Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: DLIFVOIP on July 22, 2014, 09:22:47 AM

Title: Where are all the high quality loans?
Post by: DLIFVOIP on July 22, 2014, 09:22:47 AM
So for the last week or so I have noticed that my filters are only kicking out 5-15 loans per release time for me to review.  My filters typically kick out 25-40 loans per release?

Anyone else experiencing this issue? 

Thanks.
Title: Re: Where are all the high quality loans?
Post by: Fred on July 22, 2014, 10:34:46 AM
I was able to get good loans until last week; however, my models have been producing very few new loans since this past weekend.
Title: Re: Where are all the high quality loans?
Post by: DLIFVOIP on July 22, 2014, 01:02:29 PM
Ok, well at least it is not just me noticing this?  Any idea on the cause?  I have been doing this for 4.5 years and never seen it slow this much.
Title: Re: Where are all the high quality loans?
Post by: WES on July 22, 2014, 01:48:57 PM
My filters are screwed down pretty tight. I usually have 4 - 8 to review at each release. The past few days, it's been 0 - 2.

So, yeah, volume seems considerably reduced.
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 22, 2014, 03:51:39 PM
For this past weekend, there have only been approximately 50 new loans during feeding time. Monday was comparable to this weekends disappointment. Tuesday morning also showed about 50 new loans while the 1pm feeding time showed about 75. All numbers are approximate but there have really been very few new loans offered.
Title: Re: Where are all the high quality loans?
Post by: Kombinator on July 23, 2014, 01:42:39 PM
Same here, couple of weeks like this actually, the amount of loans passing filters has fallen off the cliff.

Possibly they are either pricing better and yields have fallen, more institutional interest snapping it fast (although doubt that as we would have seen the listing fill) or they have let the quality drop for the next batch of new loans...
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 23, 2014, 06:15:16 PM
Yea I'm not getting many hits either.  Only 2 trades executed today yet 1,000 in cash.
Title: Re: Where are all the high quality loans?
Post by: Fred on July 23, 2014, 10:17:18 PM
I expanded my strategies -- temporarily -- to include higher-grade loans (Bs and Cs).  This allows me to keep investing in loans & minimize my idle cash.
Title: Re: Where are all the high quality loans?
Post by: Rob L on July 23, 2014, 11:41:01 PM
I feel like a yo-yo.
A couple of weeks ago I had no cash and was really  thinking I could/should add more.
Now my cash is piling up; nearly 1% of the account value and still climbing.
Title: Re: Where are all the high quality loans?
Post by: brycemason on July 23, 2014, 11:47:40 PM
One time, I think in Jan. 2013, we all noticed some crazy drop off. It turned out that like 60% of loans had a public record. Lots thought there was a data error and I cracked a joke that perhaps LC was marketing to the Public Record Society. We called up and showed our findings and they confirmed direct mailing to a segment of people with public records.
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 24, 2014, 06:52:47 AM
One time, I think in Jan. 2013, we all noticed some crazy drop off. It turned out that like 60% of loans had a public record. Lots thought there was a data error and I cracked a joke that perhaps LC was marketing to the Public Record Society. We called up and showed our findings and they confirmed direct mailing to a segment of people with public records.
I do remember that now ha ha
Title: Re: Where are all the high quality loans?
Post by: Kombinator on July 24, 2014, 09:07:40 AM
Oh boy, sounds like they are almost purposefully screwing with us:) Direct mailing to convicts is next:)
Title: Re: Where are all the high quality loans?
Post by: DLIFVOIP on July 24, 2014, 09:36:37 AM
I feel like a yo-yo.
A couple of weeks ago I had no cash and was really  thinking I could/should add more.
Now my cash is piling up; nearly 1% of the account value and still climbing.

This morning was better.  My filter produced 33, but I still only bought 8.  I like it when I can buy between 10-12 per release.
Title: Re: Where are all the high quality loans?
Post by: BruiserB on July 24, 2014, 09:57:40 AM
What do most of you do in a situation like this?

a) Loosen your filters some?

b) Increase investment per note?

c) Let cash build up until situation improves?
Title: Re: Where are all the high quality loans?
Post by: DLIFVOIP on July 24, 2014, 10:25:50 AM
What do most of you do in a situation like this?

a) Loosen your filters some?

b) Increase investment per note?

c) Let cash build up until situation improves?

