Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: muflafler on November 06, 2014, 09:32:27 AM

Title: "Credit for Ineligible Loan"
Post by: muflafler on November 06, 2014, 09:32:27 AM
I had several transactions show up today, "Credit for Ineligible Loan."  Does anyone know what is going on when this happens?  The Account Activity page does not show the loan number or any other data, just this:


11/06/14   Transfer   Credit for ineligible loan   $24.44

I had 8 of these show up today, I've never seen it before.
Title: Re: "Credit for Ineligible Loan"
Post by: brycemason on November 06, 2014, 09:39:59 AM
LC may have bought back loans that were either identify theft or never should have been on their platform in the first place. Given how many you had and how  rarely loans have been bought back due to identity theft, I vote for the latter.
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 06, 2014, 09:51:11 AM
If it was ID theft, then I would expect the full $25.00 to be credited, no?  The only way it would be for less is if there was a payment made on the loan.  Maybe I'm hanging out with the wrong kind of crooks, but the ID thieves I know don't usually start making payments on the victim's loan.  That kind of defeats the purpose.

OK, maybe some screwed up family member situation.  I can see that.
Title: Re: "Credit for Ineligible Loan"
Post by: Ran on November 06, 2014, 10:43:16 AM
If it was ID theft, then I would expect the full $25.00 to be credited, no?  The only way it would be for less is if there was a payment made on the loan.  Maybe I'm hanging out with the wrong kind of crooks, but the ID thieves I know don't usually start making payments on the victim's loan.  That kind of defeats the purpose.

OK, maybe some screwed up family member situation.  I can see that.

If LC can provide loan ID for these credited loans in account activity page, that would help us a lot. Currently I do not even know what happened to my loans? Are they marked as fully paid or charged off?
Title: Re: "Credit for Ineligible Loan"
Post by: Kombinator on November 06, 2014, 10:56:49 AM
This is quite strange, possibly them cleaning their books to be queaky clean going into IPO, or buying back policy code  loans they accidentally released into general population...would be good to get a clear answer.
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 06, 2014, 11:07:19 AM
or buying back policy code  loans they accidnetally released into general population...

A full month into it?  (Since it appears payments were made.)  Ummm were they buying the lates too or just the current ones?  That's real convenient that they get to choose which ones to stick you with after the ponies leave the gate.  Yanking notes out of somebody's account after the fact seems a bit wrong on many levels.
Title: Re: "Credit for Ineligible Loan"
Post by: Kombinator on November 06, 2014, 11:16:49 AM
No question, looks like a monumental fuck up somewhere, just not clear where and how
Title: Re: "Credit for Ineligible Loan"
Post by: samybob on November 06, 2014, 11:22:52 AM
I also have 6 of these, does anyone know for sure what they are? I didnt see any notes come off my account?

Date
Type
Description
Amount
11/06/14   Transfer   Credit for ineligible loan   $25.28
11/06/14   Transfer   Credit for ineligible loan   $25.15
11/06/14   Transfer   Credit for ineligible loan   $24.90
11/06/14   Transfer   Credit for ineligible loan   $25.15
11/06/14   Transfer   Credit for ineligible loan   $24.95
11/06/14   Transfer   Credit for ineligible loan   $24.94
Title: Re: "Credit for Ineligible Loan"
Post by: avid investor on November 06, 2014, 11:37:45 AM
I also have 6 of these, does anyone know for sure what they are? I didnt see any notes come off my account?

Date
Type
Description
Amount
11/06/14   Transfer   Credit for ineligible loan   $25.28
11/06/14   Transfer   Credit for ineligible loan   $25.15
11/06/14   Transfer   Credit for ineligible loan   $24.90
11/06/14   Transfer   Credit for ineligible loan   $25.15
11/06/14   Transfer   Credit for ineligible loan   $24.95
11/06/14   Transfer   Credit for ineligible loan   $24.94
So, you have some credits that EXCEED the $25 loan?  I assume you are investing in $25 increments because all of these numbers center on $25.
Title: Re: "Credit for Ineligible Loan"
Post by: Kombinator on November 06, 2014, 11:39:49 AM
Looks like they are just taking it out with accrued interest or at par, which explains the 25+/- numbers.

