TonyL
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Post by TonyL on Jul 23, 2018 17:52:09 GMT
To Lendy Support and Paul64 The reason I left FC and joined Lendy was to lend to asset-backed loans. If you seriously think your platform will survive by fobbing us off with option 1 then you really don't understand your own business model. With asset-backed loans in default you are supposed to take ownership of the property, figure out how to get the best for the lenders and anything left over can be given back to the borrower. If there is no excess the BORROWER gets NOTHING. Your proposal for option 1 is the exact opposite. Why are you suggesting we gift our property to this borrower? WHY? I don't mind if someone (with absolutely no financial links to the borrower) purchases the property from us at a bargain price (although I'd prefer a fair price), because that is their luck...but the BORROWER should get NOTHING. In this instance, because I don't trust your shady back-room deals, I would prefer that we funded this build-out ourselves to completion and sold the completed units to honest punters for fair value at the end.
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Post by p2plender on Jul 23, 2018 23:38:30 GMT
That's a good post above.
Nothing surprises me anymore with Lendy. From comments around the internet on 'risky' areas for mortgages to announcing they have now lent £400m. Suppose anyone can lend, the key is getting it back.
As for pipeline, who on earth would chuck in more now give the state of the platform? I like a punt but this isn't even punt territory and at 12%, no thanks!
I rarely login to my account but I had a look at the website and updates recently. It's quite shocking just how bad things are, terrifying I'd have thought for those with decent sums in.
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Post by picanto on Jul 24, 2018 20:48:12 GMT
Update on loan vote (24th July 2018) "The following provides an update on the loan vote. Note, however, that we are restricted in the information we are able to release to you in relation to the loan as a result of the risk of waiving Lendy's legal privilege and the adverse consequences this would have on potential claims which exist to recover the outstanding capital balance, accrued interest and bonus accrual.
Insolvency and restructuring experts appointed by Lendy following expiry of the loan have advised that, even following the completion of the build, the sale proceeds from the security property will be insufficient to repay the capital invested. Should investors therefore choose to proceed with option 1 and accept the offer of refinance from the borrower in full settlement of the amounts owed by it, Lendy will be bringing additional claims to recover the balance of capital, accrued interest and bonus accrual to increase the return to investors which our legal advisors have confirmed have good prospects of success.
In the event that Lendy proceed with option 2, recovery action available to Lendy will be progressed to maximise the return of capital, accredited interest and bonus accrual. This would include a claim against the borrower's personal guarantee. However, we will not be able to truly ascertain the prospect of successfully recovering the outstanding capital, accrued interest and bonus accrual until such time as we obtain further information o the guarantor's updated financial position which has not been made available at this time.
For your information, as per the provision fund policy, any claim against the PF will be made only once any possible legal action or claims against any liable third part is assessed, actioned or declined."
It is good to know that option 1 doesn't mean an end to any recovery action by Lendy and they are hopeful of recovering the capital shortfall at least, but what "good prospects of success" actually equates to in reality is difficult to assess.
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KoR_Wraith
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Post by KoR_Wraith on Jul 24, 2018 21:50:07 GMT
Was there an email sent out with the updated information?
Option one sits more comfortably with me now given the commitment to continue pursuit of the outstanding funds.
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Post by arctic on Jul 24, 2018 21:55:42 GMT
Update on loan vote (24th July 2018) Should investors therefore choose to proceed with option 1 and accept the offer of refinance from the borrower in full settlement of the amounts owed by it,Surely the borrower is offering 11 mill now plus 1 mill in 12 months in 'full settlement of the amounts owed', if there is a threat from Lendy to chase the borrower for the outstanding balance owed there is not a chance in hell that the borrower will cough up 11 mill. Hopefully option 2 will win the vote, but no guarantee that Lendy will follow vote result.
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invester
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Post by invester on Jul 24, 2018 22:16:28 GMT
To be honest it changes nothing for me.
What value would you put on Lendy's promise to pursue?
The chances of success are slim and it would take ages. I base that on what actions we have seen so far on their other loans. So IMO, you can assign it a 10% weighting of the outstanding capital to get an expected value of it. If you want to assess it, then you should work out your own EV of that option and add that to the values.
To me, it stinks. Here we have nothing more than a veiled threat against option 2), but if the guarantors financial position is not available at this time, how are assurances meant to be made on option 1) in this case? Nobody knows where this £11m is coming from, or how much he will have left after it.
The only thing you could say is that it may be more likely because the overall claim would be less, but if someone has arranged their finances in a way they don't have anything to their name, the chances of success are the same for recouping £100k or £1m.
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1stwaz
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Post by 1stwaz on Jul 24, 2018 22:38:12 GMT
To be honest it changes nothing for me. What value would you put on Lendy's promise to pursue? The chances of success are slim and it would take ages. I base that on what actions we have seen so far on their other loans. So IMO, you can assign it a 10% weighting of the outstanding capital to get an expected value of it. If you want to assess it, then you should work out your own EV of that option and add that to the values. To me, it stinks. Here we have nothing more than a veiled threat against option 2), but if the guarantors financial position is not available at this time, how are assurances meant to be made on option 1) in this case? Nobody knows where this £11m is coming from, or how much he will have left after it. The only thing you could say is that it may be more likely because the overall claim would be less, but if someone has arranged their finances in a way they don't have anything to their name, the chances of success are the same for recouping £100k or £1m.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 24, 2018 22:41:48 GMT
Was there an email sent out with the updated information? Option one sits more comfortably with me now given the commitment to continue pursuit of the outstanding funds.Oh Dear, Oh Dear, Oh Dear, does anyone actually believe that? And I thought that as a Group we Lenders were wising up.
