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Post by Ton ⓉⓞⓃ on Oct 25, 2014 10:23:13 GMT
"il moro's flying pink pigs come to mind!"Have faith....here it is: (e-mail 17:40) "Further to our update we have chased the borrower/introducer today as to why repayment has not yet been achieved ........Whilst we are not happy ........"
We can all relax now until next Tuesday (Diwali not an issue in this one as far as I know). 
Another week and the same old tiresome excuses form Assetz Capital. Their toothless approach in dealing with this type of ongoing nonsense from borrowers such as this is becoming a joke. If, as many lenders had suggested on this forum and in emails to AC, would have issued the letter and instructed the LPA maybe the borrower would be pressured into ensuring repayment of their loan which is now FOUR MONTHS or so overdue. Regardless of the default interest that we may receive someday, I am also concerned by the lack of ability of AC, across all loans, in achieving repayments of loans. Loan extensions just seem to put on hold repayment problems and repeat defaults. My take on this and similar BL's, perhaps I wrong, is that AC believe the Borrower was mistakenly advised to go for a 6mnth bridge, perhaps it should've been 12mnth or some other financial product. As such it's not right to penalize them for that; other than the default rate. In other words the B is doing everything reasonable in the situation, but I may well have missed something. At the same time Lenders were in effect 'mislead' on how long their capital would be tided up like. Then again that's bridging and lending in general.
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j
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Post by j on Oct 25, 2014 10:40:27 GMT
Fret ye not.... there is still time today for the promised update (telling us of the next delay i.e failure of solicitors, accountants, lawyers etc to actually do their jobs in a reasonable and efficient way). Have faith....here it is: (e-mail 17:40) "Further to our update we have chased the borrower/introducer today as to why repayment has not yet been achieved ........Whilst we are not happy ........"
We can all relax now until next Tuesday (Diwali not an issue in this one as far as I know).
Ye of little faith indeed
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Post by oldnick on Oct 25, 2014 10:46:15 GMT
Another week and the same old tiresome excuses form Assetz Capital. Their toothless approach in dealing with this type of ongoing nonsense from borrowers such as this is becoming a joke. If, as many lenders had suggested on this forum and in emails to AC, would have issued the letter and instructed the LPA maybe the borrower would be pressured into ensuring repayment of their loan which is now FOUR MONTHS or so overdue. Regardless of the default interest that we may receive someday, I am also concerned by the lack of ability of AC, across all loans, in achieving repayments of loans. Loan extensions just seem to put on hold repayment problems and repeat defaults. My take on this and similar BL's, perhaps I wrong, is that AC believe the Borrower was mistakenly advised to go for a 6mnth bridge, perhaps it should've been 12mnth or some other financial product. As such it's not right to penalize them for that; other than the default rate. In other words the B is doing everything reasonable in the situation, but I may well have missed something. At the same time Lenders were in effect 'mislead' on how long their capital would be tided up like. Then again that's bridging and lending in general. I will trust AC's judgment on these matters until I have reason not to. P2B is still quite new to me, and the economy still weak, so I'm glad to be able to tap into their collective experience. They will no doubt pull the plug on recalcitrant borrowers when it's appropriate. No one can be more aware of the reputation at stake than AC themselves.
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mikes1531
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Post by mikes1531 on Oct 25, 2014 15:43:40 GMT
As I see it, there's a conflict of interest problem between AC and us lenders. It doesn't cost anyone any money as long as a full recovery is made eventually, but if there's a recovery shortfall we bear the brunt of it and our returns are reduced, whereas AC's return is not affected unless the shortfall is extremely large. The chance of a less-than-full recovery increases the longer the loan goes overdue and the more accrued interest builds up. So AC have much less incentive than we to avoid letting things drag on.
