Liz
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Post by Liz on Aug 4, 2017 17:37:04 GMT
So with latest updates, I am currently deducing the following: 1. The first 4 units are NOT yet complete. (So the 'showhouse' isn't finished at all unlike what the estate agent stated?) 2. Lendy won't be lending the money because there's no security available from the borrower to lend against (So how is the borrower going to get extra funding) 3. As explained above, I don't believe the borrower has any chance of getting extra funding, so recovery is imminent. 4. The money is gone, What we will recover is an unfinished job which therefore isn't going to be per development value. 5. Therefore there is a possibility we are not going to get all the money back, unless Lendy get the project developed under their own initiative (Tell me I'm wrong please). So please tell me if I am correct above Sherlocks? Because I'm going Ele'MENTAL!! You are correct. This one starting to look like a car crash. Who would refinance this at such a high LTV? Which is increasing everyday interest accrues at something like 20%pa+. Now how much is left in the PF after recent loans have dipped into it? N
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seeingred
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Post by seeingred on Aug 4, 2017 17:49:29 GMT
The showhouse is finished - there is an agent on site for viewings (not sure which agent).
The first four units look almost finished from the outside.
The site looked to me to be somehow frozen in time. One day everything was happening, next day silence.
I actually feel sorry for this guy - he may be some sort of dreamer but without too much grasp of finance planning. Last time I looked none of his Exeter apartments were marked as SSTC or Under Offer.
The work on these houses as far as it goes looked really good. Not sure how an experienced developer could have got into this mess - it is not as though there has been a sudden recession and downward shift in house prices.
This site is going to need quality people to finish it. Sounds as if there is no more money from Lendy.
Someone needs to pick it up and finish it to the standard of the work so far - or else much of the money already spent will be devalued.
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mary
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Post by mary on Aug 4, 2017 18:01:45 GMT
The showhouse is finished - there is an agent on site for viewings (not sure which agent). The first four units look almost finished from the outside. The site looked to me to be somehow frozen in time. One day everything was happening, next day silence. I actually feel sorry for this guy - he may be so sort of dreamer but without too much grasp of finance planning. Last time I looked none of his Exeter apartments were marked as SSTC or Under Offer. The work on these houses as far as it goes looked really good. Not sure how an experienced developer could have got into this mess - it is not as though there has been a sudden recession and downward shift in house prices. This site is going to need quality people to finish it. Sounds as if there is no more money from Lendy. Someone needs to pick it up and finish it to the standard of the work so far - or else much of the money already spent will be devalued. Agreed, not sure Lendy can follow the previous (unsuccessful) Leatherhead example and put their own money in now the FCA is looking over their shoulders? If only there was transparency with respect to the PF we might have some hope of recovery! Although with all the other defaults, likely not.
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ozboy
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Post by ozboy on Aug 4, 2017 18:09:41 GMT
So the Borrower has been given £6 million to complete 8 / 10 houses and this is the result. This money was drawn down as a result of the Monitoring Surveyors reports on progress. The initial loan document stated that the Developer had a contracted builder to complete all of the houses for a fixed price of £3.7 million.So what was the Monitoring Surveyor reporting against? It is either crass incompetence on the part of the surveyor or the team at Lendy who approved the release of monies and also calls into question the legal position of the Borrower who may have used the money incorrectly. This one is going to be far worse than the Garden Centre. Issuing idle threats to the Borrower to get other finances in place will do lenders no good as any sane person is not going to fund this disaster. It also questions the competence of the Lendy team from the top down who have allowed this to happen. DFL 02 (the same borrower) is also heading in this direction as the LY management team play at sailors whilst our money sinks into the sea. Oh I think I'll have a G & T. This is certainly one for our friend from The Times to look at. Yep, get the Journos on the case, and Panorama or whatever TV "Expose" show suits.
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seeingred
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Post by seeingred on Aug 4, 2017 18:20:02 GMT
This one needs careful thought and not rushing to judgement. Maybe not all the facts are as we suppose from limited information.
