, also with 2% cash back. I think the idea is just to spin it out with smaller sequential loans and hope to get more lender cash later, or delay taking it on their balance sheet. It may not work, but they have very little alternative. There are one or two places which do short term property bridging loans if that would help. Quite high interest though! On a more serious note, there has to be some law of diminishing returns applicable here?
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TitoPuente
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Post by TitoPuente on Jul 7, 2015 7:41:45 GMT
Their options are very limited. This is the fifth tranche and as they start it they need about another £1M for this project and are committed to fund it on their balance sheet if it will not go with lenders/underwriters. They took a chunk of the fourth tranche, also with 2% cash back. I think the idea is just to spin it out with smaller sequential loans and hope to get more lender cash later, or delay taking it on their balance sheet. It may not work, but they have very little alternative. The obvious natural market alternative would be to let bidders bid what they think the loan is worth. For some reason Faucet Clogged is stubborn with their fixed pricing for property loans.
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sl75
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Post by sl75 on Jul 7, 2015 12:59:43 GMT
The obvious natural market alternative would be to let bidders bid what they think the loan is worth. For some reason Faucet Clogged is stubborn with their fixed pricing for property loans. A truly natural market would be two sided, with the borrowers also participating in determining the market rate. I'm not entirely sure that the "lenders bid a rate and borrowers have to take it or leave it" method is necessarily any more "natural" than "borrowers set a rate and lenders have to take it or leave it"... Either way, one or other party is left with a "take it or leave it" deal and no real power to negotiate. For a property loan, the borrower needs to plan the development on the basis of a known cost of funding. Who on earth would enter into a multi-million pound development with only the terms of an initial small first tranche agreed, and absolutely no idea of the cost of funding of the subsequent tranches? In your proposed solution, what is the borrower supposed to do when, due to a large amount of activity on the marketplace at the time their second (or third, or fourth...) tranches are in auction, they're left at an unacceptably high cost of funding - having made plans on the basis of being able to borrow at 8% (plus arrangement fees), it's probably not economical to borrow at up to 15%, nor to leave the project half-completed. Neither is it likely to be convenient to source funding from any other lender (who would probably not offer very good terms whilst subordinated to FC lenders, and thus would need to lend a large amount in order to take out the FC loan too).
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mv
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Post by mv on Jul 7, 2015 13:00:06 GMT
Why does FC buy £100 chunks when it needs to fund 20K+? - do they sell on the SM? - is there little else for the work-experience to do? - is it just so they can time it, going up to the wire but taking as little as possible?
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am
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Post by am on Jul 7, 2015 13:35:13 GMT
Why does FC buy £100 chunks when it needs to fund 20K+? - do they sell on the SM? - is there little else for the work-experience to do? - is it just so they can time it, going up to the wire but taking as little as possible? I see no reason why they can't buy "after the wire", in whatever size chunk they like.
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