mikes1531
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Post by mikes1531 on Jun 2, 2016 15:27:08 GMT
...the macbeth loan is being advertised for 1.9m and the value is supposedly 2.43m). At this discounted price it should sell quickly but if the sale drags on then so do the costs. If I was in this loan I would be more than happy to get my capital back. So would I. And there's a way to achieve that. I put 1p up for sale yesterday and it had sold by today. Since interest has been paid up until a very few days ago, why aren't there £1.7M of PBL020 parts on the SM right now? And who is buying?
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goopy
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Post by goopy on Jun 2, 2016 15:34:08 GMT
...the macbeth loan is being advertised for 1.9m and the value is supposedly 2.43m). At this discounted price it should sell quickly but if the sale drags on then so do the costs. If I was in this loan I would be more than happy to get my capital back. So would I. And there's a way to achieve that. I put 1p up for sale yesterday and it had sold by today. Since interest has been paid up until a very few days ago, why aren't there £1.7M of PBL020 parts on the SM right now? And who is buying? I am literally lost for words.................
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Liz
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Post by Liz on Jun 2, 2016 15:54:57 GMT
yep, that's my (rather naive) understanding of the reason to have a LTV specified, isnt it? That is correct. However there are many other factors to be taken into consideration. The 70% LTV is for the full value of the site, if you want a quick sale the price has to drop (the macbeth loan is being advertised for 1.9m and the value is supposedly 2.43m). At this discounted price it should sell quickly but if the sale drags on then so do the costs. If I was in this loan I would be more than happy to get my capital back. Why should it sell quickly at £1.9m? It might, it might not. This is a business in administration, so the original valuation figures are just pie in the sky.
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Post by dualinvestor on Jun 2, 2016 16:45:49 GMT
That is correct. However there are many other factors to be taken into consideration. The 70% LTV is for the full value of the site, if you want a quick sale the price has to drop (the macbeth loan is being advertised for 1.9m and the value is supposedly 2.43m). At this discounted price it should sell quickly but if the sale drags on then so do the costs. If I was in this loan I would be more than happy to get my capital back. Why should it sell quickly at £1.9m? It might, it might not. This is a business in administration, so the original valuation figures are just pie in the sky. If the property/business was going to sell quickly at anything above the debt Lendy would should not have allowed it to enter Administration which is an extremely costly and time consuming procedure.
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littleoldlady
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Post by littleoldlady on Jun 2, 2016 18:15:25 GMT
If the property/business was going to sell quickly at anything above the debt Lendy would should not have allowed it to enter Administration which is an extremely costly and time consuming procedure. Would they need the borrower's agreement to do that (ie sell it)?
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mikes1531
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Post by mikes1531 on Jun 2, 2016 18:21:34 GMT
Why should it sell quickly at £1.9m? It might, it might not. This is a business in administration, so the original valuation figures are just pie in the sky. If the property/business was going to sell quickly at anything above the debt Lendy would should not have allowed it to enter Administration which is an extremely costly and time consuming procedure. If the property/business was going to sell quickly at anything above the debt, the borrower would have sold it themselves! I expect they are well aware that they're unlikely to get anything via the Administration, so any sale they could have organised that would have produced any return, no matter how small, would have been better for them than the prospect they have now.
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nick
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Post by nick on Jun 2, 2016 18:26:56 GMT
why be lucky? isn't that what the 70% LTV is all about? to avoid "luck" Looking at the (possible) outcome of some defaulted loans with ltv around this figure (not necessarily on SS), 70% is not a level I would be comfortable with anymore (in general) I agree. A 70% LTV for these type of loans (or any loan for matter) is on the high side. After factoring in short marketing time, administrator/receiver fees and direct selling costs, the recoverable value vs debt will be often be close to break-even. Plain vanilla residential property is obviously less risky than any development projects, renovation, or unusual properties which are more likely to be more heavily discounted to secure a quick sale. I'll be very surprised if the PF will cover interest. At this stage, their focus will be to ensure that adequate funds are built up to protect any future capital shortfalls.
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Post by dualinvestor on Jun 2, 2016 18:33:10 GMT
If the property/business was going to sell quickly at anything above the debt Lendy would should not have allowed it to enter Administration which is an extremely costly and time consuming procedure. Would they need the borrower's agreement to do that (ie sell it)? If by they you mean Lendy they could have sold it by appointing a Receiver if the borrower would not do so themselves. The borrowers would not want an Administration for other reasons (principally from the Directors personal point of view that the Administrator will, in due course, be required to make a report to the Secretary of State on their conduct and they may face procedings under the Company Directors Disqualification Act and some of them, at least, haave other directorships) so would be likely to co-operate, indeed, IMO, it is likely that they were trying to sell the business/property themselves and ran out of time and/or Lendy ran out of patience.
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mikes1531
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Post by mikes1531 on Jun 2, 2016 18:40:52 GMT
Plain vanilla residential property is obviously less risky than any development projects, renovation, or usual properties which are more likely to be more heavily discounted to secure a quick sale. : Might you have meant unusual?
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mikes1531
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Post by mikes1531 on Jun 2, 2016 18:49:39 GMT
I'll be very surprised if the PF will cover interest. At this stage, their focus will be to ensure that adequate funds are built up to protect any future capital shortfalls. That's a logical conclusion to draw. Except it doesn't really apply to this PF because SS have shown that they take money out of the PF when a loan is repaid successfully, and have said that they intend to top the PF back up to 2% if it's ever used.
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Post by earthbound on Jun 2, 2016 23:32:27 GMT
Looking at the (possible) outcome of some defaulted loans with ltv around this figure (not necessarily on SS), 70% is not a level I would be comfortable with anymore (in general) I'll be very surprised if the PF will cover interest. At this stage, their focus will be to ensure that adequate funds are built up to protect any future capital shortfalls. so will i, so should this default be removed from the SM before any more unfortunates realize that buying this on the SM is not going to make them any interest and in a severely stressed sale, may cost them a lump of their capital as well.
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goopy
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Post by goopy on Jun 3, 2016 8:28:20 GMT
I'll be very surprised if the PF will cover interest. At this stage, their focus will be to ensure that adequate funds are built up to protect any future capital shortfalls. This statement from SS regarding the Macbeth loan would seem to contradict this; Whilst it is entirely within the discretion of the directors of the provision fund to make a cash withdrawal from the provision fund, we would be keen to protect our goodwill to ensure that any shortfalls in repayments to investors are mitigated.
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littleoldlady
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Post by littleoldlady on Jun 3, 2016 10:09:13 GMT
I'll be very surprised if the PF will cover interest. At this stage, their focus will be to ensure that adequate funds are built up to protect any future capital shortfalls. This statement from SS regarding the Macbeth loan would seem to contradict this; Whilst it is entirely within the discretion of the directors of the provision fund to make a cash withdrawal from the provision fund, we would be keen to protect our goodwill to ensure that any shortfalls in repayments to investors are mitigated.Mitigated does not mean eliminated.
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littleoldlady
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Post by littleoldlady on Jun 3, 2016 10:17:20 GMT
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goopy
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Post by goopy on Jun 3, 2016 10:39:32 GMT
This statement from SS regarding the Macbeth loan would seem to contradict this; Whilst it is entirely within the discretion of the directors of the provision fund to make a cash withdrawal from the provision fund, we would be keen to protect our goodwill to ensure that any shortfalls in repayments to investors are mitigated.Mitigated does not mean eliminated. No, but it does imply that the provision fund could be used to pay at least some of the outstanding interest.
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