mikes1531
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Post by mikes1531 on Oct 7, 2014 22:09:22 GMT
Regarding paying the default interest to date. There's always the possibility that the borrower simply hasn't got the funds to do so. Like many I watch many a TV programme where the owner vastly underestimates the cost of refurbishment/renovation and not just by a few thousand here and there. Often banks/BS simply will not lend on work in progress. I don't suppose it's really a likely possibility, but if the cause of the delay really is Aldermore, and that it's because of that delay that AC are threatening to call in a receiver and sell off the property in a 'fire sale' auction, then perhaps the borrower could persuade Aldermore that if they want the business maybe they'd be willing to advance the default interest to AC to keep them from pulling the plug and leaving Aldermore and the borrower high and dry? I expect that Aldermore will have invested a fair amount of time into this project and really wouldn't want it to go pear-shaped. Then again, I don't expect the borrower has a lot of bargaining power with Aldermore inasmuch as they know that if they don't make the loan the borrower would lose the property, and some/most of their equity in the process. For all I know -- and I know nothing -- maybe Aldermore are dragging their feet to put pressure on the borrower and to get them to agree terms that would be more favourable to Aldermore than those previously offered/agreed. Or is that being too cynical?
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Oct 7, 2014 22:17:52 GMT
Regarding paying the default interest to date. There's always the possibility that the borrower simply hasn't got the funds to do so. Like many I watch many a TV programme where the owner vastly underestimates the cost of refurbishment/renovation and not just by a few thousand here and there. Often banks/BS simply will not lend on work in progress. I don't suppose it's really a likely possibility, but if the cause of the delay really is Aldermore, and that it's because of that delay that AC are threatening to call in a receiver and sell off the property in a 'fire sale' auction, then perhaps the borrower could persuade Aldermore that if they want the business maybe they'd be willing to advance the default interest to AC to keep them from pulling the plug and leaving Aldermore and the borrower high and dry? I expect that Aldermore will have invested a fair amount of time into this project and really wouldn't want it to go pear-shaped. Then again, I don't expect the borrower has a lot of bargaining power with Aldermore inasmuch as they know that if they don't make the loan the borrower would lose the property, and some/most of their equity in the process. For all I know -- and I know nothing -- maybe Aldermore are dragging their feet to put pressure on the borrower and to get them to agree terms that would be more favourable to Aldermore than those previously offered/agreed. Or is that being too cynical? Dont suppose its got anything to do with Aldermore being distracted by their imminent floatation? Will have shareholders to think about, publicly reported accounts etc. 
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Post by Ton ⓉⓞⓃ on Oct 7, 2014 23:14:52 GMT
In some way the Borrower might have to throw in more money or some other assets to make it more realistic for the new lenders to have security. I'm guessing that Ald****** are having to value & weigh up a larger more complex deal than we originally looked at, so Anglesey is turning into Ippy & Eppy for Ald******.
I just hope the guy can sell or get BtL mortgages in the long term. Do we know if the New Lender is again bridging.
The Leeds Comm. Prop. is a 5y business loan, but the borrower is using it as a bridge, there are similar deals too.
Anglesey and the other defaulting bridges make it quite clear that you actually have to HAVE the exit clear when you go into a six month bridge loan. Not simply be looking for it or just waiting for a buyer. The Kent deal seems to have it about right assuming the PP appeal is okay and a builder & full plans and a new loan are lined up... They seem well organized just as the Essex loan must be to be drawn so quickly.
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mark
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Post by mark on Oct 8, 2014 9:17:19 GMT
Excellent comments from all the above contributors...
Regarding the disappointing but expected usual ' update ' from AC, I have some comments and questions and concerns over the current position and action, or lack of, from AC and question their diligence in allowing this loan to get to where we are.
Firstly, regarding the alleged refinancing with Aldermore, I find it difficult to believe that refinancing is STILL progressing after five months without proof or any evidence or supporting documentation provided to lenders. Aldermore's refinancing originally had a deadline of 19th June , so effectively the application with Aldermore for refinancing must of commenced weeks before this date. Are we really to believe that the application legal process has taken five months so far ? and if so why ?.
Apparently AC have been ' told ' that repayment is expected by the end of the month. Lenders have been told this before that payment will be made by the end of June or by the beginning of Oct. Each time we have been 'updated' by AC informing us that they 'see' no reason why repayment should not happen as scheduled.
Well, how about start looking a little bit more closely and obtaining actual assurances. AC should be demanding supporting documentation from the borrower to what they are being 'told' prior to deadline days.
Has AC seen any recent documentation from Aldermore to support the borrowers claims of slow progress ?. are they able to confirm this with Aldermore ? as the first charge holder they must have been in communication with them and, if so, give us some details.
I personally believe that AC's softly softly approach to borrowers who default together with their empty warnings of dates for demand letters being issued ect. could lead borrowers to believe that they can relax regarding any action being taken. What happens if we come the end of the month the alledged refinancing is still progressing ? will AC decide on our behalf to reserve the right to demand as waiting for refinancing to complete will be a quicker option for repayment.