Really disturbing that there has been 0 communication on this issue from LC.
Title: Re: "Credit for Ineligible Loan"
Post by: avid investor on November 06, 2014, 11:43:03 AM
Ok, just called LC on this.  They were "recent" notes that should not have been allowed on the platform.  They have been bought back by LC, without fee.  If the amount is less than the note amount, you have already received one or more payments.  If it is more, it is due to accrued interest.  Sounds like "no harm no foul", if what I have been told is correct.
Title: Re: "Credit for Ineligible Loan"
Post by: Kombinator on November 06, 2014, 11:44:54 AM
For what reason were these loans not allowed on the platform initially?
Title: Re: "Credit for Ineligible Loan"
Post by: avid investor on November 06, 2014, 11:46:15 AM
I didn't ask that, but I failed to add that I was told that the "problem was corrected".  Ergo, we should not be seeing more of these unless a new such problem occurs.
Title: Re: "Credit for Ineligible Loan"
Post by: samybob on November 06, 2014, 11:47:08 AM
yes, I invest in $25 increments. So then this is no big dela, they are either paying us more and if they are giving us less its because we got a payment already. I would to know which notes these are so I can look at them.
Title: Re: "Credit for Ineligible Loan"
Post by: Kombinator on November 06, 2014, 11:48:55 AM
I didn't ask that, but I failed to add that I was told that the "problem was corrected".  Ergo, we should not be seeing more of these unless a new such problem occurs.

Its great that the problem was corrected, but we need to know what exactly the problem was, what was the source to determine if it is likely to occur again, and on what scale, as our accounts can all of a sudden find tehmselves with potentially meaningful cash drag out of the blue.

I will follow up with LC as well to see WTF happened here.
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 06, 2014, 11:52:01 AM
Sounds like "no harm no foul", if what I have been told is correct.

Many of the notes would have been worth slightly more after the first payment and FICO change.  You guys got gypped.  It is not no harm no foul.  And who is there to verify that they took all the loans that they were supposed to, not just the good ones?  Nobody.  Y'all just have to take their word for it.  It all sounds damn suspicious to me.
Title: Re: "Credit for Ineligible Loan"
Post by: avid investor on November 06, 2014, 12:00:21 PM
Just trying to honor the LC 13th Amendment, core.   ;)
Title: Re: "Credit for Ineligible Loan"
Post by: kbenson99 on November 06, 2014, 12:02:41 PM
An example note refunded to me is https://www.lendingclub.com/account/loanPerf.action?loan_id=22101306&order_id=36226607&note_id=57454347 (https://www.lendingclub.com/account/loanPerf.action?loan_id=22101306&order_id=36226607&note_id=57454347).  If you attempt to access the performance page or detail page, you will receive a "Sorry, you do not have access to this loan" or an "Invalid Note or Order specified" exception.  Given the exception, it is logical that these are loans (policy code, institutional, etc) that were not supposed to be released to retail investors.

I noticed the exception on Nov 2 and sent LC an email looking for an explanation.  The reply I received was that it was forwarded on to the "appropriate team for further review as it may be related to a system bug".  Haven't received a follow-up on the refund yet.
Title: "Credit for Ineligible Loan"
Post by: BruiserB on November 06, 2014, 12:34:29 PM
I have around 20 of these.


Sent from my iPhone using Tapatalk
Title: Re: "Credit for Ineligible Loan"
Post by: Randawl on November 06, 2014, 12:49:59 PM
I have a bunch of these as well.  These are technically "refunds" related to some error on LC's part, but they put the credited money under adjustments/credits.  Doesn't "adjustments/credits" get reported as taxable income?  Odd that they didn't include the loan or note ID.  Also odd that part of the "refund" included accrued interest, but yet the sum total of remaining principal was also put into adjustments/credits.  Will those loans get charged-off?  Or are they simply going to "disappear"? This is odd on quite a few levels to say the least.
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 06, 2014, 01:00:16 PM
Nobody has used the word incompetent yet in this thread.  I see from the counts posted that this is obviously not just a few notes here and there.  This is the Bozo the Clown Show.

