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Post by overthehill on Aug 15, 2023 11:23:31 GMT
Latest Updates on 1st Charge Barnoldswick (8010286828) 11/08/2023 Following previous updates in this matter we have received a number of emails from Investors regarding this loan. These have been reviewed by our solicitors and their advice (without waiving privilege) remains that we should proceed as they have previously advised, that is to apportion the sale proceeds to the separate pieces of land so that those in the second charge loan will receive approximately 20% of the net sale proceeds, however given the contentious nature of this matter, we have been further advised to keep the matter open for a further 28 days to allow Investors to challenge this position. Following the expiry of the 28 day period further legal advice will be sought. 11/07/2023 As previously advised, there has been an issue raised in connection with the Baroldswick Loans which have required further investigation and legal advice. After taking legal advice, it has become apparent that these loans were not first and second charges in the way in which they were presented on the Platform. The Barnoldswick Loan was over a Property and some Adjoining Land. The Adjoining Land was purchased first, using the loan advertised as “a second charge loan”. The Property was subsequently purchased using the “First Charge loan”. The charge registered was an “all monies” charge and therefore relates to both loans. In the circumstances, we have been advised that the net proceeds of sale should be apportioned as between the Property and the Adjoining Land. Using the purchase values it is clear that 20% of the Net Proceeds of Sale must be apportioned to the Second Charge Loan. We intend on keeping this matter open for the next fourteen days, following which we will recalculate the net proceeds of sale and update the Platform in due course thereafter. I find the advice baffling on 3 points. 1. There is an explicit statement of priority stated on the 1st charge loan. 2. The 2nd charge loan is named "2nd Charge Barnoldswick (2861004433)" and the 1st charge loan is named "1st Charge Barnoldswick (8010286828)" 3. The 2nd charge loan offers a higher rate. To give them equal status goes against the principles of secured lending, not just FS, not just P2P lending, but all secured lending.
It's probably about who in the 2nd charge loan is threatening legal action despite the blatant evidence. I believe a lot of wealthy people were fooled and humiliated by Fundingsecure and they have the resources for lawyers and the motivation to get even. If it had been me complaining to the Administrators then different outcome. The Fundingsecure people responsible for the whole charade are lucky they didn't take money from hard criminals who don't use lawyers.
I have had a number of loans which fall into the legal challenge category with funds frozen and I'm sure there are more that I wasn't involved in thankfully.
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ilmoro
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Post by ilmoro on Aug 15, 2023 11:52:43 GMT
I find the advice baffling on 3 points. 1. There is an explicit statement of priority stated on the 1st charge loan. 2. The 2nd charge loan is named "2nd Charge Barnoldswick (2861004433)" and the 1st charge loan is named "1st Charge Barnoldswick (8010286828)" 3. The 2nd charge loan offers a higher rate. To give them equal status goes against the principles of secured lending, not just FS, not just P2P lending, but all secured lending.
It's probably about who in the 2nd charge loan is threatening legal action despite the blatant evidence. I believe a lot of wealthy people were fooled and humiliated by Fundingsecure and they have the resources for lawyers and the motivation to get even. If it had been me complaining to the Administrators then different outcome. The Fundingsecure people responsible for the whole charade are lucky they didn't take money from hard criminals who don't use lawyers.
I have had a number of loans which fall into the legal challenge category with funds frozen and I'm sure there are more that I wasn't involved in thankfully.
Usual problem with P2P admin ... they asked a lawyer, probably the wrong question (probably 3 times), and got a seemingly stupid answer ... now where have we seen that before? Perhaps they should just cut out the middle man and just ask the Court. Wouldnt surprise me if it didnt end up there anyway as I suspect there may be people of resource on both sides. Fortunately I can be an interested bystander on this one as I have no loans left with any hope of recovery ... and definitely nothing with FS created priorities.
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adrian77
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Post by adrian77 on Aug 15, 2023 13:02:54 GMT
maybe the case here ? But many hard criminals do use lawyers as they need them to try and stay one step ahead of the law
Personally I think some of the FS board have been stupid, naive and greedy and did not realise what sort of characters they were getting involved with....why the hell we don't have them and others behind bars is a complete loss to me
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Post by lostinspace on Aug 17, 2023 7:08:54 GMT
Is this the property where there is insufficient money in the property to pay the investors despite being a first charge?