Let cash build up.  Making 0% is better than making 15% for 3 months then experiencing a default.  Plus you have the cash ready for when the volume picks back up.
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 24, 2014, 02:52:46 PM
What do most of you do in a situation like this?

a) Loosen your filters some?

b) Increase investment per note?

c) Let cash build up until situation improves?

Let cash build up.  Making 0% is better than making 15% for 3 months then experiencing a default.  Plus you have the cash ready for when the volume picks back up.
+1

Once you have trash in the pipeline, when you realize its trash you are stuck with it.  This normally happens all at once
Title: Re: Where are all the high quality loans?
Post by: Fred on July 25, 2014, 10:34:10 AM
What do most of you do in a situation like this?

a) Loosen your filters some?

b) Increase investment per note?

c) Let cash build up until situation improves?

Let cash build up.  Making 0% is better than making 15% for 3 months then experiencing a default.  Plus you have the cash ready for when the volume picks back up.
+1

Once you have trash in the pipeline, when you realize its trash you are stuck with it.  This normally happens all at once

You guys assumed that loosening criteria means including more risky loans.  That's only half of the story.  In my case, this means including less risky loans.
Title: Re: Where are all the high quality loans?
Post by: Rob L on July 25, 2014, 11:05:07 AM
You guys assumed that loosening criteria means including more risky loans.  That's only half of the story.  In my case, this means including less risky loans.
True for me too.
I'm up to 1.3% cash so I've dialled back to include less risky / less rewarding loans starting today.
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 25, 2014, 11:15:13 AM
What do most of you do in a situation like this?

a) Loosen your filters some?

b) Increase investment per note?

c) Let cash build up until situation improves?

Let cash build up.  Making 0% is better than making 15% for 3 months then experiencing a default.  Plus you have the cash ready for when the volume picks back up.
+1

Once you have trash in the pipeline, when you realize its trash you are stuck with it.  This normally happens all at once

You guys assumed that loosening criteria means including more risky loans.  That's only half of the story.  In my case, this means including less risky loans.
Yea, I forgot I'm risk averse compared to most of you guys.  I already try to make sure I have a lot of less risky notes, but it seems that is equally as competitive.
Title: Re: Where are all the high quality loans?
Post by: Rob L on July 25, 2014, 06:15:04 PM
Meanwhile, FWIW I think I invested more in Prosper notes this week than LC.
That's a first! Where should I post this? LC, Prosper or both?
Title: Re: Where are all the high quality loans?
Post by: Ran on July 25, 2014, 07:05:44 PM
Meanwhile, FWIW I think I invested more in Prosper notes this week than LC.
That's a first! Where should I post this? LC, Prosper or both?
I vote for both :)
Title: Re: Where are all the high quality loans?
Post by: faeriering on July 27, 2014, 01:40:22 PM
with all the loans that have been available over the last couple months  I'm sitting at my lowest cash level in a long time.  That being said, usually when this happens I tend to move to higher grade borrowers like Fred implies.
Title: Re: Where are all the high quality loans?
Post by: Lovinglifestyle on July 27, 2014, 01:49:50 PM
My cash is growing.  I've moved up to B.  Still growing.
Title: Re: Where are all the high quality loans?
Post by: RaymondG on July 27, 2014, 11:53:32 PM
Only 4 orders have been placed in the past 10 days, comparing 37 notes were bought in the week before that. Cash is growing. My filters is including better graded loans as cash is building up, but still no order was made in this weekend.
Title: Re: Where are all the high quality loans?
Post by: Rob L on July 28, 2014, 08:22:49 AM
Cash up to 1.7%.
Lets hope this is a better week!
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 28, 2014, 09:08:38 AM
I've been waiting for Anil to magically appear in this thread with info on the change in volume.  Beetlejuice, Beetlejuice, Beetlejuice . . .
Title: Re: Where are all the high quality loans?
Post by: trevor on July 28, 2014, 01:22:53 PM
My cash is growing.  I've moved up to B.  Still growing.