There's also the issue of the timing of the availability of funds. We went into this loan thinking that we'd have our money back again by 20/Jun. That's a long time ago now. The good news is that AC have allowed these overdue loans to be traded on the Aftermarket. But that depends on there being someone willing to take on the capital loss risk in return for the default interest rate. This hasn't been a problem so far, but it's only a matter of time before some loan is unable to make a full recovery. And as soon as that happens, I'd expect that the demand for parts in overdue loans will drop off considerably.
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shimself
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Post by shimself on Oct 25, 2014 16:26:16 GMT
AC have 1 or 2? "insolvency practitioners" on the board, so I would expect them to be competent to judge here. Which judgement is something like, do I think the lender is likely to be able to repay soon, bearing in mind that an LPA will take months and will be costly
So far they have said they won't deal with the (nameless) introducer again so some lesson has been learned.
As long as the LTV holds up we should be ok.
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mikes1531
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Post by mikes1531 on Oct 25, 2014 16:58:23 GMT
As long as the LTV holds up we should be ok. Eventually! We also need to remember that the 'L' in the LTV increases every day that the loan remains unsettled. And that probably makes it harder and harder to make a full recovery the longer the delay continues.
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shimself
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Post by shimself on Oct 26, 2014 22:09:49 GMT
As long as the LTV holds up we should be ok. Eventually! We also need to remember that the 'L' in the LTV increases every day that the loan remains unsettled. And that probably makes it harder and harder to make a full recovery the longer the delay continues. Well I'd settle for 6 months at 12%, another 6 months at 18% and then 6 months at zero. (without prejudice of course he adds hastily)
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sqh
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Post by sqh on Oct 27, 2014 0:08:46 GMT
As long as the LTV holds up we should be ok. Eventually! We also need to remember that the 'L' in the LTV increases every day that the loan remains unsettled. And that probably makes it harder and harder to make a full recovery the longer the delay continues. The original LTV was 69.44%. It then dropped to 61.4% after the refurbishment. Even with all the default interest to date the LTV should be <70%. I wouldn't get concerned about this one until next year.
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mikes1531
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Post by mikes1531 on Oct 27, 2014 17:21:42 GMT
Eventually! We also need to remember that the 'L' in the LTV increases every day that the loan remains unsettled. And that probably makes it harder and harder to make a full recovery the longer the delay continues. The original LTV was 69.44%. It then dropped to 61.4% after the refurbishment. Even with all the default interest to date the LTV should be <70%. I wouldn't get concerned about this one until next year. has a valid point, and I hope he's right, though I suspect the post-development valuation was made in advance from plans, and the actual refurbishment might not have occurred exactly as planned. However, I'm becoming increasingly aware and concerned about valuations that seem to be based more often than not on the expected sale price that could be achieved after a normal marketing period, which can be up to a year. If AC ever have to enforce their security by selling a property with a shorter marketing period -- or at auction -- then the proceeds could turn out to be quite a bit less than the 'valuation'. And this is particularly an issue with properties that are somewhat unique -- which I would suggest would include a £1M+ property in Anglesey. (Other properties in this category would be things like hotels, etc.) I don't have enough experience with receivers/administrators to know how large their fees are, but those have to be paid out of the sale proceeds, as do all the costs of selling. I'm coming to the conclusion that any time the LTV exceeds 70% there's a significant risk that it would be impossible for AC to make a full recovery for its investors if they had to force the sale of the security. And that's without considering the cases where the security is a debenture over a business where the assets are specialised equipment, stock, and/or customer invoices, where it could be even more difficult to achieve proceeds that are 70+% of the valuations. Then there are personal guarantees...