What is troubling though is that LC apparently reserves the right to buy back notes at any time, for whatever reason they want to make up.  Right now it's not really an issue since rates cannot go lower, but it won't always be this way.  Also even if we give them the benefit of the doubt and say that this time they only bought back notes that were involved with this fiasco; what about next time?  When they can selectively start plucking notes out of accounts there is lots of room for shenanigans there.
Title: Re: "Credit for Ineligible Loan"
Post by: kbenson99 on November 06, 2014, 01:30:26 PM
Email response I received about the loans I questioned on 11/2 is as follows:

"Due to a system error, some loans that were not eligible for investment by retail investors were made available through the Lending Club platform.   ........were ineligible loans affected by this system error.  We have resolved the issue, removed all Notes corresponding to ineligible loans from investors' account and credited investors in the amount of any outstanding principal and accrued interest for such Notes."

So, sounds like policy 2 loans, institutional, etc....
Title: Re: "Credit for Ineligible Loan"
Post by: rawraw on November 06, 2014, 01:57:28 PM
Based on this forum's love of high interest rates, I'd have to gather it was subprime notes.
Title: Re: "Credit for Ineligible Loan"
Post by: Randawl on November 06, 2014, 03:15:32 PM
Based on this forum's love of high interest rates, I'd have to gather it was subprime notes.

I'd say you are right that they are the policy code 2 loans.  I've almost been refunded 1% of my entire portfolio, and they're still coming.

Edit:  I haven't made any new transfers that would skew the results.  My average age is ~16 months.
Title: Re: "Credit for Ineligible Loan"
Post by: muflafler on November 06, 2014, 03:18:47 PM
I had 8 "Credit for Ineligible Loan" when I posed this morning, but now I am up to 22 in total.  It's about 2.2% of my total Notes that have been returned/refunded.
Title: Re: "Credit for Ineligible Loan"
Post by: parker on November 06, 2014, 03:56:39 PM
I had 10 loans credited for ineligibility so far today out of ~650.

I was able to find one loan that was credited. It was subGrade A3. Interestingly almost all of the fields in the loan detail were blank. It was a NoteType = 1.

Parker
Title: Re: "Credit for Ineligible Loan"
Post by: GS on November 06, 2014, 04:12:59 PM
It's hard to believe that an A3 would be subprime ...
Title: Re: "Credit for Ineligible Loan"
Post by: Kombinator on November 06, 2014, 04:49:42 PM
The notes that were erroneously issued and have now been refunded were not really Cat 2, just made it through due to a glitch, they did not pass any of the underwriting models, older or updated, and as resulte LC reasonably had to remove them from circulation.  It was basically a bug that they fixed, not great but not terribly alarming either.
Title: Re: "Credit for Ineligible Loan"
Post by: parker on November 06, 2014, 07:02:50 PM
email rcvd from lc

Due to a system error, some loans that were not eligible for investment by retail investors were made available through the Lending Club platform. We have resolved the issue and removed all notes corresponding from ineligible loans from investors' accounts and credited investors the amount of any outstanding principal and accrued interest for such notes.
Title: Re: "Credit for Ineligible Loan"
Post by: rawraw on November 06, 2014, 07:17:36 PM
I had 10 as well (out of 1000 notes)
Title: Re: "Credit for Ineligible Loan"
Post by: lascott on November 06, 2014, 07:22:00 PM
13 out of 1500+ ... but that number has risen everytime I looked today.
Title: Re: "Credit for Ineligible Loan"
Post by: Randawl on November 06, 2014, 07:24:44 PM
So what is going to happen with the loans now?  Is LC going to package and sell them to someone else now or hold them on their books?

I wonder what this "system error" was and think of how incredibly easy it would be to claim "system error" for a multitude of questionable actions.

