Author Topic: What's with the 2-cent Partial Payments?  (Read 10208 times)

New Jersey Guy

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What's with the 2-cent Partial Payments?
« on: February 04, 2013, 02:10:23 PM »
Is there something about this bank withdrawal system I don't understand?

Guy has a $.70 monthly payment (or $791/mo. in normal people talk)

His payment apparently failed, but yet a "$.02 Partial Payment" is posted to his account.  No payment plan.

What do they do?  Do they keep hitting the account, reducing the amount each time til they found a balance and sucked the guys last $22 out of his account?

I've noticed that quite a bit.  There is no borrowers contact note shown below the summary.  So I don't think they spoke to the borrower.  And even so, I don't think a borrower is going to say "Yea, I know I owe you $791.  I don't got it, but I'll tell you what.  There's about $22 bucks in my account if you feel that will help.  Go ahead and grab that and I'll catch up with you next month."

How does this partial payment thing really work?
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

rawraw

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Re: What's with the 2-cent Partial Payments?
« Reply #1 on: February 04, 2013, 05:26:00 PM »
I think it involves a magic 8-Ball and some physics.

thezinfan

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Re: What's with the 2-cent Partial Payments?
« Reply #2 on: February 05, 2013, 02:50:44 PM »
The way this USUALLY works is that they hit it once. If it's not a complete payment, it is treated as a missed payment.

yojoakak

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Re: What's with the 2-cent Partial Payments?
« Reply #3 on: February 05, 2013, 05:11:00 PM »
The way this USUALLY works is that they hit it once. If it's not a complete payment, it is treated as a missed payment.

I thought an ACH was all or nothing.

In which case the underpayment would have to be arranged beforehand.

But then there's nothing mentioned in the Collection Log.

DanB

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Re: What's with the 2-cent Partial Payments?
« Reply #4 on: February 05, 2013, 06:05:35 PM »
You guys all appear to have a rather heartwarming belief/trust in the accuracy, timeliness,  comprehensiveness, consistency, veracity (& a few other words I can't think of right now) of the "collections log". It's quite charming really (if not a bit frightening as well) that you're able to draw such comfort from a few notations.  :)

No, no, no,...........I'm not suggesting that it is all bs. I'm suggesting that I've been doing this long enough (& have lived long enough) to recognize the purpose of the collection log. Whether everything there is up to date, accurate, complete etc.,................is actually a bit secondary to the "belief" that it actually is, as you guys have demonstrated.  :)

Ok, go ahead, let me have the criticism!

rawraw

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Re: What's with the 2-cent Partial Payments?
« Reply #5 on: February 05, 2013, 06:25:31 PM »
You guys all appear to have a rather heartwarming belief/trust in the accuracy, timeliness,  comprehensiveness, consistency, veracity (& a few other words I can't think of right now) of the "collections log". It's quite charming really (if not a bit frightening as well) that you're able to draw such comfort from a few notations.  :)

No, no, no,...........I'm not suggesting that it is all bs. I'm suggesting that I've been doing this long enough (& have lived long enough) to recognize the purpose of the collection log. Whether everything there is up to date, accurate, complete etc.,................is actually a bit secondary to the "belief" that it actually is, as you guys have demonstrated.  :)

Ok, go ahead, let me have the criticism!
Was my sarcasm missed? lol

DanB

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Re: What's with the 2-cent Partial Payments?
« Reply #6 on: February 05, 2013, 07:12:44 PM »
Ok, rawraw, not you of course. You are the epitome of realism, logic & an inspiration to us all.  :)

DanB

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Re: What's with the 2-cent Partial Payments?
« Reply #7 on: February 05, 2013, 08:07:52 PM »
Off topic but................I'd like to conduct a poll to find out which among the many canned sentences in the "collection log" are the ones that provide the most comfort to investors. Is it the "borrower promised to pay", or "borrower contacted LC"?
Because I'm fairly certain it can't be the "contacted borrower's co-worker", email bounced or the "skip trace" ones.  :)

rawraw

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Re: What's with the 2-cent Partial Payments?
« Reply #8 on: February 05, 2013, 11:06:01 PM »
Off topic but................I'd like to conduct a poll to find out which among the many canned sentences in the "collection log" are the ones that provide the most comfort to investors. Is it the "borrower promised to pay", or "borrower contacted LC"?
Because I'm fairly certain it can't be the "contacted borrower's co-worker", email bounced or the "skip trace" ones.  :)
I'm always curious if the borrower promised to pay has any relevance in performance of historical loans.

