Through our newest feature AgoraInsights, Agora Data has been tracking the impact of COVID-19 by analyzing the daily data from hundreds of millions in principal balance and hundreds of thousands of individual BHPH loans since the beginning of the pandemic.
One of the leading indicators to default is contractual delinquency. To clarify, by “contractual delinquency”, we mean that the customer is deemed late per the agreement with the BHPH dealer and according to the terms of the installment contract. Below is contractual delinquency with the best period measured during the pandemic on March 18, 2020 and the worst period on April 13, 2020.
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Contractual delinquency between March 18, 2020 and today, April 20,2020 has migrated mostly negative – although we have seen a modest improvement from the low observed on April 13th. Current loans (zero days past due) migrated from 64% of the observed portfolios to 59% which is a 5% negative trend, the 1 to 29-day bucket increased by 2%, the 30 to 59-day bucket increased by 3% and 60 to 89 were flat.
Agora is also monitoring delinquency on a recency basis. Recency being days since an actual payment is made. Below is a table showing recency for the same observed period:
Recency will remove the noise created by deferments. For example, an underlying borrower may have made his March 10th payment and then received a deferment for his April 10th payment. In that example, the borrower would show as contractually current but would be in the 1-29 days delinquent on a recency basis. Such use of deferments likely explains the improvement in contractual delinquency from April 13th to today where accounts that were in the 1-29 bucket on April 13th rolled back to current on a contractual basis as of April 20th. Overall, the observed portfolios have a 2-day average increase (i.e. deterioration) in recency.
While overall recency has not gapped out too materially, nevertheless, BHPH dealers need to keep an eye on BOTH metrics of delinquency as they manage through this crisis. It requires careful handling of your underlying customers while simultaneously assessing the overall health of your portfolio.
About AgoraInsights
AgoraInsights is our newest feature empowering BHPH dealers to have on their
desktop real time loan and portfolio valuations through our AgoraBookValue, the only Book Value for
loans and portfolios in the industry. AgoraInsights was designed to empower the BHPH dealer with AI-Infused
tools and features typically only available to the large institutional lenders and we provide it free
of charge to BHPH dealers. Access benchmarking, granular portfolio and loan data, and liquidity at the
click of your mouse.