I also wonder how they would account for this in their SEC filings, because we just got paid interest (and principal) directly by LC instead of the borrower.
Title: Re: "Credit for Ineligible Loan"
Post by: rawraw on November 06, 2014, 07:26:43 PM
It may have been discovered because of the due diligence with the IPO stuff
Title: Re: "Credit for Ineligible Loan"
Post by: Lovinglifestyle on November 06, 2014, 08:29:09 PM
It may have been discovered because of the due diligence with the IPO stuff

That was my thought as well.  Now I'm wondering why it would only happen on one day if that is the case.
I have 19 now, out of about 4,678.  That makes 0.41% of issued, currents and lates.
It's weird to have them just disappear, without knowing which ones they were.
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 06, 2014, 08:57:35 PM
So what is going to happen with the loans now?  Is LC going to package and sell them to someone else now or hold them on their books?

Good question.  Since you mentioned selling, I'm wondering what happened to all of the notes that changed hands on Folio between the time of this mysterious bug and now.  Are they going to go back and unwind all the trades?  (I doubt it.)  So that means sellers who got rid of these "bad" notes early when they went into grace period got screwed, and the buyers hit the jackpot by getting full par value. I haven't received any credits today, for what it's worth.   I find it hard to believe I didn't end up with any of these if ~1% of notes are affected.

I wonder what this "system error" was and think of how incredibly easy it would be to claim "system error" for a multitude of questionable actions.

Indeed.  Interest rates go down, they can just claim "system" error and buy back notes, repackage them under the lower prevailing rates, and issue them back to institutional investors.  LC pockets the difference in the two interest rates and it's risk-free money for them. 

If one uses some imagination one can come up with many scenarios.  What is now painfully clear though is your notes are your notes only as long as Lending Club wants you to have them.  You can lose them at any time, and you will only receive par value even though your good ones might be worth +5% on the open market.

It's odd that this "system error" happened over such a time span without being detected.  Obviously it wasn't a one-day event or else the payment dates wouldn't all be different.  It's odd that they intentionally don't tell us precisely which loans were affected.  Everything about this is odd.
Title: Re: "Credit for Ineligible Loan"
Post by: parker on November 06, 2014, 09:53:37 PM
Another scenario would be if an "ineligible" note was charged off. Did the investor get a credit for this note?
Title: Re: "Credit for Ineligible Loan"
Post by: ksb1234 on November 06, 2014, 10:24:12 PM
Has anyone had a late, defaulted, or charged off note repurchased? Mine were all current.
Title: Re: "Credit for Ineligible Loan"
Post by: Fred on November 06, 2014, 11:18:02 PM
So what is going to happen with the loans now?  Is LC going to package and sell them to someone else now or hold them on their books?

Since the loans were not eligible for retail investors, LC might simply offer them to the institutional investors.

Another interesting possibility is to sell them in FOLIOfn, since there is no retail vs. institutional distinctions in FOLIOfn, is there?

The worst case would for LC to hold the loans until they are all paid-off or charged-off.
Title: Re: "Credit for Ineligible Loan"
Post by: Fred on November 06, 2014, 11:43:59 PM
I also wonder how they would account for this in their SEC filings, because we just got paid interest (and principal) directly by LC instead of the borrower.

I will be looking for some kind of footnotes about this in the next LC 10-K or 10-Q filings.
Title: Re: "Credit for Ineligible Loan"
Post by: DanB on November 06, 2014, 11:44:37 PM
So what is going to happen with the loans now?  Is LC going to package and sell them to someone else now or hold them on their books?

Good question.  Since you mentioned selling, I'm wondering what happened to all of the notes that changed hands on Folio between the time of this mysterious bug and now.  Are they going to go back and unwind all the trades?  (I doubt it.)  So that means sellers who got rid of these "bad" notes early when they went into grace period got screwed, and the buyers hit the jackpot by getting full par value. I haven't received any credits today, for what it's worth.   I find it hard to believe I didn't end up with any of these if ~1% of notes are affected.

I wonder what this "system error" was and think of how incredibly easy it would be to claim "system error" for a multitude of questionable actions.

Indeed.  Interest rates go down, they can just claim "system" error and buy back notes, repackage them under the lower prevailing rates, and issue them back to institutional investors.  LC pockets the difference in the two interest rates and it's risk-free money for them. 

