Author Topic: wave of grace notes  (Read 5849 times)

mikedave

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wave of grace notes
« on: May 11, 2014, 10:46:56 PM »
I got about 10 grace notes this weekend, is it just my bad luck or is LC slow to process payments or something?

Lovinglifestyle

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Re: wave of grace notes
« Reply #1 on: May 11, 2014, 11:29:29 PM »
It seems to happen to me regularly on the weekend.  I keep a written log.  On Monday the number drops back down--presumably from payments that come in.  Must be a calendar thing, about payments not posting on weekends.  Not worth worrying about.

New Jersey Guy

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Re: wave of grace notes
« Reply #2 on: May 13, 2014, 10:04:34 AM »
I notice the same thing once or twice per month.  I think it's a small glitch in LC system that usually corrects itself not long after.

On a sour note, though, I have noticed a lot of people actually missing payments over the past 45 days.  I've had a very rough time with bankruptcies, too.  They are killing me.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

Lovinglifestyle

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Re: wave of grace notes
« Reply #3 on: May 17, 2014, 08:26:35 PM »
I too am getting alarmed at the recent number of current notes getting a "payment failed" notice from Interest Radar.  That, and my 33 notes that are 31+ days late now.   Nine of them are BK.

I'm going through a phase of not selling anything.  Maybe I'll get a clearer picture of what's really going on with my account and choices.

New Jersey Guy

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Re: wave of grace notes
« Reply #4 on: May 18, 2014, 10:42:39 AM »
Yea, things have really taken a turn for the worst.

I had 4 Bk's in the month of April.  For me, that alone is pretty high.

Between May 1 and May 5, I got hit with 5 more Bk's.  Yea five in 5-days!
As of today (the 18th), I'm sitting on 8 Bk's for the month.
It's almost like I'm afraid to open up any email from Interest Radar.  Anymore, it's just bad news.

Slower Folio sales is really compounding the problem as these BK's and defaults just chew into what little profit I'm making.  But this is just part of the problem.  If I was selling more, I wouldn't care.

Lately, it just seems that borrowers just aren't paying!  I'm not talking about speculative notes.  I'm talking about good, Current notes.  I have notes that have paid perfectly for 20 months or better now all of a sudden missing payments.  I have notes going from Current to 31-120 days late.  I have past-perfect payers going on payment plans.  Heck, I think I have a note with only one payment left 100 days late.
Is anybody else with a quality portfolio noticed more notes going late?  Or is it just me?

Here's another observation.

Yea, I basically look at C,D and E grade notes.  We all know those aren't the best to begin with.  That's besides the point.
What's puzzling, is that it appears the majority all have FICO drops with the majority under a score of 600.  It's one after another after another after another.

When I pull up the FICO chart, I've noticed that the drops are very recent, perhaps over the course of the past 2 to 5 months.  These are drops ranging from 50 points to 120 points.  Just killer drops, even too severe for me!
It's another indication people aren't paying.  So what's happened over the last 6 months?

I think the only people making money from LC this year are the Bankruptcy lawyers. 
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

SBryantMS

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Re: wave of grace notes
« Reply #5 on: May 18, 2014, 12:38:28 PM »
NJG,

I can report that I have seem the same Grace problem as you.  The good news is that most of my Grace notes have been paying just in grace period.

I have also seen an increase in BKs.  LC seems to be filing the paper work on Chapter 13's -- per the collection log.

It appears to me that LC has changed their internal collections process.  Some agents seem to be working by the old rules while some agents are working by the new rules.  Some of my loans jump to external collections even before they go late while others stay in the LC collections dept. for months.  Others go 30 days late and never show any collection activity, but return to current within 60 days (like LC has done some type of internal review and is happy to wait for the payment). Usually these notes have an upward trend in their FICO.     

I have started watching the FICO score more closely.  I see a direct correlation between significant FICO drops and loan moving from current to grace to late.  I have started using FICO score as an early warning of future problems.  I think I am stating the obvious to the reader here -- but -- I am repeating it for the benefit of the new lenders.       

