Mick Jackson Memorabilia

The only 'clue' is my two are listed under 'other'.

Well all three MJ memorabilia loans to the same borrower have gone T**s Up , but Funding Secure have stepped up and taken ownership of the items and paid us all out both capital and interest,

Well done FS

Here is the email I received.

TO: All investors in Michael Jackson Loans

As you are no doubt aware we have three separate loans which were secured against Michael Jackson Memorabilia, the details of which are as follows:

ID: 22084674
£5,000 loaned against a T-shirt and napkin, both signed by Michael Jackson. Valued at £7,500
Activated: 17/10/13. 6 month end date: 15/4/14
ID: 2131040674
£5,600 loaned against 2 hats signed by Michael Jackson. Valued at £8,000
Activated: 8/11/13. 6 month end date: 7/5/14
ID: 858660179
£4,200 loaned against a collection of clothing, signed by Michael Jackson. Valued at £6,000
Activated: 11/12/13. 6 month end date: 9/6/14

All of the above memorabilia were authenticated and valued by an ex-Christie valuer and by Fraser's Autographs - the leading UK autograph and memorabilia valuer and dealer. They provided a range of values - the lower end of the estimates being used as the value against which a loan was extended. Unfortunately, despite ongoing discussions with the borrower, as of today all three loans are in default.

NOTE: - there is one loan secured against Michael Jackson memorabilia that is still active. This loan was to a different client - we have no reason to believe at this stage that this will default - it is therefore not covered by this email.

We have been investigating options for disposing of these collections, including several auction houses including Fraser's, Bonham's, Heritage and Julien's in the USA. We have also been in discussion with several private buyers who had previously shown an interest in these items.

Although we have received offers for some of the items the values were not sufficient to proceed with any sale. You may have heard that there has been an increase in fake Michael Jackson memorabilia recently. Although no-one has questioned the authenticity of the items we hold, the effect of the fakes on the market has been to dramatically reduce the saleability of any real items. Unless we were prepared to accept very low offers the suggestion from all of the experts has been to hold onto them until the current furore about the fakes has died down - although this is likely to be some months away.

We have therefore decided to complete the loan, avoiding the accrual of interest which would otherwise make the possibility of a sale meeting all of the debt more-and-more unlikely. Exceptionally, we will be paying all capital and interest to date to all of our savers out of our own funds. FundingSecure will therefore take ownership of the items - which we will hold onto until we believe the market has recovered sufficiently to warrant resale. At that point we hope to recover the capital of the loan together with a portion of our admin charge.

This is an unprecedented action but we believe it is the correct one to take under these specific circumstances. FundingSecure remains a risk versus reward platform - we will continue to offer loans at high interest rates secured against assets which are professionally valued. There remains a risk that if a loan defaults there could be a shortfall, resulting in loss of interest or possibly even loss of capital. We will continue to strive to avoid this but we can never guarantee 100% return. To date we have a good track record but we would nevertheless recommend that savers should spread their investments across a number of loans to minimise the effect should there be a shortfall.

In addition to this detailed email we will be posting a more general blog on our web site to ensure those savers not directly involved with these loans will understand the position and the action taken.

If you have any questions please reply to this email and we will respond directly.

Sincerely

Noman, Richard, Nigel
 

Funding Secure have been far more than honourable regarding this selections of loans and I trust that the perpetrator of this scam will, in due course, reflect on their action and make amends in a truly charitable way by helping those in great need.

I wholeheartedly agree with the praise of FS' actions, which are unfailingly professional and more than fair, and agree that they do take their business seriously.

However, I will non-the-less return to one of my stuck record points and question again whether 70% LTV isn't too high for these types of item for which valuations are a matter of opinion and subject to random change over a 6 month period.  If instead of defaulting this borrower had requested to renew the loan, would a re-valuation have been done?  Because, clearly, the current value of these particular items is much lower than it was 6 months ago.  My feeling is that 70% LTV is probably reasonable for things like buildings, but anything that has more of a chance of depreciating quickly should have a lower LTV to be prudent.  Despite my concerns, I've tended to ignore it up till now, but I'm starting to think I ought to modify my lending behaviour.  After all, FS have stated in a round-about way that they will be willing to allow us to lose out at some point in the future if the valuations turn out to be inadequate for some reason.

Quite right too (mine's a Y****a ).  But, suppose the borrower wants to renew, just how sought after is it likely to be in December, I wonder?  Not saying I wouldn't renew, but I'd certainly be giving it some thought.

Sure are - but need to be quick before the 'biking 'season' ends. Also may need to be prepared to travel trying to sell these as they are a bit of a HOG alternative. Now I'll probably be shot down by all HD owners for saying that!!!