adrian77
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Post by adrian77 on Aug 19, 2018 15:24:58 GMT
had a quick look at the latest FS updates on this one could somebody check my logic here as I like to get my facts straight
1) ref sale of blt 2 original valuation £347K - with equity of £167K gives first charge of £180K ? but selling price was 200K ;thus funds realised =£200-£180 = £20K gross ?
2) ref blt1 original valuation £260K with equity of £159K gives first charge of £101K
so FS may not even have a charge on this one?
3) ref first charge I can't see where FS have stated how much was actually realised for the first charge and also it looks to me as if they are updating this one with the proceeds of the main house lumped together with blt2 - now why would they do that?
The existing loans have been split into 2 with one part being repaid and the other part showing as unredeemed
The total realised out of £625K is a massive £75,180K or to put another way 12.02% Of course this can be increased if FS have a charge on BLT1 - so if it goes for the full selling price it will realise a maximum of £75,180+ £101 = £176,180 or 28.2% - if we take the mid-point that is 85% loss! If BLT1 sells pro-rate to BLT2 it will realise about £36K
If FS think we are going to let this one lapse into history they can think again
As I said this is how it looks like to me (my prediction of Premier League is looking pretty safe!) but would appreciate a second opinion.
I thank you.
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empirica
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Post by empirica on Aug 19, 2018 16:19:51 GMT
had a quick look at the latest FS updates on this one could somebody check my logic here as I like to get my facts straight 1) ref sale of blt 2 original valuation £347K - with equity of £167K gives first charge of £180K ? -- net equity, so residuals after 1st charge*, fees, agents, cost of sale, etc (* 16/08/18 update "Amount due to the first charge holder was £104,651.")but selling price was 200K ;thus funds realised =£200-£180 = £20K gross ? -- update 16/08/18: "This leaves a net balance of £75,214. "2) ref blt1 original valuation £260K with equity of £159K gives first charge of £101K -- as above; net equity, so residuals after 1st charge*, fees, agents, cost of sale, etcso FS may not even have a charge on this one? -- I don't read this as a charge validity issue, rather one of re-housing a vulnerable tenant.3) ref first charge I can't see where FS have stated how much was actually realised for the first charge and also it looks to me as if they are updating this one with the proceeds of the main house lumped together with blt2 - now why would they do that? -- not sure I understand your point / question, but: 16/08/17 is "The receiver has confirmed that the debt due to the first charge holder is £1.8m." and 04/04/18: "Regretfully the main property has been sold by the first charge receivers for less than the debt due to the first charge holder."The existing loans have been split into 2 with one part being repaid and the other part showing as unredeemed The total realised out of £625K is a massive £75,180K or to put another way 12.02% Of course this can be increased if FS have a charge on BLT1 - so if it goes for the full selling price it will realise a maximum of £75,180+ £101 = £176,180 or 28.2% - if we take the mid-point that is 85% loss! If BLT1 sells pro-rate to BLT2 it will realise about £36K If FS think we are going to let this one lapse into history they can think again As I said this is how it looks like to me (my prediction of Premier League is looking pretty safe!) but would appreciate a second opinion. I thank you. See notes. Hope it helps. Thoughts over on the purple place suggest the 2nd charge loan(s) may squeak into a Div 1 position (Championship? Non- Premier League, anyway.)
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adrian77
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Post by adrian77 on Aug 19, 2018 18:31:58 GMT
thanks for your comments - you made £75,214 realised so close enough i.e. repaid against £625K or 12.2%. Ref BLT1 - wonder if the wife lives here and however much is the legal action costing? Thus if we take £625 x 75% for Premier League loss then that is a loss of £469K or a recovey of £156K so need to recover £81K for the primary loan to be Premier League. Granted it may tweek under a 74% loss - League 1.
Overall for both loans combined this is extremely likely to be Premier League.
Whatever my prediction this is bad news for all lenders involved in this one and especially for the second loan who have lost 100% - nasty!
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bg
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Post by bg on Aug 19, 2018 18:49:35 GMT
Whatever my prediction this is bad news for all lenders involved in this one and especially for the second loan who have lost 100% - nasty! Given that FS informed us that the main house had sold and "As this is less than the debt due to the first charge holder, no proceeds are available to be distributed to FundingSecure" on 5 April 2018 your prediction of there being a big loss over 3 months later shows incredible foresight and predictive prowess. Despite predicting a 100% loss (incorrect) and making a complete misunderstanding in your analysis of the loans/repayments above, you provide a wonderful service to us non-property expert novices who had no idea that such a high interest, 3rd charge dev loan on extremely illiquid mega-mansions in North Yorkshire could be so risky. Any clue as to what the euro million numbers are going to be Friday night?
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Post by brightspark on Aug 19, 2018 21:29:19 GMT
Investors were advised by FS that any claim of the wife ranked behind FS whereas I think this seems not to be the case. If so investors were misled albeit probably inadvertently The original valuation was out of line with the sale price achieved even allowing for its fire sale nature. Investors took probably a cautious a view on their lending to this borrower based at least partially on the information provided by FS. FS presumably offered the loan with the intention that it was taken up even though analysis indicated it was very high risk. FS did itself no favours by offering this loan. Knowing that the borrowers were not well placed FS was dilatory in calling for Administration. I had a mere and very cautious £25 in the third tranche indicative of my distrust of this loan. I do sympathise with those investors who may have lost considerable sums.