Ditto, buying B notes for the first time. I'm sticking with only B4 and B5, though. Seems like the interest rates drop off pretty heavily if you go above that. Not sure if it's worth it.


My regular filters producing 0 to 2 notes, at the max   :'(


I figure it's good to add some more diversity anyways.
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 28, 2014, 04:56:09 PM
This leads one to ask the question: what has changed?

I've been monitoring LC for a year and have been investing for a couple months but have always had plenty to choose from.

Is it possible LC has forgotten their hardcore base which helped them get to where they are? Are institutional accounts suffering as well?

Interesting thought.

I just got done with the 5pm feeding. Zero, zippo!

Something is not kosher.   :)

Unless your specialty is 29%DTI, 3, 4  or 5 inquiries, 15-20% income/payment, multi records, or all of the above. I've never seen such low quality inventory nor lack of decent loans. The fact that there aren't any, leads me to believe they're being sold elsewhere. Impossible for all of them to fall off the planet and all at the same time. It's like the inventory is being stripped prior to publishing.
Title: Re: Where are all the high quality loans?
Post by: Kombinator on July 28, 2014, 05:16:59 PM
Yep, something definitely has changed and it is really not a good thing.  Perhaps a large new institutional investor has come in for a large allocation, perhaps their most recent batch of borrowrs are lower grade than normal, perhaps the interest rates fell overall...whatever it is would be good once it passes...if it does.
Title: Re: Where are all the high quality loans?
Post by: trevor on July 28, 2014, 05:23:35 PM
I don't think the problem is institutional investors (for my filters, at least.) I check as soon as new notes are uploaded, and I'm just not seeing many notes at all.


For the record, I've been investing in high income C-G notes, but it has really slowed down.
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 28, 2014, 05:56:27 PM
Executed 15 trades today.  Still at 9% cash
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 28, 2014, 06:04:26 PM
Executed 15 trades today.  Still at 9% cash

How many have you executed on other Mondays or Tuesdays? I still think something is up.
Title: Re: Where are all the high quality loans?
Post by: Fred93 on July 28, 2014, 06:30:00 PM
I'm not having any trouble, so I suspect you fellows are into some corner of the market which is experiencing some disruption at the moment.
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 28, 2014, 08:18:25 PM
Yes, well you may not be but there are clearly others and myself plus the silent majority who have not chimed in that have noticed a distinct difference in recent times. My filters have been the same for 2 months and I was pulling a good amount of qualified loans to purchase from; not lately.

Additionally, I have Renton's filters listed and they are clearly pulling fewer.
Title: Re: Where are all the high quality loans?
Post by: Fred93 on July 28, 2014, 08:31:45 PM
Yes, well you may not be but there are clearly others and myself plus the silent majority who have not chimed in that have noticed a distinct difference in recent times.

Or perhaps the silent majority is silent because they're not having any trouble.
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 28, 2014, 08:43:03 PM
Possibly and a good point but the fact remains, there are most certainly fewer loans. In fact, I just ran Renton's filters with showing all listings (not just recent listings) and his 'high income' showed the most dismal results. All in fact showed fewer results than previous weeks.
Title: Re: Where are all the high quality loans?
Post by: Fred93 on July 28, 2014, 08:55:36 PM
...there are most certainly fewer loans. In fact, I just ran Renton's filters... All in fact showed fewer results than previous weeks.

Sure.  Some weeks there will be more.  Some weeks there will be fewer.   I don't see that as a crisis.

The fact that Peter published those filters means many people have copied them, and that alone will reduce availability of matching loans.

Inventory goes up and down, but I have no trouble buying loans almost every day.  If the stuff you want is in short supply, chances are in a week or so there will be more available.  That's been my experience.
Title: Re: Where are all the high quality loans?
Post by: AnilG on July 28, 2014, 08:57:32 PM
Couple of weeks ago, we had about 1,500 loans available on Lending Club. Now we have about 1,000. Also, loans are staying longer on the platform before being fully funded. I guess summer doldrum for both borrowers and lenders.
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 28, 2014, 09:13:45 PM
Now there is a logical reply, summer doldrums! I'll buy that. Let's see what happens over the next couple weeks.

