hazellend
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Post by hazellend on Sept 5, 2018 6:19:03 GMT
I'm inclined to agree but remember the developers have now put their company into administration with a £730k overdrawn directors loan account which is being investigated. They had the same bank account as the SPV and are claiming the SPV owes them £600k+. Where has the money gone? All looks a bit suspicious to me.. Personally I’d rather see the directors thrown in jail for a few years than see my money back. The thing that has surprised me the most about P2P is how easy and inconsequential it is to get away with evil activity
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Post by Butch Cassidy on Sept 5, 2018 7:05:28 GMT
I'm inclined to agree but remember the developers have now put their company into administration with a £730k overdrawn directors loan account which is being investigated. They had the same bank account as the SPV and are claiming the SPV owes them £600k+. Where has the money gone? All looks a bit suspicious to me..I think the word you require is .. CRIMINAL or perhaps FRAUDULENT... as for future legal action those words would be INEFFECTIVE or POINTLESS, the only chance of any further recovery would require a far more robust method such as HOSPITAL.
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archie
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Post by archie on Sept 5, 2018 7:37:41 GMT
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SteveT
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Post by SteveT on Sept 5, 2018 7:59:19 GMT
... and there was little wrong with the split tranche approach in principle, provided the development scheme was properly monitored and controlled to completion. Which it wasn't. Originally I went for about 70% in Tranche B, 30% in Tranche A but took advantage of the SM to sell down Tranche B progressively over the term. Happily, by the time the loan defaulted, I'd only my Tranche A holding left, so I reckon I've broadly broken even as a whole (and any further distribution down the line will be profit). But P2P is (and always has been) a risky game. Caveat Emptor.
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archie
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Post by archie on Sept 5, 2018 8:06:29 GMT
... and there was little wrong with the split tranche approach in principle, provided the development scheme was properly monitored and controlled to completion. Which it wasn't. Originally I went for about 70% in Tranche B, 30% in Tranche A but took advantage of the SM to sell down Tranche B progressively over the term. Happily, by the time the loan defaulted, I'd only my Tranche A holding left, so I reckon I've broadly broken even as a whole (and any further distribution down the line will be profit). But P2P is (and always has been) a risky game. Caveat Emptor. I totally agree but with hindsight it might have been better to keep the single tranche at 11%. I'm only in B but I chose to take the risk so not complaining. Glad it's not in an ISA though.
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empirica
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Post by empirica on Sept 5, 2018 9:45:04 GMT
Ah well severe lesson learned on this one. I will certainly be staying clear of anything other than the priority loan. Seriously all those tranches Lendy keep knocking out week after week is frightening. Some of them are nearly up to tranche 20. There is going to be some serious fall out on that platform and if i was involved in any one of them i would be having sleepless nights. Scary stuff this P2P. Lendy's tranches all rank pari-pasi unless stated otherwise - there are some second rank ones a DFL035 being a second charge behind DFL08 and the PBL194 being the second charge behind PBL133 spring to mind. One of the things I've picked up on from trawling the boards, is that there is a school of thought that the first tranche on a DFL can (should?) often be considered as much of a 70% LT(GD)V as the last tranche. (One benefit being you might get an extra 12m or so interest to offset losses shuold the worst happen) Additionally, there is some argument to be made that the latter tranches are the more secure, but only when the necessary degree of monitoring has taken place. As Lendy seem unwilling or unable to give full and complete access to the monitoring reports they receive _ or at least 'fuller' and more complete' _ it seems prudent to work on a worst case scenario basis that every project is both over budget and late. I expect that isn't the actual case, but with a lack of information to the contrary, what else can prospective investors think? Probably a moot point anyway, if Lendy are to be moving away from self selection as predicted. (Apologies for 'polluting' the MT boards )
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jsmill
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Post by jsmill on Sept 5, 2018 10:02:40 GMT
Personally i don't invest in "Tranche B" type P2P offerings. Particularly in the property development space where the LTV number is at best a rough guide and at worst meaningless i don't think that, whatever the uplift in interest rates, it can justify the extra risk of a total wipeout. Not of which alters the questionable nature of the valuation in the Birkenhead case but that isnt going to be much help to investors stuck in it. Pursuing a claim against the valuer is also a risky business from a cost/benefit perspective. Would be interested to hear if there is still an appetite out there for these tiered offerings? (I am not including the dual amortizing/IO ABL type offerings in this incidentally)
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johni
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Post by johni on Sept 5, 2018 10:04:18 GMT
... and there was little wrong with the split tranche approach in principle, provided the development scheme was properly monitored and controlled to completion. Which it wasn't.Originally I went for about 70% in Tranche B, 30% in Tranche A but took advantage of the SM to sell down Tranche B progressively over the term. Happily, by the time the loan defaulted, I'd only my Tranche A holding left, so I reckon I've broadly broken even as a whole (and any further distribution down the line will be profit). But P2P is (and always has been) a risky game. Caveat Emptor. This was done by BO not MoneyThing as per terms in agreement. I suspect this is why they split. MT have taken a lot of flak but they could only put out what BO say as it was there loan. All future recoveries will be done by BO I suspect, as it is now down to them to sort out this mess.