If so how can that be. If the borrower lied about it being a first charge then he should face legal action as he committed fraud and will need to repay the lenders.
Funding Secure failed to check it was a first charge , despite this being a simple process linked to the land registry.
FCA failed to check anything that Funding Secure did and approved this company despite not having the knowledge and understanding of how lending against assests work.
So the FCA should be liable for negligence, Funding Secure managers should be liable for either fraud or being negligent, the borrower should be liable for fraud and the lenders liable for allowing them to be conned out of there life savings and trusting the FCA
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ilmoro
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Post by ilmoro on Aug 17, 2023 12:17:16 GMT
Is this the property where there is insufficient money in the property to pay the investors despite being a first charge? If so how can that be. If the borrower lied about it being a first charge then he should face legal action as he committed fraud and will need to repay the lenders. Funding Secure failed to check it was a first charge , despite this being a simple process linked to the land registry. FCA failed to check anything that Funding Secure did and approved this company despite not having the knowledge and understanding of how lending against assests work. So the FCA should be liable for negligence, Funding Secure managers should be liable for either fraud or being negligent, the borrower should be liable for fraud and the lenders liable for allowing them to be conned out of there life savings and trusting the FCA That covers most loans ... first charge just means first dibs on any recovery proceeds. Charge is nothing to do with borrower, it's registered by the lender. FS registers the charge, they should check there aren't existing charges or notices that take priority. In this context the charge is registered & it's a first charge ... the problem is that that FS lawyers say the charge covers two loans so the recovery, which is sufficient to pay the first charge loan, also has to pay the second charge loan & so it doesn't cover the first charge after all. Whether the FCA can interfere in this reinterpretation of stated priorities is a valid question but it post dates authorisation. Not fraud, not negligence, possibly FS incompetence but mainly lawyers.
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Post by gaspilot on Sept 20, 2023 6:47:44 GMT
It's now 40 days since the last update saying they would wait 28 days and then get further legal advice. Does anyone have any further information as to how long this is going to take to sort out? If it has to go to court that would take time and ultimately reduce the amount we get repaid.
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Post by gaspilot on Sept 20, 2023 10:02:10 GMT
A loan of £587,000 secured by a 1st charge on a substantial residential property in Barnoldswick (border between Lancashire and North Yorkshire) with adjoining land.
FundingSecure previously lent £188,000 (loan ref 2861004433) under a second charge with another lender taking the first charge. The borrower now wishes to replace the first charge lender with FundingSecure. The second charge loan remains in place and ranks behind this loan.
It seems pretty clear cut to me.
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adrian77
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Post by adrian77 on Sept 20, 2023 11:10:07 GMT
Had a quick reread of this one - I see Mr *ickles is involved you know a friend of our favourite borrower Mr *ar Originally I said that many of these building projects were problematic which was undoubtably correct However Sir Ozboy and others questioned the ethics of what was going on here which I never initially realised
Mr *ickles keeps cropping up and I feel his significance is key - some days I get out my pen and paper and try to make sense of just what is happening here. I have reached a POSSIBLE conclusion which is this the entire loan book of FS (with the agreement of certain directors was basically under the control of a cabal of borrowers who had a track record of "problematic" loans.
This would explain many things not least why there was this mystery £0.5m injection from Belize and why perfecting charges etc was not done very well!
Sadly for them somebody talked and the rest is history....
This may be total gonads so I am accusing anybody of anything in particular but clearly there is something very,, very wrong here.
At least we had the FCA involved as they have shown their expertise in declaring no people were debanked for their political views - not sure which is the bigger farce this ludicrous statement or FS...
Give me a break!
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ilmoro
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Post by ilmoro on Sept 20, 2023 11:21:17 GMT
It's now 40 days since the last update saying they would wait 28 days and then get further legal advice. Does anyone have any further information as to how long this is going to take to sort out? If it has to go to court that would take time and ultimately reduce the amount we get repaid. There is a comment elsewhere that suggests that it may in part fall within the grasp of Mr Cutie where tranches were issued after the cut-off & that is the problem.
