Brainer
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Post by Brainer on Apr 6, 2021 12:57:47 GMT
BondMason CEO and Collateral CC member, stevefindlay, put out a general BondMason update a few weeks ago saying the following: I noticed they have recently written-off some loans that were marked as 'underlying platform in administration'. They originally said they had £570k loans with Collateral. They are now saying they have only £268k loans where the underlying platform is in administration. Collateral isn't the only platform they used that is in administration. Piece all that together and it appears BondMason have now written-off most, possibly all, Collateral loans.
One thing I do believe Andrew Currie on is that BDO “celebrated as if they had won the lottery” when they got hold of the reins. They're certainly going to make a lottery sized amount of this/us.
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Brainer
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Post by Brainer on Apr 1, 2021 15:53:53 GMT
I await the administrators next move with great interest. I expect it will be aimed to try and shaft us lenders again! They made one of their next moves almost straight after this court action started. Since then, on all loans where the security is not sold, they have been distributing the returns pro rata on all sums owed to both FS (including previously unmentioned default interest) and investors. This has led to fees in the 13-15% range of the total recovery. It amounted to £35,000 on the Meir, Stoke on Trent and £47,000 on the F*** Street, Warrington loans by themselves... yet "there is no money"
There was a discussion about it here. My third point about the conflict of interest is even greater given FS will now be receiving little to nothing from most loans where the security is sold. It's almost always now going to be in investors' interest for the security to be sold and almost always going to be in FS' interest for a settlement to be reached.
I was hoping this would be covered in this court action but I don't think it has been, so it looks like we will need another court hearing if we wish to challenge this fee structure as well. Particularly if CG are seen to be favouring settlements over sales of the security because they deem it to be in FS' better interest.
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Brainer
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Post by Brainer on Feb 1, 2021 18:01:11 GMT
Dented I would say. Reading through all the updates, it seems that the claims under PGs are likely to return nothing, as the more experienced members here always suggested would be the case, and by sheer coincidence the administrators seems to be recovering just enough from other loans to cover their own fees.
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Brainer
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Post by Brainer on Feb 1, 2021 17:56:17 GMT
I wonder if Moorfields are going to challenge Moorfields for their appalling handling of this loan recovery? I wonder if Moorfields will then charge thousands of pounds to reply to Moorfields who will charge thousands of pounds to receive the replies from Moorfields, until all the money is gone. Oh no, wait, all the money has already gone... to Moorfields.
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Brainer
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Post by Brainer on Jan 26, 2021 15:41:02 GMT
Blimey...there are others out there What pi**es me off is how much effort is required to try and get you-know-who to just acknowledge an inquiry..ive just recently phoned them and emailed them again. As I read it, this may complete on 29th, possibly without West Derby (if it exists) being taken into account, though I note the mention that the new buyer is not the borrower..(how was that known ? ) though lets face it, we've already seen examples where ostensibly thats been the case and when the dust has settled and the deck chairs re-arranged....... , And what happened to this 'overage' malarky 22/12/2020 Further to previous updates, a sale has been agreed at £500,000 which was due to complete in September 2020; however, the sale is subject to an overage agreement, which is yet to be agreed OK..has it been agreed or not?..and if not, then how can the sale go ahead Its like bashing your head against a brick wall I don't know for sure the purchaser isn't the borrower but from the way the updates read it doesn't appear to be. It may be the borrower in a different shell but it doesn't appear to be a 'full and final settlement' type situation.
Agreed communication in general is poor. Almost like they don't read the previous update before posting the new one, so the timeline often doesn't follow. Also agreed we need an explanation on the overage and the situation with the additional security. fundingsecure2
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Brainer
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Post by Brainer on Jan 26, 2021 14:26:50 GMT
No response to email sent Friday, so about to ring CG & Co..again Has anyone who has capital in 1056846866 received any email updates and/or seen any mention (by CG & Co) of additional property used as 2nd charge collateral with a £78K mortgage outstanding..time is running out Edit..rang..complete waste of time but now forwarding the mail I sent Thursday to a Tanya Lemon. I wouldn't worry too much about 1056846866 not receiving email updates, I imagine it's just human or FS system error, not anything deliberate.
My reading of the situation is that it's the two properties under construction that are due to complete on 29/01/21, not necessarily the loans.
While it's a bit concerning the additional 2nd charge security hasn't been mentioned at all by CG, I don't think that needs to be wrapped up by the 29th as it appears the purchaser for the two unfinished properties is not the borrower and so the remaining loan(s) should continue.
As for why it's not been mentioned, it'll fall into one of the following:
1) Another FS cock-up and for some reason the security isn't valid and CG have failed to let us know
2) CG are aware but have failed to communicate their plan for the additional security to us 3) CG have completely missed this part of the loan documentation
Hopefully you get a response soon though as we need to know which of the above it is at some point.