I believe in AC being a fairer option for borrowers that traditional lenders but after five months of grace and extension for this loan maybe it is time for some action. Issue the demand letter , the borrower can still progress with the refinancing but at least we will have some form of progress and timetable for repayment.
Default interest is being applied and the apparent LTV is good but only in so far as what we are told. Has AC visited the property since the loan drawdown ? What proof is there that the refurb work has been completed other than the borrorwer's word. Is this the reason for the delay
I believe that we should be given access any to supporting documentation for the refinancing, completion of project and property details as I am uneasy now with the current situation and with not being able to do my own due diligence regarding this property.
This is what I would request in any future update rather that the same old placation.
Copied to AH and DR
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bugs4me
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Post by bugs4me on Oct 8, 2014 9:34:02 GMT
Excellent comments from all the above contributors... Regarding the disappointing but expected usual ' update ' from AC, I have some comments and questions and concerns over the current position and action, or lack of, from AC and question their diligence in allowing this loan to get to where we are. Firstly, regarding the alleged refinancing with Aldermore, I find it difficult to believe that refinancing is STILL progressing after five months without proof or any evidence or supporting documentation provided to lenders. Aldermore's refinancing originally had a deadline of 19th June , so effectively the application with Aldermore for refinancing must of commenced weeks before this date. Are we really to believe that the application legal process has taken five months so far ? and if so why ?. Apparently AC have been ' told ' that repayment is expected by the end of the month. Lenders have been told this before that payment will be made by the end of June or by the beginning of Oct. Each time we have been 'updated' by AC informing us that they 'see' no reason why repayment should not happen as scheduled. Well, how about start looking a little bit more closely and obtaining actual assurances. AC should be demanding supporting documentation from the borrower to what they are being 'told' prior to deadline days. Has AC seen any recent documentation from Aldermore to support the borrowers claims of slow progress ?. are they able to confirm this with Aldermore ? as the first charge holder they must have been in communication with them and, if so, give us some details. I personally believe that AC's softly softly approach to borrowers who default together with their empty warnings of dates for demand letters being issued ect. could lead borrowers to believe that they can relax regarding any action being taken. What happens if we come the end of the month the alledged refinancing is still progressing ? will AC decide on our behalf to reserve the right to demand as waiting for refinancing to complete will be a quicker option for repayment. I believe in AC being a fairer option for borrowers that traditional lenders but after five months of grace and extension for this loan maybe it is time for some action. Issue the demand letter , the borrower can still progress with the refinancing but at least we will have some form of progress and timetable for repayment. Default interest is being applied and the apparent LTV is good but only in so far as what we are told. Has AC visited the property since the loan drawdown ? What proof is there that the refurb work has been completed other than the borrorwer's word. Is this the reason for the delay I believe that we should be given access any to supporting documentation for the refinancing, completion of project and property details as I am uneasy now with the current situation and with not being able to do my own due diligence regarding this property. This is what I would request in any future update rather that the same old placation. Copied to AH and DR Good points made and I have thought for some time it would be cleaner and easier if AC simply allowed another loan for a further 6 months assuming everything stacks up. Certainly those lenders/investors that wished to exit would be able to do so cleanly. From the list of 'extensions' on the AM it is obvious that a BL for just 6 months is far too optimistic. Easier I would have thought to have these for say a 12 month term with a minimum of 6 months payable interest to investors in the unlikely event of an early repayment. Probably though a case of me being wise after the event.
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hendragon
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Post by hendragon on Oct 8, 2014 11:52:00 GMT
I have a quote from a different thread/platform." There is a difference between the ability to pay, and the ability to pay on time." This may have some relevance here
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niceguy37
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Post by niceguy37 on Oct 8, 2014 13:36:28 GMT
Excellent comments from all the above contributors... Regarding the disappointing but expected usual ' update ' from AC, I have some comments and questions and concerns over the current position and action, or lack of, from AC and question their diligence in allowing this loan to get to where we are. Firstly, regarding the alleged refinancing with Aldermore, I find it difficult to believe that refinancing is STILL progressing after five months without proof or any evidence or supporting documentation provided to lenders. Aldermore's refinancing originally had a deadline of 19th June , so effectively the application with Aldermore for refinancing must of commenced weeks before this date. Are we really to believe that the application legal process has taken five months so far ? and if so why ?. Apparently AC have been ' told ' that repayment is expected by the end of the month. Lenders have been told this before that payment will be made by the end of June or by the beginning of Oct. Each time we have been 'updated' by AC informing us that they 'see' no reason why repayment should not happen as scheduled. Well, how about start looking a little bit more closely and obtaining actual assurances. AC should be demanding supporting documentation from the borrower to what they are being 'told' prior to deadline days. Has AC seen any recent documentation from Aldermore to support the borrowers claims of slow progress ?. are they able to confirm this with Aldermore ? as the first charge holder they must have been in communication with them and, if so, give us some details. I personally believe that AC's softly softly approach to borrowers who default together with