ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Aug 5, 2017 15:29:06 GMT
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!  Suggestion. Create a template letter / email for each recipient - Platform, FCA, RICS, MP. Add them to a dedicated thread (you may already have one?) with instruction as to how to use them - eg: names (where known or link to the list of MPs); postal / email addressees, etc. Provide feedback on how you have got on with those complaints, what responses were received, what further action you have taken, etc, etc. and encourage others to provide similar feedback Restrict any further comments elsewhere to a simple link to that thread. Otherwise, there's a likelihood forumites will develop 'ozboy blindness' to the subject and you will be ignored. Reasonable idea but I have done my bit new2p2p and I'm not interested in setting anything up or "leading". If Investors can't string a few words together and Complain they are their own worst enemy, I don't want to hear any whingeing when their investment/s goes down the pan because of a lying misleading VR/s. PS: I think many on here developed OzBoy Blindness some time back. 
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stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Aug 5, 2017 16:14:20 GMT
I was rather surprised at your diplomatic answer to @new2p2p, maybe you are just playing nice in the sand pit☺
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Post by charliebrown on Aug 5, 2017 18:45:53 GMT
I've got a significant sum sunk into this loan  I'm growing very tired of all things p2p to be honest, I think I'm about ready to throw the towel in. i've had lots of loans default on me at Funding Circle. Not the <2% they claim as an average, but more like 50% of all the loans I invested in defaulted. I'm in some very suspect loans at Funding Secure, including the Whitehaven loan where gross platform incompetence has been shown. In the worst case, I stand to lose a 5 figure sum on all the bad Lendy loans I'm in, including this one. I feel the risks here are not even worth the 12%. The stakes are already high but when you add in platform incompetence, potentially fradulent borrowers and potentially fraudulent valuers and other 3rd parties it seems lenders like us are going to take a bullet sooner or later regardless how well our DD is done. ... and one more thing, given the number of defaulted loans at Lendy as well as troubled loans like this one and other loans that were only resolved by desimating the PF, I personally don't think it's appropriate for Lendy to be sponsoring Cows and off having a good time. Their platform overall, to me, seems to be in a massive mess and I think all funds and efforts should be focussed on rescuing the situation. |
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spiral
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Post by spiral on Aug 5, 2017 19:07:54 GMT
Let's tweak that slightly and not allow for any further interest to the original investors. I would do this but with a caveat. I would offer additional funding on a warrant type basis i.e. if the project required an extra 20% funding, current holders would be offered the opportunity to fund up to 20% of their current holding. I would then offer the total interest package on this additional funding so if the default interest was 18%, this tranche would pay a massive 18%/(1/6) = 108% (1/6 comes from 20% new funding / 120% total funding including defaulted funds, so 100% of the interest on 1/6th of the funds) Anyone that takes up the offer would receive a balanced return of 18% across all funds if the loan was able to repay in full. If anyone didn't want to take up the offer, there'd be plenty of people that would risk a few quid for a rate of 108% so the funding would almost certainly be met.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Aug 5, 2017 20:33:54 GMT
Let's tweak that slightly and not allow for any further interest to the original investors. I would do this but with a caveat. I would offer additional funding on a warrant type basis i.e. if the project required an extra 20% funding, current holders would be offered the opportunity to fund up to 20% of their current holding. I would then offer the total interest package on this additional funding so if the default interest was 18%, this tranche would pay a massive 18%/(1/6) = 108% (1/6 comes from 20% new funding / 120% total funding including defaulted funds, so 100% of the interest on 1/6th of the funds) Anyone that takes up the offer would receive a balanced return of 18% across all funds if the loan was able to repay in full. If anyone didn't want to take up the offer, there'd be plenty of people that would risk a few quid for a rate of 108% so the funding would almost certainly be met. I may have misunderstood, but ISTM that you are returning the 20% extra funding to lenders as interest. If this is correct where is the money to complete the development?
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on Aug 5, 2017 20:35:07 GMT
I feel the risks here are not even worth the 12%. The stakes are already high but when you add in platform incompetence, potentially fradulent borrowers and potentially fraudulent valuers and other 3rd parties it seems borrowers like us are going to take a bullet sooner or later regardless how well our DD is done.. I think this is a typo?
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Post by charliebrown on Aug 6, 2017 1:27:59 GMT
I feel the risks here are not even worth the 12%. The stakes are already high but when you add in platform incompetence, potentially fradulent borrowers and potentially fraudulent valuers and other 3rd parties it seems borrowers like us are going to take a bullet sooner or later regardless how well our DD is done.. I think this is a typo? Whoops, yes, should be investors/ lenders. It was very late when I wrote that, I'm not on uk time.Thanks.
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spiral
Member of DD Central
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Post by spiral on Aug 6, 2017 7:20:03 GMT
I may have misunderstood, but ISTM that you are returning the 20% extra funding to lenders as interest. If this is correct where is the money to complete the development? No, if the original loan was 5mill and required an extra 1mill to complete, I'm saying that all the interest accruing on the whole 6mill should be paid on the 1mill. In my example the 18% default interest (1,080,000mill p.a.)which would accrue on the whole 6mill ,would be paid on the 1mill needed to complete the project therefore returning 108%. The original defaulted loan parts would be frozen with no further interest accruing. The reason for this is its a bit of a catch 22. If the project isn't completed, they will in all likelihood lose capital in addition to the accrued interest so by doing this, there may be at least an opportunity to preserve their capital going forward. What this would hopefully do is ensure that the additional funding is met either by current investors stumping up the additional funds in the hope of returning something up to 18% on their investment. Where they don't want to do this the funds should easily be met by those hoping to return up to 108% on this tranche. In reality what I would expect/hope for in this scenario is that the project could be funded to completion with nobody actually losing any capital but the completion tranche getting some reward in the 0-108% range for taking on this risk. Obviously these figures could be tweaked to perhaps a 50/50 interest split across original/new investors but the objective being that the completion tranche would need to be attractive enough to encourage full funding with fair return for risk.
