Author Topic: How long before a loan gets charged off?  (Read 2968 times)

sommers

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How long before a loan gets charged off?
« on: December 31, 2016, 05:26:07 AM »
I have been winding down my account over the last 6 months.  I am down to 4 notes (had over 5K last Spring)--all of which are very late pay---31-120 days.  The most recent payment on any of these 4 was last May---
I can't get anything for them on the market place and have been waiting for LC to just default them---so I can cash my remaining balance out and close my account
How long does this take for such seriously delinquent loans ---ones that haven''t had a payment for over 7 months to get closed out by LC?

AnilG

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Re: How long before a loan gets charged off?
« Reply #1 on: December 31, 2016, 06:54:58 AM »
You could have sold late notes on Folio at deep discounts before end of 2016. Then You could have used these losses against capital gains in 2016 at tax time. There was no need to wait for LC to write off your late notes.
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sommers

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Re: How long before a loan gets charged off?
« Reply #2 on: December 31, 2016, 08:19:56 AM »
I'm talking $150 IF they were current.  I've posted them at 90% plus discounts on the market place and zero takers

Dead money--I'm abandoning them

AnilG

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Re: How long before a loan gets charged off?
« Reply #3 on: December 31, 2016, 09:55:51 AM »
You can't write them off on taxes until Lending Club charges them off officially or you sell on Folio. In December  I have seen $100+ notes being listed for $1 or so and selling successfully, most probably by investors who want to write them off in 2016.

I'm talking $150 IF they were current.  I've posted them at 90% plus discounts on the market place and zero takers

Dead money--I'm abandoning them
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sommers

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Re: How long before a loan gets charged off?
« Reply #4 on: December 31, 2016, 12:54:25 PM »
thanks for your replies

How is that a loan whose last payment to LC was May 15, 2016 is still shown as "late" (hasn't been declared in default and charged off)?


yojoakak

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Re: How long before a loan gets charged off?
« Reply #5 on: December 31, 2016, 02:08:31 PM »
If you have Charged Off notes, there's always a chance money will come in from collections. I'm not sure I'd rush to close my account.

AnilG

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Re: How long before a loan gets charged off?
« Reply #6 on: January 01, 2017, 04:48:33 AM »
What percent of outstanding principal do you get back through collection? Not much based on historical data. Unless collection rate exceeds your capital gain tax rate, tax loss harvesting is better strategy at the end of the year than holding a late 31+ day note to following year. You can use capital losses from note selling to offset capital gains from other investment, dollar per dollar, a 10 to 20% (capital gain tax rate) benefit from sold note.

If you have Charged Off notes, there's always a chance money will come in from collections. I'm not sure I'd rush to close my account.
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sommers

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Re: How long before a loan gets charged off?
« Reply #7 on: January 01, 2017, 06:09:09 AM »
still don't understand how a note that has had zero payments for 8 months---hasn't been charged off by LC.  I have four such notes left in my account and would just like to get rid of them and close this down
I have listed them at 5 cents on the dollar and gotten zero buyers--I understand they are trash--and am just trying to dispose of them


AnilG

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Re: How long before a loan gets charged off?
« Reply #8 on: January 01, 2017, 08:26:15 AM »
Middle of last year (2016), I had reached out to Lending Club about Days since Last Payment and Loan Status discrepancy issues that I encountered during analysis of FOLIO listings. LC was able to clarify one issue - Days since Last payment less than what loan status indicates. LC also changed Days since Last Payment column displayed on FOLIO listing page to show the field indicated days since partial/full payment.

But LC was never able to explain why notes were not defaulted/charged off when days since last payment was more than 180 days.

We found Late (31-120 days) notes that even had Days since Last Payment listed at 1,048 days (almost 3 years), Late (16-30 days) notes that had Days since Last Payment listed at 720 days (~24 months) and In Grace Period notes that had Days since Last Payment as 196 days (> 6 months). I was going to publish a blog post on PeerCube about these inconsistencies but never got around to it. Attached PDF is the draft of blog post about data inconsistencies.

Quote
I have listed them at 5 cents on the dollar and gotten zero buyers

Not surprised! No smart one will pay more than a penny or two on the dollar for such notes. I have seen such $200+ notes selling for a dollar or two.

still don't understand how a note that has had zero payments for 8 months---hasn't been charged off by LC.  I have four such notes left in my account and would just like to get rid of them and close this down
I have listed them at 5 cents on the dollar and gotten zero buyers--I understand they are trash--and am just trying to dispose of them
« Last Edit: January 01, 2017, 08:29:14 AM by AnilG »
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lascott

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Re: How long before a loan gets charged off?
« Reply #9 on: January 01, 2017, 11:46:06 AM »
still don't understand how a note that has had zero payments for 8 months---hasn't been charged off by LC.  I have four such notes left in my account and would just like to get rid of them and close this down
I have listed them at 5 cents on the dollar and gotten zero buyers--I understand they are trash--and am just trying to dispose of them
So why didn't you sell them for the lowest possible amount. 1 cent or was that not possible with the interface? What did LC say when you contacted them about why they didn't get charged off? All/most companies use feedback to adjust especially if multiple people complain about something.  Good to ask a forum but if no answer or in a rush do both.
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

Rob L

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Re: How long before a loan gets charged off?
« Reply #10 on: January 01, 2017, 02:42:49 PM »
Post the loan ID's here. Maybe someone will take them off your hands.

Edward Reid

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Re: How long before a loan gets charged off?
« Reply #11 on: January 04, 2017, 01:21:07 PM »
Attached PDF is the draft of blog post about data inconsistencies.

Thanks for posting that -- very interesting. It matters to anyone watching their ANAR, not just folio buyers, assuming that LC discounts the expected return based on status rather than last payment.

Edward