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Post by gaspilot on May 26, 2018 11:36:53 GMT
Today's Update"We spoke with the borrower this morning. The purchaser has still not exchanged contracts. Post auction viewings were held this week and a serious offer of £1.3m including freehold has been made with immediate exchange and completion in 21 days. The borrower has given the first purchaser an ultimatum of Tuesday next week to exchange" From one of the previous updates, I'm assuming this is sufficient to repay at least the first and second loans. Am I correct in that assumption?
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adrian77
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Post by adrian77 on May 26, 2018 11:57:38 GMT
hopefully this is a slight ray of sunshine but why has the borrower not taken a deposit?
I would also say when I buy properties I really don't like being given ultimata!
Hopefully we have more than one person interested and they will show their hand before the auction and this one will finally be wrapped up...
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goofy115
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Post by goofy115 on May 26, 2018 19:38:17 GMT
It should be sufficient to repay the first and second tranches if everything goes to plan as according to the latest update.If you find the 3rd loan for this facility on the FS website via the all active and past loans section you will see in the updates a post on the 15/05/2018 indicating the total current debt and daily interest charge.
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adrian77
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Post by adrian77 on May 27, 2018 8:58:42 GMT
[ I think hard to say at this stage but it is not looking good to me - not least as the first 2 loans are going to be repaid at least 9 months late and are really clocking up interest at, I think, 2.4% per month per day compound. Also not sure what the auction house is charging - hopefully under 2.5%, plus there are legal fees - nasty!
My quick maths indicate the first loan will be just about OK, the second loan may be looking at 50% recovery or worse and the 3rd loan will be yet again "Goodnight Vienna". I stress this is just my opinion and is the worst case scenario given the latest updates. There may be a mini bidding war between several buyers before the next auction and this will force the price up but FS have made 2 gross errors in my opinion. 1) this was put to market before auction so would have been flagged up as a lemon (this is exactly what the auction house advises sellers not to do)
2) FS released the reserve price so don't expect any opening offers above this value.
Am I glad I am only in the first loan - answers on a digital postcard...
Another one to add to my FA league table of magnificent failures which I will post when finished.
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locutus
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Post by locutus on May 27, 2018 9:23:07 GMT
<snip> I think, 2.4% per month per day compound.</snip> It isn't compound interest. It is simple. This is one of the disadvantages of bullet loans that overrun compared to loans which repay monthly where you can reinvest interest and compound it yourself.
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adrian77
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Post by adrian77 on May 27, 2018 14:20:19 GMT
I thought it was simple but only per month - will check with FS tomorrow - whatever it is still a fair few quid!
I also note
which in one way is good as it makes default less likely for some borrowers but for defaulted loans it is another wadge denied to the lenders. Not sure if this applies here - will ask FS tomorrow
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adrian77
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Post by adrian77 on May 28, 2018 11:10:35 GMT
FS were offline this morning but if we take their example of 10K over 6 months we have
2.73 x 12 = 32.76 so an APR of 35.4% looks like compound rate to me ! below should be in the cinema thread - I am an idiot!
Whatever as I see it this chap has 3 loans
1) 1,65m at 13% due 25.05.18 - late 2) 250K at 14% due 13.01.18 - very late 3) 100K at 15% due - 10.02.18 - late again
so that is £2m - nice round number all late being charged at , I guess, 2.4% per month which is 48K per month in simple interest alone
Glad this one is "all systems go" because if not I would be worried that FS would foreclose which after fees etc would leave about 50% recovery on loan 2 and zero recovery on loan 3...yet another interesting one!
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james21
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Post by james21 on May 28, 2018 11:46:44 GMT
The borrower lost interest in the project months ago realising he was not going to get enough from the sale to cover his costs, profit and the loan repayments. Thats why he dragged his heels over certificates, ventilation etc over this year. Its fair to assume the loans covered his costs and profit. His best outcome was to have has FS default the loan as that would have been his get out and would leave FS to sell the security for what it could get for the lenders. FS did not do that. Had this happened, from the borrowers perspective the loan becomes defaulted, his business goes bankrupt, he gets a black mark on his credit rating then in one way or another starts again. Once again FS have been inept at managing the loan all of this year, and the lenders?, you guessed it, got shafted
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adrian77
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Post by adrian77 on May 28, 2018 16:12:45 GMT
I really can't argue with this - the rubbish about the building warranty etc never did ring true with me.
Will FS make this chap bankrupt - not sure if it is worth their while?
Clearly this chap had an awful lot of OUR money (£1.17m?) - OK it looks as if he is going to lose the asset but is this such a big deal.
I wonder if he had to provide notarised accounts stating that the entire loan had been spent on the development - answers on a digital postcard. Per chance he has retained a "building contingency fund" and FS foreclose on the asset then I guess he won't be that bothered. Obviously I have no idea what has actually happened here but I don't think FS have either.
I would have thought that after the Whitehaven,Knareborough, Turbine, South Wales hotel, Wimbledon etc etc fiasco FS would be a bit more professional and business savvy but I see absolutely no evidence of it whatsoever.
Let us hope the latest buyer actually comes up with some readies...
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Post by gaspilot on May 31, 2018 8:51:17 GMT
So, did the original buyer sign the papers? If not, has the new buyer signed the papers? Come on FS give us an update on the situation. This could be concluded in three weeks if you believe the last update.
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Post by brightspark on May 31, 2018 10:07:02 GMT
I asked FS for an update yesterday and so far none has been provided. I am sure I was not alone in my disappointment.
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Steerpike
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Post by Steerpike on Jun 11, 2018 8:49:48 GMT
Chat 11-Jun-18 9:40
"I assume that neither P1 nor P2 exchanged and so presumably the property will be in the next auction. Please can you confirm this will be the next step and when this will be?"
"I have spoken to the person supervising this loan and the exchange did not go ahead. We do have two interested buyers, which we have directly spoken to one of them. One of the buyers is just gathering funds which should hopefully be by the end of the week. We are in the process of forming an update to go onto this loan."
P3 and P4 simultaneously enter the equation, hopefully leading to the solution to the Formby loan question.
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markm
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Post by markm on Jun 11, 2018 10:48:14 GMT
The word for word reply that I got this morning! I am, for some reason, un-reassured....
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adrian77
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Post by adrian77 on Jun 11, 2018 11:17:15 GMT
yeah , yeah, yeah; hope it is not the same chap or chappesse who is "buying" the Litchfield cinema. As I said this one is flagged up on the local market as a lemon so I have zero confidence in all such FS "updates".
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goofy115
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Post by goofy115 on Jun 11, 2018 14:58:48 GMT
This loan is one of three loans referred to in the the June newsletter with the following quote:
'We also have a number of properties where sales have been agreed and the legal process is underway and expected to be completed in June.'
Here's hoping....
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