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Lending Club Discussion => Investors - LC => Topic started by: Rob L on December 03, 2015, 05:40:26 PM

Title: Worst Month Yet
Post by: Rob L on December 03, 2015, 05:40:26 PM
Posting this to take the opportunity to whine and also see if others have seen anything similar.
Background; my portfolio's weighted average age was maybe 15 months this past January and is approaching 18 months now.
Perhaps 90%+ of the loans are D's and E's, and all are 36 month. I have 4000 - 5000 active notes (not fully paid or charged off).
Got my Nov statement today and the past two are my worst by far.
Simply taking the numbers from the 2015 monthly statements and computing charge offs as a percent of principal invested and as a percent of interest received I came up with the following (easy stuff; no NAR, IRR, XIRR, etc.):

Stmt Start           Charged Off            Charged Off             
    Date                   as a %                   as a %
                           of Interest               of Principal
-------------          -------------             -------------
01/01/2015              50.24%                   0.66%
02/01/2015              31.27%                   0.38%
03/01/2015              48.74%                   0.69%
04/01/2015              40.07%                   0.56%
05/01/2015              31.68%                   0.41%
06/01/2015              46.76%                   0.61%
07/01/2015              27.51%                   0.39%
08/01/2015              48.92%                   0.59%
09/01/2015              41.55%                   0.52%
10/01/2015              61.86%                   0.84%        ****
11/01/2015              75.24%                   0.92%        ********

Simple Average         45.80%                   0.60%

Yep that's right fans. This months score was 75% of my interest covered charge offs and I got to keep 25% for myself.
My average weighted portfolio age is way past the peak of the charge offs curve, so I don't understand what's going on.
Maybe I should just consider myself lucky that I at least made a profit.
There's been a lot of dissing of LC's ANAR, but it did warn me things were going south fast. It dropped almost a full % the past 2 months.
Now I'm going to have a beer (and cry in it).
Title: Re: Worst Month Yet
Post by: jheizer on December 03, 2015, 06:15:01 PM
Ouch.  That is a pretty large jump.  I'd be curious if you notice anything similar about them.  All from a similar month, etc.  The holidays has had me wondering what effect it has on both existing loans and loans issued this month in the future.  I just haven't had time to attempt to research it.  At 4.9 month average duration I'm still too new to cry over too many charge offs yet.  My only advice is have 5 beers.
Title: Re: Worst Month Yet
Post by: AnilG on December 03, 2015, 07:17:02 PM
Yep, you are near the tipping point.

It will be rare for you to have negative monthly portfolio return with these loans unless you stopped lending cash in the account.

Background; my portfolio's weighted average age was maybe 15 months this past January and is approaching 18 months now.
Maybe I should just consider myself lucky that I at least made a profit.
Title: Re: Worst Month Yet
Post by: Rob L on December 03, 2015, 07:25:18 PM
Yep, you are near the tipping point.
It will be rare for you to have negative monthly portfolio return with these loans unless you stopped lending cash in the account.
Most cash drag I've had the past year was maybe 2%. I just keep plowing it back.
Haven't looked at the charge offs for common themes. Needs to be on my to-do list (after the beers).
Title: Re: Worst Month Yet
Post by: investor88 on December 03, 2015, 07:41:00 PM
Hi Rob,

I have over 5000 notes invested and my Lending Club results have recently been poor.  Mostly C,D and E notes.    Can I ask you what is your current adjusted net annualized return?  You may be about 8-10% now, but the only way to keep your return high is to keep plunging more cash in.  If you stopped investing for a while, the losses would start to snowball.
If you look at the ‘Understanding Your Returns’ chart, the interest rate falls very far over time.  Once your portfolio is over 18-24 months, the returns really start slipping to between 6-8% and with the tax consequences of so many write-offs you may even have a negative return.
Title: Re: Worst Month Yet
Post by: Fred93 on December 03, 2015, 07:49:16 PM
If you look at the ‘Understanding Your Returns’ chart, the interest rate falls very far over time.  Once your portfolio is over 18-24 months, the returns really start slipping to between 6-8%