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bg
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Post by bg on Aug 19, 2018 22:20:34 GMT
Investors were advised by FS that any claim of the wife ranked behind FS whereas I think this seems not to be the case. If so investors were misled albeit probably inadvertently FS were given legal advice that the wife's charge ranked behind theirs which is what they reported. That said it's neither here nor there as the sales price did not even fully repay the first charge never mind FS or the wife's potential charge. Selling at around 50% of the valuation in a situation like this really does not surprise me. The buyers would know it was a distressed sale and would come in with a low ball price. Even having said that, if I had £3-4m to spend on a property in Yorkshire I would probably buy a plot of land and build it myself...that way I would have the gym, swimming pools and tennis court exactly where I wanted them. I wouldn't want a property that had been completed with "performance issues" by the subcontractors. It's all going to impact the price. The valuations were done on the basis of estimations by estate agents of the property value when complete....clearly this is a highly subjective area and adds greatly to the risk of the loan (magnify this for a second charge). I think FS acknowledged the higher risk nature of these loans...hence why they offered them at the highest rates I have ever seen on FS. In my view given the risk, the rates should have been higher still. I don't think that is the case. The borrower was declared bankrupt over 18 months ago which was only weeks after the property was completed. There is little FS could do to impact the process after that.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Aug 20, 2018 0:36:55 GMT
Any 2nd or third charge should be avoided unless additional security is provided. It just goes to show we should not invest more than 1% max of our portfolios in any loan.
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Post by brightspark on Aug 20, 2018 9:07:51 GMT
In this instance in addition to the main house there was security via 2 other properties which presumably assuaged the concerns of some lenders.
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adrian77
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Post by adrian77 on Jul 21, 2019 10:47:21 GMT
As I said I am ploughing through my top 40 list in order to simplify it I have looked at Knaresborough again and it is doing my head in Can somebody tell me if I have got my fact right
Firstly , I think, FS have not yet got possession of BLT1 - I am not even convinced FS will ever get this. At best there is £159K liquidity
However I find the FS default terminology very confusing - I think
we have status : loan active/loan completed defaulted : unredeemed/defaulted
Thus as I see it (and I am losing the will to live) The 3rd charge of £100K is a 100% loss The second charge of £625K has realised £75,214 - fantastic!
Of the original £625K FS have classed
£549.786 as status : loan defaulted and defaulted : loan completed £75,214 as status : loan completed and defaulted : defaulted
not sure where the £549,718 appears in the FS statistics - here's a shocker but I think this sum should be classed as status : compete completed and defaulted :defaulted. In effect a bad debt but I think FS still have this one on the books in the vain hope it will come good sometime in the distant future which it won't..
This loan is now over 1200 days active so not an unreasonable viewpoint
Time for a Sunday pub lunch and forget about FS for a while
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adrian77
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Post by adrian77 on Sept 1, 2019 17:15:56 GMT
The above is what I wrote last year- hello FS!
Just had another look at this one with a pair of fresh eyes. This is what I think but please correct me if I am wrong There is a a second charge on the main house and 2 x BLT properties of £550K spread over 5 tranches and a supplementary charge of £100K which has gone for a 100% Burton?
One BLT property has been sold which realised £75,160 and FS have allocated this to the above 5 tranches. Thus out of £625K, £75,160 has been recovered to date
The position of the wife and her entitlement seems to be very confusing - she may well have a partial or full claim on one BLT and possibly also the settlement from the main house ?
Well here we are about 10 months later and still no update..not looking good is it! I just hate to think what all this legal action is costing FS.
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djpix99
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Post by djpix99 on Sept 2, 2019 8:22:56 GMT
adrian77 ther is actually a more recent update on some of the tranches, however still not saying much: '02/01/2019 The matter is still in the hands of both receivers and solicitors. Unfortunately there is not going to be an easy solution but we continue to act under our solicitors legal advice to attempt recovery of funds.'
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adrian77
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Post by adrian77 on Sept 2, 2019 9:48:31 GMT
damn right.
I saw the latest "update" which I regarded as simply saying "no change" i.e. no material facts to offer or in other words a non-update.
I wonder 2 things 1) does anybody know just how many legal claims FS has ongoing at the moment? I guess well over 30? I just hate to think what this costs in both FS time let alone the rip-off legal fees?
2) not sure how long FS are going to let these legal cases drag on for before throwing in the towel? Much as I enjoy suing people (and believe me I do) there is no point in throwing good money after bad especially as I hate to think where it ends up. Whitehaven being a good example - FS have clearly been had - the police aren't interested in most fraud cases and even if they got a court order it then needs to be enforced against somebody whom quite possibly has covered this tracks as in "bankrupt".
I accept legal action can't be avoided when lending money as problems will always occur but I regard FS's need for it to be solely down to their incompetence in many cases e.g. not even perfecting the charge correctly is some cases let alone the art fiasco...granted they may have improved their controls but that is not going to change the situation for loans such as this one.
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r1200gs
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Post by r1200gs on Sept 2, 2019 10:04:59 GMT
There seems to be a pattern where these companies end up spending more time and money chasing bad debt than on issuing new loans, and we know where that ends up.
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Post by brightspark on Sept 2, 2019 12:30:39 GMT
Unfortunately the alternative is just as bad if not worse i.e. i.e. more of the same.
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micky
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Post by micky on Sept 3, 2019 15:00:58 GMT
Well can you believe. BTL 1 secured at last. Unfortunately most of the equity will probably be eaten up by legals.
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