r00lish67
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Post by r00lish67 on Jan 12, 2018 14:42:36 GMT
As a general point, and not specifically directed to this loan, I'd like to see all platforms demonstrating sufficient confidence in the accuracy of the VRs they submit to borrowers that they actually put their money where their mouth is by underwriting it ie. committing to make the shortfall in any sale price in the event of default and associated sale. VR accurate? No problem! If a platform doesn't have sufficient faith the VR is accurate, they have absolutely no business putting it forward as a valid component of any borrowing proposal...and if they choose to do so anyway, I'd like to see them cough up any valuation "gaps" as required (rather than me). But, as mrc alluded to earlier, they won't do this as it would destroy their business model. There are platforms/products that do property loans and then 'fill the gap', e.g. Ratesetter, Landbay, but their rates are less than half of MT/LY/FS, for exactly that reason. IMV, when looking at VR's on MT/LY/FS/Coll, one shouldn't ask whether you're being screwed over,but just by how much.I'm in this one, btw. I am keen to see the 'autopsy', but also just glad it's being resolved quickly, as I have others on FS which have now seen two Christmases and for which I've probably lost just as much as this one, by not being able to deploy the capital elsewhere. I can also at least reduce my tax bill a little, silver lining etc etc.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jan 12, 2018 14:45:11 GMT
Fellow Investors, you all know EXACTLY what is going on. It doesn't just border on, it IS .................... No-one wanted to know just over a year ago when I first started voicing my disgust with the VRs & LTVs being foisted on us. Everyone was quite apathetic and accepting that this was the norm and that you just had to put up with it. This prevailing attitude was astounding to me, it was all extremely clear & obvious what the motivations were, I felt like The Lone Ranger at the time. Well, everyone seems to suddenly care now - a lot! SO, either put up with it, and pay through the nose, or DO something about it.I thank you. PS - I have thought hard about how to resolve this as fast as possible, unfortunately you are urinating into the wind contacting The FCA, Ombudsman, Platforms etc. IMHO, the single most effective thing to do is contact your Member of Parliament. In my experience nothing works as magically as an issue being raised and Questions being asked in Parliament!
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elliotn
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Post by elliotn on Jan 12, 2018 14:52:34 GMT
As a general point, and not specifically directed to this loan, I'd like to see all platforms demonstrating sufficient confidence in the accuracy of the VRs they submit to borrowers that they actually put their money where their mouth is by underwriting it ie. committing to make the shortfall in any sale price in the event of default and associated sale. VR accurate? No problem! If a platform doesn't have sufficient faith the VR is accurate, they have absolutely no business putting it forward as a valid component of any borrowing proposal...and if they choose to do so anyway, I'd like to see them cough up any valuation "gaps" as required (rather than me). P2P platforms aren't able to guarantee losses (unlike FSCS) and FCA would look askance at the platform risk. Timely, transparent data for any non-performance should help provide investor protection under the current regulations (ie to encourage innovation whilst investors are kept up to date with risks).
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Post by mrclondon on Jan 12, 2018 14:55:52 GMT
As snowmobile and SteveT have correctly pointed out MT did apparently request a valuation "in present condition and utilised as office accomodation", which the valuer has interpreted as based on the existing lease of £60k pa (which he earlier points out is above market rate). However he justifies the valuation based on £50k pa in para 41 (final para) saying the valuation equates to 7.96% investment yield (VR typo actually 7.69%), and quoting comparables as a range of 7% to 8.5% investment yield. The VR notes the building was unoccupied as at March 17 (para 22) but MT didn't provide us with any details as to whether there was any rental income from the existing lease, in the absense of which it seems reasonable to assume there was no rental income. The present condition is therefore essentially untenanted, and MT didn't request a valuation for this situation, if their request was indeed as vague as the valuer stated "in present condition and utilised as office accomodation".
