Discussion
anonymous said:
[redacted]
I was contacted by a reporter who claims they are doing a piece for a documentary to be aired in the near future. My advice would be to sell everything you can on the SM and brace yourself for rest. More than £50M now in defaults & Recoveries. They are going to be forced to accept some losses imminently, and the new money will stop flowing. Can't help thinking it will unravel very quickly from there.
Trustpilot and the likes are getting hit with a tidal wave of people demanding some action, yet the only action Lendy are taking is pulling as many reviews as they can.
It looks to me like the RICS valuations were rigged, with many loans turning out to be in excess of 100% LTV.
It's not going to be pretty.
Just to update this - to add insult to injury, and on top of the loan default/recovery book now looking like it will grow bigger than the entire live loan book by year end, it appears that Lendy has passed on lenders details to several borrowers who are attempting to sue individual lenders directly for the way that Lendy have conducted themselves. So it appears it is indeed possible to loose more than just the capital you invested.
Things appear to be going from bad to worse.
DonkeyApple said:
cashmax said:
Just to update this - to add insult to injury, and on top of the loan default/recovery book now looking like it will grow bigger than the entire live loan book by year end, it appears that Lendy has passed on lenders details to several borrowers who are attempting to sue individual lenders directly for the way that Lendy have conducted themselves. So it appears it is indeed possible to loose more than just the capital you invested.
Things appear to be going from bad to worse.
How is that even logical, yet alone legal? Is this really happening? It seems almost impossible. Things appear to be going from bad to worse.
http://p2pindependentforum.com/thread/8000/dfl017-...
Lots of lessons learned for amateur investors here TBH, just why anyone would get involved with a loan like this is completely beyond me, but just goes to show how toxic some of this stuff really is. Got a feeling Lendy will be the first high profile scalp that exposes this business.
Deesee said:
You need to have a look at the t&cs and get a copy of the loan agreement/s.
Most of these lenders will provide a list of investors to the borrower, so that’s not unusual, however if this is not in t&cs then they have possibly breached data protection laws.
The loan agreement should also state the solicitors used in the transaction if they are the same be concerned.
If a lender has lent funds without relevant quoted security in place they will be liable.
If a solicitor has made a mistake their PI will take a hammering, likewise with the valuer.
If your going to make investments like this ensure you are well spread say .5% of what you’ve got in each project. So 50p for every £100 in P 2 P, but TBH, they have no balance sheet to absorb losses/adjustments/fluctuations or even natural disasters, so it’s all your cash at risk.
That's the best bit. Lendy never made the loan agreement available to lenders. Despite many requests they refused to provide a copy. As it happens, this will likely work in lenders favour.Most of these lenders will provide a list of investors to the borrower, so that’s not unusual, however if this is not in t&cs then they have possibly breached data protection laws.
The loan agreement should also state the solicitors used in the transaction if they are the same be concerned.
If a lender has lent funds without relevant quoted security in place they will be liable.
If a solicitor has made a mistake their PI will take a hammering, likewise with the valuer.
If your going to make investments like this ensure you are well spread say .5% of what you’ve got in each project. So 50p for every £100 in P 2 P, but TBH, they have no balance sheet to absorb losses/adjustments/fluctuations or even natural disasters, so it’s all your cash at risk.
From the FT today.
A British peer-to-peer property lender has taken the unusual step of appealing to its regulators for help after one of its biggest borrowers threatened to sue the company and many of its investors.
Retail investors in Lendy are already facing tens of millions of pounds in potential losses after almost two-thirds of borrowers failed to repay their loans on time, according to a Financial Times analysis of its loanbook.
The developments threaten to trigger the first big crisis in Europe’s rapidly expanding peer-to-peer industry, at a time when the sector is fighting to convince regulators it does not need stricter regulation.
In a letter to the Financial Conduct Authority seen by the FT, Lendy said a borrower had accused it of unfairly giving notice on its loans and failing to arrange for it to receive further funds in line with its contract and threatened to pursue a £10m damages claim. Lendy indicated that it considered the threatened claim to be vexatious.
