Notes Receivable

9 Months Ended

Sep. 30, 2018

Notes Receivable [Abstract]

Notes Receivable

3.  Notes Receivable

The table below provides information relating to our notes receivable and our allowance for loan losses as of September 30, 2018 and December 31, 2017 (dollars in thousands):

	As of
	September 30,		December 31,
	2018		2017
Notes receivable secured by VOIs:
VOI notes receivable - non-securitized	$	167,717	$	184,971
VOI notes receivable - securitized		399,080		364,349
		566,797		549,320
Allowance for loan losses - non-securitized		(37,341)		(38,497)
Allowance for loan losses - securitized		(90,859)		(85,161)
VOI notes receivable, net	$	438,597	$	425,662
Allowance as a % of VOI notes receivable		23%		23%
Notes receivable secured by homesites: (1)
Homesite notes receivable		986		1,329
Allowance for loan losses		(99)		(133)
Homesite notes receivable, net	$	887	$	1,196
Allowance as a % of homesite notes receivable		10%		10%
Total notes receivable:
Gross notes receivable	$	567,783	$	550,649
Allowance for loan losses		(128,299)		(123,791)
Notes receivable, net	$	439,484	$	426,858
Allowance as a % of gross notes receivable		23%		22%

(1) Notes receivable secured by homesites were originated through a business, substantially all the assets of which were sold by us in 2012.

The weighted-average interest rate on our notes receivable was 15.1% and 15.3%at September 30, 2018and December 31, 2017, respectively.  All of our VOI loans bear interest at fixed rates.  The weighted-average interest rate charged on our notes receivable secured by VOIs was 15.2% and 15.3% at September 30, 2018 and December 31, 2017, respectively. 

Credit Quality for Financed Receivables and the Allowance for Loan Losses

The activity in our allowance for loan losses (including with respect to our homesite notes receivable) was as follows (in thousands):

	For the Nine Months Ended
	September 30,
		2018		2017
Balance, beginning of period	$	123,791	$	120,270
Provision for loan losses		35,866		32,066
Less: Write-offs of uncollectible receivables		(31,358)		(31,581)
Balance, end of period	$	128,299	$	120,755

We monitor the credit quality of our receivables on an ongoing basis.  We hold large amounts of homogeneous VOI notes receivable and assess uncollectibility based on pools of receivables as there are no significant concentrations of credit risk with any individual counterparty or groups of counterparties.  In estimating future credit losses, management does not use a single primary indicator of credit quality but instead evaluates our VOI notes receivable based upon a static pool analysis that incorporates the age of the respective receivables, default trends and prepayment rates by origination year, as well as the FICO scores of the borrowers.

The percentage of gross notes receivable outstanding by FICO score at origination, were as follows:

	As of
	September 30,		December 31,
	2018		2017
FICO Score
700+	56.00	%	54.00	%
600-699	40.00		41.00
<600	3.00		3.00
No Score (1)	1.00		2.00
Total	100.00	%	100.00	%

⁽¹⁾ VOI notes receivable without a FICO score are primarily related to foreign borrowers. 

The following table shows the delinquency status of our VOI notes receivable as of September 30, 2018 and December 31, 2017 (in thousands):

	As of
	September 30,		December 31,
	2018		2017
Current	$	539,836	$	525,482
31-60 days		5,462		6,088
61-90 days		4,531		4,897
Over 91 days (1)		16,968		12,853
Total	$	566,797	$	549,320

(1) Includes$11.6 million and $7.6 million as of September 30, 2018 and December 31, 2017, respectively, related to VOI notes receivable that, as of such date, had defaulted, but the related VOI note receivable balance had not yet been charged off in accordance with the provisions of certain of our receivable-backed notes payable transactions. These VOI notes receivable have been reflected in the allowance for loan losses.