Mucho P2P
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Post by Mucho P2P on Dec 19, 2018 9:40:10 GMT
Hmm.
Capital shortfall on DFL035 recovery following negotiated settlement with the borrower... And that's why I didn't touch the second charge loan. Looks like this could be a sign of things to come with the other loans - CAPITAL SHORTFALLS - Which raises the question, why all the debentures, PG's and other security BS, if it will not be called upon for the lenders benefit. Lendy has to realise that business with customers is partly about trust, and lack of trust leads to failed businesses.
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adrianc
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Post by adrianc on Dec 19, 2018 9:44:14 GMT
Looks like this could be a sign of things to come with the other loans - CAPITAL SHORTFALLS <shrug> Is this news? It shouldn't be. It should be something you've expected, and accept as an inevitable reality. Remember the golden rule - diversify widely, and expect 7% as a realistic post-loss return over the long term. If you're getting 12%, there's going to be losses against that. Because it's better to come up with a mutually acceptable deal that sees a smallish shortfall than to spend a lot of time/effort/blood pressure/money on chasing the full amount through the courts and eventually walking away with a similar net amount - or less - in a couple of years time.
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Mucho P2P
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Post by Mucho P2P on Dec 19, 2018 9:51:27 GMT
Looks like this could be a sign of things to come with the other loans - CAPITAL SHORTFALLS <shrug> Is this news? It shouldn't be. It should be something you've expected, and accept as an inevitable reality. Remember the golden rule - diversify widely, and expect 7% as a realistic post-loss return over the long term. If you're getting 12%, there's going to be losses against that. Because it's better to come up with a mutually acceptable deal that sees a smallish shortfall than to spend a lot of time/effort/blood pressure/money on chasing the full amount through the courts and eventually walking away with a similar net amount - or less - in a couple of years time. It was a rhetorical question, not a question based upon corporate tactics. I should have made it clearer in the reply/question.
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Post by rooster on Dec 19, 2018 11:22:49 GMT
So why did the original email (quoted below) imply that it was recovered in full, without actually saying so?
"The repayment on Loan DFL035 is complete.
It was past its original repayment term and completing recovery is further evidence of the enhanced recovery process"
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Post by picanto on Dec 19, 2018 16:44:30 GMT
Dissapointing that there was a capital shortfall in this loan, there was nothing in the updates to suggest there would be and even the second charge loan seemed a safe loan imo. But I'm not too concerned about the use of the PF, that is what it is there for. Will Lendy still take legal action against the borrower to recover the loss capital?
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Mucho P2P
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Post by Mucho P2P on Dec 19, 2018 17:20:36 GMT
Dissapointing that there was a capital shortfall in this loan, there was nothing in the updates to suggest there would be and even the second charge loan seemed a safe loan imo. But I'm not too concerned about the use of the PF, that is what it is there for. Will Lendy still take legal action against the borrower to recover the loss capital? Looks like another valuation was "off" on what could be achieved by the sales. Have any of Lendys valuations actually been on target?? <- rhetorical question, answer not needed.
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sl75
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Post by sl75 on Dec 20, 2018 8:09:29 GMT
Have any of Lendys valuations actually been on target?? <- rhetorical question, answer not needed. I'll answer anyway - plenty, and most of the relevant loans have either been repaid or recovered in full, or never got as far as the borrower receiving the money in the first place, so nobody bothers discussing them more than a few days later...
... but "some of the valuations are on target", or even "most of the valuations are on target" isn't really good enough - like an egg that is only rotten in part, the bad taste will permeate the whole thing, even if it remains just as nutritious.
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Post by GSV3MIaC on Dec 20, 2018 8:23:13 GMT
Will Lendy still take legal action against the borrower to recover the loss capital? Almost certainly not, reading between the lines. If that was viable, the PF would not have paid out, and the loan would be on the 'legal action being taken' list, with the castle and lots of others.
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Mucho P2P
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Post by Mucho P2P on Dec 20, 2018 8:53:57 GMT
Have any of Lendys valuations actually been on target?? <- rhetorical question, answer not needed. I'll answer anyway - plenty, and most of the relevant loans have either been repaid or recovered in full, or never got as far as the borrower receiving the money in the first place, so nobody bothers discussing them more than a few days later...