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1stwaz
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Post by 1stwaz on Jul 24, 2018 22:43:03 GMT
This is only speculation on my part but reading between the lines my guess is that the claim will be against the valuers insurance for the poor valuation. It was this inflated valuation that led me to believe that the risk was acceptable. I do not see that their can be a claim against the borrower if we have a full and final settlement with him.
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Brainer
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Post by Brainer on Jul 25, 2018 0:21:45 GMT
This is only speculation on my part but reading between the lines my guess is that the claim will be against the valuers insurance for the poor valuation. It was this inflated valuation that led me to believe that the risk was acceptable. I do not see that their can be a claim against the borrower if we have a full and final settlement with him. That was my reading of it too.
Presumably this remains a possibility for Option 2? So Option 2 has two arrows in its quiver: borrower's PG and the valuer's insurance?
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mary
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Post by mary on Jul 25, 2018 6:17:50 GMT
This is only speculation on my part but reading between the lines my guess is that the claim will be against the valuers insurance for the poor valuation. It was this inflated valuation that led me to believe that the risk was acceptable. I do not see that their can be a claim against the borrower if we have a full and final settlement with him. That was my reading of it too.
Presumably this remains a possibility for Option 2? So Option 2 has two arrows in its quiver: borrower's PG and the valuer's insurance?
Exactly. The Borrower obviously wants his cake (building) and to be able to eat it (Lendy waiving the PG). If I default on my mortgage would any Bank ever agree to such a proposal??
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SteveT
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Post by SteveT on Jul 25, 2018 6:49:35 GMT
I've now changed my vote to Option 1
My issue with Lendy's original information was that it was entirely unclear whether other recovery avenues would be followed under Option 1, nor whether a PF claim would be considered if these failed to recover the capital owed (although I'm not hanging my hat on the PF!). Lendy have now clarified that, aside from limiting the borrower's PG to the final £1m, Option 1 would still see other recovery avenues pursued (including potentially the PF).
My suspicion is that pursuing the borrower's PG for any shortfall would prove pretty pointless; he's likely up to his neck in debt already and this scheme is way too big for someone to bail it out personally. Bankruptcy seems the more likely outcome which, whilst he probably deserves it, achieves nothing in terms of getting money back. Taking the £11m refinance offer now (with the limited prospect of a further £1m down the line) seems the pragmatic choice to take, provided claims against the Valuer's PI insurance (and/or the IMS's) will then be pursued.
Lendy clearly also feel Option 1 is the way to go, and I see little reason for them to be advocating a sub-optimal path for their lenders.
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invester
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Post by invester on Jul 25, 2018 7:25:31 GMT
Lendy clearly also feel Option 1 is the way to go, and I see little reason for them to be advocating a sub-optimal path for their lenders. That made me laugh. We have a clear divergence of interests here. The GDV of this project a few months ago was such that there should be enough room for someone to finish this and return the monies back to lenders. We are then told the value has gone down, but then not provided with the new value, or even any reasons why. It seems quite obvious to me why Lendy would not bother furnishing us with the report and then asking us to vote, because publishing the report is more likely to see us vote against what they want. If the GDV had suddenly dropped to £14m I am sure they would have had no hesistation in either providing the report or quoting it. They seem to have no problem quoting values when there is an uplift. It seems obscene to me that they would seek to manipulate the vote. There is no guarantee that enforcing the PG will succeed in option 1 either yet they are described in much different terms. Legitimising the path of reneging on a loan and then offering less money to settle it is sub-optimal for lenders in the long-term, I think it's very short-sighted to think about this in isolation.
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SteveT
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Post by SteveT on Jul 25, 2018 7:34:55 GMT
Lendy has already set out it's stall by saying the SETTLEMEMT offer is £11m now, plus £1m in 12 months ( which Will never materialise). Now they're back peddling yet again by saying that the full lot will be recovered- go for option 1. It seems clear option 2 is firmly in the lead and Lendy is panicking. If I were to accept option 1, i'd want to know the total fees paid to Lendy for the extension, this is not sensitive information that could affect recovery. Lendy Support I'm struggling a bit with your logic. If you believe the final £1m in 12 months would never materialise (which the borrower remains on the hook for via his PG) then presumably you believe his PG to be worthless. But, in that case, the only logic in voting for Option 2 is if you reckon auctioning the site will yield more than £11m. Is that what you think?
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TheDriver
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Slightly bonkers
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Post by TheDriver on Jul 25, 2018 7:35:08 GMT
Agreed mary. I guess if L accept option 1 they will be deemed to forgo any claim against valuation, as there is no market test. What hope we have of any further recoveries in either case is yet to be demonstrated, despite being mooted in several instances. The only way I would consider 1 was mentioned earlier, with a charge against the property for all remaining dues; so the borrower has the incentive to maximise value, and when it appears we can share the benefit.
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