c88dnf
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Post by c88dnf on Jun 17, 2017 18:21:55 GMT
In case anyone's missed the joy of having a late FC property loan, three more went late on Friday. One hoping to refinance with FC and its investors (which certainly won't be including me), one seeking external refinance and the last because the expected sale has been delayed. Happily, investors are promised 2% interest over the loans' stated rates, payable when (if?) the loan is repaid.
Has anyone got a chart showing the proportion of FC's property loans now overdue?
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easylender
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Post by easylender on Jun 17, 2017 20:10:25 GMT
It's quite normal for property loans to run late, and it's good for lenders because we get additional interest. I too have a surge of new late property loans but that's because there were a lot of them launched 6 months ago, so I'm not worried about that. Of course what does worry me is those which have been late for a long time, and although I have a few notorious ones I don't see their numbers increasing yet.
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c88dnf
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Post by c88dnf on Jun 18, 2017 0:00:46 GMT
It's quite normal for property loans to run late, and it's good for lenders because we get additional interest. I too have a surge of new late property loans but that's because there were a lot of them launched 6 months ago, so I'm not worried about that. Of course what does worry me is those which have been late for a long time, and although I have a few notorious ones I don't see their numbers increasing yet. I'm glad you're comfortable with the situation. I am not. I'd still be interested to know what percentage of FC's loans are now late and how that number has changed over the past 12 months. My guess is that it's grown quite significantly. Remember, rolling over loans into new ones doesn't equal financial stability.
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pickles
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Post by pickles on Jun 18, 2017 11:21:38 GMT
Strictly speaking Luton is not actually late yet - payment date is today and shown as "processing". BH (Cumbria) was due to pay last Friday but is still showing as 0 days late.
I've noticed a strange phenomenon on the SM where my property loans are snapped up just after the third payment from the end. This is despite having the max premium applied and my having other more attractively priced parts for sale but half-way between payment dates (ie 1.5 or 2.5 months from final payment). I'm not sure if they don't realise how the interest works on parts bought on the SM? But, that aside, they are buying a two month loan paying around 4% with a high chance of not paying on time and being unsaleable. You could do better than that buying at a decent rate and selling at par, even after fees. Or are they actually hoping they go overdue, so they get 12% for an unknown period? It's a bit of a mystery.
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fasty
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Post by fasty on Jun 18, 2017 11:29:06 GMT
Strictly speaking Luton is not actually late yet - payment date is today and shown as "processing". BH (Cumbria) was due to pay last Friday but is still showing as 0 days late. I've noticed a strange phenomenon on the SM where my property loans are snapped up just after the third payment from the end. This is despite having the max premium applied and my having other more attractively priced parts for sale but half-way between payment dates (ie 1.5 or 2.5 months from final payment). I'm not sure if they don't realise how the interest works on parts bought on the SM? But, that aside, they are buying a two month loan paying around 4% with a high chance of not paying on time and being unsaleable. You could do better than that buying at a decent rate and selling at par, even after fees. Or are they actually hoping they go overdue, so they get 12% for an unknown period? It's a bit of a mystery. I'm quite sure that there are people who simply don't understand the SM properly. More than once I have had "E" band loans bought at +3% premium while parts from the same loan are available at around +0.5%.
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adrian77
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Post by adrian77 on Jun 18, 2017 14:00:34 GMT
ref ---It's quite normal for property loans to run late, and it's good for lenders because we get additional interest--- agreed that is the theory but these are interest only loans and (I have the tee-shirt) having a late running development with a large loan clocking up daily interest can easily end in tears. Personally I only buy property loans in order to flip them....believe me partly completed developments command a very hefty discount (25% minimum in my experience).
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easylender
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Post by easylender on Jun 18, 2017 16:38:47 GMT
A snapshot of my property loans on 28th May shows: - Repaid 158
- Late 4
- Processing 2
- Live 101
which looks good to me.
Looking back to a snapshot on 14th March there were 6 late and 1 processing.
So I have no evidence of a build up of late property loans - though I admit some have been refinanced.
Does anyone else have any evidence, or do you have other ways of knowing what's true?.
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c88dnf
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Post by c88dnf on Jun 18, 2017 19:53:41 GMT
A snapshot of my property loans on 28th May shows: - Repaid 158
- Late 4
- Processing 2
- Live 101
which looks good to me.
Looking back to a snapshot on 14th March there were 6 late and 1 processing.
So I have no evidence of a build up of late property loans - though I admit some have been refinanced.
Does anyone else have any evidence, or do you have other ways of knowing what's true?.
As you haven't indicated the relative sizes of the loans, that data is of limited use. My loans are pretty much all the same value (in theory to limit my exposure to any single business or situation) and the relative numbers are: Bad Debt - 5 Late - 14 Processing - 2 (background comments indicate they will be late) Live - 48 Net - bad news items are 30.4% of my total portfolio. That certainly wasn't the case 12 months ago.
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easylender
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Post by easylender on Jun 18, 2017 21:45:55 GMT
All my property loans are of the same size and so my data is useful. I am only including property development loans secured with a 1st charge, none of which have been graded as bad debt. What are you including c88dnf? Looks like SME loans to me. To be useful please also include the number of repaid loans in your sample.
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trevor
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Post by trevor on Jun 18, 2017 21:54:11 GMT
Overdue = +2%. suits me.
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easylender
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Post by easylender on Jun 18, 2017 22:05:54 GMT
That's very good trevor - my proportion overdue (late + processing)/repaid is 3.8%.
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c88dnf
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Post by c88dnf on Jun 18, 2017 23:55:00 GMT
All my property loans are of the same size and so my data is useful. I am only including property development loans secured with a 1st charge, none of which have been graded as bad debt. What are you including c88dnf? Looks like SME loans to me. To be useful please also include the number of repaid loans in your sample. All my loans are also 1st charge and bought as A+/A investments as first offered by FC. None bought via the secondary market. My total number of repaid loans is 180, but that's over several years, so the relevance to today's situation is not very high IMHO. Bottom line: you're happy with your property investments on FC which is great and I wish you luck in the future. I won't touch FC with a bargepole.
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blender
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Post by blender on Jun 19, 2017 7:51:23 GMT
Question: What is the property most commonly held by FC investors?
Answer: An unused barge-pole.
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easylender
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Post by easylender on Jun 19, 2017 8:04:42 GMT
Oh dear c88dnf, those are really bad results for secured loans. I wasn't aware that any had become classified as bad debts. I'm surprised not to have heard more about them on here. What are their numbers?
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c88dnf
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Post by c88dnf on Jun 19, 2017 9:47:15 GMT
Oh dear c88dnf, those are really bad results for secured loans. I wasn't aware that any had become classified as bad debts. I'm surprised not to have heard more about them on here. What are their numbers? They are the London loans (14978 et al) extensively discussed in another FC thread on this forum. The Borehamwood set of loans (also a thread on this forum) and Tewkesbury loans are looking very dodgy too. FC are trying to refinance Borehamwood as a "B", downgraded from A, but it isn't exactly flying off the shelf: 45% filled after 3 days on a 77% LTV after two attempts to get a valuation which was acceptable.
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