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on Aug 6, 2017 9:13:13 GMT
I may have misunderstood, but ISTM that you are returning the 20% extra funding to lenders as interest. If this is correct where is the money to complete the development? No, if the original loan was 5mill and required an extra 1mill to complete, I'm saying that all the interest accruing on the whole 6mill should be paid on the 1mill. In my example the 18% default interest (1,080,000mill p.a.)which would accrue on the whole 6mill ,would be paid on the 1mill needed to complete the project therefore returning 108%. The original defaulted loan parts would be frozen with no further interest accruing. The reason for this is its a bit of a catch 22. If the project isn't completed, they will in all likelihood lose capital in addition to the accrued interest so by doing this, there may be at least an opportunity to preserve their capital going forward. What this would hopefully do is ensure that the additional funding is met either by current investors stumping up the additional funds in the hope of returning something up to 18% on their investment. Where they don't want to do this the funds should easily be met by those hoping to return up to 108% on this tranche. In reality what I would expect/hope for in this scenario is that the project could be funded to completion with nobody actually losing any capital but the completion tranche getting some reward in the 0-108% range for taking on this risk. Obviously these figures could be tweaked to perhaps a 50/50 interest split across original/new investors but the objective being that the completion tranche would need to be attractive enough to encourage full funding with fair return for risk. I may still be misunderstanding but hasn't the interest on the 5m already been paid to investors? Ly don't have it any more. So while I think your idea has merit I don't follow the cash flow. You might achieve a similar effect by offering another tranche of 1m at a huge rate of interest to be paid at redemption with interest and capital taking preference over existing lenders (if that's legal) thus almost certainly condemning the latter to a capital loss. It might be possible to design it so the the preference only applied until that capital loss equalled the interest already received at which point all loans were treated equally. The problem is that existing lenders would need to understand that this plan gave them the best prospects, and convincing them might be tricky (although I would go for it personally, as IMO it offers a better chance than putting the borrower into liquidation and a fire sale of a half finished project)
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elsee
Member of DD Central
Retired:D
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Post by elsee on Aug 6, 2017 9:44:40 GMT
I only have £100 left in this and am in no way a BH but even so I think it is completely daft that LY aren't trying to find a way to help the developers complete this project and would be more than willing to put more money in to help achieve a completion.
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Post by masquedefer on Aug 6, 2017 10:16:15 GMT
I must admit, I would love to see some of these IMS reports to see exactly what they say. Typically such letter simply states: We are pleased to certify that work is now completed to (select from the list below).
(Please note this is not a statement as to adequacy of the building works which are the duty of the BCO/Architect/SO).
Dpc level
First floor level
Roof wallplate level
Roof completion
First fix
Second fix
CompletionLy would have pre agreed the amount of each stage payment. Which begs the question why doesn't Ly use the Architect/SO to certify release of lending monies?
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Post by masquedefer on Aug 6, 2017 10:33:30 GMT
If there are 50 plots with planning permission (even just outline PP), then approx current (conservative) site value = 5 exec plots (not started) x say £200k = £1m 40 pleb plots x say £100k = £4m Value of 5 near completed exec houses x £400k = £2m Ignore value of the other non completed properties Total = minimum £7m (pure guess), more likely possibly £8m?  ? Amount of LY loan = £7m. What have I missed? Make no more stage payments until ALL work is at the pre agreed stages (presumably completion of 10 plots) and repossess site as soon as default occurs and sell on to best bidder? |
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MarkT
Member of DD Central
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Post by MarkT on Aug 6, 2017 10:39:41 GMT
I must admit, I would love to see some of these IMS reports to see exactly what they say. Typically suhc letter simply states: We are pleased to certify that work is now completed to (select from the list below).
(Please note this is not a statement as to adequacy of the building works which are the duty of the BCO/Architect/SO).
Dpc level
First floor level
Roof wallplate level
Roof completion
First fix
Second fix
CompletionLy would have pre agreed the amount of each stage payment. Which begs the question why doesn't Ly use the Architect/SO to certify release of lending monies? Without any earned value analysis (EVA), or equivalent, it would be pretty meaningless IMHO.
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Post by masquedefer on Aug 6, 2017 10:45:25 GMT
@ Mark T
Agreed. My point exactly
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spiral
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Post by spiral on Aug 6, 2017 11:05:16 GMT
For clarity, I've broken down my Alice-in-Wonderland thinking. In my AiW world I would see this scenario (using your assumptions). I'll add at this point that interest on the new loan would accrue from the outset not be retained for payout as per standard loans. I also wouldn't see them as first/second charges but equal charges. 6000000 original loan amount 1000000 additional loan amount further 12 mths to complete 0 accrued interest on original loan amount 1.26mil accrued interest on completion tranche selling price of completed project original loan completion tranche 600000 6/7 of capital returned 6/7 of capital returned 700000 100% capital returned 100% capital returned 750000 100% capital returned (no interest) 100% capital returned +50% interest I haven't included any fees in the above calculations and you may be right that Lendy have already concluded that it cannot be completed profitably but one would assume that completing the project is likely to produce less of a loss than trying to offload a building site.
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