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Post by MoneyThing on Sept 5, 2018 10:48:50 GMT
Morning. Thank you for your patience. All withdrawals that have been requested have now been processed and are up to date. Regards, Ed.
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cwah
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Post by cwah on Sept 5, 2018 12:31:09 GMT
I've been reading this loan and it looked like tranche A was safe with 47% LTV.
But as usual, with most loans, the LTV is absolutely out of the whack.
How can a property be valued at 4.85m and be sold for 2.1m???
What's the point to have a surveyors if EVERY valuation are overvalued and many significantly wrong?
Who takes responsibility?
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tommytaylor
P2P - The new wild west
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Post by tommytaylor on Sept 5, 2018 12:40:44 GMT
I've been reading this loan and it looked like tranche A was safe with 47% LTV. But as usual, with most loans, the LTV is absolutely out of the whack. How can a property be valued at 4.85m and be sold for 2.1m??? What's the point to have a surveyors if EVERY valuation are overvalued and many significantly wrong? Who takes responsibility? Couldnt agree more with this. So who does take responsibility. Maybe its all my fault. I take it everyone involved in this has lost money apart from the borrower. Maybe that is a way forward. Buy yourself a Hugo Boss suit and pay a visit to all the P2P clowns. Eventually one of the will happily lend you a few million based on very little info. Then just clear off abroad never to be seen again. Much like the 7 million Lendy lent against Marlebone Road. This defaulted after a month. I have been doing it the wrong way round all this time
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shimself
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Post by shimself on Sept 5, 2018 13:57:49 GMT
I'm inclined to agree but remember the developers have now put their company into administration with a £730k overdrawn directors loan account which is being investigated. They had the same bank account as the SPV and are claiming the SPV owes them £600k+. Where has the money gone? All looks a bit suspicious to me.. Personally I’d rather see the directors thrown in jail for a few years than see my money back. The thing that has surprised me the most about P2P is how easy and inconsequential it is to get away with evil activity Not just p2p. All forms of investment attract fraudsters.
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shimself
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Post by shimself on Sept 5, 2018 14:00:10 GMT
I've spent enough time trawling through this thread and not finding it.
Was there not an issue that BO had some other investors that we didn't know about and so the LTV was not as advertised?
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Post by mattygroves on Sept 5, 2018 14:15:55 GMT
I've been reading this loan and it looked like tranche A was safe with 47% LTV. But as usual, with most loans, the LTV is absolutely out of the whack. How can a property be valued at 4.85m and be sold for 2.1m??? What's the point to have a surveyors if EVERY valuation are overvalued and many significantly wrong? Who takes responsibility? The valuation was for a completed project and not a half completed one. They aren't done on the same basis as for a residential house where there are comparatives to use. Development projects are valued on a residual basis ie. what the finished project will make less the known costs of getting there including an element of profit to come up with the residual value. They are not often based on the likely sales proceeds particularly if the project is unfinished.
However, this doesn't seem to be the case here although as the intial valuation states that the comparative basis has been used. The GDV is £6 million for the completed development so a valuation of a part finished project at £4 million seems a bit too high to be a true market value so I suspect it is part residual.
In this case it looks like BroadOak are chasing the valuer as the values are so far off. it will be interesting to see how that pans out particularly as I've currently lost money on tranche A. I actually thought I'd be OK in tranche A even with a default but am not surprsied B is looking like a total wipeout.
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Post by mattygroves on Sept 5, 2018 14:18:12 GMT
I've spent enough time trawling through this thread and not finding it.
Was there not an issue that BO had some other investors that we didn't know about and so the LTV was not as advertised?
I don't think so the presence of other investors has always been known and is very easy to verify via Companies House. What wasn't known / wasn't clear was the number of flat purchasers who had registered their deposits before the BroadOak loans.
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