Anglesey Update

It really is ridiculous- The lender update from the original loan on the documents tab States "We retain a First Legal Charge over the property and the refurbishment work has been completed improving the valuation from when loan was originally drawn down". Clearly we have been misled by that statement as it now appears to be worth considerably less.
I agree and hope Assetz are doing everything they possibly can to ensure lenders will not lose out on anything on this loan.

An unforgivable situation we find ourselves in here. The loan is initially dressed up with a valuation of £1.26 m on a loan of £875k (69% LTV), then we are told the refurbishment works are completed improving the value and of course property prices have rocketed in the last couple of years.

Now we are told the property is worth probably half what it should be and we will be lucky to get all our capital back. Something is seriously wrong with this and Assetz need to look far deeper and find out exactly who is at fault and who will ultimately pay if we should lose anything on what we should all get. We will certainly not let this rest.

In order to assist and hopefully help us feel more at ease, we need to know the following, at least:
1) what have the valuers got to say about the property's current value (and the suggested value/return by the auctioneer)?
2) what is the current and proposed rent roll?
3) have the refurbishment works definitely been completed and to what standard and what value have they actually added the the property?
4) what is the current accrued interest (including default interest) on the loan and the predicted additional interest of say 6 months during the sale process?
5) what are the current / proposed LPA receiver fees allowing another six months to sell?
6) a true and accurate up to date assets and liability statement is needed from the borrower, to give us an indication of additional recovery options
7) what are the prospects for the business to continue trading on behalf of lenders - ie will it be able to cover interest due, management fees etc, with a view to the value increasing after a successful trading period?

These are the sort of things Assetz need to be finding out and Andrew Holgsate reporting back to us urgently (We have seen the posts on the pink pages)

Chris, please give us more respect, we have been dealing with property for many years, you are talking of a suggested auction value of probably 50% (or less) of the current market value (based on the original value, refurbishment improvements and considerable prices increases over the last two years).

You and the receivers have also had more than enough time to collate much of the information in our previous post (which should be available to you, them and investors, before you even condsider the auction route), so please do not come out with such poor excuses as time of year.

Of course selling for such a low price is not an option (especially with the professional valuation you have obtained) and we are pleased the LPA receivers are not following that route, but need the information ASAP please.

For its day, the Anglesey loan (#60 when originally listed) was unusual in so far as the loan overview stated "Urgent drawdown (20 Dec) to avoid fees on prior loan so underwritten without auction and loan units to be sold on the aftermarket".  This was the end of 2013 when the underwriting capability was in its infancy, and its likely that most if not all the £875k loan was underwritten by just one, maybe two underwriters.

I wonder to what extent these underwriters carried out their own detailed due dilligence before investing hundreds of thousands of pounds.  As a minimum I would have thought they would have verified the valuation document made sense by investigating any comparables quoted, and done an assessement as to whether plans for funding the remainder of the refurbishment were sensible. If I was lending that amount of money against a single property I would be insisting on a site visit and an opportunity to meet the borrower.

This was one of several anonymous loans, sold to us (retail lenders) by AC on the basis that one or more large investors had also done due dilligence alongside AC.  If this loan results in anything less than a full recovery of capital and accrued interest due to a poor valuation, those original large scale underwriters should shoulder some of the moral responsibility for not challenging the valuation at the outset. The anonymous nature of this loan has prevented crowd due dilligence from being applied, and I'm still in the dark as to what the security for this loan actually is.

If any of the original underwriters of this loan are reading this, it would be interesting to hear your views of the original valuation based on your due dilligence at the end of 2013.

How naive of you mrclondon to try and pass blame to others, You should know better, especially someone in your position, these RICS valuations are carried out by qualified professionals covered by their PI insurance accordingly. After reading the initial valuation and checking a number of things out, we had no reason to disagree with the original valuation or question the professional integrity/advice of the valuer, or clearly we would not have invested in the first place. This is why we are very concerned and questioning the auctioneers opinion (albeit a FSV) as of course are the LPA receivers.