If one uses some imagination one can come up with many scenarios.  What is now painfully clear though is your notes are your notes only as long as Lending Club wants you to have them.  You can lose them at any time, and you will only receive par value even though your good ones might be worth +5% on the open market.

It's odd that this "system error" happened over such a time span without being detected.  Obviously it wasn't a one-day event or else the payment dates wouldn't all be different.  It's odd that they intentionally don't tell us precisely which loans were affected.  Everything about this is odd.

I'm not sure how you're working out this scenario. So for example let's say I had one of those $25 notes, it wen't IGP & I sold it to you for $15. Today rolls around & I can see one of 2 things happening.

Scenario 1.............nothing happens. I keep $15, you keep the IGP note.
Scenario 2.............they take note from you & return your $15, then temporarily return note to me & remove $15 from my acct. 
                               Then they take note from me, return the $25 initially invested less any interest already paid & do whatever
                                with the note. 

How exactly did the seller get screwed or the buyer hit the jackpot?
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 06, 2014, 11:53:02 PM
Scenario 2 is far too complicated already as you presented it, and you're neglecting the possibility that it may have changed hands 10 more times after that.  They are not going to do anything like unwinding a whole chain of trades, I guarantee you.  Another company might.  LC can't/won't.  I do have some small experience in having trades unwound here.

Scenario 3 (and the most likely one IMHO):  You keep your $15.  The Folio trade stands.  Lending Club pays me the $25 full par value and takes the IGP note.
Title: Re: "Credit for Ineligible Loan"
Post by: Fred on November 07, 2014, 12:29:11 AM
Has anyone had a late, defaulted, or charged off note repurchased? Mine were all current.

Mine are all Current status, with IssueDate as early as 13-Aug-2014.  So this has been going on for about 3 months!

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FzbmmuwD.png&hash=3ee9cbdadec16e91592166bb4e806c0b)
Title: Re: "Credit for Ineligible Loan"
Post by: Fred on November 07, 2014, 12:31:03 AM
When you go to the LoanDetail page, you'll get a "Sorry, you do not have access to this loan" message:

https://www.lendingclub.com/browse/loanDetail.action?loan_id=22471582

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F36NDMn9.png&hash=c7a5fe115ae69f7c61c487077067106d)
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 07, 2014, 12:44:24 AM
Mine are all Current status, with IssueDate as early as 03-Aug-2014.  So this has been going on for about 3 months!

3 months?  Wow.  That's some "system error".  And isn't that oh-so-special that they are all current notes?  Methinks maybe some deal was reached with somebody and they needed a whole bunch of notes to trade off in a pre-IPO deal.  What better way to get a lot of notes at once than to simply take them... this way newly released loan volume on the retail side isn't affected.  But of course take only the current ones.

Fred how are you finding out exactly which notes were affected?  I thought the credit message doesn't give you a loan ID?  I wish I had a few so I could look into this myself.  I'm interested in how A3 loans being released to retail investors can be a "system error".

There's a small possibility that Folio notes that were in the process of settling when they got snatched away are going to be improperly accounted for.  I say this because Lending Club has a long history of kind of just ignoring Folio implications when coming up with their half-baked ideas, and then knee-jerk fixing things later when someone like me exploits the swiss cheese they left and the complaints roll in.  The seller could end up with the Folio sale price _and_ the LC refund leaving the buyer with nothing.  Unless they run this same job again tomorrow.  Before you say "nah, they couldn't be that incompetent", well just look at the past.  They have proven that they are.  We wouldn't be having this discussion if they weren't.  And I haven't gotten any strange Folio order cancellation messages today as far as I know.
Title: Re: "Credit for Ineligible Loan"
Post by: Fred on November 07, 2014, 01:01:52 AM
Fred how are you finding out exactly which notes were affected? 

I keep track of my notes daily, so this is just a matter of outer-join between today's notes vs. yesterday's notes -- finding notes that were there yesterday but not today.
Title: Re: "Credit for Ineligible Loan"
Post by: DanB on November 07, 2014, 03:25:03 AM
Scenario 2 is far too complicated already as you presented it, and you're neglecting the possibility that it may have changed hands 10 more times after that.  They are not going to do anything like unwinding a whole chain of trades, I guarantee you.  Another company might.  LC can't/won't.  I do have some small experience in having trades unwound here.

