star dust
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Post by star dust on Mar 14, 2015 17:27:28 GMT
So it seems the inevitable has finally happened - PBL 07 in default. However, I have to say that going by the information in their weekly update - "We have instructed a receiver and appointed a local agent. Auction booked for end April. A buyer is in place in case the property doesn’t reach full reserve at auction." (For those that haven't got or don't get it) - SS certainly seem to have got the situation swiftly under control, and hopefully with a 65% LTV will get a good outcome from the auction. So far so impressed  . In Edit: I guess we'll find out what happens in default now, six days left of original term, assume all those with upfront interest will be allowed to trade at that point, and interest will accrue 'till resolved? Also, shouldn't there be some kind of warning on the loan page SS? It's still 'tradeable' at the moment. |
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Post by Deleted on Mar 14, 2015 17:56:10 GMT
Yes the inevitable. Will be very interesting to watch how this develops and the outcome. It will a have big effect on perceptions and trust in the SS platform.
In terms of the LTV, the Market Value subject to a quick sale was £200,000. The £260,000 valuation on which the 65% LTV was based assumed a normal exposure to the market. It seems what we have here with it going into auction next month is an attempted quick sale so the LTV might more properly be stated as 84% in the circumstances?
I shall be watching this with a lot of interest.
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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 Mar 14, 2015 18:09:25 GMT
So it seems the inevitable has finally happe - PBL 07 in default. However, I have to say that going by the information in their weekly update - "We have instructed a receiver and appointed a local agent. Auction booked for end April. A buyer is in place in case the property doesn’t reach full reserve at auction." (For those that haven't got or don't get it) - SS certainly seem to have got the situation swiftly under control, and hopefully with a 65% LTV will get a good outcome from the auction. So far so impressed . In Edit: I guess we'll find out what happens in default now, six days left of original term, assume all those with upfront interest will be allowed to trade at that point, and interest will accrue 'till resolved? Also, shouldn't there be some kind of warning on the loan page SS? It's still 'tradeable' at the moment. I would assume that as we lend to SS direct they will cover an interest due from term end until recovery & then recoop that from any extra proceeds.
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mikes1531
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Post by mikes1531 on Mar 14, 2015 19:54:28 GMT
I'm slightly confused by the statement that the borrower has defaulted if there's still six days to go. Is this one of those loans where SS set the 'Remaining term' to end a month after the official maturity date of the loan -- like they did regularly on their boat loans? The contrast with the way AC deal with defaults couldn't be much starker. I wonder how much of that is the result of SS/Lendy being in complete charge and not needing to 'consult' with lenders before deciding what to do. SS/Lendy clearly aren't giving this borrower much slack, appointing receivers and sending the property to auction so quickly. This might be their standard policy, or this speed might be related to this particular lender. It will be interesting to see how the auction works out. As for whether this situation should be made obvious on the website... my feeling is that it should. But if SS remain committed to returning all lenders' capital and accrued interest after the auction (or subsequent sale) -- no matter what level of proceeds are received -- then the consequences to SS investors are relatively small. But the issue of timing does remain. Anyone buying parts on the website -- and there have been some parts sold/bought today -- easily could be unaware of the situation, and be expecting their money back at the end of term as stated on the website, which is in six days' time. So they could be rather surprised and disappointed to find that they won't get their capital back until some time after "end April". So they really do need to be made aware of the situation. Unless, of course, savingstream intend to settle up with their investors six days from now, in advance of the property disposal. Which brings up another question... When a small item is sold at auction, the buyer is expected to pay very promptly. What happens with property auctions, where large sums and possible mortgages are involved? |
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Post by Duane Dibley on Mar 14, 2015 20:07:33 GMT
It wouldn't be quite right to say that I've been looking forward to this day but I have been anticipating it in an ever so slightly masochistic kind of a way.
Certainly it will be interesting to see how SS manage a default and how the provision fund might work in practice.
They don't seem to be taking any prisoners so far, and unlike other lenders this could all be over bar the shouting by Easter.
Provided SS handle this matter in the same professional manner they've handled other issues I'm waiting to be impressed.
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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 Mar 14, 2015 20:12:55 GMT
I'm slightly confused by the statement that the borrower has defaulted if there's still six days to go. Is this one of those loans where SS set the 'Remaining term' to end a month after the official maturity date of the loan -- like they did regularly on their boat loans? The contrast with the way AC deal with defaults couldn't be much starker. I wonder how much of that is the result of SS/Lendy being in complete charge and not needing to 'consult' with lenders before deciding what to do. SS/Lendy clearly aren't giving this borrower much slack, appointing receivers and sending the property to auction so quickly. This might be their standard policy, or this speed might be related to this particular lender. It will be interesting to see how the auction works out. SS know it will default because they have been in contact with the borrower for weeks. The weekly update from Feb 6th said " We are going to be working with this client to provide us with an exit from this loan. Brokers are confident that a commercial facility will be in place by the end of the term". By keeping the system simple they have time to concentrate on the important things.
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indy
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Post by indy on Mar 14, 2015 20:32:22 GMT
Looks like Lendy have things under control, will be interesting to see how this pans out.
