Asset Management Weekly Update, August 9-15, 2020
BY Dave Wilson, Director of Asset Management 17, AUG 2020
As the financial and real estate markets continue to experience upheaval due to the COVID-19 pandemic, we understand that some GROUNDFLOOR investors may become more concerned than usual with the status of their investments.
We recently published an extensive stress test analysis of our entire outstanding portfolio to understand what potential effects a coronavirus-related recession could have on our investors’ portfolios. While this analysis is useful to help inform our customers about how GROUNDFLOOR investments could respond to changing market conditions, we also feel it is important to share how our loans are actually performing in real time.
To that end, as part of our continued efforts to be highly accountable to our investors and provide ongoing transparency, we are pleased to begin publishing weekly updates of loan repayments and asset management activities. This latest installment looks at activity from last week, August 9-15, 2020. You may view activity from the previous weeks by clicking the links below.
August 2-8, 2020
July 26 - August 1, 2020
July 19-25, 2020
July 12-18, 2020
July 5-11, 2020
June 28 - July 4, 2020
June 21-27, 2020
June 14-20, 2020
June 7-13, 2020
May 31-June 6, 2020
May 24-30, 2020
May 17-23, 2020
May 10-16, 2020
Principal and Interest Repaid Over The Past Four Weeks
First, let’s take a look at the total principal and interest repayments disbursed to investors over the past four weeks:
Aggregated Performance Metrics
Next, let’s take a deeper dive into repayment activity over the past weeks to get a better picture of how our recently repaid loans have been performing. We examine the metrics of loans repaid within the last four weeks, loans repaid since the start of Q2 (which also coincides with the general onset of economic impacts in the U.S. of the COVID-19 pandemic), and loans repaid year to date.
It’s important to underscore that this table showcases the performance of loans that were repaid during the delineated periods, not the performance of loans originated during these timeframes.
Last Week’s Repayments - August 9-15
This table presents loans that were repaid within the previous week (Sunday-Saturday), with details on the status, actual vs. expected term, actual vs. expected rate, and the exit valuation (sales price or appraised value at time of refinancing):
*NOTE: Actual rate is not inclusive of any promotions. Individual repayments are dependent on how long your principal is active in a given loan.
**NOTE: The borrower did not disclose the source of repayment proceeds.
Key To Loan Status Column:
Current - loan remained current throughout the term and repaid with full principal (plus interest)
Default - loan was resolved while in default
Workout - a workout plan was put into effect and the loan was resolved under the terms of the workout agreement
REO - GROUNDFLOOR assumed title to the property (either through foreclosure or deed in lieu) and sold the property.
Links to the loan detail pages for the above loans:
2300 Nelms Dr SW
762 Moreland Ave SE (Loan #1 and Loan #2)
363 Lady Guinevere Way
15226 Blackstone Ave
5708 Spruce Dr
25 Nesmith Ave
3321 Wilcox Ave
3603 Dudley Ave
4009 24th St
1912 Walnut St
3623 Broadview Ct
Special Situations Repaid Last Week
Next, we provide a weekly overview of special situation loans we resolved in the prior week.
Last week, a total of 11 loans were repaid. 5 of these loans proceeded according to schedule, repaying on time and in full with the contract interest rate. 6 loans last week were special situation loans, the details of which are below.
2300 Nelms Dr SW - Repaid Out Of Default
The loan was in maturity default due to delays in the closing process. The property was under contract at the beginning of July, but was not able to close until August 10th due to delays from the buyer’s lender.
15226 Blackstone Ave - Repaid Via Workout Agreement
The loan was in maturity default due to COVID-19-related delays. The property was completed and listed on the market back in March, but due to COVID-19 the borrower was not able to schedule showings and did not receive any offers on the property. The property was under contract a couple of times, but the contract fell through due to the prospective buyer losing his job. The borrower was provided a 90 days extension due to the pandemic, and the loan was repaid under the terms of the workout agreement.
5708 Spruce Dr - Repaid Out Of Default
GROUNDFLOOR had reached out to the borrower several times for an update regarding the approaching maturity date with no response. GROUNDFLOOR’s attorney filed for foreclosure. It was discovered that the borrower had filed for Chapter 11 bankruptcy. Our bankruptcy attorney then filed a motion to convert the case to Chapter 7 or dismiss the case entirely, allowing the borrower to close on the contract. GROUNDFLOOR’s attorney worked out a settlement with the borrower’s attorney so we could get full recovery for investors.
3321 Wilcox Ave - Repaid Out Of Default
The loan was in maturity default due to delays in the closing process. The property was completed and listed in June, but the buyer's lender took longer than usual due to COVID-19. The property went under contract in July and closed in early August.
3603 Dudley Ave - Repaid Via Workout Agreement
The loan was in maturity default due to delays in the sale of the property. The property was completed and listed in April, but the borrower did not receive any response to the showings due to COVID-19. The borrower was provided with a 90 days extension. The property was under contract to close at the end of July.
3623 Broadview Ct - Repaid Out Of Default
The loan was in maturity default due to the borrower being unable to sell the property before the maturity date. The property was under contract but the contract fell through due to buyer financing issues. The property was under contract at the beginning of July and closed in the first week of August.
Special Situations Activity Last Week
Finally, our asset management team moved forward with the following special situation loans last week (see link to each individual loan page for detailed history of updates). As a reminder, all performing loans are monitored for repayment status starting at 120 days prior to maturity.
We have entered into a workout agreement on the following loans:
We proceeded with foreclosure actions on the following properties last week:
Real Estate Owned (REO) Activity:
We did not take possession of any new properties last week.
We did not go under contract to sell any properties last week.
We did not sell any real estate owned properties last week.