r1200gs
Member of DD Central
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Post by r1200gs on Apr 15, 2017 10:08:25 GMT
Just a reminder to everybody (and not aimed at anybody in particular) that where a loan is headed for default, particularly if some form of litigation is a likely outcome, be careful what you say on this forum. It would be a shame to jeopardise recovery chances. Thank you. No offence taken if you put me right, not that it would stop you. :-)
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Post by WestonKevTMP on Apr 15, 2017 12:23:32 GMT
I personally find this loan debacle very distasteful.
Traditional risk management would never lend only on "the deal" (i.e. security), you always assess the borrower. And if the property does sell for something like £1m then it'll turn out that "the deal" wasn't even a good one. Which should have been obvious from previous sale prices of the property.
This loan has allowed an ex-bankrupt, that several media outlets have called "a crook" to probably walk away with £2m cash and shot of a property he didn't want anymore. If this is what happens, then shame on all involved.
Kevin.
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seeingred
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Post by seeingred on Apr 15, 2017 12:24:14 GMT
"but nobody should have to pay to have some naïve posh boys to learn basic life lessons."
Taken as a whole, this nursery for posh boys is becoming quite a dangerous place, financially speaking.
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Post by harryvederci on Apr 15, 2017 12:59:14 GMT
Traditional risk management would never lend only on "the deal" (i.e. security), you always asses the borrower.A somewhat unfortunate typo Westonkev, or a different approach to underwriting? 
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Post by WestonKevTMP on Apr 15, 2017 13:21:58 GMT
Traditional risk management would never lend only on "the deal" (i.e. security), you always asses the borrower.A somewhat unfortunate typo Westonkev, or a different approach to underwriting? Perhaps in this instance I'd make an exception.....
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Post by dualinvestor on Apr 17, 2017 16:43:22 GMT
I personally find this loan debacle very distasteful. Traditional risk management would never lend only on " the deal" (i.e. security), you always assess the borrower. And if the property does sell for something like £1m then it'll turn out that " the deal" wasn't even a good one. Which should have been obvious from previous sale prices of the property. This loan has allowed an ex-bankrupt, that several media outlets have called "a crook" to probably walk away with £2m cash and shot of a property he didn't want anymore. If this is what happens, then shame on all involved. Kevin. Whilst the underlying debtor may well have got a loan for more than the value of the property together with another "profit" he might have made on the associated loan, he has not walked away with £2million unless the loan was not written under usual Lendy/Saving Stream conditions. He "only" got £1.6million, plus the intervening rent from the third party as the interest was retained from the original advance. mason The sale is under the auspices of LPA Receivers, but that is not conclusive evidence they have possession, of course one of the units is occupied by a tenant the status of the other one, which was previously occupied by an associated company of the debtor is a little less clear.
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moist
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Post by moist on Apr 18, 2017 8:06:18 GMT
So to summarise....Lendy has been conned, investors suffer.....and Lendy keep quiet?
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oldgrumpy
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Post by oldgrumpy on Apr 18, 2017 13:23:36 GMT
So to summarise....Lendy has been conned, investors suffer.....and Lendy keep quiet? It would be nice to have some sort of comment, but they may be genuine reasons LY can't comment (legal issues?) In regards to the Tenanted Office Block, there is secondary security (Debenture & PGs... What? Stop Laughing...) so I would hope that LY is looking into these as a course of action. The most recent accounts showed £2.9m "Tangible Assets", although I guess the Office Block takes up most of this. In regards to the PG, the borrower has a history (with a mainstream bank) of wrangling out of these. Of course, I'm guessing the PG is with DP; it could be anyone. This particular individual will have a favourite (replacement?) lawyer just sitting there looking at everything, waiting to pounce (at the last possible moment, of course) on any tiny technicality to delay and/or absolve him from any repayments whatsoever. So we'd better keep schtum for now.
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Post by WestonKevTMP on Apr 18, 2017 20:10:38 GMT
If I was a staff member at Lendy, I would be worried and not comment about this case on a public forum. There will be legal action continuing, and it would be interesting to know if the FCA were involved. It is possible that the valuation on which the loan was based, was inflated by the " fake lease" between connected parties. This financial structure by the borrower supported Lendy into substantially overvaluing the property. To such an extend that it was valued at 3* the last known sale price (£2,870,000 vs £800,000). And to be fair, Lendy have relied on a third party to perform this valuation. As jfm rightly pointed out right at the start of this thread " Is anyone concerned that a majority of the rent on the building is paid by a newly formed company connected to the borrower?" Perhaps Lendy were inexperienced and this just reflects poor risk governance. Alternatively it is a case of 'Financial Crime' (as defined by the FCA - www.fca.org.uk/firms/financial-crime ) through manipulation by an individual whose moral characterer has been question in the national press and financially is an ex-bankrupt (although that in itself can be quite innocent, although unfortunate). The FCA role in Financial Crime avoidance is " to ensure the integrity of the UK financial markets we require all authorised firms to have systems and controls in place to mitigate the risk that they might be used to commit financial crime". If I'd lost money on this loan, I'd want to know if my loss was simply inexperience and poor risk management, or fraud through the manipulation of fake lease contracts to inflate a property price at the expense of lenders. Kevin. |
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Post by harryvederci on Apr 18, 2017 20:40:38 GMT
I suspect the answer lies in Appendix 5 of the val report ie look who instructed it
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ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,168
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Post by ozboy on Apr 18, 2017 22:42:12 GMT
Perhaps, now, Investors will take seriously my hobby horse rantings about the VR "Industry", for that is what it has become.
Most VRs wouldn't be fit for toilet paper and yet we accept them, "Do your own DD" being the response. Well, we shouldn't have to, these Documents should be reasonably honest, accurate & reliable and it's high time this racket was exposed.
Yes, yes, I know it's difficult to get an accurate VR, but come on, many of them are miles out with glaring mistakes a child can uncover in five minutes on the internet.
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seeingred
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Post by seeingred on Apr 19, 2017 11:53:59 GMT
This was a particularly bad case, but in effect, it seems valuers can produce any old rubbish provided it is 'reasonable' according to some model or other of local prices, get paid and be able to walk away. And this is for loans worth sometimes millions. Added to which the platforms do little DD on borrowers.
We are still waiting to see how Lendy deal with all their defaults. If it is via a number of capital losses that is going to affect the whole P2P market for property investments, and especially for non-housing where valuations are more difficult to get right?
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Post by mattie on Apr 19, 2017 13:22:08 GMT
Less than a week to go until this will join the seemingly ever increasing ranks of defaulted loans and bring the total to over £11 million  |
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Post by geraldine1210 on Apr 19, 2017 14:08:01 GMT
Less than a week to go until this will join the seemingly ever increasing ranks of defaulted loans and bring the total to over £11 million I think most people realised from very early on that this loan could only go one way.
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seeingred
Member of DD Central
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Post by seeingred on Apr 19, 2017 17:46:12 GMT
You should buy into SS mini-bonds instead if risky individual loans.
One of the assurances in the prospectus is:
" All loans have indemnified valuation "
Nothing can go wrong! And you get 7%.
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