Asset Management Weekly Update, October 11-17, 2020
BYJoey Wilson 19, OCT 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, October 11-17, 2020. You may view activity from the previous weeks by clicking the links below.
October 4-10, 2020
September 27 - October 3, 2020
September 20-26, 2020
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 - October 11-17
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:
250 Anderson Ave NW
205 SW Pagoda Terr
10918 Hillcroft St
7140 S McCarty Dr
2450 McCarty Dr
2106 Venetian Dr SW
17235 Holbrook Campground Rd #1
46 163rd Pl
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 8 loans repaid last week, all of which were special situation loans. The details of these loans are below.
250 Anderson Ave NW - Repaid Out Of Default
The Loan was in maturity default because the borrower failed to repay the loan on time. The property was actively listed on the market and did not sell by the maturity date. The borrower requested an extension but failed to provide the necessary documentation for an extension. Therefore, GROUNDFLOOR issued a 30-day Notice of Default to the borrower and engaged in legal counsel to proceed with the foreclosure. The property was under contract and sold at the beginning of October and the loan was repaid in full.
205 SW Pagoda Terr - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay the loan on time. The property was listed on the market and was under contract to close by the end of April 2020; however, because of the prevailing market situation the closing contract fell through. The borrower decided to refinance the current loan to pay off GROUNDFLOOR. Due to COVID-19, GROUNDFLOOR provided loan leniency in the form of a 120-day extension so the borrower had adequate time to refinance the loan. Due to the pandemic, the refinancing process took longer than usual but ultimately the borrower was able to repay the loan in full.
10918 Hillcroft St - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay the loan on time. The borrower was not able to complete the property before the maturity date because he was having difficulty getting a permit from the county. Due to COVID-19, the county was operating on a limited capacity so the permitting process took longer than usual. GROUNDFLOOR provided loan leniency in the form of a 90-day extension so the borrower had adequate time to obtain permits and complete the property. The borrower was able to sell the property and repay the loan in full.
7140 S McCarty Dr - 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 the loan but the refinancing process took longer than usual due to COVID-19. GROUNDFLOOR provided loan leniency in the form of a 6-month extension so the borrower had adequate time to refinance the property and pay off GROUNDFLOOR.
2450 McCarty Dr - 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 the loan but the refinancing process took longer than usual due to COVID-19. GROUNDFLOOR provided loan leniency in the form of a 90-day extension so the borrower had adequate time to refinance the property and pay off GROUNDFLOOR.
2106 Venetian Dr SW - Repaid Out Of Default
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 through another lender. Due to COVID-19, the refinancing lender decided not to close at the last minute. The borrower paid off GROUNDFLOOR from his own funds to satisfy the loan.
17235 Holbrook Campground Rd #1 - Repaid Via REO
This new construction loan was in default because the borrower was unable to complete the property before the maturity date. GROUNDFLOOR issued a Notice of Default and began foreclosure proceedings. The project was incomplete; as such, GROUNDFLOOR determined the best course of action to achieve as favorable a resolution as possible for our investors was to take possession of the property and sell as-is.
The property was sold for $70,000. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $66,210.06, which represents a 60% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
46 163rd Pl - Repaid Out Of Default
The loan was in maturity default because the borrower failed to repay the loan on time. The property was actively listed on the market and did not sell by the maturity date. Therefore, GROUNDFLOOR issued a 30-day Notice of Default to the borrower and engaged in legal counsel to proceed with the foreclosure. The property was under contract and sold at the beginning of October and the loan was repaid in full.
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 entered into workout agreements on the following 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 did not go under contract to sell any properties last week.
We did not sell any real estate owned properties last week.