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Brainer
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Post by Brainer on Dec 22, 2020 16:22:50 GMT
Update 22/12/20 Can't find any reference to this in the loan particulars, maybe someone in the loan(s) from the outset has better memory and can comment? FS extracting their 12.89%-sized pound of flesh because, in-spite of Receivers and Administrators being involved, this is classed as a 'Borrower Settlement'. Come the New Year; Come the Day of ReckoningNope, never mentioned in the loan particulars. Was always advertised as a "first legal charge on a property in Warrington, supported by a personal guarantee."
However, mrclondon posted the land registry title in DD Central: So the assumption was always that C7 swapped the priority ordering to give FS the first charge. So did the Receivers miss this or did FS cock-up the deed of priority? Or if C7 was never what we assumed, why did FS advertise this loan as a first legal charge? Unless it's the Receivers' mistake then either way you look at it it's misrepresentation and gross incompetence from FS. And their reward for all their diligent work... £47,000 . Mucho P2P can we add this to the growing list of loans to be explained at the next CC meeting, please.
Other points to note: - the first house sold for £181,500, so in theory there was £544,500 in security left with the remaining three houses. How CG's valuation of £420,000 came about I'd like to know.
- assuming for a second that a settlement was better than sale after factoring in the £70,000 other charge, then it's actually only FS' misrepresentation and gross incompetence that meant settlement was the better option, which conveniently means they get a (contested) 13% fee rather than a (contested) 5% fee. So even more reward for their appalling conduct. - once again, lenders in the senior loan are effectively being charged FS' fees and default interest from supplemental loans they were never in.
- the 27/03/20 update from CG mentioned the potential for a second charge to be put in place to cover the shortfall, this was not covered in today's update. Is this still the case?
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Brainer
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Post by Brainer on Dec 15, 2020 15:52:57 GMT
So, to summarise:
Category 1 - <redacted> from the Client account (£2.548M)
Category 2 - fake loans where there's no discernible security (£4.369M)
Category 3 - genuine loans which haven't paid back (£1.678M)
That about right?
Someone with the full loan book download and a list of MC loans (and possibly the Reading loan) might be able to piece together which loans are category 2 and 3 with a bit of arithmetic.
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Brainer
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Post by Brainer on Dec 3, 2020 14:36:43 GMT
At the point of lending, even if Primary loan lenders had been cognisant of the 5% Default Loan Administration Fee in the Ts&Cs, it would not have been possible for those lenders to have anticipated that unannounced additional funding (which is what the Supplementary loan was) would become a factor in the event of their loan Defaulting and that 5% of that Supplementary loan would also be deducted from any redeemed sums. This is so blatantly unfair to 1188052941 lenders that I can't help wondering if FS / CG are deliberately dropping a clanger on one or two loans in the hope that it distracts attention from the broader picture? (Hint: ain't gonna happen ) They did the same on the Formby loan, so if it is a clanger it's not an individual one.
I thought the FCA rules on fees were that they needed to fair and transparent. I can't see how you can get less transparent than a fee that the investor couldn't possibly have known would exist when they invested.
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Brainer
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Post by Brainer on Nov 18, 2020 12:48:13 GMT
Recovery wise, I have had far greater amount returned by FS Admin so far (6.5 - 7 K) compared to a few quids by MT (around £30) so far and have had similar amounts stuck on both the platforms when they went into Admin (others might have a different experience though).
Yes, there are cons in going down the Admin Route too, like firesales achieving less value, just to mention one. So, I'm not saying Admins are great and would always be better, but in this particular case, I believe Admin is a better Route (just my view though, others are entitled to theirs). Have you missed the recent change where FS' administrators are now taking upwards of 15% fees for FS (on top of the 3% for themselves) on some loans seemingly because of a technicality in the T&Cs?
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Brainer
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Post by Brainer on Nov 10, 2020 15:16:58 GMT
So let me get this straight, because section 6.2.5 of the T&Cs says "sale" and doesn't specifically mention the recovery priority for a 'settlement' with the borrower, the administrators have sought legal advice.
This legal advice has said that instead of using the established priority ordering of 6.2.5 - which lenders invested on the basis of and has been used in all historical repayments, settlement or otherwise - they have opined that the correct distribution is pro rata between FS and investors, which rather conveniently means FS now get a much, much larger share of any repayment where the security isn't sold. There is so much wrong with this: 1) This is not how lenders were led to believe recoveries would work at any stage in our decision to invest, and not how it has worked historically 2) Our returns are now being diminished by 'default interest' and other FS fees we had no sight of prior to investing - effectively putting us in a similar situation to Lendy model 2 investors 3) This creates a potential conflict of interest, as it may in some cases be in lenders' interest for the security to be sold at a lower price than can be recovered from the borrower directly, so that 6.2.5 applies Just when you think P2P can't get any worse, it finds a new way of shafting us. And CG have the cheek to send an email saying, "The Administrators’ priority has always been the return of funds to Investors." They appear to have missed the word 'minimal' before 'return'. Mucho P2P Will this and all the other interpretations of fees have CG have pulled out of their hat be challenged in the same court hearing, or is that specifically about the 5% and each variation will have to be challenged separately? If they apply this particular interpretation to every loan where the security isn't sold then I suspect this one will actually steal more of our money in the long run than the 5%.
