Asset Management Weekly Update, September 20-26, 2020
BYJoey Wilson 28, SEP 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, September 20-26, 2020. You may view activity from the previous weeks by clicking the links below.
September 13-19, 2020
September 6-12, 2020
August 30 - September 5, 2020
August 23-29, 2020
August 16-22, 2020
August 9-15, 2020
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 - September 20-26
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:
2 Huson Ave
898 Rose Cir SW (Loan #1 and Loan #2)
392 North Mouse Creek Rd NW
2619 Abercorn Rd
1171 Indale Pl SW
1164 Fenwood St SW
103 North Cedar St
317 Wink Cir NE
334 Broadway Blvd
1907 Raven Hill Dr NE (Loan #1, Loan #2, Loan #3, and Loan #4)
1261 NW 18th Ave
90 Whitaker Cir NW
1913 Mecklenburg Hwy
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 13 loans were repaid. 4 of these loans proceeded according to schedule, repaying on time and in full with the contract interest rate. 9 loans last week were special situation loans, the details of which are below.
2 Huson Ave - Repaid Out Of Default
The loan was in maturity default because the borrower failed to repay the loan on time. GROUNDFLOOR issued a Notice of Default to the borrower due to failure to repay by the maturity date and engaged the attorney for the foreclosure proceedings on August 2, 2020. The borrower was able to repay the loan and cured the default on September 21, 2020.
898 Rose Cir SW (Loan #1 and Loan #2) - Repaid Via Workout Agreement
The loan was in maturity default because the borrower was not able to repay the loan on time. The borrower was in the process of refinancing this loan, but due to the COVID-19 the refinancing process took longer than usual. GROUNDFLOOR provided a loan leniency in the form of a 90 day extension to the borrower. and the loan was repaid under the terms of that workout agreement.
392 North Mouse Creek Rd NW - Repaid Via Workout Agreement
The loan was in maturity default because the borrower was not able to repay the loan on time. The property was completed and listed on the market in April, but due to the pandemic the buyer lost his job and had to terminate the sales contract. GROUNDFLOOR provided a loan leniency in the form of a 90 day extension to the borrower, and the loan was repaid under the terms of that workout agreement.
1171 Indale Pl SW - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay the loan on time. The borrower was facing delays completing the property due to COVID-19. GROUNDFLOOR provided a loan leniency in the form of a 90 days extension to the borrower. The borrower was able to refinance the loan and repay GROUNDFLOOR under the terms of that workout agreement.
1164 Fenwood St SW - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay the loan on time. The borrower was in the process of refinancing this loan, but due to the COVID-19 the refinancing process took longer than usual. GROUNDFLOOR provided a loan leniency in the form of a 90 days extension to the borrower, and the loan was repaid under the terms of that workout agreement.
317 Wink Cir NE - Repaid Out Of Default
The loan was in maturity default because the borrower failed to repay the loan on time. The property was completed and listed on the market in January. GROUNDFLOOR issued a Notice of Default to the borrower due to failing to repay by the maturity date. The borrower had advised that due to COVID-19 the closing had been delayed. The borrower was able to close and repay GROUNDFLOOR on September 18, 2020.
334 Broadway Blvd - Repaid Out Of Default
The loan was in maturity default because the borrower failed to repay the loan on time. GROUNDFLOOR issued a Notice of Default to the borrower due to failing to repay by the maturity date and engaged an attorney for foreclosure proceedings on August 30, 2020. The borrower had advised that he was in the process of refinancing his current loan with GROUNDFLOOR, but the refinancing had been delayed due to COVID-19. The loan was repaid in full on September 21, 2020.
1261 NW 18th Ave - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay the loan on time. The borrower was facing delays completing the property due to COVID-19. GROUNDFLOOR provided loan leniency in the form of a 90 days extension to the borrower. The property was completed and sold in September.
90 Whitaker Cir NW - Repaid Via REO
The property was in default because the borrower failed to repay the loan on time. GROUNDFLOOR issued a Notice of Default and began foreclosure proceedings. Upon taking possession, the property was discovered to have a cracked foundation, which led to leaking in the basement and a severe mold problem. The entire basement was covered in black mold and required radiation. As this was outside the scope of our normal REO process, the GROUNDFLOOR team determined that we needed to sell the property at a lower price point to offset those material defects.
The property was sold for $120,000. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $104,912.80, which represents a 65% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
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.
Loan Activity:
We did not enter into a workout agreement on any loans last week.
We did not proceed with foreclosure actions on any properties last week.
Real Estate Owned (REO) Activity:
We did not take possession of any properties last week.
We went under contract to sell the following properties last week:
We sold the following real estate owned properties last week: