"Stress in the Residential Market" - Major Lender Exits

By John Honovich, Published Nov 06, 2019, 08:54am EST

The residential security / 'alarm' market is getting worse, at least for traditional players. Now, one of the biggest lenders in the industry has quietly exited.

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In this note, we examine the exit, what is going wrong in the market and how it might get worse.

Exit ** ******* ******* ****

******* ******* **** *** exited *** ******** ******* business. *** ******* (********* referred ** ***************, *********** * ********** ******* *******) *** one ** *** ******* lenders ** *** **** decade ** ******** ********* ranging ****$*** ******* ********* ** ASG **** ** ******$** ******* **** ** Becklar ** *** ******* **** ***** *** to$** ******* ******* ** Mountain ***** ** ******* 2019.

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***** ******** ******* ***** was *** ****** ********** ********* ********* ** industry ****** ********* ***** ********* ******* ** SNG**** ****.

"Stress ** *** *********** ******"

**********, ** ******* ***********, Pacific *******'************* *** * ********** ****** ** *** residential ******, ***** *****:

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**** *********** ************** *************** ****** * ******* dollars ** **** *** eliminated/converted ** **** ** new ***********. ***** *** slide **** *** ******* Amazon, ****** ** **********, by ****, ** ** pretty ***** **** **** group ** ********* *** having ** ********** ******.

Lenders ********* ****** **********

**** ***** ** **** security ******* *** ****** confidence ** *** ******, according ** ***** ***** to *** *******. **** is ***, *********, ** isolated ****** ** *** Bank *** ********** ******* concerns ** *** ***********.

Vicious ***** ****

** *** ****** **** lenders **** ******* ** raise *** **** ** lending, **** ***** ******** the ************ *** *********** residential ***** *********. *** less **** ********* *** the ****** *** *****, the ****** ** ** for *********** ********* ** grow *** ****, *** some, *******.

Economics *********, *** *** ******'* *****

*******, **** ** * problem ** *** ********* of *** *********** *********** model, *** *** ******'* turning ** *** ********. The ***** *** ****** reflecting *** ******* ** changing *********** ********. ** the ***** ********* ***** call ****, *** ****** creation ***** *** ***** margins ****** **** *** traditional ***** * **** lucrative ********, ***** ********** puts ******** ******** ** valuations (*** *** *********, etc.).

Fleeing ** **********

******** ** *** ****** boy ** *** ****** to **********, **** ************ *********** focused ********* *** ********* / ******** **** **** commercial (*.*., ********.*** / ******* ******** **** *****).

***** *** ********** ****** is ********* *** **** impacted ** ***, *** historical *** ********** *******, rather **** *** *******, business ** **** *********** attractive **** *** ************ model. ** *** ***** hand, **** ** *** traditional *********** ********* *** faced **** ********** ** bankruptcy ** **** ******** solely ** ****-****** *********** against ******* ***.

Simplisafe ***** **** '*******'

*** ******** ******* ** the ******'* ****, *** certainly, *******,********** ******** * *** marketing ************** ******** *********** *********** providers ** ******* ********'* blind, ** *** ***** excerpt ***** *****:

Outlook *****

***** ** ***** ******* niches ****** *** *********** residential ****** **** *******, especially *** ******-*** ***********, mass-market *********** ** ****** severe ******** ********. **** ADT *** ****** ******* position ********** ** ***** home ********* ****** *** challenge **** ** *** much ** ** **** / *************** *** **** sustain ** *** ********* who *** **** ************ filling *** ***** *** smart **** *********.

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Comments (8)

***! *** ***** **** up ** ***%! * would **** ** *** us ***** ****....

* ***** **'* *** late ** **** ***** "blockchain" ********* ** **** name *** ***** $$$

** ** *** ** money ** *** ****, I'd ******** **** **** a ***, *** **** and *** **** ****/****** are ** **. ****'** seemingly ********* ********** ** far, *** *** *** hard ** ******* **** slithering ***** *** **** this ******* **** - and ** **** **, well, **'* ******** **** over *** * ***** of ******* ******* (****** too *****, ** *** big **** ********* ** debt).

**** *** ******* *** also *** *** ********* deals **** ******* ** over **% **** ** the ***.

#*, ****** *** *******. I ***** **** *** but *** *** **** able ** ***** ** down. **'** **** * bit ******* *** ********* / ***** ****** *** we *** ****** ** get **** ******* ** this. ****** *****!

* **** **** ***** that ******** ** ******* out ** *** **** deals *****. *** ** advising *********** ********* ** find ******* ****, *** is *** ******* *** of *** ********** *****.

**** *** **********, **** what * **** *****, are *** ******** ** move **** **** ********* these ***** ******.

********* ** ****** * spoke **, ************* *** ~$650M *** *****, *** the ***** **** * prepayment *******. ** *** of ***** ******* ********* customers **** ** ***** terms *** *** ****** (which ** *** ******* uncommon), **** *** ****** much *****, ** ************* is ***** ** ** unlikely ** **** ** extend *****, ******** **** financing, ***. **** ****** those ********* ******* ** seek * *** ****, from ******* *******, *** then ****** ********** ********* on ***** ******** ****, making *** *********** ******** that ***** ********* *********** being **** **** **** expensive.

* ***** ****** **** overall ** **** ** reduced ********* *** **********, and ******** **** ***** in *&* ******** ** this ***** **** **** as **** ************* *** forced ** **** ** they ***'* **** *** capital **** **** ** the ********** ********.

* ******** ** *** how ****** ***** **** positive ** ****? *** anyone *** *** * case, ******* *** ***** with ** ** ***, on **** ******* ** positive ** *** *********** space? ***** **** ** you **** *** ******.

**** **** *****… “**** is *** ****** ** traditional *********** ******** *********”?
** *******…. **** *** doomed ** **** ***’* embrace *** ******* ** the ******. *** ****** itself ** * ********** opportunity, *********. *** *** trend **** ****** **-**-***-**. One ** *** ********** to *********** *********** ****** is ************* *** ** do ******** ******* *** local ****** ** ***** silent *******. **** ********** will ** ******** *** same ******…. ********** **** not *** ***** ****** monitoring **********, *** *** operate ***** ***** *** monitoring ********, *** *** systems *** *** ******-*******. They ***-**** ********** *** license ** *** ** the *** *********** *****-***** sources…. **** ********** ** just ******* ******** ******** with * *** *********** budget *** **** ** puffery. **** ** *********** if ******** ***.
******: *** *****; ******* Services *****

** ** **** ********** in ****. ** **** from ** ******* **** to *******. **** ***** will **** * ******* with *** (** ***** is ***) ************ (** there ***** ***) **** come **** ** *** market.

** *** ******** ***** on **** ** ** difficult ** ** ******* experience *** *********.

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