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Post by fundingsecure on Apr 7, 2014 11:11:36 GMT
Hello,
Regarding our valuation policy - the overall aim hasn't changed. It is still our intent to value items at the low end of the valuation range received and to offer a loan at an interest rate and LTV that would aim to fully recover both capital and interest in the event of a default. Unfortunately valuation is not an exact science - so there is no cast-iron guarantee that selling any item would achieve 100% of the valuation - although we believe our valuation process has improved and will continue to do so over time. As MikeS1531 already commented it is always difficult to balance the LTV with the borrowers expectation.
We do, however, also believe that, due to the nature of the security, any return would be much faster and at a much higher return than for any defaulted loans from most of the competing p2p finance offerings. So far this has been the case - but savers have to make their own judgement by balancing the interest rate and LTV offered against the perceived risk, for both secured and unsecured loans.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on May 9, 2014 14:41:43 GMT
And another default just come to light, bottle of brandy. A bit of googling shows a more favorable price range for this (£2k - £4k (on a loan of £1k)) so hopefully the recent uneasiness will soon be a distant memory! Fingers crossed. If not maybe there's enough brandy to share around the borrowers to drown our sorrows...  A success story. FS found a buyer for the bottle of cognac, and after all expenses and interest due to the lenders, there was a little left over to pass on to the borrower.
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Post by elljay on May 10, 2014 7:28:11 GMT
That is good news.
Hic!
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Post by davee39 on May 28, 2014 17:29:29 GMT
I had a message on 22nd asking if I wanted to invest in a possible renewal of the loan. It is still 4 days later than the 7 days allowed for settlement. Furthermore the MJ defaults are still waiting details of an auction date.
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Post by fundingsecure on May 28, 2014 21:17:33 GMT
Quick update - interest payment expected end of May - to include extra accrued interest. Loan to be renewed shortly thereafter.
HTH
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jun 16, 2014 17:02:57 GMT
And another one bites the dust - motorbike loan just defaulted. We were discussing it over on the MJ thread just the other day! |
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mikes1531
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Post by mikes1531 on Jul 10, 2014 19:41:36 GMT
And another one bites the dust - motorbike loan just defaulted. We were discussing it over on the MJ thread just the other day! Has there been any news on the motorbike in the past few weeks? Earlier today I noticed that it's been a month since FS wrote to say that the bassoon owner had defaulted and that they were "taking measures to dispose of the asset. We will update you in due course." Not having heard anything, I asked for an update, and the response was ... ... so FS are working the problem, but the timing is still unknown. Just goes to show -- if we didn't already know it -- that recoveries from defaults are long, drawn-out, affairs. And that, of course, makes it more difficult to achieve full recovery of capital and accrued interest/fees when the LTV is high to start with. (In this case, LTV was 70%, and since the loan was due at the end of May there's now six more weeks of interest/fees to recover.)
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jul 10, 2014 20:09:52 GMT
And another one bites the dust - motorbike loan just defaulted. We were discussing it over on the MJ thread just the other day! Has there been any news on the motorbike in the past few weeks? Earlier today I noticed that it's been a month since FS wrote to say that the bassoon owner had defaulted and that they were "taking measures to dispose of the asset. We will update you in due course." Not having heard anything, I asked for an update, and the response was ... ... so FS are working the problem, but the timing is still unknown. Just goes to show -- if we didn't already know it -- that recoveries from defaults are long, drawn-out, affairs. And that, of course, makes it more difficult to achieve full recovery of capital and accrued interest/fees when the LTV is high to start with. (In this case, LTV was 70%, and since the loan was due at the end of May there's now six more weeks of interest/fees to recover.) Hey there mikes1531 - I noticed you pop up in today's loan and wondered when we'd find you back in here  I haven't heard any more about the Yamaha - to be honest it had disappeared off my radar with a number of other things going on recently, so thank you for bringing it up again. Yes, defaults are long-winded. My longstanding dislike of the 70% LTVs on these loans is already well documented. The more time goes by, the more I dislike them. We still don't have a great deal of experience to go on with defaults here, but the results aren't really shaping up too well so far. The only reason we haven't taken losses is that FS have (very kindly) covered them for us to date. The brandy ended well, but otherwise it's not been pretty. I've already stopped lending on anything with the lower interest rates some time ago, and I've recently started getting a wee bit pickier with the others too. I'm keeping an open mind; FS have claimed they have improved their valuation process and in the long run things might not look too bad. Be good to know about the bike though - the prime selling time for them is relatively short.
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mikes1531
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Post by mikes1531 on Jul 10, 2014 20:43:01 GMT
My longstanding dislike of the 70% LTVs on these loans is already well documented. The more time goes by, the more I dislike them. When I looked at the situation early on, I concluded that a loan that started at 70% LTV would be up to nearly 90% LTV after seven months, and achieving that after auction fees, etc., could be difficult. If the recovery process drags on longer -- as seems to be the norm -- the chance of a full recovery becomes rather slim indeed. In an earlier exchange of emails, FS pointed out to me that their Ts&Cs state that they are paid all their fees before lenders receive any interest. That was not reassuring, though their actual performance in dealing with defaults, and going out of their way to protect lenders from losses, has been. They've obviously done that to keep lenders happy -- but can they continue to do that?