That is misleading.  Most of the data in that chart is from 36 month loans, and with a portfolio of 36 month loans, you really cant get beyond about 15 months average age unless you stop investing.  I believe the data points for higher average age are people who have stopped investing.  It is possible that these people stopped investing because they were doing poorly.  That's a selection bias. 
Title: Re: Worst Month Yet
Post by: lascott on December 03, 2015, 08:27:19 PM
Can I ask you what is your current adjusted net annualized return?
See http://www.lendacademy.com/forum/index.php?topic=3365.msg31411#msg31411
Title: Re: Worst Month Yet
Post by: investor88 on December 03, 2015, 08:38:49 PM
I believe the data points for higher average age are people who have stopped investing.  It is possible that these people stopped investing because they were doing poorly.  That's a selection bias.

I think there is also a selection bias that the people who post on this forum are mostly active investors who have young portfolios and are seeing the illusion of a good return.

I stopped investing in LC about a year ago and therefore have an older aged portfolio, I have experienced the pain of charge offs that Rob is only now beginning to experience.  So I am offering a warning to Rob from the older end of the investment curve that it may be a mistake to keep plowing your cash into LC.   

When I stopped investing I thought that I was past the peak of the charge off curve. However, I still have months where the charge offs are well over 100% of the interest earned!  I think that if you stopped investing now that by January or February your charge offs would be over 100% of the interest you earn because you would not have the falsely inflated benefit of new notes paying 20-25%+.
Title: Re: Worst Month Yet
Post by: Fred93 on December 03, 2015, 09:34:11 PM
When I stopped investing I thought that I was past the peak of the charge off curve. However, I still have months where the charge offs are well over 100% of the interest earned!

Clearly, you made poor choices.  You are precisely one of those people I was talking about who has stopped because he had poor performance.

The main reason people who invest in very risky loans are deceived is that loans pay interest starting after 1 month, but cannot be charged off until they are 5 months old.  Thus there is a 4 month skew in the numbers that people often subtract.  (And NAR makes this same mistake.)   It is not the average age that matters, but the fraction of loans which are younger than 4 months.

Quote
I think that if you stopped investing now that by January or February your charge offs would be over 100% of the interest you earn because you would not have the falsely inflated benefit of new notes paying 20-25%+.

And you make this rather astonishing claim while knowing nothing about my portfolio!  I have no notes paying 20-25%. 
Title: Re: Worst Month Yet
Post by: brycemason on December 03, 2015, 11:00:06 PM
My account and that of my family has shown increased distress in the last quarter.
Title: Re: Worst Month Yet
Post by: nonattender on December 03, 2015, 11:06:10 PM
I think there is also a selection bias that the people who post on this forum are mostly active investors who have young portfolios and are seeing the illusion of a good return.

Fred93 has done the hard lifting of pointing out the real selection biases involved in the issue you're experiencing, but, as far as
"forum-demographic", many of us have been around this industry since ~2006 - and some of us since before ZOPA UK's debut...

It's not the first time we've seen someone discover adverse selection, the effect of new loans (or prepays) on return metric, etc.

I will note, as well, that you mentioned "tax consequences" as a factor in whatever return calculation you may have been using
to model your portfolio's performance.  Investing in this asset class outside of a tax-efficient vehicle (IRA/etc)  is "not optimal"...

That was my clue that it was you who is the rookie - rather than your initial claim that the real problem belonged to all of us. ;)
There is an EOY/holiday effect that usually affects performance during this time of year - but that is a higher order "problem".

Better luck to you (primarily in the sense that you reduce your dependence upon "luck")!
Title: Re: Worst Month Yet
Post by: investor88 on December 03, 2015, 11:30:33 PM

Quote
I think that if you stopped investing now that by January or February your charge offs would be over 100% of the interest you earn because you would not have the falsely inflated benefit of new notes paying 20-25%+
Quote
And you make this rather astonishing claim while knowing nothing about my portfolio!  I have no notes paying 20-25%.

