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Lending Club Discussion => Investors - LC => Topic started by: Bohb Daishi on November 11, 2013, 06:48:47 AM

Title: Payment - Settled In Full
Post by: Bohb Daishi on November 11, 2013, 06:48:47 AM
https://www.lendingclub.com/account/loanPerf.action?loan_id=1491676&order_id=12760637&note_id=14453481

Collection Log:
10/9/13 (Wednesday)   Payment - settled in full



I have 5 of them. Can't decide what to make of this, and whether to hold on or to sell them for a loss...
Title: Re: Payment - Settled In Full
Post by: core on November 11, 2013, 07:02:46 AM
Interesting.  I've never seen that one before.  What's even more interesting is that no payment shows up in the payment log anywhere near that date.  What happened to it, accounting-wise?  I would hope that they'd eventually credit it to you.

When that happens, if that note changes from 31+ late status to anything else, even for a day, I say put some lipstick on her and get her sold.  Surely some senior citizen will take it off your hands, using the last $25 to their name that they were just going to blow on some more Alpo.  This seems like a better investment for them.

I'd be a buyer at -85% on this.  If you want to part with all 5, I'll take em.  Fill or kill.
Title: Re: Payment - Settled In Full
Post by: Bohb Daishi on November 11, 2013, 08:16:32 AM
I'd be a buyer at -85% on this.  If you want to part with all 5, I'll take em.  Fill or kill.

I might consider that. The "payment processing" period just started, so we'll have to wait until Thursday or Friday before I can put them up on Folio. One of them is a $50-note, so the total face value of the five is $112.20 with accrued interest ($105.84 without).

Current bid: Core @ $16.83 (85% discount). Anyone else interested?  8)
Title: Re: Payment - Settled In Full
Post by: core on November 11, 2013, 08:37:38 AM
Current bid: Core @ $16.83 (85% discount). Anyone else interested?  8)

Hey now, FOK means no time to take bids or wait for status changes.  There's a way to make the trade even during payment processing.  Of course I'm not going to spill the beans and you're probably not interested in giving me your password so I guess I am forced to wait.  I'll still take them after processing as long as they don't say Default/Chargeoff/PaidOff.  Otherwise no.  That's the gamble, see?
Title: Re: Payment - Settled In Full
Post by: Bohb Daishi on November 11, 2013, 09:05:43 AM
I'll still take them after processing as long as they don't say Default/Chargeoff/PaidOff.  Otherwise no.  That's the gamble, see?

But of course. I'm just shamelessly trying to see if I can get a better deal than an 85% discount. It's only convenient that I have the excuse of the "payment processing" delay... ;)
Title: Re: Payment - Settled In Full
Post by: core on November 11, 2013, 09:28:31 AM
See, who needs FOLIOfn at all?  LC would just need to add a simple form where you enter the proposed trade and then I log in and approve it on my end.  Done.  Notes and cash immediately transferred.  Best of all, we don't have to give Peter any commissions.  He can just sleep well knowing that he has served mankind or whatever it is that he does.  :)
Title: Re: Payment - Settled In Full
Post by: DanB on November 11, 2013, 02:56:31 PM
See, who needs FOLIOfn at all?  LC would just need to add a simple form where you enter the proposed trade and then I log in and approve it on my end.  Done.  Notes and cash immediately transferred. Best of all, we don't have to give Peter any commissions.  He can just sleep well knowing that he has served mankind or whatever it is that he does.  :)

Huh? Peter gets a commission when you trade now? Must have missed that development.  :)
Title: Re: Payment - Settled In Full
Post by: New Jersey Guy on November 11, 2013, 03:09:18 PM
" LC would just need to add a simple form where you enter the proposed trade and then I log in and approve it on my end."

  Having trades pass through you would be like asking Blackbeard the Pirate to hold your wallet.
Title: Re: Payment - Settled In Full
Post by: core on November 11, 2013, 03:13:46 PM
Huh? Peter gets a commission when you trade now? Must have missed that development.  :)

Good morning, Dan.  It's only noon out there.  No, I said we _don't_ have to pay a commission to Peter.  If the trade was "pre-arranged" here on Peter's site and executed on LC.com, there would be no commissions at all.  Dan you better get your green-eyed mistress to make you some coffee.

Having trades pass through you would be like asking Blackbeard the Pirate to hold your wallet.

I meant "I" as in the buyer.  Any buyer would have to log in and approve the trade.  Same as you have to log into paypal to pay an ebay invoice.  After re-reading the way I phrased it, yes I can see how it could have been worded better.
Title: Re: Payment - Settled In Full
Post by: DanB on November 11, 2013, 03:50:25 PM
Huh? Peter gets a commission when you trade now? Must have missed that development.  :)

Good morning, Dan.  It's only noon out there.  No, I said we _don't_ have to pay a commission to Peter.  If the trade was "pre-arranged" here on Peter's site and executed on LC.com, there would be no commissions at all.  Dan you better get your green-eyed mistress to make you some coffee.