Keltset

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Re: What's with the 2-cent Partial Payments?
« Reply #9 on: February 06, 2013, 12:21:00 AM »
Off topic but................I'd like to conduct a poll to find out which among the many canned sentences in the "collection log" are the ones that provide the most comfort to investors. Is it the "borrower promised to pay", or "borrower contacted LC"?
Because I'm fairly certain it can't be the "contacted borrower's co-worker", email bounced or the "skip trace" ones.  :)
I'm always curious if the borrower promised to pay has any relevance in performance of historical loans.

I've worked many years in debt collections at various companies, and currently handle accounting for one such company, and have discovered that notes and collection logs are complete garbage noise. I know that collection logs have little to no value. In fact a collections log is generally considered a CYOA (Cover your own .... Protect yourself from FDCPA violates and move on) type of material over the correct reporting of statements. Actions are where value is, make your payment or don't- As a collector pay me or I'll sue you if I can garnish---Period. Even assuming you have direct access to the "real" logs, and not the ones they provide us, the logs are hardly close to accurate as things aren't noted or are noted incorrectly. Promises often mean nothing because collectors receive bonuses(Their bonus is the commission they are telling you they don't get) based on amount collected so even the contact is "I'll pay you in ten years" a collector is likely to place it as a promise 'just in case' the guy randomly pays in a time frame that they may benefit. I have wholly ignored every line in the collection logs that LC provides unless it indicates consistent non-contact or BK. In general, collection logs are useless and hold very little accuracy in relation to actual correspondence with the debtor. Again this is all assuming you are receiving the real logs and as retail LC lenders we are not.

I hope this helps to elaborate DanB :)

DanB

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Re: What's with the 2-cent Partial Payments?
« Reply #10 on: February 06, 2013, 01:36:48 AM »
Keltset.........Now you've done it!  Did you have to be so honest? You're removed the comfort blanket from a bunch of transparency believers. What, you spoke the truth? Come on buddy, what were you thinking? This is America.........No one wants to hear the truth!  :)  Just look at who we just re-elected?  :)

Ok, well I just want everyone here to know that I'm not the one responsible when people start jumping off of bridges, or offing themselves. I was perfectly content just making jokes about the log. (I had plenty of material to last me months.)  It was Keltset, who without warning, suddenly decided to launch 2 torpedoes into the ship named "LC Collection Log" & send it limping back to port.  :) 

yojoakak

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Re: What's with the 2-cent Partial Payments?
« Reply #11 on: February 06, 2013, 03:27:22 AM »
I'd like to conduct a poll to find out which among the many canned sentences in the "collection log" are the ones that provide the most comfort to investors. Is it the "borrower promised to pay", or "borrower contacted LC"?

I used to take a little comfort in an *empty* Collection Log.

But I guess now we can't count on even that being accurate.

DanB

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Re: What's with the 2-cent Partial Payments?
« Reply #12 on: February 06, 2013, 05:50:13 AM »
I'd like to conduct a poll to find out which among the many canned sentences in the "collection log" are the ones that provide the most comfort to investors. Is it the "borrower promised to pay", or "borrower contacted LC"?

I used to take a little comfort in an *empty* Collection Log.

But I guess now we can't count on even that being accurate.

You mean a "late" loan with an empty log? Or just an empty collection log in general?

New Jersey Guy

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Re: What's with the 2-cent Partial Payments?
« Reply #13 on: February 06, 2013, 08:53:45 PM »
I have to agree with Keltset on this.  Those log notations are so vague and haphazard.

"Customer contacted Lending Club".  Okay, so does mean the customer called to confirm they are aware they are behind?  Does it mean that they made a promise to pay?  It could mean they called to tell LC they got laid off and can't pay.  It could mean they called and told LC they WON'T pay. 

As interesting as the log might be, none of this still answers the original question of this post.

How do they come up with these 2-cent partial payments?
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

DanB

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Re: What's with the 2-cent Partial Payments?
« Reply #14 on: February 06, 2013, 09:18:38 PM »
New Jersey Guy..........Obviously I can't be sure without seeing the loan & I've hesitated to answer the question because I've been trying to figure out why no one else has answered it yet.............when there are at least 2 very obvious (at least to me) possible answers.

And though I can certainly appreciate the humor, you could probably help things along a bit by not referring to them as "2 cent partial payments"...............because that's not really what they are & perhaps people are taking you literally?