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snowmobile
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Post by snowmobile on Jan 12, 2018 15:35:56 GMT
I think its worth considering at this point the fact that the valuation was not an as is valuation of the property (untentanted office accomodation) but a residual value valuation based on a development scheme given outline planning approval. Certainly that is one of the market values the Valuer was instructed to assess, but the other was "Market value of freehold interest in present condition and utilised as office investment". His assessment of the market value on this basis was the same figure, £650k, based on his estimated market rent of £50k pa (which he observed was lower than the current rental income of £60k pa). I took some assurance from the fact that, if the development did not proceed, there was an alternative use for the building that should support a similar valuation. The truth appears very different and, although we've no insight into why no-one sees anything like this value in the building as an office investment, it is this valuation that I think should be challenged.(crossed with snowmobile ) Indeed if a new tenancy of £50k pa is achievable, why haven't any the numerous parties viewing this property been prepared to offer more ![:-S](//storage.proboards.com/forum/images/smiley/wavey.png) At the accepted offer price it could be a very attractive yield. Is the £50k pa achievable or is this the basis upon which the valuation has been overstated I wonder? It occurs to me that the borrower and 'absent tenant' may be connected in some way. Why else would the building be let at a higher than market rent?
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TFTO
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Post by TFTO on Jan 12, 2018 16:18:15 GMT
I am not in this one – I no longer invest in property loans thanks to these rubbish VRs and the platforms casual attitude to their lenders.
I actually think the platforms should be held responsible, several have jumped on the property “dash for trash” over the past couple of years – with Lendy always being there. They are happy to allow VRs to match whatever amount the borrow requires - but then they would as the up-front fees make a nice little profit.
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Post by munchydave on Jan 12, 2018 17:58:16 GMT
I am not in this one – I no longer invest in property loans thanks to these rubbish VRs and the platforms casual attitude to their lenders. I actually think the platforms should be held responsible, several have jumped on the property “dash for trash” over the past couple of years – with Lendy always being there. They are happy to allow VRs to match whatever amount the borrow requires - but then they would as the up-front fees make a nice little profit. Today i decided to stop all lending on P2P sites for the moment. I will let loans run their course and take the money out as it comes in and will sit and wait for the defaults to I hope give some return over the next few months. Loans secured on property should be a good investment but with the increase in defaults across many lending platforms it is obvious that the information we are being given is of poor quality and resembles more of a sales pitch to draw investors in rather than an accurate set of facts on which to base my choice as to what and to who I want to invest. Valuations are a joke. In most cases when it goes in default property is sold for less than the loan even though we are told the magic 70% applies.
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7d7
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Post by 7d7 on Jan 12, 2018 18:09:31 GMT
I would like to know what p2p lending companies are doing to put an end to the fallacious valuation practice observed at present. While it might be tolerable in the short term, I cannot see the industry surviving in the long run. If lenders lack confidence in the valuation reports displayed, the presented security becomes worthless resulting in no investment. There is no p2p business without lenders and platforms will go bust. It's about time action is taken before it gets too late.
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Post by munchydave on Jan 12, 2018 20:33:52 GMT
I would like to know what p2p lending companies are doing to put an end to the fallacious valuation practice observed at present. While it might be tolerable in the short term, I cannot see the industry surviving in the long run. If lenders lack confidence in the valuation reports displayed, the presented security becomes worthless resulting in no investment. There is no p2p business without lenders and platforms will go bust. It's about time action is taken before it gets too late. It's not even tolerable in the short term, it is fraud. Loans are being offered on property that is overvalued and that is very obvious now the defaults are coming in. Loans are also, it would seem in some cases, given to borrowers who if the full facts were known would never get money from any of us. At the moment money in the bank at 0% is possibly a better deal than 15% in P2P with defaults. I will have a more accurate picture by April when I start to prepare for next years tax returns but I expect to just about break even over 8 different sites or make a small overall loss. Is it worth the effort? The platforms that seem to make some effort to do the DD on loans and just not take anything that comes their way are finding it difficult to get anything to invest in as they reject the low quality loans others accept. Vote with your money.
