pom
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Post by pom on May 1, 2016 8:09:21 GMT
I wouldn't worry, selling property at auction is perfectly normal, and some properties will do a lot better that way provided the agents do their marketing well and get the right people in the room (I sold my grandfathers house at auction last year and it ended up making more than the guide price, tho the building plot didn't meet the reserve and took a little while longer to sell). Potentially an advantage for us provided it does sell it means completion dates will for once be entirely predictable so there won't be any of these "in legals" "still in legals"... updates
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Post by GSV3MIaC on May 1, 2016 9:25:58 GMT
Not to mention that, assuming we have a first charge on the title, it isn't going anywhere until/unless we (meaning Lendy, in this case iirc) agree to it.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on May 1, 2016 9:32:12 GMT
Will this be the first known instance where an SS property goes to auction? A search of ilmoro 's list of loans & updates finds no other mention of one. As mentioned by others, a property going to auction is nothing to worry about. Didn't the defaulted loan not successfully go to auction (PBL07)?
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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 May 1, 2016 12:04:51 GMT
Will this be the first known instance where an SS property goes to auction? A search of ilmoro 's list of loans & updates finds no other mention of one. As mentioned by others, a property going to auction is nothing to worry about. Didn't the defaulted loan not successfully go to auction (PBL07)? It did and sold at first attempt. This of course is borrower selling not SS.
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adrianc
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Post by adrianc on May 1, 2016 12:14:05 GMT
As mentioned by others, a property going to auction is nothing to worry about. Didn't the defaulted loan not successfully go to auction (PBL07)? It did and sold at first attempt. This of course is borrower selling not SS. Indeed. Does it make a big difference how the borrower is finding a buyer? The charge will need to be removed (by repaying the loan) before the sale can complete. If the sale price is lower than SS are owed, then the borrower is going to have to find the difference.
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spiral
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Post by spiral on May 1, 2016 15:54:28 GMT
The charge will need to be removed (by repaying the loan) before the sale can complete. How does that work in practice? Person A is selling their property at auction and realise 100K from a 150K loan. Person B bids 100K for the said property in good faith. Person A is only able to find an additional 25K. I assume that in the above scenario the property goes under the hammer with a 125K reserve rather than person B thinking they've bought the property only to find out a few weeks down the line that the previous debt can't be cleared.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on May 1, 2016 16:49:37 GMT
The charge will need to be removed (by repaying the loan) before the sale can complete. How does that work in practice? Person A is selling their property at auction and realise 100K from a 150K loan. Person B bids 100K for the said property in good faith. Person A is only able to find an additional 25K. I assume that in the above scenario the property goes under the hammer with a 125K reserve rather than person B thinking they've bought the property only to find out a few weeks down the line that the previous debt can't be cleared. Yes; because SS have the first charge of the security, any sale needs to be agreed with them prior to any sale. In the event of an auction, SS would (presumably) insist on the reserve to be large enough to cover the loan. If the reserve is not meet (after the first couple of auctions), that is where the SS & the borrower would have to come to an agreement to make up any difference in a future auction. Any issues arising due to the borrower having the lack of funds, then SS would just have to accept any amount that comes from the auction of the security. Any investor involved in said loan wouldn't shouldn't lose out because any shortfall would should be covered by the Provision Fund. BTW, if you or anybody else is interested; the documents for the charge on the security of PBL07 & (presumably) same for the other SS loans securities are freely available on the companies house website. A thrilling read
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adrianc
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Post by adrianc on May 1, 2016 18:02:24 GMT
The charge will need to be removed (by repaying the loan) before the sale can complete. How does that work in practice? Person A is selling their property at auction and realise 100K from a 150K loan. Person B bids 100K for the said property in good faith. Person A is only able to find an additional 25K. I assume that in the above scenario the property goes under the hammer with a 125K reserve rather than person B thinking they've bought the property only to find out a few weeks down the line that the previous debt can't be cleared. In exactly the same way as repaying your mortgage from the proceeds of your house sale if you're in negative equity.
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Post by earthbound on May 1, 2016 20:06:10 GMT
am i right in thinking that at the point of auction sale, the borrower still has full possession of the asset, and therefor needs to acquire a minimum sale amount to pay back SS in full? ie loan+interest amount.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on May 1, 2016 20:10:33 GMT
am i right in thinking that at the point of auction sale, the borrower still has full possession of the asset, and therefor needs to acquire a minimum sale amount to pay back SS in full? ie loan+interest amount. The loan hasn't defaulted, so the borrower still has full possession of the asset, but SS has first charge, so the borrow can't sell the security without savingstreams prior permission. The reserve would have to cover the loan & interest, unless the borrower has provided any prior payment.
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Post by earthbound on May 1, 2016 20:13:09 GMT
am i right in thinking that at the point of auction sale, the borrower still has full possession of the asset, and therefor needs to acquire a minimum sale amount to pay back SS in full? ie loan+interest amount. The loan hasn't defaulted, so the borrower still has full possession of the asset, but SS has first charge, so the borrow can't sell the security without savingstreams prior permission. The reserve would have to cover the loan & interest, unless the borrower has provided any prior payment. got it... thanks cd..
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ben
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Post by ben on May 1, 2016 20:14:24 GMT
or SS agree that the loan will default and are willing to sell it for what they can (ie get some money back), although it is unlikely to be at that stage yet
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Post by earthbound on May 1, 2016 20:18:55 GMT
or SS agree that the loan will default and are willing to sell it for what they can That is the default scenario that i always thought was the norm. (again agreed , we are not there yet, but still interesting, as per what could happen)
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Post by earthbound on May 1, 2016 20:29:27 GMT
The exit strategy does clearly state.
EXIT
STRATEGY sale of site, or refinance by development lender within 6 months.
Which can quite legitimately mean sale by auction.
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Liz
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Post by Liz on May 1, 2016 20:46:26 GMT
or SS agree that the loan will default and are willing to sell it for what they can That is the default scenario that i always thought was the norm. (again agreed , we are not there yet, but still interesting, as per what could happen) Do we know where it's being auctioned and the reserve price?
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