Fred, I am talking to the original poster Rob.  He is the one asking other people who have D and E investments about their portfolio's performance.  Since you do not invest in these kind of notes there is no need for you to offer your opinions.  Please let us D and E investors commiserate and discuss with each other.

I invested in these higher interest/ higher risk loans because LC projected the returns at 12%-15% at the time when I placed my orders.  However now my account is showing an ANAR of under 8% and looking at the 'Understanding Your Returns Chart', I am performing on average of others with similar notes.  Looking at the chart, zero people who invested in over 500 notes have earned over 10%, most are between 5 and 8%.

Rob, why did you choose to invest in the D and E notes?  Were you swayed by LC's projections that you would earn over 12%?   
Title: Re: Worst Month Yet
Post by: nonattender on December 03, 2015, 11:41:16 PM
I invested in these higher interest/ higher risk loans because LC projected the returns at 12%-15% at the time when I placed my orders.  However now my account is showing an ANAR of under 8% and looking at the 'Understanding Your Returns Chart', I am performing on average of others with similar notes.  Looking at the chart, zero people who invested in over 500 notes have earned over 10%, most are between 5 and 8%.

Rob, why did you choose to invest in the D and E notes?  Were you swayed by LC's projections that you would earn over 12%?

Ah... professional victimhood.  Ok, you don't want to learn - you want someone to blame, besides yourself.

Moving on...
Title: Re: Worst Month Yet
Post by: investor88 on December 03, 2015, 11:54:43 PM


Ah... professional victimhood.  Ok, you don't want to learn - you want someone to blame, besides yourself.

Moving on...
[/quote]

Yes, please move on.  I am trying to honestly help the OP and give information about my experience with LC.  I’m really confused by what the motivation is to insult me, but please stay out of this discussion.  You haven’t added anything to the topic except for trying to silence me.  I am just offering Rob my honest experience and warning him about what is in store. 
Title: Re: Worst Month Yet
Post by: RaymondG on December 04, 2015, 12:52:39 AM
Got my Nov statement today and the past two are my worst by far.

I have noticed it in October that my adjusted XIRR (of the month, annualized) suddenly dropped in August. It's 4.4%, 5.83%, 7.11% from August to October, which means increasing number of notes became late. Charge-off / Interest is 50% in October.
Title: Re: Worst Month Yet
Post by: lascott on December 04, 2015, 01:21:23 AM
Simply taking the numbers from the 2015 monthly statements and computing charge offs as a percent of principal invested and as a percent of interest received I came up with the following (easy stuff; no NAR, IRR, XIRR, etc.)
Rob L,
You made me curious what mine looks like.
Here it is but note that I only started this account in 03/2014 and it currently has an avg age of 8.6 mos.

Charged Off as a % of Interest
Image: http://i.imgur.com/YS66vtg.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FYS66vtg.png&hash=1482e7cc8cc04b2f45bb59ebb4e07288)
(I multiplied the Principle % by 100 to scale it)
Title: Re: Worst Month Yet
Post by: Rob L on December 04, 2015, 10:17:51 AM
Can I ask you what is your current adjusted net annualized return?
Once your portfolio is over 18-24 months, the returns really start slipping to between 6-8% and with the tax consequences of so many write-offs you may even have a negative return.

My ANAR has slipped to 9.65% from 10.65% a couple of months ago and my account is IRA. I understand the tax inefficiency of investing in LC notes in a non-tax deferred account and would  sure hate to have the headaches associated with preparing the return. The drop off over time is something I expect as average age increases. I'm just surprised at the suddenness and magnitude of the recent two months charge offs. With so many notes I did not expect the volatility.
Title: Re: Worst Month Yet
Post by: Rob L on December 04, 2015, 10:50:42 AM
Rob, why did you choose to invest in the D and E notes?  Were you swayed by LC's projections that you would earn over 12%?