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niceguy37
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Post by niceguy37 on Oct 27, 2014 17:35:48 GMT
The original LTV was 69.44%. It then dropped to 61.4% after the refurbishment. Even with all the default interest to date the LTV should be <70%. I wouldn't get concerned about this one until next year. has a valid point, and I hope he's right, though I suspect the post-development valuation was made in advance from plans, and the actual refurbishment might not have occurred exactly as planned. However, I'm becoming increasingly aware and concerned about valuations that seem to be based more often than not on the expected sale price that could be achieved after a normal marketing period, which can be up to a year. If AC ever have to enforce their security by selling a property with a shorter marketing period -- or at auction -- then the proceeds could turn out to be quite a bit less than the 'valuation'. And this is particularly an issue with properties that are somewhat unique -- which I would suggest would include a £1M+ property in Anglesey. (Other properties in this category would be things like hotels, etc.) I don't have enough experience with receivers/administrators to know how large their fees are, but those have to be paid out of the sale proceeds, as do all the costs of selling. I'm coming to the conclusion that any time the LTV exceeds 70% there's a significant risk that it would be impossible for AC to make a full recovery for its investors if they had to force the sale of the security. And that's without considering the cases where the security is a debenture over a business where the assets are specialised equipment, stock, and/or customer invoices, where it could be even more difficult to achieve proceeds that are 70+% of the valuations. Then there are personal guarantees... Wouldn't an opt-in provision fund be nice?
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oldgrumpy
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Post by oldgrumpy on Oct 27, 2014 17:44:21 GMT
"Wouldn't an opt-in provision fund be nice?" Ooooh! We know what andrewholgate has said from the very start about those! We also know what he has said from the start are Assetz's superior practices which are better than provision funds.  We seem to be inching nearer to testing the efficacy of those practices.... sooner or later... not just FF.
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mikes1531
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Post by mikes1531 on Oct 27, 2014 18:16:34 GMT
Wouldn't an opt-in provision fund be nice? Is that really necessary? If you're worried about a loan, just put all your units up for sale as soon as you start feeling uncomfortable. In this case, I expect the 18% interest rate would attract enough buyers to take your holding off your hands soon enough.
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niceguy37
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Post by niceguy37 on Oct 27, 2014 22:49:36 GMT
Wouldn't an opt-in provision fund be nice? Is that really necessary? If you're worried about a loan, just put all your units up for sale as soon as you start feeling uncomfortable. In this case, I expect the 18% interest rate would attract enough buyers to take your holding off your hands soon enough. The provision fund has a big advantage for higher-rate tax payers. You can see RateSetter's massive growth, much of which is due to the comfort and tax advantage a well-financed provision fund provides.
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bugs4me
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Post by bugs4me on Oct 27, 2014 23:02:08 GMT
Is that really necessary? If you're worried about a loan, just put all your units up for sale as soon as you start feeling uncomfortable. In this case, I expect the 18% interest rate would attract enough buyers to take your holding off your hands soon enough. The provision fund has a big advantage for higher-rate tax payers. You can see RateSetter's massive growth, much of which is due to the comfort and tax advantage a well-financed provision fund provides. I don't feel comparing RS with AC is comparing apples with apples. They are two different business models IMO. Agreed RS has achieved respectable growth but I suspect a great many of those funds have come from Z***, attracted by the higher rates, platform flexibility and lending speed (should you choose the correct rate to loan at). Just look at the growth that W*******y has achieved.
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mikes1531
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Post by mikes1531 on Oct 28, 2014 4:02:37 GMT
Is that really necessary? If you're worried about a loan, just put all your units up for sale as soon as you start feeling uncomfortable. In this case, I expect the 18% interest rate would attract enough buyers to take your holding off your hands soon enough. The provision fund has a big advantage for higher-rate tax payers. You can see RateSetter's massive growth, much of which is due to the comfort and tax advantage a well-financed provision fund provides. I'm sure the provision fund has helped RS, but so has offering lenders about 1% more return than Zopa has. Provision funds are more necessary for unsecured loans than for secured loans. As for the tax situation, I expect that any failure to make a full recovery upon selling the security to produce the proceeds to repay lenders mostly will mean loss of accrued interest rather than capital -- this is what I'm expecting at FF -- so capital losses will be few and far between and being a higher-rate taxpayer will be of little consequence. But that's JMHO.
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