And as far as others copying Renton, true but the quality is down from each issuing period.
Title: Re: Where are all the high quality loans?
Post by: Thatguybil on July 28, 2014, 09:20:21 PM
I don't think the problem is institutional investors (for my filters, at least.) I check as soon as new notes are uploaded, and I'm just not seeing many notes at all.


For the record, I've been investing in high income C-G notes, but it has really slowed down.

Perhapse LC has changed the grading on high income borrowers such that more are falling into A,B,C and less into C,D,G?
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 28, 2014, 09:22:53 PM
My 15 matches is below what I would expect.  On a normal Monday, whatever that means, I think I'd be almost fully invested.  Not quite sure the change

I got 23 more matches at the 8 PM feeding.
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 28, 2014, 09:44:56 PM
What I'm finding is fewer quality C and D (assuming what you consider "quality"). There have been much less to choose from and there have been much less that meet my filtering than 2 weeks ago. We'll see how it goes over the next few weeks. I picked up one loan at 9pm tonight and it was a stretch.  :)

I've gone into B4 and B5 loans for the first time as a result.

I was investing $2500 every 2-3 weeks or so but my recent $2500 is verry slooow going.
Title: Re: Where are all the high quality loans?
Post by: Fred93 on July 28, 2014, 11:08:06 PM
I was investing $2500 every 2-3 weeks or so but my recent $2500 is verry slooow going.

If you mentioned how many notes you own I missed it.  Perhaps you need to invest more $ per loan, so that you get the $ moved in that you want, without using so many loans.
Title: Re: Where are all the high quality loans?
Post by: Fred on July 29, 2014, 01:51:21 AM
Perhaps you need to invest more $ per loan, so that you get the $ moved in that you want, without using so many loans.

Anyone here uses Kelly Criterion (http://en.wikipedia.org/wiki/Kelly_criterion) to determine how much to invest on a particular loan?
Title: Re: Where are all the high quality loans?
Post by: JoeB on July 29, 2014, 08:10:37 AM
My account is still too small to up the ante; only 450 loans thus far and rising. :)
Title: Re: Where are all the high quality loans?
Post by: rawraw on July 29, 2014, 08:13:20 AM
Perhaps you need to invest more $ per loan, so that you get the $ moved in that you want, without using so many loans.

Anyone here uses Kelly Criterion (http://en.wikipedia.org/wiki/Kelly_criterion) to determine how much to invest on a particular loan?
An example of why I love Fred being a member here. . .
Do you use it?  Seems interesting to me
Title: Re: Where are all the high quality loans?
Post by: Fred on July 29, 2014, 03:28:15 PM
Anyone here uses Kelly Criterion (http://en.wikipedia.org/wiki/Kelly_criterion) to determine how much to invest on a particular loan?
An example of why I love Fred being a member here. . .
Do you use it?  Seems interesting to me

No, I do not use it (yet), because the criterion depends on the available cash in the portfolio.  My cash has almost always been < 0.5%. 

However, I might start implementing the criterion now that my cash is growing, due to the rarity of "quality" loans. :-(
Title: Re: Where are all the high quality loans?
Post by: rawraw on August 05, 2014, 05:58:40 PM
Volume picked up significantly for me today.
Title: Re: Where are all the high quality loans?
Post by: lascott on August 05, 2014, 06:38:50 PM
Volume picked up significantly for me today.
Good news since my deposit happens tomorrow and I've decided to enlarge it on a per month basis.
Title: Re: Where are all the high quality loans?
Post by: trevor on August 05, 2014, 11:14:05 PM
Volume picked up significantly for me today.

Same here. High income loans were abundant today. Hopefully this volume keeps up.
Title: Re: Where are all the high quality loans?
Post by: JoeB on August 05, 2014, 11:44:42 PM
Today was back to 'normal'.
Title: Re: Where are all the high quality loans?
Post by: Kombinator on August 06, 2014, 07:48:45 AM
Same experience here, the volume is back to normal levels, guess was a weird blip in loan pipeline in terms of quality...hopefully will not be a regular occurence