Monetus
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Post by Monetus on May 23, 2016 8:56:31 GMT
What's bizarre is that the vast majority of people's concerns could probably be cleared up with a simple response from FS.
By saying nothing, FS aren't exactly filling people with confidence. If they came back to us with a simple breakdown of how things are operating with the property loans I'm sure it would help to restore some faith in the platform's ability to cope with this latest influx.
The way things are going, staying silent is doing nothing but fuelling panic amongst investors.
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Post by rookey on May 23, 2016 11:39:38 GMT
Invest or not, it's your choice. Comments like this fuel a panic and are unnecessary. Only a small percentage of FundingSecure investors even look on this site. I do not feel the need for them to come onto this board to explain themselves at every turn.
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Post by Deleted on May 23, 2016 11:40:19 GMT
Trouble is if they describe their various deals they start to limit their negotiation positions with the borrowers. "This is not negotiable" kinda loses it meaning when the other side knows that it is.  "Panic"; sudden uncontrollable fear or anxiety, often causing wildly unthinking behaviour. about right, calm down.  Sometimes chatter on the internet is like listening to Boris J, lots of big words hiding confusion. |
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mikes1531
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Post by mikes1531 on May 23, 2016 11:57:47 GMT
If we are lending on Rolex watches ... a second roll-over makes no sense. If we are lending on a prop development and the borrower rolls over then the I don't understand the developer and I don't want to know any more, the property is now of uncertain value and the borrower should have gone for a different deal. A second rollover on a watch or a car may make no sense when viewed from the beginning of a loan, but when viewed from after the first rollover it's not really different from the first rollover decision. That's because of the way 'sunk costs' affect decision-making. Another factor in the decision for this type of property is whether the borrower has any attachment to the item -- call it sentimental value, if you prefer. As for property development rollovers, the borrower might have known when they took out the loan that their project was going to take more than six months, and that a rollover was going to be required. So that could have been part of the original plan, but it had to be done as a 6-month loan and a rollover because FS don't do 12-month loans. (Example: The description of the Bootle land loan due next month includes "Borrower expects to renew the loan in six months, allowing further time to develop and sell two bungalows on the plot.") As long as the borrower can provide the funds needed for the rollover, this shouldn't indicate a problem.
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Post by Deleted on May 23, 2016 12:52:51 GMT
Mike, your comments make complete sense, like others my actions are driven by my fears as well as my intellect. Still at the moment I've set my principles and they will stay like that till I change them (shades of Groucho). |
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jimbob
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Post by jimbob on May 24, 2016 10:04:48 GMT
Old car and a bit of bling on a ring both flew off the shelf in less than 20 seconds. I think everyone was thinking the same thing - a nice chance to get some diversification from property  |
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mikes1531
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Post by mikes1531 on May 24, 2016 10:37:09 GMT
Old car and a bit of bling on a ring both flew off the shelf in less than 20 seconds. I think everyone was thinking the same thing - a nice chance to get some diversification from property Seems to suggest that FS have saturated their current investors' appetites for medium and large property loans. And that there's no shortage of money to invest, just an unwillingness to increase exposure beyond a certain level. FS investors probably would gobble up fifty £50k property loans, but won't fund five £500k loans. Unfortunately, most people wanting loans against property seem to be looking for six-figure sums. The Scottish boatyard in -- or about to be in -- receivership won't help encourage investors, either.
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ben
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Post by ben on May 24, 2016 10:57:13 GMT
I was quite suprised the ring and car went so fast with the amount of other loans hanging around but as you say looks like people have had enough of loans has been far to many recently
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09dolphin
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Post by 09dolphin on May 24, 2016 12:02:53 GMT
Re property loans.
My problem is that borrowers seem to rarely pay back after the 6 months when the loan is due in my experience. Could be I've just selected the wrong loans. FS seem very happy to grant extensions to anyone who asks and I think they should inform lenders that a 6 month loan can be extended by 1, 2 3 months.
If I lend money for 6 months is it so unreasonable to expect repayment of the loan in 6 months.
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09dolphin
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Post by 09dolphin on May 24, 2016 12:12:55 GMT
I personally have decided not to lend anymore on property loans. Especially as the property loans I have lent on seem to ask for extensions. which FS always seem to grant.
My understanding was I had lent money for 6 months rather than for whatever period FS decided they'd extend the loan for.
At the moment I have quite a few loans which should have been either renewed or repaid. FS assure me that they expect payment "next week". Just "next week" never seems to come.
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mikes1531
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Post by mikes1531 on May 24, 2016 13:58:37 GMT
AIUI, loans running beyond the expected term is a common occurrence with bridging loans. With small 'pawn' loans, a borrower needs to come up with a three-figure sum in order to renew a loan. With property loans being so much larger, however, it takes a significant sum to renew one of them, and borrowers find it difficult to raise the required funds.
Experience with defaulted loans suggests the recovery process is a long drawn out affair. So if a borrower has a chance to raise the necessary funds somehow, it's often most efficient to let them do that. FS have an obligation to be fair to borrowers, so they have to proceed carefully. To the extent that working with the borrower avoids the need to call in receivers, the results can be best for everyone as significant costs are avoided.
But it does take a while to resolve. The 6-month Carpets loan is now 376 days old. The 6-month Boatyard loan is now 313 days old, and it's just starting the receivership process.
The bottom line is that if you need to know exactly when you'll have access to all of your invested funds, FS is not the place to invest. If you need to know when you'll have access to most of your invested funds, then the situation isn't so bad as long as you have your investment spread over a large number of loans and don't have an excessive amount tied up in any single loan. However, you can't build a diversified portfolio of loans very quickly.
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