PBL23

Stony silence from SS!

Is there an issue?

I've seen no sign of one.  Has anyone else?

Based on the 'Remaining Term' info, yes.  In the last update (28/Apr), however, SS were expecting repayment before the BH weekend.

So it looks like SS have been stood up by a borrower -- yet again!

I took a look at PBL023 this morning, what I saw did not fill me with confidence. (see LH photo above)

It is clearly still a building site. With blockwork & sand etc on the drive, so obviously the works are still at an early stage. So much for a 1-3 month maximum before an 'agreed' mortgage were in place!

I know it is a Sunday, but the building site looked almost derelict, no sign of any recent activity, and little or no security for the building materials lying around.

There is no chance that the work will be completed anytime soon. I would guess at least another 6 months at their current rate of progress.

There is absolutely no chance that the property will increase in value to £350K. Nearby is another similar property looking very much better with similar internal specs to PBL023 and that has an asking price of £260K. See other photo and Zoopla. 

If the property were repossessed and sold at auction in its current state, we could expect about £150-170K after costs

So in summary.
   Expect at least another six months (probably more) before the borrower can get a standard mortgage big enough to repay us anything.
   Additional interest looks suspect and we may eventually be facing a loss as the real LTV after costs is probably >100

I can't comment about the idea of a £350k value, but unless the interior is a disaster zone I'd have thought that a developer would be happy to buy the place at >£200k, finish the refurbishment, and make a nice profit if it could be sold for something approaching £250k.

But it may serve to highlight a flaw in the methodology that SS use to value property and set LTVs. It will be interesting to see how it plays out.

We need to bear in mind that we're lending to SS and they're lending to the borrower.  They have indicated that they have a fair amount of working capital that enables them to make loans first and then offer parts in those loans to us.  But this also works at the redemption end of these loans' timescale.  Yes, they may have received repayment from the PBL023 borrower.  But there's also, IMHO, a significant probability that they have decided to use some of their working capital to repay us lenders, which gives them the opportunity to deal with a defaulting borrower as they wish, with none of their lenders asking awkward questions as we can see happening on other platforms.

There's also the matter of the timing of the release of PBL032.  Is it just a coincidence that PBL023 repaid just in time for SS investors to transfer their money from PBL023 to PBL032?  I expect this convenient timing helped ensure that PBL032 would be fully funded in a hurry, which makes the platform look good.

I do sometimes wonder why they didn't do something like that on PBL007.  Perhaps they didn't have sufficient working capital available at the time that one came due.  And now that they've given us as much info about the recovery procedure as they have, there might be eyebrows raised if the loan magically was paid off very quickly.

Food for thought, eh?