The Nordic peer-to-peer lending platform EstateGuru has taken possession of its first defaulted loan’s collateral and has started the sales process to regain investors’ funds.
In October, Toome avenue development loan in the amount €224,000 reached its maturity date, however, the borrower had become insolvent and was therefore unable to repay the loan. EstateGuru’s COO Mihkel Stamm comments that the bailiff agent has declared an auction process that starts on 14th of November 2017 and has a starting price of €313,280. The collateral is a 544,7 m2 private house that is situated on a 1577 m2 property in Nõmme district Tallinn. The collateral has been valued by an accredited valuation company ERI Kinnisvara in the valuation of €440,000. The auction can be found on the following link: www.oksjonikeskus.ee/oksjon/view/?okid=35447
“Toome avenue development loan is the first loan among all facilitated 220 loans during 3 years that has been declared defaulted, however, a good thing is that our risk model is efficient and investors’ interests are covered. During the entire process, EstateGuru’s representatives have been in constant contact with the borrower who remains fully cooperative. The borrower has the chance to repay all debt and regain control over the property before the auction has ended,” Stamm adds.
As Stamm explains, the first default evidently illustrates the reason behind EstateGuru only facilitating property-backed loans. „In our current portfolio, the average loan to value ratio is 58%. This means that in case the borrower becomes insolvent EstateGuru has a strong chance to regain all investors’ funds by selling the collateral property. In this particular case, we have informed the EstateGuru security agent and the selling process has been taken over by our partnering bailiff agent. EstateGuru team is confident that the proceedings from the sales process will be sufficient to cover the entire cumulative debt.“
Toome avenue development loan was funded on 28th of October 2015 and the loan was financed by 294 investors. The loan collaterals are a private house in Nõmme, a 6,26-hectare property in Keila parish and a 6,31-hectare property in Keila parish.
EstateGuru is Baltic’s leading peer-to-peer lending platform created by property professionals. The firm is focused on facilitating short-term property-backed business loans. EstateGuru offers flexible terms and fast processing for its borrowers and great investment opportunities for its international investor base. The loan amounts vary between €50,000-€3,000,000 and the LTV can be maximum 75% of the collateral’s value.
EstateGuru is growing nearly 300% in a year and has opened offices in Tallinn, Riga and Vilnius. During the firm’s 3 years in the market, more than 200 loans amounting to €35 million have been facilitated. Estateguru has an international investor community of more than 8500 members.