No, I never expected 12%-15% returns and I didn't start with the D's and E's. I started more conservatively and increased the riskiness of my portfolio over the first year or so as I learned more about this P2P (whatever) stuff. Thought I would get a better return if I took on more risk but only 1% - 2%. When all is said and done if I make 8% I'm delighted, 6% to 8% happy, less than 6% not happy.
Title: Re: Worst Month Yet
Post by: Rob L on December 04, 2015, 11:00:23 AM
Based on RaymondG, Bryce, Lascott and me there does seem to have been a surge of charge offs the past couple of months.
Nonattender suggested seasonality. Maybe. Trouble in the oil patch? That's been discussed. Other theories?
Once again I am very surprised at the volatility here. Something that simply owning a lot of notes doesn't ameliorate.
Title: Re: Worst Month Yet
Post by: avid investor on December 04, 2015, 12:36:58 PM
I wouldn't sweat it.  I have had poor months and great months (just coming off a great one, FYI). and there is a certain "luck of the draw" all of the time.  Keep in mind that I invest electronically through the API, so there are "no poor choices" made manually in my investments.  The software looks at the filters and model and makes the choices.  As a result, I can say that these things do occur as a part of the random selection, but let's face it.  Investing in LC notes is for the long haul.  Anybody that invests $1000 in hopes of having an extra $100 a year later and not reinvesting it would have to be crazy.  The real return is in compounding your returns.  Have a glass of holiday cheer and let it ride.  I've been in for 5 years now - very happy with my returns.
Title: Re: Worst Month Yet
Post by: nonattender on December 04, 2015, 01:02:42 PM
Nonattender suggested seasonality. Maybe.

Q3 traditionally shows very strong demand; after Q3 comes Q4.

Q3 of year 0="we need money"; Q4 of year 1="check's in mail".

*shrug*
Title: Re: Worst Month Yet
Post by: AnilG on December 04, 2015, 07:12:06 PM
In 2015, three months with highest charge offs

October0.4429%
January0.4376%
September0.4327%


For All Lending Club loans issued between June 2007 and Sept 2015,

Three months with highest charge offs

October0.4163%
March0.4078%
January0.4076%

Three months with lowest charge offs

June0.3617%
May0.3566%
November0.3561%

Based on RaymondG, Bryce, Lascott and me there does seem to have been a surge of charge offs the past couple of months.
Nonattender suggested seasonality. Maybe. Trouble in the oil patch? That's been discussed. Other theories?
Once again I am very surprised at the volatility here. Something that simply owning a lot of notes doesn't ameliorate.
Title: Re: Worst Month Yet
Post by: Rob L on December 04, 2015, 08:27:15 PM
In 2015, three months with highest charge offs

October0.4429%
January0.4376%
September0.4327%


For All Lending Club loans issued between June 2007 and Sept 2015,

Three months with highest charge offs

October0.4163%
March0.4078%
January0.4076%

Three months with lowest charge offs

June0.3617%
May0.3566%
November0.3561%

Based on RaymondG, Bryce, Lascott and me there does seem to have been a surge of charge offs the past couple of months.
Nonattender suggested seasonality. Maybe. Trouble in the oil patch? That's been discussed. Other theories?
Once again I am very surprised at the volatility here. Something that simply owning a lot of notes doesn't ameliorate.

Thanks for the ground truth! I can certainly vouch for this October. You looked at all loans, not just D & E's, so mine will be much higher.
Wonder why 2015 charge offs are above the long term average that includes the great recession?
Looking at my 2015 numbers and assuming a normal distribution my November charge offs were a tad under 2 sigma.
I guess a 20 to one shot can be expected after about 32 months but that's way over simplifying it.
Note there are 30 days in June and November; two of the three overall lowest charge off months. I did not account for that. Makes my current November result that much more askew. All in all though well within the expected uncertainties of marketplace lending.

Meanwhile the beers have helped enormously!
Title: Re: Worst Month Yet
Post by: Lovinglifestyle on December 04, 2015, 09:38:28 PM
Reading all of this prompted me to at least look at last month, November.  Charge offs reported on the LC statement + sale losses (of graces) as reported by Interest Radar add up to a simple 40% of interest earned.  That's a hefty investment fee.
Title: Re: Worst Month Yet
Post by: AnilG on December 05, 2015, 03:02:51 AM
F & G grade charge offs seems to have taken off since May this year. Overall 2015 charge-offs are within the median +/- 95% CI for past 8 years on annual basis. The charge offs bottomed out in 2012 and have been rising since then. We are back to 2010 level in 2015.