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Brainer
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Post by Brainer on Sept 29, 2020 15:28:44 GMT
The email a month or so ago about the PFs suggests to me AC's original plan for these loans is dead in the water. But I expect the recent tiny uptick in the PFs and some handy optimism about future events will see AC kick the can down the road for another 3-6 months. Unless they show a serious willingness to look at other options for repaying these loans then I suspect the only way it is going to happen in the next few years, if ever, is to restart/start progressing down the official complaint route.
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Brainer
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Post by Brainer on Sept 22, 2020 15:21:44 GMT
Was this property recovered via a sale which is the clear criteria for the deduction of the 5%? Not a refinance or a settlement but a sale ... it's pretty clear.
Adding this to the administrators seemingly choosing 5% of the loan or sale amount depending on whichever is larger, it seems to me they have gone full vulture mode and are now just taking the maximum amount from lenders they think they can possibly get away with.
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Brainer
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Post by Brainer on Sept 22, 2020 15:13:07 GMT
I notice the 5% fee is taken as a percentage of all loans including supplementals but effectively charged to the senior loan holders. So senior loan holders are getting charged a fee from a loan they were never in. A loan that only came into existence at a date after they entered their loan, and so they couldn't possibly have known about this future fee at the time they made their decision to invest. How can this possibly be correct, or legal for that matter?
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Brainer
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Post by Brainer on Sept 5, 2020 1:14:02 GMT
I think you are underselling it as "committed to 'conversationally'". I fully believe that FS themselves saw the repayment priority to be as shown in my post above. There are other instances of loans where FS said that in line with the T&Cs they would take no fees as investor capital ranked ahead. IIRC CG dismissed these as one-off gestures in the last administrators report but that was not my understanding. As you say, the court will decide in the end.
Should the 5% stand I agree with the rest of your post, and I hope that is where efforts will be directed at that point. Also worth noting that if, as it now seems, CG are taking 5% of the loan value from here onward there will likely be more than c. £2.0m in the pot by the end, possibly a lot more. If anyone has an idea of how much of the loan book is remaining, maybe we can get a better estimate.
I'm sure FS did when that quoted post was written in 2016. Had they not been in administration, they may have even honoured the 'informal' * commitments made on the loans with imperfect charges. However, FS today is not FS of four years ago. The Administrators only need to deliver what is legally required of them, not what an erstwhile FS may have felt morally and/or ethically duty-bound to deliver - if only to avoid the risk of being dragged through the courts, or worse, the press! CG&Co's stance on this particularly sucks, in my opinion, but ... * When I wrote 'conversationally', I was referring to FS' waterfall quote made here on the forum. However, I had forgotten about how FS typically communicated with lenders. As a layperson, and regardless of the standing of what FS wrote here, I'm really rather surprised that what FS communicated to all lenders via formal Loan Updates isn't deemed as some kind of legal contract. Maybe it's a question of their not wanting to throw good money after bad, but I should have thought it worthwhile lenders in those loans collectively formally querying the Administrators on what grounds they had based their determination and then showing the response to FSAG's legal rep for an opinion. Perhaps that's already been done. Perhaps it a non-starter. No idea. As I mentioned it's not just the post written in 2016, FS said on multiple occasions that their fees ranked behind investor capital, including as late as 2019.
If we're just discussing the ranking priority and not the imperfect charges then it's not a case of FS potentially feeling morally duty-bound, it's my assertion that they believed the ranking in 6.2.5 was correct legally. If that turns out not to be the case legally and my assertion is true, then we have a situation where FS (or at least the early directors) seemingly didn't understand their own T&Cs, and therefore presumably never intended for them to be interpreted as they now are. I mean where do you even begin with that? How in the world are consumer investors supposed to understand the T&Cs of a platform with greater legal accuracy than the platform directors themselves? It's farcical.
As to the imperfect charges, I agree that may be a conversation worth having, especially if the 5% stands as there should be enough in the pot to cover those loans. AIUI, it's not that you can't take legal proceedings against a company in administration, it's that you need consent from either the administrators or a court. Whether this is a situation where that might apply I have no idea, it seems reasonable to me but when has that ever counted for anything with P2P administrations.
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