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Post by df on Jan 12, 2018 20:37:00 GMT
Significant update on MT. Prepare yourselves for a loss I would have expected to receive an e-mail from MT or is it just me who didn't receive it? It is quite a significant update that IMO should be communicated to lenders. If I wasn't reading the forum I wouldn't find out until the next 'pending loans' occasion. Thank you dan1 ! The actual fact didn't upset me. I wasn't overexposed in this loan and the projected loss of capital is insignificant to compare with the income I received from MT for the past 12 months. I like that MT decided to sell the asset at the real price instead of waiting for miracles. When investing in property loans I expect some losses and rather have a proportion of my capital returned sooner so I can reinvest it instead of being locked in failed projects.
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Post by df on Jan 12, 2018 21:33:37 GMT
I would like to know what p2p lending companies are doing to put an end to the fallacious valuation practice observed at present. While it might be tolerable in the short term, I cannot see the industry surviving in the long run. If lenders lack confidence in the valuation reports displayed, the presented security becomes worthless resulting in no investment. There is no p2p business without lenders and platforms will go bust. It's about time action is taken before it gets too late. It's not even tolerable in the short term, it is fraud. Loans are being offered on property that is overvalued and that is very obvious now the defaults are coming in. Loans are also, it would seem in some cases, given to borrowers who if the full facts were known would never get money from any of us. At the moment money in the bank at 0% is possibly a better deal than 15% in P2P with defaults. I will have a more accurate picture by April when I start to prepare for next years tax returns but I expect to just about break even over 8 different sites or make a small overall loss. Is it worth the effort? The platforms that seem to make some effort to do the DD on loans and just not take anything that comes their way are finding it difficult to get anything to invest in as they reject the low quality loans others accept. Vote with your money. I don't think it is fraud, it is common practice that we wish to be changed. I agree, if everything was valued at fire sale price most of these loans wouldn't have chance of being funded, but that's something that we have to accept - high interest rates involves high risk. Money in the bank at 0% is not a better deal. If you diversify across loans and platforms you can get a decent return. I had losses, but not much comparing to gains. Some proportion of my loan book is 15%+ and most of them are paying. Percentage doesn't always represent the risk involved. Overall, MT is one of the best in 10%+ P2P market.
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Post by Badly Drawn Stickman on Jan 12, 2018 21:53:09 GMT
Significant update on MT. Prepare yourselves for a loss I would have expected to receive an e-mail from MT or is it just me who didn't receive it? It is quite a significant update that IMO should be communicated to lenders. If I wasn't reading the forum I wouldn't find out until the next 'pending loans' occasion. Thank you dan1 ! The actual fact didn't upset me. I wasn't overexposed in this loan and the projected loss of capital is insignificant to compare with the income I received from MT for the past 12 months. I like that MT decided to sell the asset at the real price instead of waiting for miracles. When investing in property loans I expect some losses and rather have a proportion of my capital returned sooner so I can reinvest it instead of being locked in failed projects. The absence of an email notification in instances like this is indefensible and MoneyThing needs to address this failing as a matter of urgency. Simply not good enough. I think others have already covered most other key failings. Lets just hope the Personal Guarantee has some legs
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Post by dan1 on Jan 12, 2018 22:02:34 GMT
Significant update on MT. Prepare yourselves for a loss I would have expected to receive an e-mail from MT or is it just me who didn't receive it? It is quite a significant update that IMO should be communicated to lenders. If I wasn't reading the forum I wouldn't find out until the next 'pending loans' occasion. Thank you dan1 ! The actual fact didn't upset me. I wasn't overexposed in this loan and the projected loss of capital is insignificant to compare with the income I received from MT for the past 12 months. I like that MT decided to sell the asset at the real price instead of waiting for miracles. When investing in property loans I expect some losses and rather have a proportion of my capital returned sooner so I can reinvest it instead of being locked in failed projects. I actually waited a short while before posting because I was expecting MT to post here indicating there was an update on the platform, but it clearly wasn't coming
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applets
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Post by applets on Jan 12, 2018 22:19:15 GMT
..... and this from the platform voted by the members of this forum as the best in 2017.
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dovap
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Post by dovap on Jan 12, 2018 23:37:11 GMT
things change rapidly though. Sadly I doubt this is the weakest of some of the latest offerings and the interest rates don't really reflect the risk imho. All a bit Lendy innit
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