January, March, October and December tend to be outside median +/- 95% CI on monthly basis.


Thanks for the ground truth! I can certainly vouch for this October. You looked at all loans, not just D & E's, so mine will be much higher.
Wonder why 2015 charge offs are above the long term average that includes the great recession?
Looking at my 2015 numbers and assuming a normal distribution my November charge offs were a tad under 2 sigma.
I guess a 20 to one shot can be expected after about 32 months but that's way over simplifying it.
Note there are 30 days in June and November; two of the three overall lowest charge off months. I did not account for that. Makes my current November result that much more askew. All in all though well within the expected uncertainties of marketplace lending.

Meanwhile the beers have helped enormously!
Title: Re: Worst Month Yet
Post by: rawraw on December 05, 2015, 07:04:07 AM
Are many of you guys involved in watching the credit markets?   There has been signs of weakness.  Of course there is consumer weakness in some parts of Texas, North Dakota, Oklahoma, etc.  But the fall in oil combined with the rising dollar is really pressuring the industrial economy -- some are claiming we are in an industrial recession.   And then the leveraged loan market recently seemed to freeze briefly before the banks had to make concessions to get the deals done.  Weakness in the securitization market. Etc. I just think there are some credit cracks starting to show.

And like I've said many times on this forum, people need to realize where we are at in the consumer cycle.  Things are not going to get much better from here, only worse.  I've been recently cleaning my account out of high grade notes I suspect have weakness due to their locations and job titles in anticipation of these credit trends that started a few months ago.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi17.photobucket.com%2Falbums%2Fb52%2FEffort-D2%2FConsumer%2520trends_zpshks7jzlz.png&hash=98867422dedd4f64e01f84d0263f57fb)
Title: Re: Worst Month Yet
Post by: RaymondG on December 05, 2015, 11:07:07 AM
Peter had a post recently about eREIT, link: http://www.lendacademy.com/fundrise-launches-first-ever-ereit-to-invest-in-commercial-real-estate/. Is anyone going to try it? I signed up but I do not know when it's available to me. It would most likely have much less charge-offs. The chargeoff rates published by Federal Reserve: http://www.federalreserve.gov/releases/chargeoff/chgallsa.htm
Title: Re: Worst Month Yet
Post by: RaymondG on December 05, 2015, 11:22:36 AM
Rob, why did you choose to invest in the D and E notes?  Were you swayed by LC's projections that you would earn over 12%?

No, I never expected 12%-15% returns and I didn't start with the D's and E's. I started more conservatively and increased the riskiness of my portfolio over the first year or so as I learned more about this P2P (whatever) stuff. Thought I would get a better return if I took on more risk but only 1% - 2%. When all is said and done if I make 8% I'm delighted, 6% to 8% happy, less than 6% not happy.

Given your risk profile and satisfied with 8% return, I would choose to diversify on loan grades too.

It is not guaranteed that the return will always correlate to the risks you take, especially when the risks are not clear. Someone in AIG felt happy to collect money from selling CDS in good time. They under estimated the risk and had no hedge in place and have to bite the consequence.
Title: Re: Worst Month Yet
Post by: DLIFVOIP on December 05, 2015, 11:39:20 AM
I think that most people have experienced lower returns over the last quarter, but I do not think it is an issue just with the last quarter.

I think the biggest reason for the decreasing returns is a result of LC lowering interest rates at least 3-4 times in the last 18 months.  It is really hard to maintain our current risk appetite, not modify our filters and expect to maintain our old returns.  We take the same risk for a lower average interest rate, it is simple math.

I also think supply has severely decreased over the last 12-18 months (at least for my filters).  2-3 years ago I was able to reinvest payments + $20k of new cash a month at $25 per loan without an issue.  I have been forced to expand my filter criteria as well as my per loan investment.  I now take more risk at a lower interest rate than I would have received had I taken that level of risk in the past.  What I am finding is I am investing an increasing % of funds at a lower interest rate to simply get funds invested. 

