bsandy: couldn't agree with you more.........
If they'd done their DD they would know that no loans had been closed as yet. That is why the potential is still here. They would know they had 26 clients. They would know that 5 had complained about the time taken to close loans/ get funding. They would know the company had responded by a PR.
When you look at the TV report there are fundamental questions I ask myself:
The woman who 'lost everything' paid $45k in application fees for a loan of $47 million. Quite a large loan for what appears a family business affair, but we'll leave that one for now. Previously, the family had 8 investment homes. Well if they were investment homes they should have been self-financing then imo or they are not investment homes if they cannot meet repayments from income (if only if that is the interest payments on mortgages). So why did they lose them all and their family home as well? Before the loan application I assume they would had sufficient funds/ income to meet costs for the 8 homes and their own home. If the loan application meant they couldn't meet repayments for whatever reason they should not have committed those funds in the first place imo.
In the worst case scenario, if they got into real financial difficulties and needed bridging finance they could probably have sold one or two homes...surely that would have raised $45k? etc etc. I am not saying that is an ideal situation, but unless all their properties were financed by 100% mortgages and had not increased in price at all, there must surely have been some equity in them? In truth, we don't know all the answers, but all I am saying is that maybe there were other factors that caused their real financial problems, but were never touched on in the report. It was all a bit simplistic imo. An application fee does not guarantee a loan. You still have to qualify by meeting certain criteria. If the price of the application fee for a loan to take you from a family business with 8 investment homes to one with $47 million at your disposal can send you under, then don't do it ...simple as that imo
As I mentioned in a previous post, I understand HCPC presented details of where they were at in terms of closing the loans. This was not included in the report either. Why?
In the end, as I said before, it all comes down to whether the company can close the loans or not. All else in just our personal opinion at this stage. I still think they will come through and deliver. Time will tell.
GLTA