The case affects about 5,000 investors, who lent a combined £8.2m to a number of offshore companies linked to a family trust in the British Virgin Islands, mainly to develop a residential project in Marylebone, west London.
Lendy told the FT that all investors in the loan had been informed and that “this type of dispute is fairly common between lenders and borrowers” but it had a “skilled recoveries team acting in lenders’ interests”. In its letter to the FCA, the company noted that “the situation is novel and is unfolding on a day-to-day basis, hence our urgent request” for a meeting to enlist the regulator’s “support”.
The FCA declined to comment, but a person briefed on its position said the regulator was aware of the legal issue and monitoring the situation.
Portsmouth-based Lendy was founded six years ago and initially specialised in lending against marine assets like boats. It moved into property lending because “the marine asset market could not keep up with the demand” from investors.
As well as sponsoring the annual Cowes Week regatta, Lendy advertises returns of up to 12 per cent for investors who fund its loans. But the legal dispute adds to its problems as it fights rising bad loans and falling profits.
Lendy reports a non-performing loan rate of 12.3 per cent, but an FT analysis of its loanbook showed that £112m of its £180m of outstanding loans were outside their terms — meaning payments were at least one day overdue.
Lendy says it waits 180 days after a missed payment before formally considering a loan to be non-performing.
The company added that the higher proportion of loans past due was because it had become “more cautious” about issuing new loans, and “as loans have been repaid, this has meant that loans within term have become a smaller percentage of the ‘live loan book’”.
Its loans under management have shrunk 3 per cent since the start of 2018. The proportion of loans past due has more than doubled compared to a year ago, and risen from 50 per cent to more than 60 per cent in the past month alone.
The Marylebone development that is the subject of the threatened legal action was not considered non-performing as of last week, despite the fact that Lendy issued a formal demand for repayment more than a year ago.
An £11m loan to finance a residential tower in Liverpool will not be considered “non-performing” until this week, although the developer behind the project entered administration in June.
A report by the administrators of the Liverpool project’s developer earlier this month estimated that Lendy would only receive around 62 per cent of the money it was owed on the project. The administrators valued the development at £8m, compared to the £17.9m listed as security when Lendy extended the loan.
The company said: “All Lendy loans are secured on UK property at conservative LTVs [loan to value]. As with any form of lending, there is a possibility of loans defaulting. However, the possibility of losses to Lendy investors from those defaults is lower, due to the value of the security held.”
Peer-to-peer lenders have grown rapidly in recent years, helping to fill the gaps left by mainstream lenders that cut lending to certain sectors after the 2008 financial crisis.
However, the FCA is currently consulting on changes that would limit firms’ access to retail investors, after finding that some firms were encouraging users to take on more risk than they should.
Lendy’s pre-tax profits fell by three-quarters last year, according to documents filed with Companies House. The company said it “remains one of only a handful of profitable sector platforms in the UK.”
The most ironic thing about all this, is that despite the loanbook approaching nearly £100M (yes you read that right) of loans in default for more than 180 days, some with the asset long since sold and the borrower in liquidation, Lendy still refuse to crystallise a single loss of capital. They are still happy to claim that no lender and ever lost a penny of capital.
Lendy has a provision fund of circa £2M, they have defaults older than 6 months of £80M. There are multiple loans where the asset has been sold, and left the capital repayment £millions short and the borrower put the SPV into liquidation and disappeared of the grid, the PF wouldn't even cover a single instance of this. So they just don't bother using it because it would be depleted instantly and generate even more bad press.
DonkeyApple said:
My wild and random guess is that Baker Tilly will call in all loans, get the book all into default, sell on the debts and deliver an invoice that matches what is received.
Bang on the money with that prediction DA, this is exactly how it's played out. Apart from a few investors have thrown good money after bad with the lendy action group in a futile attempt to take Baker Tilly to court.Edited by DonkeyApple on Monday 27th August 19:27
Edited by DonkeyApple on Monday 27th August 19:30
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