sl75
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Post by sl75 on Jul 4, 2018 7:46:32 GMT
I've not followed this loan, but it's common for the GDV to drop by more than the capital reduction. If a developer sells a £100k flat on a 70% LTV loan, he's perfectly within his rights to keep £30k, and repay £70k. It would be abnormal if he retained more than his equity share, but that doesn't appear to be the case here. That's fine if he's taken out multiple individual loans on each flat - and as per any standard mortgage, the charges are fully satisfied before any additional funds are release. In this case the loan is secured on the whole development, and standard practice is to follow convention and pay down the charges fully from any income before releasing surplus (unless other arrangements are made, eg to provide a working capital facility to assist with further sales) I don't really see what this fuss is about - after the repayment we have better security (at least in terms of LTV ratio) and more money. The people who are claiming it will increase the LTV are wrong! By my calculations, borrower paid off 2.4% of the loan and the value of our remaining security reduced by less than 2%, decreasing the LTV from 59.4% to 59.1% (both display as "59%" on the website, but early days...) There's previous precedent on the platform with DFL023 - just before the final payment came in, we had a final LTV of 18% - an outstanding balance equivalent to the value of one unit, but still secured on all the remaining units. Purely from a simple extrapolation (with a simplified model that falsely assumes that the development effectively consists of 52 units of the same value as the one just sold), in this case if the borrower were to continue to make further payments of the same amount, each reducing the security by the same amount, then after 40 more payments, we'd have a residual loan of less than £160k, secured on a residual GDV of £3.4M - a loan that would be repaid by the sale of any one unit, but secured on all of them (in this simplified model, 11 units of that value remain at that point). Actual payments will of course vary, as the individual units have a range of different values (and hopefully when sales pick up there'll be times when several complete on the same day getting consolidated into a single loan reduction payment), but the principle is the same. The main point is that (unless we have reason to doubt the residual valuation), any payment which reduces the loan by a larger percentage than the GDV should enhance our security. Edit: Legally, yes, it's undoubtedly the case that the borrower cannot expect to receive a penny from sales until the charge holder agrees to allow it, but practically, for as long as the residual development remains viable, there's no reason not to.
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Post by brightspark on Jul 4, 2018 7:59:41 GMT
I would prefer hard cash like wot I lent out in t first plaice if you know what I mean guv.
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sl75
Posts: 2,092
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Post by sl75 on Jul 6, 2018 16:37:21 GMT
A bit late to update my last post... but another aspect is of course that (as stated in today's update) the borrower is paying interest. Just 1 month's interest at 1% on a nearly £10M loan is nearly £100k, which is pretty much the same as the difference between the security reduction and the capital payment - so looks like in this instance we did get pretty much the entire sale proceeds after all.
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michaelc
Member of DD Central
Say No To T.D.S.
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Post by michaelc on Jul 6, 2018 17:55:54 GMT
A bit late to update my last post... but another aspect is of course that (as stated in today's update) the borrower is paying interest. Just 1 month's interest at 1% on a nearly £10M loan is nearly £100k, which is pretty much the same as the difference between the security reduction and the capital payment - so looks like in this instance we did get pretty much the entire sale proceeds after all. Suspect you might be right but why doesn't Lend explain this kind of detail? It would be easier and cheaper to gain some confidence than trying to manipulate trustpilot.
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awk
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Post by awk on Jul 30, 2018 9:24:00 GMT
"R3" is showing under REPAID (27.7.18), but not clear what has been repaid
did anyone get anything credited?
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,333
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Post by ilmoro on Jul 30, 2018 9:33:31 GMT
"R3" is showing under REPAID (27.7.18), but not clear what has been repaid did anyone get anything credited? Capital repayment £93k, about 1%, credited on 27/7
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TheDriver
Member of DD Central
Slightly bonkers
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Post by TheDriver on Jul 30, 2018 10:14:49 GMT
Hi awk, Yes, I received almost another 1% repayment on 27th, making exactly 8% paid back so far; slightly disappointing given the whole project was due to complete a year ago last month, but had only then after 19 months made the first sale of what was supposed to be a 7 month project!
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Post by charliebrown on Jul 30, 2018 14:05:07 GMT
Hi awk , Yes, I received almost another 1% repayment on 27th, making exactly 8% paid back so far; slightly disappointing given the whole project was due to complete a year ago last month, but had only then after 19 months made the first sale of what was supposed to be a 7 month project! I sometimes wonder how Borroers can still make a profit when projects overrun by a year at LY’s interest rates. Was there really that much profit in the development? When I see borrowers making partial repayments I always find it encouraging. It’s the intent that I find encouraging, at least, it seems, the borrower’s intent is to repay. All property developers usually understand that time is money so anything more than a minor overrun is a big problem.
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rocky1
Member of DD Central
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Post by rocky1 on Jul 30, 2018 15:48:34 GMT
maybe thats where all this offer business is coming from.make a offer that covers lendys interest and exit fees and we will accept a loss of interest and IA and some capital loss.lendy and borrower happy to have made a good deal out of it.lenders turned over again.
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Post by da2279 on Aug 2, 2018 20:00:31 GMT
1 month extension and July unpaid interest paid.
Update on platform.....
"We have now received the interest from the borrower for this month's loan extension and have credited investors accounts with 3 days of interest due for the end of July 2018 (29th - 31st July 2018) as the loan had expired on 28th July 2018 but has now been extended to 28th August 2018."
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TheDriver
Member of DD Central
Slightly bonkers
Posts: 493
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Post by TheDriver on Aug 3, 2018 7:35:22 GMT
What I don't understand is why its only paid 3 days interest for a month's extension - any ideas?
edit: other than the borrower's run out of funds, obviously!
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gareot
Member of DD Central
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Post by gareot on Aug 3, 2018 7:44:05 GMT
I believe the one months interest is for Aug so we will receive it at the end of the month.
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webwizard
Member of DD Central
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Post by webwizard on Aug 7, 2018 7:18:30 GMT
Update from 27 April: Close contact with the borrower is being maintained and we await the Independent Monitoring Surveyor’s next report of progress on site.No actual update on progress since then only about the partial repayments and loan extensions. Can we get a progress report and update on the IMS report please Lendy Support. |
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richox
Member of DD Central
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Post by richox on Aug 30, 2018 11:07:43 GMT
It looks as if the borrower is struggling to sell the flats and struggling to pay extension costs. If the borrower can't/won't pay the extension costs then we need to know. Will tomorrow's update shine some light on the borrower's circumstances or will it just gloss over them with something like "Further unit sales are expected to complete over the coming weeks/ months to gradually repay the loan. Further loan extensions will be considered provided the extension costs are paid in advance and unit sales are progressing to our satisfaction."? Unless the borrower pays the extension costs Lendy may well provide cut and paste updates for some time to come.
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Post by picanto on Aug 31, 2018 18:22:15 GMT
Loan has been extended to cover the interest for another month.
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