I am not saying cash drag is a result of decreased returns, I am simply not adding the level of new funds to the account that I would have in the past.  As we all know, the returns are higher on "younger" funds, so the less "younger" funds and the increase in "aged" funds results in lower returns as well.

I am sure some will disagree, but I have a different strategy/objective than most.  I am not worried about investing $10-20k and making 15%.  My strategy needs to be able to invest $30k+ a month and maintain a consistent return.  My personal IRA account has under $30k in it and makes 11.3%, but this account only gets $5.5k a year of new funds and I do not care if it takes 2 months to invest that $5.5k.  So waiting for the right higher interest rate loans is easy. Dealing with accounts that have over $25k of monthly payments is a different beast.

I could go on forever, but will leave it at that.  I think P2P provides great returns compared to all other fixed income style investments.  Yes returns are going down, but I do believe just in the last 2 weeks or so, LC actually increased rates on some loans. 

Title: Re: Worst Month Yet
Post by: Rob L on December 05, 2015, 01:03:29 PM
I think the biggest reason for the decreasing returns is a result of LC lowering interest rates at least 3-4 times in the last 18 months.  It is really hard to maintain our current risk appetite, not modify our filters and expect to maintain our old returns.  We take the same risk for a lower average interest rate, it is simple math.

I also think supply has severely decreased over the last 12-18 months (at least for my filters).  2-3 years ago I was able to reinvest payments + $20k of new cash a month at $25 per loan without an issue.  I have been forced to expand my filter criteria as well as my per loan investment.  I now take more risk at a lower interest rate than I would have received had I taken that level of risk in the past.  What I am finding is I am investing an increasing % of funds at a lower interest rate to simply get funds invested. 

I was beginning to write a post and you took the words out of my mouth. I'll admit I have loosened my loan standards over the past year too. Bottom line is that it takes a lot more notes to produce the same amount of interest than it used to. More notes, more charge offs. I'm not saying your comments imply a direct cause and effect for my two crummy months but address the big picture. For backup:

The charge offs bottomed out in 2012 and have been rising since then. We are back to 2010 level in 2015.

And like I've said many times on this forum, people need to realize where we are at in the consumer cycle.  Things are not going to get much better from here, only worse.  I've been recently cleaning my account out of high grade notes I suspect have weakness due to their locations and job titles in anticipation of these credit trends that started a few months ago.

This leads me back to the thread I started Oct 6 this year suggesting LC should begin to raise interest rates.
http://www.lendacademy.com/forum/index.php?topic=3435.0 (http://www.lendacademy.com/forum/index.php?topic=3435.0)

Don't think the idea garnered much support but I'll suggest it again. I freely admit I don't know how to quantify my risk and count on LC to do that job for me. I've heard Prosper 1.0 didn't work out very well; primarily because they left this job up to lenders. It is in LC's vital interest to get this right over the long term and stay ahead of the curve. Sure the world is awash in lenders today, but once burned lenders don't typically come back (institutional ones too). There will always be borrowers and they won't always have the upper hand. It appears financial repression and the end of ZIRP are at hand. Very slowly back to a more normal world where chasing yield may be somewhat less necessary.

Yes returns are going down, but I do believe just in the last 2 weeks or so, LC actually increased rates on some loans.

This I hadn't heard but is most welcome news. I just took a look at the interest rate chart on the LC web site. Except for G grade a few months ago I can't see any appreciable change. If you have a link or something please share it.
Title: Re: Worst Month Yet
Post by: Fred on December 05, 2015, 02:37:03 PM
I've been recently cleaning my account out of high grade notes ...

Me, too.
Title: Re: Worst Month Yet
Post by: lascott on December 05, 2015, 06:23:47 PM
I also think supply has severely decreased over the last 12-18 months (at least for my filters).  2-3 years ago I was able to reinvest payments + $20k of new cash a month at $25 per loan without an issue.  I have been forced to expand my filter criteria as well as my per loan investment.  I now take more risk at a lower interest rate than I would have received had I taken that level of risk in the past.  What I am finding is I am investing an increasing % of funds at a lower interest rate to simply get funds invested. 