Scenario 3 (and the most likely one IMHO):  You keep your $15.  The Folio trade stands.  Lending Club pays me the $25 full par value and takes the IGP note.

Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note? In view of your tremendously low opinion of LC in virtually all areas including in the area of "trust",  your opinion of how this would pan out seems suspiciously generous. Thank you though for sparing us the "doing the right thing" nonsense.

Title: Re: "Credit for Ineligible Loan"
Post by: core on November 07, 2014, 03:47:17 AM
Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note?

I am basing this on the fact that in every case we have seen so far, LC has paid note holders the principal plus accrued interest.  That is what the numbers say, that is what the quoted LC rep emails say.  It makes no difference what the investor paid for it.  To do what you are suggesting, unwinding a whole series of trades (even though the cash may no longer be there in some account along the way) would be an absolute nightmare.  This went on for 3+ months.  This is not something that can be undone with a wave of a wand like you are suggesting.  It's not just one trade.

Paying P+I for the note is very straightforward.  That is what they seem to have done.  All I am saying is it's not exactly proper.  You seem to be agreeing with me based on your disbelief that it actually happened that way.

Also Dan this whole IGP discussion may be academic.  I have not yet seen any evidence that LendingClub bought back any IGP/late notes at all.  Not one.  I don't see why they would.  If you're going to rob somebody you take the good stuff.
Title: Re: "Credit for Ineligible Loan"
Post by: DanB on November 07, 2014, 07:28:49 PM
Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note?

I am basing this on the fact that in every case we have seen so far, LC has paid note holders the principal plus accrued interest.  That is what the numbers say, that is what the quoted LC rep emails say.  It makes no difference what the investor paid for it.  To do what you are suggesting, unwinding a whole series of trades (even though the cash may no longer be there in some account along the way) would be an absolute nightmare.  This went on for 3+ months.  This is not something that can be undone with a wave of a wand like you are suggesting.  It's not just one trade.

Paying P+I for the note is very straightforward.  That is what they seem to have done.  All I am saying is it's not exactly proper.  You seem to be agreeing with me based on your disbelief that it actually happened that way.

Also Dan this whole IGP discussion may be academic.  I have not yet seen any evidence that LendingClub bought back any IGP/late notes at all.  Not one.  I don't see why they would.  If you're going to rob somebody you take the good stuff.

I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October. So I would ask for confirmation of the 3+ month claim as well as the 1% of notes claim that someone previously mentioned...............unless they mean 1% of October. 
Title: Re: "Credit for Ineligible Loan"
Post by: rawraw on November 07, 2014, 07:30:25 PM
Based on my redemptions, it comes out to a little less than 1% of my total notes I have invested right now.  And I'm a fairly low interest rate investor (weighted average is 14).
Title: Re: "Credit for Ineligible Loan"
Post by: Randawl on November 07, 2014, 07:31:46 PM
Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note?

I am basing this on the fact that in every case we have seen so far, LC has paid note holders the principal plus accrued interest.  That is what the numbers say, that is what the quoted LC rep emails say.  It makes no difference what the investor paid for it.  To do what you are suggesting, unwinding a whole series of trades (even though the cash may no longer be there in some account along the way) would be an absolute nightmare.  This went on for 3+ months.  This is not something that can be undone with a wave of a wand like you are suggesting.  It's not just one trade.

Paying P+I for the note is very straightforward.  That is what they seem to have done.  All I am saying is it's not exactly proper.  You seem to be agreeing with me based on your disbelief that it actually happened that way.

Also Dan this whole IGP discussion may be academic.  I have not yet seen any evidence that LendingClub bought back any IGP/late notes at all.  Not one.  I don't see why they would.  If you're going to rob somebody you take the good stuff.

I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October. So I would ask for confirmation of the 3+ month claim as well as the 1% of notes claim that someone previously mentioned...............unless they mean 1% of October. 

Fred's post on the previous page of this thread shows one of his from August 13.