Two things seems certain - inadequate financial supervision from the top down, woeful surveyor competence.
Leatherhead seems to be a joke - a finished house not being properly marketed last time I looked.
I came into Saving Stream long after the garden centre episode. valuations wrong again??
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Liz
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Post by Liz on Aug 4, 2017 19:24:12 GMT
This one needs careful thought and not rushing to judgement. Maybe not all the facts are as we suppose from limited information. Two things seems certain - inadequate financial supervision from the top down, woeful surveyor competence. Leatherhead seems to be a joke - a finished house not being properly marketed last time I looked. I came into Saving Stream long after the garden centre episode. valuations wrong again?? Yes you are right about the careful thoughts. However it is the complete incompetence at Lendy Towers that riles me, having been in Contracting, Residential Developments etc all of my working life I have never seen such continual mismanagement. Instead of hitting the Borrower over the head with a piece of 4 by 2, Lendy now need to sit down with him and draw up a plan to get this development finished. No one will buy this for a price that will repay lenders. Lendy should appoint a Project Management company who can assess the cost to complete and time frame required and then put that to the Borrower and the Lenders. In essence they need to take over the Works and get it completed. IMHO the Lenders will support a valid action plan that guarantees a satisfactory outcome. I may come out of retirement to give Lendy and hand on this project (for a fee of course).  I still don't see where the funds are coming from to get this project finished. Surely you can't force 3000 Lendy lenders to fund the completion, even if it would produce the best outcome.
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seeingred
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Post by seeingred on Aug 4, 2017 21:21:02 GMT
I hope Lendy are listening to all this.
Neither DFL001 nor DFL002 needed to get into difficulties - both are fundamentally sound building projects in an area of the UK where housing demand and prices are strong.
In both cases there seems to have been a complete 'hands off' cursory tick box approach to overall loan management and far too much reliance on valuers who do the bidding of borrowers - or so it would seem - or who maybe just take the easy way out, knowing how difficult and expensive it would be to sue them under their insurance. This is a criticism that may apply to many other Lendy projects - as investors may soon find to their cost.
There is no shortage of existing modern very hi-spec housing within a mile or so of DFL001 - comparisons would be easy enough and with proper allowance made for the noise from the M5 which is so close to DFL001. This development needs to be properly and uniformly completed to a high standard and soon - winter is coming. Ten houses sold for even 550k each would return some of the investment. If the site is left to left to degrade the existing expenditure could quickly be compromised.
As for DFL002, the area is saturated with apartments of various qualities and prices and again sensible comparisons would be possible making proper allowance in this case for the lack of on-site car parking. The architects made imaginative use of the existing listed building but may have forgotten about summertime overheating with all the unshaded south facing glazing. Also, there was an obsession with balconies - even in locations where they are practically unusable. This is a blindingly obvious feature of DFL001 also.
A common feature is overvaluation and the risks that poses to investors - but this is not a problem unique to Lendy, it can be seen across the P2P sector.
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Liz
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Post by Liz on Aug 4, 2017 22:04:42 GMT
I still don't see where the funds are coming from to get this project finished. Surely you can't force 3000 Lendy lenders to fund the completion, even if it would produce the best outcome. Maybe a second charge loan at 18% ( yes Lendy, 18%) offered in the first instance to existing investors and then to the broader lender base? It would have to be a very detailed proposal, the budget forecasts would have to be impeccable and the existing borrower kept at a suitable distance for me to even consider it. I don't think the figures will add up even at 18%. Let's say they need another £1m and need to keep the existing funding for 12 months. Assuming total interest rate of 20% on current borrowing(inc. default interest & lendy's fee). Total borrowing £7m vs £8.6m GDV, already gives an 80%+ LTV. But factor in the interest due on loan 1 and: Total borrowing £7m+£1.2m vs £8.6m, gives LTV of 95%+. That 95% LTV assumes everything runs smoothly; and sales will need to exceed £8.4m after selling costs for the 2nd charge to just receive capital back, with little chance of full interest, so the 18% or even 25% would be irrelevant. The above figures are of course just an example and not based on any fact.