I'm wondering if the affect of new investing (41 states now?) PLUS new tools (LendingRobot, custom) has spread the available notes thinner available to you (us).

A lot has changed in the just the couple years I've been here.  Example, LendingRobot has an estimation of the number of notes your filters will pick up based on the past few weeks notes. My filters are shown to pick up 1/4th as many notes as they were probably a year ago. Perhaps tho their estimation accounts for a large increase in subscribers to their service (only so many notes to go around).

There's still note volume but perhaps just more investors.
Image: http://i.imgur.com/Oko3QJa.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FOko3QJa.png&hash=6dae0df2513f987e998d06a1ef879619)
Image: http://i.imgur.com/MNzB1IV.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FMNzB1IV.png&hash=b51971950c02f772edb8b5342dc3f5e3)


Title: Re: Worst Month Yet
Post by: rawraw on December 05, 2015, 09:01:05 PM
I agree with CircleT, but it's just a function of credit in general.  It's going to be virtually impossible to get the pricing right.  Loans always have these same trends, whether it is banks or other entities.  A crisis happens and underwriting tightens, returns increase but growth slows.  Then in an attempt to grow, competition comes in and underwriting loosens to achieve the growth and maintain returns.  Then economy has a hiccup and the loose underwriting results in credit costs (more for some than others).  Then it tightens back up.  It's just the way credit works and I don't see a reason to think this will ever change, it is just human nature.  We are in the loosening phase and compared to history, this phase is lasting a very long time without hiccups.  Some think the hiccup is coming now, but I have no clue other than I know it'll seem obvious after the fact.

I don't mean the above to criticize LC or suggest they are doing something wrong.  It's just I hope people who don't spend much time around other forms of lending understand this dynamic.  Hopefully things don't get as loose as they did in 2008, but they will get loose.  Just like it happened in oil -- some people started waving certain parts of the a typical structure and are not feeling the pain from those choices.  But you have to bend some to compete or you may not be able to grow enough.

The above is why every strategy I use, I also test that strategy starting in 2007 and seeing how the loans performed when the recession hit.  It's important to not just know the expected return, but how wide the range of possible outcomes are.
Title: Re: Worst Month Yet
Post by: Rob L on December 08, 2015, 07:22:44 PM
Things don't seem to be going better. Lost  another 6 ANAR basis points just today.
Meanwhile my "blue dot" (not earth from space, the other one) is near top of the class.
Title: Re: Worst Month Yet
Post by: jheizer on December 08, 2015, 08:39:04 PM
I feel like the week or two after a holiday anar is always goofy.  Mine is down the last two days and I haven't had any more loans drop a status.
Title: Re: Worst Month Yet
Post by: Rob L on December 12, 2015, 05:29:59 PM
So I wondered if LC has begun charging off loans more quickly.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FXHg5oBy.png&hash=01d0bb4aa5b36896b81fd57601911285)

These data are almost all of my charge offs (about 460 of them), not a map of Florida. A few of my charge offs do not have a loan status date and were omitted.
Charge offs do seem to be happening more quickly after last payment. I cannot rule out some natural cause and have not looked closely at the results.
Here is one loan from the chart very recently charged off:

https://www.lendingclub.com/account/loanPerf.action?loan_id=12816075&order_id=19011062&note_id=42543100 (https://www.lendingclub.com/account/loanPerf.action?loan_id=12816075&order_id=19011062&note_id=42543100)
Title: Re: Worst Month Yet
Post by: Fred93 on December 12, 2015, 06:55:04 PM
Days OVERDUE would be more meaningful I think than days from the last payment (which may not have brought the loan back to current).
Title: Re: Worst Month Yet
Post by: Randawl on December 12, 2015, 10:09:24 PM
So I wondered if LC has begun charging off loans more quickly.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FXHg5oBy.png&hash=01d0bb4aa5b36896b81fd57601911285)