New Jersey Guy

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Re: wave of grace notes
« Reply #6 on: May 18, 2014, 03:22:02 PM »
See, this is what I'm talking about.  My newest Interest Radar email:

Loan ID    Note ID    Grade    Principal    Previous Status                       Current Status
1165300    9054473   D1 (17.3%)   9.12   Current                               In Grace Period
1165300    9048706   D1 (17.3%)   9.12   Current                               In Grace Period
1166036    9054480   D3 (18.3%)   9.23   Current                               In Grace Period
1227146    9899100   D3 (18.3%)   10.74 Late (16-30 days)               Late (31-120 days)
1227146    9865767   D3 (18.3%)   10.74 Late (16-30 days)               Late (31-120 days)
1543621    13795772   E3 (21.5%)   3.46   Current                               In Grace Period
6889518    29700166   F4 (24.9%)   23.65   Late (16-30 days)       Late (31-120 days)

No good news.  Just more people who aren't paying.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

Ran

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Re: wave of grace notes
« Reply #7 on: May 18, 2014, 04:58:41 PM »
Yea, things have really taken a turn for the worst.

I had 4 Bk's in the month of April.  For me, that alone is pretty high.

Between May 1 and May 5, I got hit with 5 more Bk's.  Yea five in 5-days!
As of today (the 18th), I'm sitting on 8 Bk's for the month.
It's almost like I'm afraid to open up any email from Interest Radar.  Anymore, it's just bad news.

Slower Folio sales is really compounding the problem as these BK's and defaults just chew into what little profit I'm making.  But this is just part of the problem.  If I was selling more, I wouldn't care.

Lately, it just seems that borrowers just aren't paying!  I'm not talking about speculative notes.  I'm talking about good, Current notes.  I have notes that have paid perfectly for 20 months or better now all of a sudden missing payments.  I have notes going from Current to 31-120 days late.  I have past-perfect payers going on payment plans.  Heck, I think I have a note with only one payment left 100 days late.
Is anybody else with a quality portfolio noticed more notes going late?  Or is it just me?

Here's another observation.

Yea, I basically look at C,D and E grade notes.  We all know those aren't the best to begin with.  That's besides the point.
What's puzzling, is that it appears the majority all have FICO drops with the majority under a score of 600.  It's one after another after another after another.

When I pull up the FICO chart, I've noticed that the drops are very recent, perhaps over the course of the past 2 to 5 months.  These are drops ranging from 50 points to 120 points.  Just killer drops, even too severe for me!
It's another indication people aren't paying.  So what's happened over the last 6 months?

I think the only people making money from LC this year are the Bankruptcy lawyers.

Thanks for the statistics. They added one more data point to my argument that Folio is a seller's market. Discounted notes always appear more attractive than they actually are.
Small fishes bought a few hundred dollars notes, take the hit and leave. But when the borrower turns his back against big sharks like NJGuy, sellers won!

mikedave

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Re: wave of grace notes
« Reply #8 on: May 19, 2014, 01:28:37 PM »
Actually I can't complaint too much.  This wave of grace notes amounted to 1% of my portfolio and doubled my loss rate to about 2%.  At an average age of my portfolio of 8months I expect about 1/2 the risk is done from what I've read so I am on track for ~4% default rate overall which is about what I expected according to IR's stats.

Folio sales have been great, it has been a sellers market for the past month or two for sure. I have more than made up the loss to defaults with the little trading I do.   For the last week or so though it has really slowed down I've hardly sold anything.

Randawl

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Re: wave of grace notes
« Reply #9 on: May 19, 2014, 06:55:58 PM »
I haven't noticed abnormally high numbers of graces lately from my point of view, although more might be coming and I am just getting lucky.

New Jersey Guy

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Re: wave of grace notes
« Reply #10 on: May 19, 2014, 09:18:16 PM »
I got hit with 3 more defaults over the weekend.

Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

Joleran

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Re: wave of grace notes
« Reply #11 on: May 20, 2014, 12:34:59 AM »
I got hit with a few a couple of weeks ago, but it's been quiet for me lately.  It's almost like there are hundreds of thousands of notes we could all be investing in and the overlap isn't very good.  Hey, wait a second, there might be something to this theory...

Jomar

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Re: wave of grace notes
« Reply #12 on: May 20, 2014, 09:13:17 AM »
I'm seeing the same trend in my small portfolio - had my first BK in April and three notes went IGP this past weekend.

rockinray

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Re: wave of grace notes
« Reply #13 on: May 20, 2014, 04:57:59 PM »
So far - so good for me... I have only had one go IGP this past week.

Ray

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Re: wave of grace notes
« Reply #14 on: May 21, 2014, 02:44:15 PM »
I had my first BK note in April, too.... A B2 with a FICO that never dipped below 700 ... Oh well.  It's part of the game.