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ilmoro
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Post by ilmoro on Sept 20, 2023 11:26:47 GMT
A loan of £587,000 secured by a 1st charge on a substantial residential property in Barnoldswick (border between Lancashire and North Yorkshire) with adjoining land. FundingSecure previously lent £188,000 (loan ref 2861004433) under a second charge with another lender taking the first charge. The borrower now wishes to replace the first charge lender with FundingSecure. The second charge loan remains in place and ranks behind this loan.It seems pretty clear cut to me. There is no second charge, it's all under the same charge and the current legal position is that means both loans are pari passu ... seems nonsense but then until admin can can a different opinion it's stuck. If it stays as is then it's mis-sold but that just gives lenders a claim against FS ... & they are bust.
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Brainer
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Post by Brainer on Sept 21, 2023 13:29:29 GMT
Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in.
I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc.
What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in.
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ilmoro
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Post by ilmoro on Sept 21, 2023 18:17:57 GMT
Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in. I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc. What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in. Small matter of their debts which are why they are in insolvency in the first place ... FS has very little income, the deductions are to cover costs ... difficult to see true picture as missing info in last set of admin accounts
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sqh
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Post by sqh on Sept 21, 2023 18:55:02 GMT
A loan of £587,000 secured by a 1st charge on a substantial residential property in Barnoldswick (border between Lancashire and North Yorkshire) with adjoining land. FundingSecure previously lent £188,000 (loan ref 2861004433) under a second charge with another lender taking the first charge. The borrower now wishes to replace the first charge lender with FundingSecure. The second charge loan remains in place and ranks behind this loan.It seems pretty clear cut to me. gaspilot It is clear and there was a very good reason for maintaining the priority. Not only is it clear that there is a priority of the tranches. It even specifically states the order of priority. The reason for maintaining the priority was that if the 1st and 2nd charges were merged then the 2nd charge loan would have needed to be repaid early. Rolling up the interest would have pushed the LTV above 70%. For all their failings FS didn't issue 1st charge loans over 70% LTV. Therefore, they kept the 2nd charge and specifically stated the prioritisation. I think Edward understands this but his lawyer doesn't. I think 80% should be paid out to 1st charge holders now and the 20% should be withheld pending a legal claim from those in the 2nd charge. I'm sure plenty of lenders in the first charge will give a Court statement defending their rights in the 1st charge without the need for excessive legal costs.
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Brainer
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Post by Brainer on Sept 22, 2023 13:46:45 GMT
Are they? Seems to me between the 'settlement' fees (where they take 15-20% of the recovery) and the new 5% 'expense contribution', FS are raking it in. I understand there are costs to recovering the loans but most of this comes directly from the loan recoveries themselves before us lenders get the leftovers. E.g. legal fees to do with the recovery, receivers / sales agents, insurance, C&G's 2.5%+VAT etc. What other costs are there? A few staff, most of which should come from C&G's fees given they are likely their employees. A bit of upkeep for the IT system? Some Court hearings? A few CC meetings? C&G's £25k p/a extra fee. I don't see how this is going to total the millions FS is/has pulled in. Small matter of their debts which are why they are in insolvency in the first place ... FS has very little income, the deductions are to cover costs ... difficult to see true picture as missing info in last set of admin accounts In the initial Administrators' Proposals, "trade and expense creditors" totalled £434k. I would guess some of this had/has to be paid keep the administration going. The JC Starr debt is its own thing and (potentially) being taken from lenders' funds not FS'. The other debts are RK and friends, which has nothing to do with the running of the administration, and should just join the creditor queue at the end of the administration.
Very little income? Just from a couple of my loans that finally settled recently, they took over £130k in 'settlement' and 'expense contribution' fees. Across the whole loan book this will seemingly total millions. So back to my question above, are the costs really going to come to that much? Or are CG building a nice pot for creditors?
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adrian77
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Post by adrian77 on Sept 22, 2023 17:01:45 GMT
As I see it this is business and sadly most people who can control the purse strings do so for their own ends - bit like MPs and expenses.
As to why this is taking so long beats me - all they had (in theory) was assets with a charge over them and all they had to do was realise them
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