... but "some of the valuations are on target", or even "most of the valuations are on target" isn't really good enough - like an egg that is only rotten in part, the bad taste will permeate the whole thing, even if it remains just as nutritious. My mistake sl75, having been with Lendy since the first months of Saving Stream, I am quite aware of their operations and history having participated in 95%+ of their entire historical loan book. I should have been more specific in my rhetorical question, "have any of Lendys recent valuations been on target"? <---Again rhetorical and answer not needed. If any recent valuations are on target then obtaining possession orders and selling the asset without a shortfall would generally be less work/hassle for Lendy as they would not need to seek for further funds from PG's, dentures and PF.
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sydb
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Post by sydb on Dec 20, 2018 10:14:24 GMT
The real question is have Lendy's recent valuations been out of trend with like for like evaluations at the time? I am not in the trade but I am guessing surveyors use the going rates at the time. In a rising market, the evaluations should be under valued by the time a distressed loan security is sold. In a falling market, they are going to be over valued by the time it comes to sell. But, by how much? I know of no data that reasonably accounts for the huge disparities in many of the loans.
So the question is then to ask why did the surveyors sometimes get things so chronically wrong? If there was a large degree of uncertainty then why did the surveyor not convey this in their report?
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adrianc
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Post by adrianc on Dec 20, 2018 10:23:02 GMT
I should have been more specific in my rhetorical question, "have any of Lendys recent valuations been on target"? Have they had many recent valuations? They seem to have totally given up on new business. The most recent loans are PBL200 (valuation 19th April by Knight Frank) and DFL37 (valuation 2nd July by Vickery Holman)... Knight Frank are well known and national. Vickery Holman seem to be regional and reputable, and also did DFL34 in January (no surprise - it's linked to 37). Then there's PBL199 - valuation date 23rd February, by Colin Lilley Surveyors, another seemingly reputable national outfit. And that's about it for 2018 valuations. So...? Where there IS a problem with "recent" valuations, couldn't it be more one of them becoming outdated in an uncertain, probably falling, market? Sorry, but...
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Post by mrclondon on Dec 21, 2018 12:17:32 GMT
As far as I am aware, this loan will be repaying today 
(btw, this developer has a ~£450 million portfolio with no bank lending til recently, just starting to refinance
some senior debt out to banks and it's taking time (one of several reasons they avoid banks for dev work,
they take on potentially difficult projects and work at triple speed, banks don't like the risk and hamper progress)
It started as a husband and wife team, they do a lot for the homeless in Liverpool, and other charitable work. I have a large chunk of my pension with them (directly), and am really happy things have turned out so well for them.
(Awarded best hotel in the UK this year, amongst others).
Vero whilst not wishing disagree with your observations last week, I think it fair to say the behaviour of the borrower in relation to financial matters does raise some concerns.
a) For this project earlier this month they filed dormant company accounts for y/e March 2018 showing just the share capital of £1. Not a great surprise as the accounts for y/e March 2017 filed 4.5 months late (in May 18) also showed just £1 share capital although were not labelled as dormant. The 2018 accounts were signed off by someone declaring themselves as a director when CH has no record of that person being a director of this specific SPV.
b) For the hotel loan on AC (#602) they appear to be refusing to supply a balance sheet as part of the monthly management information - the AC updates detail this in some considerable depth
c) For whatever reason this project has not matched the hoped for financial return, to the extent that they felt it acceptable to negotiate a partial debt write-off from oridinary people (not fat cat banks).
If they are now looking to increase their debt funding, they are going to have to "up their game" somewhat to secure anything other than expensive short term funding.
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Post by oweno on Dec 22, 2018 13:19:03 GMT
I am scratching my head about the discussion of using the provision fund on a second charge loan, which by Lendy standards has only been overdue for 10 minutes.....
If the PF is used on any second charge loan at all I would then expect it to be used to at least the same extent on each and every first charge loan....
(which is clearly ridiculous since it won't have the capacity to do that) - hence the PF should not be used at all on any second charge loan, otherwise there is no extra risk from a second charge loan.
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Post by GSV3MIaC on Dec 22, 2018 15:34:48 GMT
It's discretionary, so logic should not be assumed. However this seems to be the first/only case where Ly have concluded** there is no way forward, nobody to sue, no chance of further repayment. Maybe in 5 or 10 or 50 years, when other loans reach the same state, the PF will get involved there too.
(** and agreed with the borrower?)
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adrianc
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Post by adrianc on Dec 22, 2018 15:55:08 GMT
Do we even know how back the DFL35 shortfall is/was/would've been without the Provision Fairy stepping in?
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