stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Sept 18, 2016 22:24:14 GMT
This loan valuation seems very close to 100%. The valuation document is 2 years old. There are no plans of the site refered to in the report so it looks like UU encroachment is not at the side of the land but is the enclosed area in the centre. No disclosure about what compensation is being sought nor timeframes.
Seems like a very low quality offer and I have not managed to spot the listing on the new loans thread.
I plan to shy clear of this unless satisfactory clarrification is placed.
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Post by jonboy73 on Sept 19, 2016 8:47:10 GMT
I too am steering clear, it would be useful to know what the loan is for..
With regard to the liability, what is the likely settlement amount and timescale?
If it drags on the interest adds up and may not be worth the borrower paying back... if no settlement is forthcoming in a reasonable timeframe then presumably the land would be difficult to sell while this dispute is going on.
I'm not sure it really represents any security at all..
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Post by Deleted on Sept 19, 2016 8:51:46 GMT
One other problem (not considered in the evaluation report) is that litigation expenses might ramp up quickly.
The financial conditions of the borrower might deteriorate rapidly if his fight is not brought to conclusion rapidly.
This means that the security would not be free for sale in case he is not able to repay and no settlement has been reached yet.
So, definitely this is an element of risk which should have been considered and priced (I would say this loan should not go on the market for less than 16% interest...)
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mikes1531
Member of DD Central
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Post by mikes1531 on Sept 19, 2016 13:09:57 GMT
The thing I find odd is the comment that the borrower is expecting to repay the loan from the proceeds of the settlement. That suggests to me that the utility is going to pay something like 75+% of the value of the property in compensation for the encroachment, and that seems rather incredible.
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Post by jonboy73 on Sept 19, 2016 14:33:16 GMT
is it possible that he is borrowing the money to fund the case, therefore should he be successful he could expect compensation and perhaps this money back towards costs?? just a thought, but we could be funding the case. it would seem odd to otherwise mention the case..
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Post by Deleted on Sept 19, 2016 15:01:02 GMT
The thing I find odd is the comment that the borrower is expecting to repay the loan from the proceeds of the settlement. That suggests to me that the utility is going to pay something like 75+% of the value of the property in compensation for the encroachment, and that seems rather incredible. He might well ask damages and illegal occupation for xx years. The problem is that if the case is not won rapidly, the value of the security cannot even remotely be considered what esitmated here. It is simply too risky to lend on this one at this rate.
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Post by martin44 on Sept 19, 2016 15:19:24 GMT
Would you really need £120k to come to a compensation agreement, where liability has been admitted.  |
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Post by Deleted on Sept 19, 2016 16:24:22 GMT
Would you really need £120k to come to a compensation agreement, where liability has been admitted. We don't really know what has been admitted and what has been quantified. I presume they are still discussing the value of that land... The 120k loan might even be a strong argument to demonstrate the 'market value' for the land, which is probably challenged by the other party..
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Post by fundingsecure on Sept 19, 2016 22:21:45 GMT
Thank you for your comments.
The borrower is in a position to service interest on an ongoing basis.
The borrower has a number of other capital transactions that may result in the loan being repaid without settlement of this transaction (not unlike many of our other borrowers)
The reference to the dispute with UU was to highlight that this particular piece of land has an inherent value above and beyond the value ascribed. We understand that, based on media reports, the installation cost of the encroachment was £2.5m. The borrower's opening position is to request UU to remove the equipment. Our assumption is that there will be some upside - amount uncertain.
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Post by Deleted on Sept 20, 2016 6:35:42 GMT
Thank you for your comments. The borrower is in a position to service interest on an ongoing basis. The borrower has a number of other capital transactions that may result in the loan being repaid without settlement of this transaction (not unlike many of our other borrowers) The reference to the dispute with UU was to highlight that this particular piece of land has an inherent value above and beyond the value ascribed. We understand that, based on media reports, the installation cost of the encroachment was £2.5m. The borrower's opening position is to request UU to remove the equipment. Our assumption is that there will be some upside - amount uncertain. The fact the borrower has other ongoing capital transactions does not give me reasurances. Unless you get a full charge on something else, I have to base my analysis purely on the value of the security he offered, which is uncertain at best... If he is so full of valuables, get a charge on another property and lenders will invest!
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bg
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Post by bg on Sept 28, 2016 6:30:31 GMT
Further security now added to this loan putting the LTV below 50%.
Seems a very attractive proposition now, I have increased my investment - surprised if it doesn't fill by the end of today.
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KoR_Wraith
Member of DD Central
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Post by KoR_Wraith on Sept 28, 2016 8:45:03 GMT
Further security now added to this loan putting the LTV below 50%. Seems a very attractive proposition now, I have increased my investment - surprised if it doesn't fill by the end of today. Thanks for the heads up. Now a much more attractive offering.
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mikes1531
Member of DD Central
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Post by mikes1531 on Nov 25, 2016 3:32:34 GMT
At long last, this loan was activated Thursday, two months and a bit after it first appeared on the platform for funding. No fanfare from FS, but still something to celebrate!  |
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stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
Posts: 1,447
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Post by stub8535 on Nov 25, 2016 19:49:02 GMT
Must be. Record at 67 days ..... Unless others point to another sloooooowwwwww one that knocks it off top spot.
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Post by mrclondon on Nov 25, 2016 20:36:52 GMT
Must be. Record at 67 days ..... Unless others point to another sloooooowwwwww one that knocks it off top spot. This one was inevitably going to be very slow to drawdown - the late addition of extra 2nd charge security was at that point presumably without any upfront legal work to get the clearance of the 1st charge holder to the 2nd charge. To complete the legal work in just under two months since then doesn't sound too outlandish to me.
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