Having trades pass through you would be like asking Blackbeard the Pirate to hold your wallet.

I meant "I" as in the buyer.  Any buyer would have to log in and approve the trade.  Same as you have to log into paypal to pay an ebay invoice.  After re-reading the way I phrased it, yes I can see how it could have been worded better.

No coffee around here..............just Mimosas...........& she consumes most of that before going to work.
Title: Re: Payment - Settled In Full
Post by: core on November 11, 2013, 04:06:42 PM
No coffee around here..............just Mimosas...........& she consumes most of that before going to work.

A female psychologist getting liquored up before going in to consult with the mentally disturbed.  Oh my, I LOVE IT.  Dan, your household life sounds more fun by the day!  (Is that why you're crabby this morning?  A wee bit of a hangover?)  My my.  I've had some court-ordered sessions with those female types. You know what shrinks aren't supposed to do with patients.  They do.
Title: Re: Payment - Settled In Full
Post by: DanB on November 11, 2013, 06:15:18 PM

No coffee around here..............just Mimosas...........& she consumes most of that before going to work.

A female psychologist getting liquored up before going in to consult with the mentally disturbed.  Oh my, I LOVE IT.  Dan, your household life sounds more fun by the day!  (Is that why you're crabby this morning?  A wee bit of a hangover?)  My my.  I've had some court-ordered sessions with those female types. You know what shrinks aren't supposed to do with patients.  They do.

Counselor to marginally disturbed "wayward girls" actually, but your point is very well taken. But we all do what we need to do right? For example tomorrow, if I go, I'll possibly have to do a few lines just to get through the p2p meetup. A bunch of "professionals" all talking in monotones usually cause me to have suicidal thoughts................. & we will after all be on the 11th floor.  :)
Title: Re: Payment - Settled In Full
Post by: Bohb Daishi on November 12, 2013, 02:16:53 AM
Current bid: Core @ $16.83 (85% discount). Anyone else interested?  8)

Any other bidders? This obvious accounting error is a very rare opportunity! How often do you find notes that claim to be paid off, but where the payment hasn't posted yet? Clearly LendingClub made a mistake here. A mistake that you can profit on!

Act now and you'll also receive this extra note for FREE (just pay separate $1.49 processing): https://www.lendingclub.com/foliofn/loanPerf.action?loan_id=1228916&order_id=12108150&note_id=9923945

Plus, if you mange to outbid him in the next 3 days, I'll also throw in the smug satisfaction of knowing that you beat Core at his own game. ;D
Title: Re: Payment - Settled In Full
Post by: Bohb Daishi on November 19, 2013, 09:52:26 AM
The payment due date was the 10th, but Folio still claims that these notes are in the "four business day" period. This is getting ridiculous...

Core, are you still interested in them?
Title: Re: Payment - Settled In Full
Post by: core on November 19, 2013, 12:07:01 PM
Sure, as long as you haven't had them wasting away on Folio for days trying to fetch a better price. ;)  I doubt I'll make anything on them, but they'll look good in my curio cabinet.
Title: Re: Payment - Settled In Full
Post by: core on November 20, 2013, 02:44:33 AM
Got them, Bohb.  Thanks!

If anything good happens with them I'll be sure to post a follow-up to rub it in keep you updated.
Title: Re: Payment - Settled In Full
Post by: Bohb Daishi on December 09, 2013, 07:22:32 AM
I just picked up another one of these notes. It makes me really curious what the "Payment - Settled In Full" log really means...

 https://www.lendingclub.com/account/loanPerf.action?loan_id=708969&order_id=14230741&note_id=4218269
Title: Re: Payment - Settled In Full
Post by: yojoakak on December 09, 2013, 10:06:03 AM
I just picked up another one of these notes. It makes me really curious what the "Payment - Settled In Full" log really means...

 https://www.lendingclub.com/account/loanPerf.action?loan_id=708969&order_id=14230741&note_id=4218269


Maybe it means this:

"...cashing a check marked "payment in full" may well discharge the debtor's obligation entirely..."

http://www.callawyer.com/clstory.cfm?pubdt=NaN&eid=916594&evid=1
Title: Re: Payment - Settled In Full
Post by: Keltset on December 09, 2013, 01:03:42 PM
This is directly from the borrower agreement I received when taking out my loan here. (I'm still waiting for it to be issued but I'm a long term investor here as well and see no reason for it to not complete)

"Prepayments and Partial Payments. Borrower may make any payment early, in whole or in part, without penalty or premium at any time. Any partial prepayment is to be applied against the principal amount outstanding and does not postpone the due date of any subsequent monthly installments, unless Lender otherwise agrees in writing. If Borrower prepays this Note in part, Borrower agrees to continue to make regularly scheduled payments until all amounts due under this Note are paid. Lender may accept late payments or partial payments, even though marked "paid in full", without losing any rights under this Note."