their empty warnings of dates for demand letters being issued ect. could lead borrowers to believe that they can relax regarding any action being taken. What happens if we come the end of the month the alledged refinancing is still progressing ? will AC decide on our behalf to reserve the right to demand as waiting for refinancing to complete will be a quicker option for repayment. I believe in AC being a fairer option for borrowers that traditional lenders but after five months of grace and extension for this loan maybe it is time for some action. Issue the demand letter , the borrower can still progress with the refinancing but at least we will have some form of progress and timetable for repayment. Default interest is being applied and the apparent LTV is good but only in so far as what we are told. Has AC visited the property since the loan drawdown ? What proof is there that the refurb work has been completed other than the borrorwer's word. Is this the reason for the delay I believe that we should be given access any to supporting documentation for the refinancing, completion of project and property details as I am uneasy now with the current situation and with not being able to do my own due diligence regarding this property. This is what I would request in any future update rather that the same old placation. Copied to AH and DR Good points made and I have thought for some time it would be cleaner and easier if AC simply allowed another loan for a further 6 months assuming everything stacks up. Certainly those lenders/investors that wished to exit would be able to do so cleanly. From the list of 'extensions' on the AM it is obvious that a BL for just 6 months is far too optimistic. Easier I would have thought to have these for say a 12 month term with a minimum of 6 months payable interest to investors in the unlikely event of an early repayment. Probably though a case of me being wise after the event. IMHO there's no fundamental problem with the 6 month bridging loan. We get a useful default interest, which must compensate the risk somewhat, but also it ought to focus the borrower's mind. But lenders would be more comfortable if there were site visits / valuations / evidence of refinance offers etc, to be sure that work is done, progress is being made and security margins are comfortable, from the 5th or 6th month mark. Also the default interest needs to be paid weekly or monthly as it accrues, rather than rolled up against the eventual repayment. My concern in giving a borrower 12 months when they think they need 6 might fit with our experience with this current batch of bridging loans, but it doesn't entitle us after 6 months to step up the interest rate, the level of oversight and the possibility of calling in the big guns if needed.
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Post by cyrilmadrid on Oct 8, 2014 16:44:57 GMT
Don't mind having some money stuck a little longer at 18 % in these bridging loans, assuming they do refinance at some time.
What is worrying is that at 18 % per annum, LTV increases quite quickly and should a short sale take place, not sure we would get all the money back...
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mikes1531
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Post by mikes1531 on Oct 8, 2014 18:29:03 GMT
What is worrying is that at 18 % per annum, LTV increases quite quickly and should a short sale take place, not sure we would get all the money back... And furthermore, the priority for the distribution of sale proceeds is such that payment of lenders' accrued interest is last in the queue. Which puts it behind the payment of AC's fees and their costs incurred in dealing with the default. If there is a shortfall in the proceeds, it is the lenders who suffer most. There's an example of this in the FundingSecure P2PIF thread. The following is a bit I wrote there about a month ago... (The whole of my message is available here.) The numbers will be different for an AC default, but the principle is the same -- AC seem to have a bit of a conflict of interest with their lenders in a default situation because they have little or no financial incentive to bring the settlement to a conclusion quickly.
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mark
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Post by mark on Oct 8, 2014 22:42:05 GMT
And the silence fron AC to this thread is deafening. A contribution or response from AH or DW would be helpful. I have messaged both in hope.
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Post by andrewholgate on Oct 9, 2014 16:01:31 GMT
And the silence fron AC to this thread is deafening. A contribution or response from AH or DW would be helpful. I have messaged both in hope. A tad harsh. I am running a business which means I can't always be on the forum checking posts and commenting. I will revert once I have spoken to the team. A
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Post by andrewholgate on Oct 9, 2014 16:16:11 GMT
OK.
I have seen a copy of the refinancing agreement from the bank in question. It is genuine. I've also seen the chasers being sent to said bank and until they sort things out, we are stuck. I have asked DR to get a fuller update sorted for lenders.
Andrew
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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
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Post by ilmoro on Oct 14, 2014 12:26:30 GMT
Update. Refinance now expected by Friday 17. Like buses these loans, wait for ages and then 3 potentially come along at once. This , H***ney & LTL 7 all this week! Just need the new site & it will be like Xmas  |
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niceguy37
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Post by niceguy37 on Oct 14, 2014 12:49:43 GMT
Update. Refinance now expected by Friday 17. Like buses these loans, wait for ages and then 3 potentially come along at once. This , H***ney & LTL 7 all this week! Just need the new site & it will be like Xmas Hopefully the inflow of repayments will help shift some of the aftermarket backlog. It is encouraging to see the results of AC's firmer stance on some of the bridging loans.
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Post by Ton ⓉⓞⓃ on Oct 14, 2014 13:06:00 GMT
Update. Refinance now expected by Friday 17. Like buses these loans, wait for ages and then 3 potentially come along at once. This , H***ney & LTL 7 all this week! Just need the new site & it will be like Xmas Hopefully the inflow of repayments will help shift some of the aftermarket backlog. It is encouraging to see the results of AC's firmer stance on some of the bridging loans. I'm sure you're right. But don't forget the boost to confidence, I'm thinking there will be increased flows of money into AC now.
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