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APC JE > Loan Secuity Valution > Flashcards

Loan Secuity Valution Flashcards

1
Q

What’s the guidance for Loan Security Valuations in the Red Book? and the UK Supplement?

A
  • VGPA 2 of Red Book 2022
  • UK VPGA 10 (commercial)
  • UK VPGA 11 (Resi)
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2
Q

Conflicts of Interest for secured Lending?

A
  • All involvements with the borrower have to be raised.
  • 2 Years prior, but can be longer.
  • Instructions should be declined if COI
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3
Q

VPGA 2 Examples of COIs? (4)

A
  • Long-standing relationship with borrower
  • Gets an introduction fee
  • Finical interest in the holding
  • Valuer is retained to act on the disposal or letting.
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4
Q

Additional Info in Bank reports?

A
  • Disclose involvement with borrower in LOE.
  • Methodology supported where appropriate with calculations if requested.
  • Previous Transactions
  • Environmental Consideration and reports
  • Suitability of Loan
  • Circumstances that could effect the price
    -AOM
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5
Q

Agden Brook, Did you do anything extra when report with a Special Assumption?

A

Yes,
- Stated the difference in value the assumption did and why.

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6
Q

RICS Guidance on Contamination?

A

Contamination, the Environment and Sustainability, 2010 (3rd Edition)

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7
Q

3 Phases of Contamination?

A
  1. Review History (Desktop Based)
  2. Investigations with detail soil samples
  3. Remediation Report
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8
Q

What advice do you give for contamination?

A
  1. Caveat report (Special assumption)
  2. Refer to specialist advice
  3. Deduct remediation costs from Value.
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9
Q

Wrinehill Hall Farm, What values did you submit to the client?

A
  • Market Value
  • Market Value on the SP on a ‘no scheme world’
  • Market Value on the SP of access across the strip.
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10
Q

Wrinehill Hall Farm, what did you consider in the depriation of the remaining farm?

A
  • Lack of land in proportion to cattle housed, didn’t meet NVZ
  • Lack of assets not being required
  • Houses proximity to railway.
  • No legal access to severed land.
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11
Q

Ravenhill, what did you include in your abnormalities?

A
  • Services
  • Landscaping
  • Track Repair
  • Re roofing (Checks with BS)
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12
Q

Whats Contingency?

A

An indecent expense for risk

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13
Q

Ravenhill, Why would a structural survey eliminate risk?

A

Gave more accurate to the figure needed to repair the roof.

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14
Q

Redhall Farm, how did you incorporate the Option agreement?

A
  • Investigated Planning
  • No immediate development as it was in greenbelt and green space.
  • Assumed that the option wasn’t going to be actioned given it was near the end of the timeframe.
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15
Q

Standish Hall, How did you report a single figure?

A
  • Gave an appropriate discount to the combination of all of their values.
  • Cross-referenced this on a £/acre basis against other estate portfolios and arable farms that had a mixture of dwellings and investments.
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16
Q

What is the Loan to value ratio?

A

Loan amount to security

17
Q

Ravenshall Farm, what else did you consider and highlight in your residual?

A
  • Sensitivity testing (Scenario)
  • Method of Sale for GDV
  • Construction costs (BCIS)
18
Q

Additional considerations at the LOE Phase?

A
  • Liability Cap
19
Q

How do you assess the Suitability of the Loan security?

A
  • Does it meet the Loan Security Ratio
  • SWOT analysis
  • Factors considering Cash flow and liquidity
20
Q

Does a loan security value rely upon regulated purpose?

A

No
- not regulated by third parties

21
Q

Option vs Promotion agreement?

A

Option - develope gets given the right to apply for planning. Then can buy it at Market Value. Obligation to sell.

Promotion - both parties want best value, no obligation to sell and take it to the market after.

22
Q

Red Hall Farm, What did you look for in the Option agreement?

A
  • Trigger
  • Term
  • Option Fee
  • Price to be paid
23
Q

Red Hall Farm, what was the figures? dates? and calculation?

A

Option fee was = £2,500
Term was 5 years with 1 year remaining
Calculation was MV-OF.

APC JE (23 decks)

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