Based on what I bolded from the borrower agreement, there is no liability to LC to cash a check marked "Paid In Full" that obligated them to treat the note as fully settled. I believe they are just notating that the check was marked as such and would continue any standard payment methods or collections methods as needed on the account. One of the note links I had clicked on and reviewed indicated that there were collection efforts after the notation on the payment. Had I seen this thread earlier, I would have offered to purchase those notes from you ;)


Edit: Actually this was from the Loan Agreement, not borrower agreement.
Title: Re: Payment - Settled In Full
Post by: brycemason on December 09, 2013, 03:54:04 PM
Of course, LC's agreement with the borrower cannot fly in the face of the California statute which trumps it. It seems the law would win out. It's like a state making a law that opposes federal law, which would hold. Go go severability clause.
Title: Re: Payment - Settled In Full
Post by: Keltset on December 09, 2013, 04:54:23 PM
I'm not entirely certain what California law is under the matter but I do recall reading about a few court decisions and the primary court decision sticking out in my head is nelson v. fire insurance exchange in which the decision, if I recall correctly, was that there was no reservation of rights and thus the check cashed indicating that the claim is resolved in full does constitute an agreement to resolve the outstanding amounts and resolved any potential further action from claim.

What I had read into the failure to reserve rights was that they failed to protect themselves such as I would view LC's clause... I'm not a lawyer though and this is also from memory. Either way it has peaked my fascination.

Are all of these loans governed under CA law, or do they reside under the host (residing) state of the individual borrower where case-law and written law may differ state to state?
Title: Re: Payment - Settled In Full
Post by: core on December 09, 2013, 05:16:26 PM
Why would a loan originated by a Utah bank and sold to a Delaware company be governed by California law?

At any rate this whole deal is ridiculous.  For one, it says SETTLED in full, not paid in full.  And LC wouldn't build in a whole different status message in their system to log it in case some crackpot tries some trick that he read about once.   If they wanted to log it there are plenty of other ways to do so which would be more clear to everyone involved.  Hint: The word "Settled" would not be a part of it.  "Nut" might be.  "Refuses to pay" is even better.  Also, you will note that no payment is logged near the date of that notation for the notes in question.

Next y'all are going to suggest that the borrower offered to pay his debt in pennies, LC refused it, and that's what the notation means.  It makes just as much sense.  This thread is on-target to get as funny as that one where you guys thought LC was providing bankruptcy counseling when people called up.
Title: Re: Payment - Settled In Full
Post by: Keltset on December 09, 2013, 05:34:11 PM
Why would a loan originated by a Utah bank and sold to a Delaware company be governed by California law?

Lost in headquartered in SF-CA land... Ha! Anyway my question was more regarding the enforcement laws, I would think it would be related to the resident state of the borrow vs. the lenders state in the same way that debt collection laws are related to the individual state of the borrower or federal depending on the law you are looking at.

After a little research it looks like there are many protections against the ability to simply state you are paid in full and have that be a valid restrictive endorsement. One can look at the UCC laws and the Safe Harbor clause alone to see many exit's for a company such as LC. In fact simply having the check go to a processing center or lockbox can void a restrictive endorsement in many (if not all, depending on the most recent version of UCC the state has) states. The restrictive endorsed check would have to be mailed to a specific place or person and must be manually reviewed during the course of business and not just shoved through a payment processing unit that has no legitimate ability to negotiate an agreement as such on behalf of the organization.

Based on everything I have read out of my curiosity going sky high, it's more of a myth these days than a factual obligation- especially if the disputed party to the contract has reserved their rights against such action directly in the contract- most states allow this contractual exemption and even allow them to still take and cash the check and simply dispute the restrictive endorsement on it.

Edit>I have no idea regarding the lack of payment around the thing... Has anyone actually messaged support regarding this to just get a clear cut answer?
Title: Re: Payment - Settled In Full
Post by: core on December 09, 2013, 05:54:52 PM
Has anyone actually messaged support regarding this to just get a clear cut answer?

Not that I know of.  If anyone wants to try, you'll probably need a note in-hand to ask about.  I would be glad to sell you one for -70%.
Title: Re: Payment - Settled In Full
Post by: Keltset on December 09, 2013, 05:58:49 PM
You paid 85... I'll take one for 90 :P Ha.... I'll just worry about it when / if I ever come across one...
Title: Re: Payment - Settled In Full
Post by: Bohb Daishi on May 07, 2014, 03:30:56 AM
Looks like the old "Payment - Settled In Full" log was just changed to "Borrower completed all payments for the negotiated settlement amount and will not be making additional payments".

I'm glad I offloaded those notes to Core...  ;)