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jul 11, 2014 10:52:05 GMT
And another one bites the dust - motorbike loan just defaulted. We were discussing it over on the MJ thread just the other day! Has there been any news on the motorbike in the past few weeks? Maybe you jogged more memories than just mine here - loan just repaid . No explanation, so either they came up with the money, or it sold successfully.
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Post by fundingsecure on Jul 11, 2014 12:43:06 GMT
Glad to say the bike sold for sufficient to cover the whole loan and all accrued interest.
The defaulted bassoon is currently with a specialist seller - who has confirmed the value. Hopefully also looking good for a sale in the near future.
FundingSecure
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Jul 11, 2014 12:45:13 GMT
Glad to say the bike sold for sufficient to cover the whole loan and all accrued interest. The defaulted bassoon is currently with a specialist seller - who has confirmed the value. Hopefully also looking good for a sale in the near future. FundingSecure That's great - thanks for the updates. I hope there was a little left over for the borrower too - I feel a bit of 'brotherhood' (or perhaps 'sisterhood') for my fellow biker types 
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ramblin rose
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Post by ramblin rose on Aug 19, 2014 11:29:52 GMT
Glad to say the bike sold for sufficient to cover the whole loan and all accrued interest. The defaulted bassoon is currently with a specialist seller - who has confirmed the value. Hopefully also looking good for a sale in the near future. FundingSecure I was wondering whether there is any news on the bassoon? Time is marching on................. 
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mikes1531
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Post by mikes1531 on Aug 26, 2014 0:20:38 GMT
Glad to say the bike sold for sufficient to cover the whole loan and all accrued interest. The defaulted bassoon is currently with a specialist seller - who has confirmed the value. Hopefully also looking good for a sale in the near future. FundingSecure I was wondering whether there is any news on the bassoon? Time is marching on................. I think it's time for an update from fundingsecure -- we've had silence on this for a month and a half now. I thought I might have located the website of the 'specialist seller', but they list the bassoons they have for sale and there's nothing on the list that matches the description of this one. Since this loan was due on 31/May, we're rapidly approaching three months overdue, and full recovery via the sale of the instrument is getting very unlikely very rapidly.
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mikes1531
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Post by mikes1531 on Sept 4, 2014 2:48:02 GMT
The defaulted bassoon is currently with a specialist seller - who has confirmed the value. Hopefully also looking good for a sale in the near future. I was wondering whether there is any news on the bassoon? Time is marching on................. I think it's time for an update from fundingsecure -- we've had silence on this for a month and a half now. Since this loan was due on 31/May, we're rapidly approaching three months overdue, and full recovery via the sale of the instrument is getting very unlikely very rapidly. For anyone who isn't directly involved, FS have emailed an update today, and ramblin rose's 12/Jun comment in another thread ... 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. ... is very relevant. What FS said today was... In thinking about this a bit more, it seems to me that the FS Ts&Cs mean that fundingsecure have a bit of a conflict of interest when arranging a sale that won't fetch enough to pay all of the accrued interest and fees. Taking the bassoon as an example, it was valued at £2000 and £1400 was borrowed. FS fees accrue at 2.4%/month and lender interest at 1.1%/month. That's £34/month for FS and £15/month for lenders. At the end of the six-month term, FS is owed £204 and lenders are owed £90. If a sale takes a month to organise, the amounts accrued grow to £238 and £105. If the sale proceeds after commissions, etc., are at least £1743, then both FS and the lenders would get all their fees/interest and everyone would be happy. If the proceeds come to less than £1743, then the lenders suffer because the FS fees get paid before the lenders' interest. If the security takes longer to sell, however, as the bassoon has -- the loan matured on 31/May -- the picture looks rather different. We've already passed the 9-month point, so let's say the sale occurs at the end of this month. Ten months' of accruals come to £340 for FS and £150 for the lenders. So now the sale proceeds would have to come to £1890 for everyone to be happy. That's clearly unlikely for this bassoon since the asking price is £1900 and there will be sale fees to pay. So let's say the sale proceeds are the £1743 needed at the end of month seven. The lenders receive their £1400 of capital back, FS receive their £340 of fees -- and lenders receive £3 of their accrued interest! The net result is that FS are better off with the 10-month sale, and the lenders lose out compared to what they would have received in a 7-month sale. From which I conclude that FS have little incentive to sell the security quickly and thus have a conflict of interest with the lenders because of the priority their fees have over lenders' interest as specified in the Ts&Cs. We can only hope that either the slow bassoon sale is atypical, or that FS are more generous to lenders than required by the Ts&Cs. And, with a bit of luck, FS will be more eager to grow the business than to squeeze every penny they can out of it in its early life. I remain hopeful, but I'm also thinking a bit more about the saleability of the security offered in some FS loans.
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