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hazellend
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Post by hazellend on Aug 5, 2017 7:51:13 GMT
This is ridiculously poor management by lendy and their interim valuers.
I cannot see a similar situation arising on MT or Col who seem actually pay attention.
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Post by martin44 on Aug 5, 2017 8:20:03 GMT
Considering Lendy may/not charge the borrower a % fee of the initial valuation of the project/loan , then surely a vastly inflated, nonsensical valuation report is a good thing (for Lendy) I must stress this is only my theory, i do not for one minute think Lendy would let this sort of thing happen.   |
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MarkT
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Post by MarkT on Aug 5, 2017 9:05:28 GMT
I must admit, I would love to see some of these IMS reports to see exactly what they say.
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ozboy
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Post by ozboy on Aug 5, 2017 11:09:06 GMT
This is ridiculously poor management by lendy and their interim valuers. I cannot see a similar situation arising on MT or Col who seem actually pay attention. More like Incompetence?
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ozboy
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Post by ozboy on Aug 5, 2017 11:26:07 GMT
I hope Lendy are listening to all this. Neither DFL001 nor DFL002 needed to get into difficulties - both are fundamentally sound building projects in an area of the UK where housing demand and prices are strong. In both cases there seems to have been a complete 'hands off' cursory tick box approach to overall loan management and far too much reliance on valuers who do the bidding of borrowers - or so it would seem - or who maybe just take the easy way out, knowing how difficult and expensive it would be to sue them under their insurance. This is a criticism that may apply to many other Lendy projects - as investors may soon find to their cost.There is no shortage of existing modern very hi-spec housing within a mile or so of DFL001 - comparisons would be easy enough and with proper allowance made for the noise from the M5 which is so close to DFL001. This development needs to be properly and uniformly completed to a high standard and soon - winter is coming. Ten houses sold for even 550k each would return some of the investment. If the site is left to left to degrade the existing expenditure could quickly be compromised. As for DFL002, the area is saturated with apartments of various qualities and prices and again sensible comparisons would be possible making proper allowance in this case for the lack of on-site car parking. The architects made imaginative use of the existing listed building but may have forgotten about summertime overheating with all the unshaded south facing glazing. Also, there was an obsession with balconies - even in locations where they are practically unusable. This is a blindingly obvious feature of DFL001 also. A common feature is overvaluation and the risks that poses to investors - but this is not a problem unique to Lendy, it can be seen across the P2P sector. Happens with almost every Loan, it's obviously a cosy racket with complicit parties, and it's rampant on most Platforms and Other Investments. How long before you DO something about it and get this con cleaned up? Complain to The Platform, The FCA, RICS, your MP, and everyone else. I simply do not get why Investors are so docile on this point, do you have to lose your shirt, home and life savings before you think "Hang on, that Valuation Report was massively wrong and because of it I have now lost a LOT of money"!!!! PS: I know I go on about this quite a bit but am frustrated at everyone constantly complaining, but seemingly doing NOTHING to stop the practice. You're standing there, bent over with your trousers down, and handing them the vaseline over your shoulder - wake up!
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Post by Deleted on Aug 5, 2017 12:39:00 GMT
I've always assumed that Lendy were a littel naive and I think this has shown itself in these results If, the regular surveyors have been at fault, their reports should have taken on some sort of responsibility. If so Lendy should be sueing them. If not then the naive label sticks. If, their reports did not take on some sort of responsibility then someone in Lendy should be leaving the company and Lendy should be reviewing their processes and questioning who pays for what. Now in neither case will we get to hear about this for a time as both process is going to confidential, however, they also need to keep up our confidence in their behaviour. Be interesting to see how Lendy's communications guru walks that line, I suspect it will be by talking about Cows.  have a good one Phil |
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elliotn
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Post by elliotn on Aug 5, 2017 14:49:27 GMT
You're standing there, bent over with your trousers down, and handing them the vaseline over your shoulder - wake up! Very British. A stiff upper. Look the other way.
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have a good one Phil