Asset Management Weekly Update, October 25-31, 2020
BYJoey Wilson 02, NOV 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 25-31, 2020. You may view activity from the previous weeks by clicking the links below.
October 18-24, 2020
October 11-17, 2020
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 25-31
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:
1121 East 71st St
2646 Hughes St SE
1118 West 2nd St
1385 Centra Villa Dr SW
1065 Harwell St NW
127 39th Ave NE
275 Aurora Ave NW
514 South Delaware Ave
400 West Lake Ave NW
778 East Park (Loan #1, Loan #2, Loan #3, Loan #4)
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 10 loans repaid. 3 of these loans proceeded according to schedule, repaying on time and in full with the contract interest rate. 7 loans last week were special situation loans, the details of which are below.
1121 East 71st St - Repaid Out Of Default
The loan was in maturity default because the borrower failed to repay on time. The property was completed and actively listed on the market before the maturity date. Due to COVID-19, the borrower was not able to sell the property before the maturity date. However, the borrower was not communicating his plan of repayment with GROUNDFLOOR when GROUNDFLOOR reached out to him multiple times via email. The property was under contract and scheduled to close at the end of October. The borrower was able to repay the loan in full on October 27, 2020.
1118 West 2nd St - Repaid Out Of Default
The loan was in maturity default because the borrower failed to repay the loan on time. The borrower was in dispute with the seller and the realtor from whom he originally purchased the property. The borrower was not able to start the renovation because the county was not providing them with the permit because of zoning issues. The borrower was able to repay the loan in full from his own funds.
1385 Centra Villa Dr SW - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay on time. The borrower was in the process of refinancing this loan through another lender. The refinancing process took longer than usual 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 and repay GROUNDFLOOR. The borrower was able to repay the loan in full on October 27, 2020.
1065 Harwell St NW - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay on time. The property was completed and actively listed on the market before the maturity date. Due to COVID-19, the borrower was not able to sell the property before the maturity date. GROUNDFLOOR provided loan leniency in the form of a 60-day extension so the borrower had adequate time to sell the property. The property was under contract in early October and the borrower was able to repay the loan on October 30, 2020.
127 39th Ave NE - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay on time. The property was completed and listed on the market in May. Due to COVID-19, the borrower was unable to complete and sell the property before the maturity date. GROUNDFLOOR had provided loan leniency in the form of 90 day extension so the borrower had adequate time to sell the property. The borrower was unable to sell the property by extension maturity date. Therefore, GROUNDFLOOR had sent the Notice of Default to the borrower. The borrower was able to refinance the loan through another lender and repay GROUNDFLOOR on October 29, 2020.
400 West Lake Ave NW - Repaid Via REO
The loan was in default because the borrower failed to repay on time. GROUNDFLOOR issued a Notice of Default on March 27, 2020, and subsequently initiated foreclosure proceedings. There were numerous construction deficiencies that reduced the value of the property. The heavy rains exposed a significant drainage and water intrusion problem. 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 $160,000. After adding the remaining escrow balance and subtracting foreclosure costs and fees, the net recovery on this property was $128,265.62, which represents an 83% recovery of principal. Impacted investors may view a more detailed breakdown of the recovery in our recent email communication.
778 East Park - Repaid Via Workout Agreement
The loan was in maturity default because the borrower failed to repay on time. The borrower was not able to complete the property before the maturity date because of COVID-19 delays. Due to the pandemic, the borrower was unable to obtain the permit from the county in a timely manner. Also, he was having trouble receiving materials on time due to supply chain issues. GROUNDFLOOR provided loan leniency in the form of a 90-day extension to the borrower so the borrower had adequate time to refinance the loan and pay off GROUNDFLOOR. The borrower was able to refinance the current loan with another lender and repay GROUNDFLOOR.
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.