Has anyone had a late, defaulted, or charged off note repurchased? Mine were all current.

Mine are all Current status, with IssueDate as early as 13-Aug-2014.  So this has been going on for about 3 months!

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FzbmmuwD.png&hash=3ee9cbdadec16e91592166bb4e806c0b)
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 07, 2014, 11:55:12 PM
I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October.

Alright, then I'll ask you the same question I asked Fred:  How were you able to determine which notes were affected, in order to get the dates?  I am guessing you didn't do an outer join on your database because unless my memory is failing me, you were the one that never uses automated tools because he never found the need.  Even if you wanted to investigate after the fact, you would still have needed a csv snapshot from the previous day or something similar.  Why would someone who doesn't use automated tools take a manual snapshot the day before if they didn't know this was coming?

I thought my data was decent, but I am unable to determine if I was affected except that I do know that I didn't receive any credits.  Disappearing notes happens hundreds of times a day (Folio settlements) and I never had the foresight to look out for notes that disappeared for other reasons.  I thought I had enough crap tracked.  Now it seems I need to add a burglar alarm to my systems too.
Title: Re: "Credit for Ineligible Loan"
Post by: hoggy1 on November 08, 2014, 06:23:59 PM
  I thought I had enough crap tracked.  Now it seems I need to add a burglar alarm to my systems too.

I love this board. I think I might nominate Core for the "Al Sleet Hippy Dippy Policeman Memorial Post: Tonight will be mostly burglars with a scattered few accountants, code jockeys, SEC officials, and investment banker covering up the plunder by morning.

I have only one of these loans but I have seen a few possibly related anomalies this week. I had two high interest notes for sale on folio that got canceled reportedly for payments processing. But neither of them were anywhere near payment processing time. I just re-listed them and they sold today. 
Title: Re: "Credit for Ineligible Loan"
Post by: SamV on November 09, 2014, 12:32:41 AM
I am fairly new to investing with LC and only have a small number notes so far as I test things out to see if I want to commit more money to this.  So it was easy for me to see that five of my already issued notes had disappeared when I logged in to their site on Friday.  I had five of these "Credit for ineligible loan" transactions on my account activity page and wasn't sure what that meant so I called them.

I got the same explanation as others in this thread but wanted to work through the numbers for myself because I don't have a lot of trust for this company yet and didn't just want to take their word for it with no details.  So I asked for details and the customer service person was able to give me the Loan ID's and Note ID's for the affected notes.  It was still a major chore to pull all the information together because the notes were no longer showing up in my account so I had to cross reference the ID's with orders on my account statements to find their dates and interest rates, and then payment details on the account activity page to find the payments I had received for them.

I just created an account on this forum just to let people know that you should call and ask if you want to know specifically which of your notes where affected by this.

I think I will be calling or emailing them again to let them know that I am not happy about the way they are handling this.  They should have contacted us to let us know what was happening and made it easier to find the details about which notes were involved.  I take it from the comments here that this is not a frequent occurrence?  I hope not.
Title: Re: "Credit for Ineligible Loan"
Post by: core on November 09, 2014, 07:04:41 AM
I take it from the comments here that this is not a frequent occurrence?  I hope not.

Sam this exact event has never happened before.  But Lending Club making the rules as they go along, just kind of doing whatever they damn please with your accounts, IS a frequent occurence.  So you better get used to it now.
Title: Re: "Credit for Ineligible Loan"
Post by: Dennis on November 09, 2014, 03:30:58 PM
I am fairly new to investing with LC ....   I take it from the comments here that this is not a frequent occurrence?  I hope not.

Keep in mind that LC is still a young company and P2P (if you can still call it that) is still in its infancy so mistakes will happen.  We're all still learning here.  I think LC has been very good at correcting things in the past and they get better at what they do as time goes on.  But one of the risk factors you must accept if you are going to invest in P2P is that these things will happen from time to time.  Hopefully it won't dissuade you from investing.  I've been doing this for over 3 years and I'm still confident enough in P2P that I continue to add new money.  Best of luck..... 
Title: Re: "Credit for Ineligible Loan"
Post by: DanB on November 10, 2014, 05:19:40 AM
I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October.

