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Post by GSV3MIaC on Dec 3, 2018 20:58:58 GMT
It's basically a copy/paste from the developer/borrower's other loan (DFL019) .. demonstrating the Ly continue to be confused about what, exactly, security I loaned money against.
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TitoPuente
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Post by TitoPuente on Dec 3, 2018 21:37:03 GMT
Why is Lendy not appointing receivers immediately and selling the property? What is the issue? Why do you suppose that appointing receivers immediately, with their costs outranking us on the eventual / discounted sale of the property would provide a better result for investors than allowing another lender to advance more funds that rank behind us on any eventual sale/refinance of the property?
Indeed, if receivers are appointed in a manner that seems "premature", without making all reasonable effort to allow the loan to be repaid by other means, it increases the chance of a borrower challenging the decision through other channels, potentially leading to far longer delays and far worse recovery prospects than working with the borrower. The value hardly seems likely to evaporate overnight if we wait a little before initiating the "nuclear option".
Why? Because you omitted the key part of the quote! "According to Lendy the leasehold was valued at £16,150,000 a few months ago. As far as I understand the development is complete and there was no property cataclysm that could have wiped 50% of the value in the last few weeks. The total loan is £7,846,884" That's why.
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sl75
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Post by sl75 on Dec 4, 2018 10:52:39 GMT
Why do you suppose that appointing receivers immediately, with their costs outranking us on the eventual / discounted sale of the property would provide a better result for investors than allowing another lender to advance more funds that rank behind us on any eventual sale/refinance of the property?
Indeed, if receivers are appointed in a manner that seems "premature", without making all reasonable effort to allow the loan to be repaid by other means, it increases the chance of a borrower challenging the decision through other channels, potentially leading to far longer delays and far worse recovery prospects than working with the borrower. The value hardly seems likely to evaporate overnight if we wait a little before initiating the "nuclear option".
Why? Because you omitted the key part of the quote! "According to Lendy the leasehold was valued at £16,150,000 a few months ago. As far as I understand the development is complete and there was no property cataclysm that could have wiped 50% of the value in the last few weeks. The total loan is £7,846,884" That's why. That was the point - your figures suggest to me more of a reason to wait longer, rather than giving up our priority access to the security.
As the development is complete, it's not likely to suddenly lose value overnight, and any gradual loss of value is eating into the borrower's expected return and not ours, giving the borrower every incentive to co-operate and maintain that value. In addition, the loan continues to accrue interest, which gives the borrower an incentive to act relatively quickly.
If security were to be enforced, maintenance costs become our problem rather than the borrower's; these and the receivers' / adminstrators' fees would need to be repaid from any eventual sale BEFORE we see any of our money returned.
That suggests to me that keeping it "the borrower's problem" rather than "our problem" is better for us. I don't really understand how you consider "we should appoint receivers immediately" to follow as a conclusion from figures that suggest there's probably plenty of equity left in the property for the borrower. It seems the exact opposite to me - that while value still remains for the borrower, this gives us plenty of leverage over the borrower to ensure they remain compliant. We lose [most of] that leverage the moment we enforce the security, and also take on quite a few risks and costs that are currently the borrower's problem.
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Carter
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Post by Carter on Dec 4, 2018 12:30:04 GMT
All good arguments. What I would add is the Lendy factor. If administrators were appointed they have to act in our best interests, there's more than enough room to pay associated costs and remember this is currently a business running sub-optimally so administrators could actually add value to the business side and secure a good exit.
If we continue as is who knows what choices Lendy will make and how long it will take to conclude. Another year, two, who knows?
At this stage I would like to see a professional hand who has to act in our best interests. Based on previous actions I do not trust Lendy with this loan or this borrower to act in that capacity.
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Mucho P2P
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Post by Mucho P2P on Dec 4, 2018 17:46:57 GMT
Very concerned about today’s update “ Offer of Finance which has been made by a third-party funder, to provide a working capital facility to the borrower”.This does not sound like a plan to repay this overdue loan. I hope this is not some version of the plan to provide cash to the borrower while failing to repay his debts and relegate our first charge! Provide a "working capital" facility, ah hum...... and on the 28.9.2018 L stated, "the borrower is "seeking a refinance". How do we go from "refinance" to "working capital" 2+ months down the line? Or are L confused with the definition of words??
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Post by loftankerman on Dec 4, 2018 19:28:33 GMT
Very concerned about today’s update “ Offer of Finance which has been made by a third-party funder, to provide a working capital facility to the borrower”.This does not sound like a plan to repay this overdue loan. I hope this is not some version of the plan to provide cash to the borrower while failing to repay his debts and relegate our first charge! Provide a "working capital" facility, ah hum...... and on the 28.9.2018 L stated, "the borrower is "seeking a refinance". How do we go from "refinance" to "working capital" 2+ months down the line? Or are L confused with the definition of words?? My understanding is that the transition was flagged in the update of the 17th October. I thought that was what was implied then and that there'd be no refinance, just some help for them that would be of no benefit to us. I remarked as much on the 19th October.