My understanding is, your "likely" assumption of "just one, maybe two underwriters" is wrong. In any event, irrespective of the level of investment, anyone who invest should carry out their own due diligence to a certain degree (as did we), which includes you (retail investors) if, of course, you invested. The whole point of our original post is to get to the bottom of why there is now such a vast difference in values and why such critical information is not already being shared/available to help us understand why and to give a reasoned and judged view on the way forward.

Pathetic comments like those posted by westcountryfunder are most unhelpful and just go to wind up an already worrying situation so, as a moderator, your time/comments would be better spent stopping such ridiculous nonsense please.

I have to say I'm personally disappointed with the tone of this thread and the lack of courtesy being displayed.  We should never descend to insulting each other, this is supposed to be a discussion forum where lenders and platforms can come together in open and constructive discussion.  If that discussion devolves into a witch hunt or a place to vent at each other then there's no point us as a platform engaging, it serves no one.

Thankfully this is the very rare exception on this board, in part due to the exceptional service provided by the mods (free of charge), and I for one would like to keep it that way.

I understand the frustrations of lenders who want instant answers but dealing with insolvency practitioners and the recoveries process in general simply does not work that way.  It is the LPA receiver who now dictates the timeframe and how matters are pursued, not AC, and they do so with all creditors in mind.  They have a legal duty to recover as much value from assets as possible, and they will be the ones who will decide whether that is best served by selling the property at auction or continuing to market the property as they have been doing.

Until that process is complete we simply do not know the value they're going to be able to recover.  An offer could be made tomorrow which completely vindicates the original valuation and recovers everything owed to the lenders.  If the decision is made to take the property to auction then again everything owed may be recovered.  We cannot start beating down the original valuers door demanding answers until that process has been completed and we know what, if any, shortfall there has been and the circumstances surrounding it.  Threatening them with legal recriminations based upon speculation is not the way we do business and would not help our lenders at all.

Andy has promised to review some of the circumstances surrounding the loan and will report back to lenders in full when he has all the facts. This will specifically cover the point about the works completed to date and how much more work needs to be done (if any) to complete the project.  As that point involves third parties it's not something we can idly speculate about in a public forum.

As a director I am the right person to escalate questions to when the other official channels have been exhausted or have failed.   However several users have asked these exact same questions via those channels, quite probably including those posting in this forum, and as technical director I'm not going to be able to provide additional insight beyond information I can gather from those same channels.   As an underwriter you already have a relationship manager whom you can (and presumably have) been talking to about these matters.  I'm not going to be able to provide you with more information here than has been provided by him.  

I have not seen any evidence of our customer services team failing to engage via those channels or refusing to provide information I feel that they could or should provide and so I have nothing I can add.  If someone tells me otherwise I can then escalate.

The point I was trying to make was that the only info retail lenders have been provided with is the 4 page abridged credit report. The borrower and the security remain anonymous. No valuation report was made available. It was (and remains) close to impossible for any retail lender to do any form of independent due diligence on this loan.

There was a (light weight) article in yesterdays Telegraph How do you know you're investing not gambling ? Whilst everyone will have their own line between gambling and investing, I'm firmly of the belief that investing in p2p loans on any platform without doing independent due diligence is gambling. As such my view has been that any investment by retail lenders in Anglesey was little better than a gamble, especially when the 4 months of retained interest ran out (the point at which I disposed of most of my holding).

I'm more interested in trying to use past experiences such as this to improve future outcomes for all p2p lenders, and make no apologies for highlighting that AC (amongst other platforms) provide a level of detail to the underwriting community on some loans that is denied to retail lenders.  When the dust settles on the FCA authorisation process for p2p platforms, it will be interesting to see whether additional guidance in this area is forthcoming.  It is already clear that at least one platform is continuing to allow cherry picking of loans (or tranches thereof) by underwriters / larger investors contary to the FCA's initial guidance.


I guess it would be too much to hope that AC took the decision to now release the original Anglesey valuation to current holders of the Anglesey loan.