There is over 8k of PLB 007 on the SM, some unsuspecting buyers might be in for a shock.
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Post by solicitorious on Mar 14, 2015 20:33:53 GMT
Which brings up another question... When a small item is sold at auction, the buyer is expected to pay very promptly. What happens with property auctions, where large sums and possible mortgages are involved? The completion date is normally 28 days after the auction. If you can't complete, there is penalty interest, and if the deal falls through the seller can sue you for costs and damages [the auction fess, solicitors costs and any shortfall in the price achieved second time round in the auction].
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Post by Deleted on Mar 14, 2015 20:40:18 GMT
Which brings up another question... When a small item is sold at auction, the buyer is expected to pay very promptly. What happens with property auctions, where large sums and possible mortgages are involved? Normal procedure is 10% deposit payable on day of auction with legal completion and payment of balance after 20 working days (28 days later). So prospective buyers really have to have their finances already sorted out. Cash buyers really. So in short, full purchase price will be received 28 days from the auction date (assuming it sells of course).
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mikes1531
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Post by mikes1531 on Mar 14, 2015 22:05:39 GMT
... unlike other lenders this could all be over bar the shouting by Easter. According to my calendar, 'end April' is four weeks after Easter, and if auction buyers have a further four weeks to complete...  But it's still an awful lot faster than another platform where I'm still waiting for security sales to be organised many months after the loans were due to be repaid. I've accrued a lot of default interest over there, but it remains to be seen how much of that ever will arrive in my account as money I can spend.
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Post by Duane Dibley on Mar 14, 2015 22:17:42 GMT
According to my calendar, 'end April' is four weeks after Easter, and if auction buyers have a further four weeks to complete... Poetic licence.
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manue
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Post by manue on Mar 14, 2015 22:25:47 GMT
Typical bad luck.. loan 07 was my very first PBL investment on a P2P platform was very sceptical about the investment but was buoyed by the fact that SS had never had a default which they so proudly pointed out.. get ready for more defaults they usually follow once they start.. lets see how well the LTV stands up once sold in the open market..
Be prepared to loose capitol from your investments.. risk v reward..
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mikes1531
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Post by mikes1531 on Mar 14, 2015 23:39:40 GMT
Be prepared to loose capitol from your investments.. risk v reward.. There ought to be enough value in the property to allow the return of all lenders' capital and accrued interest, so keep your fingers crossed. If not, there's the Provision Fund, so we'd find out how that works in practice. And speaking of accrued interest... Would anyone care to guess what will happen on 31/Mar? Will we receive the usual monthly interest payment? If savingstream are serious about their policy of insulating their investors from repayment problems then they ought to pay us as normal.
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Post by duncandive on Mar 14, 2015 23:50:44 GMT
Not great news really, yes I am involved in this loan. I do find it rather poor form that folks are listing their holdings on the SM. Perhaps if there was a clear message warning new buyers that the loan is now in 'Default'. BUt until that time, I find it wrong to try and dump any of my holding onto the less well informed.
I am now wondering how the below details in the property description might affect the disposal by auction.
PROPERTY DESCRIPTION
The property is a 19th century former residential building in Mansfield, near Nottingham with a large brick built extension on the rear. It is currently arranged as a 15 bed care home and the client has owned it for 4 years since buying as the manager from the previous owners. The current financial arrangements for the initial purchase have come to an end and the client requires a short term bridge whilst she arranges another term loan to take Saving Stream out. We understand that this is in hand and has a number of offers to consider.
We are lending on this property purely on a bricks and mortar basis; we have not taken into consideration the operating business as a going concern. We understand that the client has completed a recent refurbishment and that 6 of the available 15 beds are occupied so there is scope for increasing the cash flow
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mikes1531
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Post by mikes1531 on Mar 15, 2015 3:33:55 GMT
Not great news really, yes I am involved in this loan. I do find it rather poor form that folks are listing their holdings on the SM. Perhaps if there was a clear message warning new buyers that the loan is now in 'Default'. BUt until that time, I find it wrong to try and dump any of my holding onto the less well informed. What I'd like is a clear statement from savingstream as to how exactly they're intending to proceed... - Are they going to pay off lenders next week and deal with the default themselves? If they are, then no change to the secondary market via updates/warnings is necessary
- Are they going to delay repayment to SS lenders until after the auction/sale? If so, then I'd appreciate them making that obvious now -- both to existing lenders and to potential purchasers of secondary market parts.
- Inasmuch as the Provision Fund has more than enough in it to prevent lenders from suffering any losses at all, could SS please confirm that's the case, so that lenders can be a bit more confident regarding what's going to happen?
[SS said] ... the client requires a short term bridge whilst she arranges another term loan to take Saving Stream out. We understand that this is in hand and has a number of offers to consider. What concerns me most is that if the borrower really did have lots of options to choose between seven months ago, why hasn't one of them turned into reality and allowed her to avoid defaulting? I presume that the SS/Lendy loan agreement does contain penalty clauses, and even if they don't make any difference to SS's investors they should give the borrowers a significant incentive to avoid defaulting.
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