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Post by GSV3MIaC on Dec 4, 2018 19:38:44 GMT
This asset needs defaulting and selling. If there is left over cash, the borrower is welcome to pour it into dfl019. (I choose not to).
To see how to do it right, visit moneything, wandsworth.
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Mr_N
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Post by Mr_N on Dec 4, 2018 19:45:20 GMT
This asset needs defaulting and selling. If there is left over cash, the borrower is welcome to pour it into dfl019. (I choose not to).
To see how to do it right, visit moneything, wandsworth.
It brings into question a wider issue, being that (in the unlikely event) when a security is sold and value in excess of investor's capital, where is that additional money going? Lendy acting as agent should be returning it to us, but I'm sure they will find a way to fiddle the books to retain every last penny of it.
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Mucho P2P
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Post by Mucho P2P on Dec 4, 2018 19:55:04 GMT
This asset needs defaulting and selling. If there is left over cash, the borrower is welcome to pour it into dfl019. (I choose not to).
To see how to do it right, visit moneything, wandsworth.
It brings into question a wider issue, being that (in the unlikely event) when a security is sold and value in excess of investor's capital, where is that additional money going? Lendy acting as agent should be returning it to us, but I'm sure they will find a way to fiddle the books to retain every last penny of it. Good point, as after all capital has been repaid to borrower and lender including any costs, interest, and charges, any excess should go to the lenders as we are the principals. Unfortunately, I just do not see any asset being sold for significantly more than the amount that was loaned against in the current market.
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locutus
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Post by locutus on Dec 4, 2018 20:04:02 GMT
It brings into question a wider issue, being that (in the unlikely event) when a security is sold and value in excess of investor's capital, where is that additional money going? Lendy acting as agent should be returning it to us, but I'm sure they will find a way to fiddle the books to retain every last penny of it. Good point, as after all capital has been repaid to borrower and lender including any costs, interest, and charges, any excess should go to the lenders as we are the principals. Unfortunately, I just do not see any asset being sold for significantly more than the amount that was loaned against in the current market. I'm not sure if you're both trolling or deadly serious. If you are serious, please immediately stop investing in P2P and stick to bank deposits. 
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Mr_N
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Post by Mr_N on Dec 4, 2018 20:07:59 GMT
Good point, as after all capital has been repaid to borrower and lender including any costs, interest, and charges, any excess should go to the lenders as we are the principals. Unfortunately, I just do not see any asset being sold for significantly more than the amount that was loaned against in the current market. I'm not sure if you're both trolling or deadly serious. If you are serious, please immediately stop investing in P2P and stick to bank deposits. Perhaps you could explain your view, rather than behaving like a petulant child? We have for example situations in which Lendy is considering build outs, essentially completing the build on the behalf of the borrower, and then once we're all paid we just hand the rest over to the borrower as their profit. Not much of an incentive for the borrower to find refinance when they can sit back and let Lendy do it all for them, at little or no risk to them.
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Mucho P2P
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Post by Mucho P2P on Dec 4, 2018 20:32:27 GMT
Good point, as after all capital has been repaid to borrower and lender including any costs, interest, and charges, any excess should go to the lenders as we are the principals. Unfortunately, I just do not see any asset being sold for significantly more than the amount that was loaned against in the current market. I'm not sure if you're both trolling or deadly serious. If you are serious, please immediately stop investing in P2P and stick to bank deposits. I am serious. Please explain why you think I am not serious? Factual please.
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Post by Deleted on Dec 4, 2018 20:44:22 GMT
It is as simple as knowing the difference between a debt and an equity investment.
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Mucho P2P
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Post by Mucho P2P on Dec 4, 2018 21:09:51 GMT
It is as simple as knowing the difference between a debt and an equity investment. We are talking about property financing and not company shares, where the term equity investment is generally used. Borrower defaults on the [property] mortgage, then the lender becomes mortgagees in possession, which is debt either fully or partly converted to an asset [the property].
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Mr_N
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Post by Mr_N on Dec 4, 2018 22:05:22 GMT
It is as simple as knowing the difference between a debt and an equity investment. We are talking about property financing and not company shares, where the term equity investment is generally used. Borrower defaults on the [property] mortgage, then the lender becomes mortgagees in possession, which is debt either fully or partly converted to an asset [the property]. That is roughly my understanding too. The borrower isn't selling the property to the lender with the difference being given to the borrower, it's the lender taking possession of the asset, regardless of what it later sells for. So my question remains, and pertinent with build out's. Lendy as agent shouldn't be withholding any additional funds from future sales where more money is recovered than the original capital, interest, and potentially the fees Lendy has paid to exact recovery. In situations like the Liverpool tower this could prove to be very profitable for investors, but I suspect it won't be long before L change their terms on the fly to ensure we don't, and they do.
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