ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Sept 20, 2016 13:27:30 GMT
Trying to get my head round the UNs (and failing spectacularly due to the legalise) However, seems to me these aren't charges in the normal sense merely a notice that there might be additional claims on the security. Anyone can post a notice and don't have to prove validity of a claim unless title holder seeks to remove them. I don't think they entitle anybody to realise the security like a chargeholder but should the security need to be realised the valid ones would have to be satisfied ahead of the shareholders.
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Post by wildlife2 on Sept 20, 2016 13:28:29 GMT
Just got go-live email.
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bg
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Post by bg on Sept 20, 2016 13:33:41 GMT
13k allocation
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jonbvn
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Post by jonbvn on Sept 20, 2016 13:49:03 GMT
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Liz
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Post by Liz on Sept 20, 2016 13:51:00 GMT
No! Some loans have been unlimited allocation ie didn't fill on Pre-funding.
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bg
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Post by bg on Sept 20, 2016 13:51:37 GMT
Well it wasn't too long ago that large loans would take months to sell down never mind having allocations restricted!
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dan83
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Post by dan83 on Sept 20, 2016 14:06:04 GMT
I didn't think you could pre-fund more then £10,000.
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guff
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Post by guff on Sept 20, 2016 14:07:39 GMT
I didn't think you could pre-fund more then £10,000. It depends on how much you have invested.
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jonbvn
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Post by jonbvn on Sept 20, 2016 14:14:18 GMT
No! Some loans have been unlimited allocation ie didn't fill on Pre-funding. So they can now drawdown ASAP and repay me (amongst many others) for the same lending on MT.
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Post by savingstream on Sept 20, 2016 14:22:02 GMT
We thought it would be helpful to clarify the position with respect to "unilateral notices" and how we deal with them at Saving Stream.
In cases of development of apartment blocks, developers frequently "pre-sell" units before they are built (sometimes called "off-plan investments"). The purchase contracts for those pre-sold apartments usually provide for deposits to be paid at defined intervals. Usually, there will be a deposit payable on exchange of contracts, and then subsequent deposits payable at set times to help the developer to fund the costs of building the project with a final payment due on completion of the building project. Developers usually require further finance to help with land acquisition and development costs.
Purchasers of individual off-plan units will be advised by their solicitors to protect their purchase contracts at the Land Registry by registering a Unilateral Notice against the developer’s Land Registry land title. This gives notice of the purchaser’s interest to anyone seeking to buy or take a charge over the property. Whilst this is not a first charge (as their interest would be over a small part of a site - and in the case of a second/third/fourth floor flat etc. could not even be distinguished) it is still important. If we took a mortgage over the property in question and there were no prior mortgages ahead of us, then our mortgage would be classed as a first charge.
If the Borrower defaulted on the loan and we had to sell the property under the powers contained in our mortgage, then we would need to bear in mind that the deposits paid pursuant to the collective apartment purchase contracts will need to be paid back to those purchasers who had registered a notice of their purchase contracts at the Land Registry. In such a case, we would therefore need to take into account the deposits that had been paid prior to the grant of our charge. And the way we do this is to deduct the collective deposits from the overall valuation, and then apply a Loan-to-Value percentage against this leftover sum.
If at the point of repossession the development was at a stage which would enable an individual apartment to be identifiable, then we could be compelled to sell the flat to the contracted purchaser. We would be able to collect the final purchase monies in this case.
So, in summary, what we are effectively doing is ring-fencing the deposits as a known cost of realisation in the case of a Borrower default. This would then leave us with an amount against which our investors can offer to lend against, at a set Loan-to-Value. We feel this is a prudent and sensible approach to lending.
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mikes1531
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Post by mikes1531 on Sept 20, 2016 14:31:42 GMT
savingstream: Thanks for the explanation. One further small question, though. You wrote... Does this mean that any deposits paid after the SS charge is granted would rank behind the SS charge?
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mikes1531
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Post by mikes1531 on Sept 20, 2016 14:45:23 GMT
And I think there was £12,929k that went onto the SM -- and disappeared in a flash. There are 1967 investors now.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Sept 20, 2016 15:38:43 GMT
So they can now drawdown ASAP and repay me (amongst many others) for the same lending on MT. I'm sure they will do it ASAP, but ASAP will not be until all the pre-funds have been paid for unless SS are willing and able to do so without them all.
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mikes1531
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Post by mikes1531 on Sept 20, 2016 17:20:14 GMT
So they can now drawdown ASAP and repay me (amongst many others) for the same lending on MT. I'm sure they will do it ASAP, but ASAP will not be until all the pre-funds have been paid for unless SS are willing and able to do so without them all. I don't think they'll wait until ALL the negative balances are settled. That could take far too long. So I expect they'll use some of their working capital -- that's what it's for, isn't it?
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sam i am
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Post by sam i am on Sept 20, 2016 22:18:21 GMT
If the Borrower defaulted on the loan and we had to sell the property under the powers contained in our mortgage, then we would need to bear in mind that the deposits paid pursuant to the collective apartment purchase contracts will need to be paid back to those purchasers who had registered a notice of their purchase contracts at the Land Registry. In such a case, we would therefore need to take into account the deposits that had been paid prior to the grant of our charge. And the way we do this is to deduct the collective deposits from the overall valuation, and then apply a Loan-to-Value percentage against this leftover sum.
If at the point of repossession the development was at a stage which would enable an individual apartment to be identifiable, then we could be compelled to sell the flat to the contracted purchaser. We would be able to collect the final purchase monies in this case.
So, in summary, what we are effectively doing is ring-fencing the deposits as a known cost of realisation in the case of a Borrower default. This would then leave us with an amount against which our investors can offer to lend against, at a set Loan-to-Value. We feel this is a prudent and sensible approach to lending. , thank you for your explanation. While I understand what you are doing, and of course welcome the fact that the deposits are taken into account, I disagree with your method. Fundamentally the deposits don't reduce the value of the land. If land values fall by 10% then this applies to the whole value, not the part left after the deposits are deducted. This applies a gearing effect on losses on the part held by lenders because the deposits are fixed and won't reduce by the same proportion. This gearing effect is very much the same as that experienced by a second charge loan. While our loan may not technically be classed as a second charge it has some of the characteristics of such. And I would also like an answer to the question raised by mikes1531. Is it really true that subsequent deposits rank after our loan? I can imagine purchasers' solicitors getting rather exercised about that and giving the developer a hard time. It wouldn't be condusive to sales.
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