Alright, then I'll ask you the same question I asked Fred:  How were you able to determine which notes were affected, in order to get the dates? I am guessing you didn't do an outer join on your database because unless my memory is failing me, you were the one that never uses automated tools because he never found the need.  Even if you wanted to investigate after the fact, you would still have needed a csv snapshot from the previous day or something similar.  Why would someone who doesn't use automated tools take a manual snapshot the day before if they didn't know this was coming?

I thought my data was decent, but I am unable to determine if I was affected except that I do know that I didn't receive any credits.  Disappearing notes happens hundreds of times a day (Folio settlements) and I never had the foresight to look out for notes that disappeared for other reasons.  I thought I had enough crap tracked.  Now it seems I need to add a burglar alarm to my systems too.

No, you're absolutely correct. I have no way of knowing if it has been going on for a month or many months. That 1% of loans comment for some reason temporarily shorted my thought process out & made me forget that I was only looking back 1 month. My mistake.
Title: Re: "Credit for Ineligible Loan"
Post by: SamV on November 11, 2014, 12:42:08 AM
Thanks Core and Dennis.  It is good to know that this specific thing hasn't happened before but that this type of thing is not unusual at this point.  I remain interested but cautious and will continue to monitor my account relatively closely.  And hope that LC is learning from its mistakes and gets more reliable and consistent as it goes forward.
Title: Re: "Credit for Ineligible Loan"
Post by: Fred93 on November 11, 2014, 01:03:03 AM
Keep in mind that LC is still a young company and

Bzzt.  Been in business 7 years.  I don't accept the "young company" excuse, nor should you.

They made a mistake, and they fixed it, but they forgot to explain what the hell they were doing to their customers, which is another mistake.  They're worse and worse about this 2nd type of mistake as time goes on. 
Title: Re: "Credit for Ineligible Loan"
Post by: Prescott on November 11, 2014, 09:38:57 PM
I vote system error in their underwriting criteria - it could be something like a rounding error in their calculations that changed the interest rate on the note or allowed it to get past underwriting criteria when it shouldn't have.

Consider the calculation for how many months ago their last default was - how do you calculated months. If their model builders calculated it based on days / 30, vs the engineers calculating it as something slightly different, you have the situation where loans are just off by a bit. Now suppose your criteria is default < 6 months ago = no loan. You'll get people on the fringes depending on how you calculate months which might be off.

It could be fraud, but in my (somewhat limited experience) fraud is usually limited to joe stealing his neighbor or family members identity - which means finding a bunch of notes all at once wouldn't be common - it would trickle.

If a fraudulent note was late, and you sold it on the second market at a loss, I could see LC liability to the original seller.
Title: Re: "Credit for Ineligible Loan"
Post by: muflafler on February 25, 2015, 05:46:56 PM
Hi,

Noticed on my 1099-B that all of these "ineligible" notes are on there.  Date of Acquisition is the date the note was funded,, while date of sale is listed as 11/06/2014 for all of them. 

Cost is $25 for all (my original investment amount in each note) and then Principal/Income received is just what I received in payments.  And the sale price works out so that I have zero gain or loss on all the notes, I.e., if I bought a $25 note, and then received an $0.80 monthly payment before the note got yanked back by LC, then the sale price is listed as $24.20 so that the total is $25.00 and I have no gain.  So for tax purposes LC is treating this as if you sold on the secondary market for no gain or loss.

Slightly annoying for me because I don't do the secondary market very much and haven't sold any notes on the secondary market, but now I have to enter this 1099-B info for a bunch of notes that LC screwed up on and where the total p&l is zero.  And I do not know how to import it into turbotax in an automated fashion.  Oh well...

Edit:

Actually, if total p&l is zero AND p&l on each individual line item is zero, do I really need to file the info from the 1099-b?  I guess the answer is yes, just because the IRS will receive this and the automated system will probably flag that the IRS received a 1099-B but I did not report a 1099-B in my filing.  And then my filing might get an additional review or something because of that.  Better safe than sorry when it comes to the IRS!