These data are almost all of my charge offs (about 460 of them), not a map of Florida. A few of my charge offs do not have a loan status date and were omitted.
Charge offs do seem to be happening more quickly after last payment. I cannot rule out some natural cause and have not looked closely at the results.
Here is one loan from the chart very recently charged off:

https://www.lendingclub.com/account/loanPerf.action?loan_id=12816075&order_id=19011062&note_id=42543100 (https://www.lendingclub.com/account/loanPerf.action?loan_id=12816075&order_id=19011062&note_id=42543100)

I don't have data to show but anecdotally my experience has been the same.
Title: Re: Worst Month Yet
Post by: Rob L on December 12, 2015, 10:28:03 PM
Days OVERDUE would be more meaningful I think than days from the last payment (which may not have brought the loan back to current).

Okay, if you can tell me how to figure out days OVERDUE I'll run a plot of it.

In the example loan I linked above the next payment is due on 12/14 (two days from now).
The last payment was made on 9/29 (as shown on the graph). It was "completed in grace period" and presumably brought current.
Isn't that what "completed in grace period" means? Maybe not since the final collection log entry says:

11/16/15 (Monday) Charge-off after settlement completed

So, charged off on 11/16 after payment made on 9/29 and zero "recoveries" paid to me.
There was a nice "investor fees" of about 3.9% of the remaining principal back on 5/7 though.
Meanwhile I buy and hold. I almost never look at the collections log. I look at one and don't understand it.
Go figure...
Title: Re: Worst Month Yet
Post by: Fred93 on December 12, 2015, 11:52:45 PM
Okay, if you can tell me how to figure out days OVERDUE I'll run a plot of it.

There's a good reason I didn't explain how in prior mail.  They don't make it easy.  I think you have to look at how far the principal has been paid down, and then look at what time principal was supposed to be paid down that far.  Lateness is the difference between now and when the principal was supposed to have been at this level.  This is my approach.  I should add that I'm too lazy to do it.

Quote
In the example loan I linked above

The link doesn't work for me.  Probably because I'm not in that loan.

Quote
the next payment is due on 12/14 (two days from now).
The last payment was made on 9/29 (as shown on the graph). It was "completed in grace period" and presumably brought current.
Isn't that what "completed in grace period" means?

If I were using those words, that is what they would mean, because you wouldn't be in a grace period if you were more than one payment late.  However, when LC's computer prints those words, I'm not sure what they mean.

Quote
Maybe not since the final collection log entry says:
11/16/15 (Monday) Charge-off after settlement completed

I see a big red flag there.  What the ... does "after settlement completed" mean?

Quote
So, charged off on 11/16 after payment made on 9/29 and zero "recoveries" paid to me.
There was a nice "investor fees" of about 3.9% of the remaining principal back on 5/7 though.

How can that be?
Title: Re: Worst Month Yet
Post by: rubicon on December 17, 2015, 12:26:19 PM
hey I was just looking at my charged off amount and compared with the individual loans that were charged off and it looks wrong.

Can other people compare the actual charged off amount for the month with the individual loans that were charged off (remaining principal)?

thanks!
Title: Re: Worst Month Yet
Post by: Rob L on December 17, 2015, 02:34:44 PM
hey I was just looking at my charged off amount and compared with the individual loans that were charged off and it looks wrong.

Can other people compare the actual charged off amount for the month with the individual loans that were charged off (remaining principal)?

thanks!

LC posted my charge offs for the first half of the month today and I now have a total of 512 of them (up from 485).
I downloaded my detailed notes into a spreadsheet, summed the PrincipalRemaining column for all notes with status=charged off. It exactly matches the amount LC displays in the dashboard "Notes at a Glance" adjusted amount table as well as that shown in "Account Details". This is an all "all time" total, not the monthly amount you mentioned. Does LC provide a monthly amount display? I'm not sure where to find that.
Title: Re: Worst Month Yet
Post by: rubicon on December 17, 2015, 02:44:22 PM
thanks!

For me, the charged off amount in "Understanding Your Traded Note Returns" differs from "my notes at a glance".
Title: Re: Worst Month Yet
Post by: Rob L on December 29, 2015, 12:30:52 PM
I did an analysis last week of recoveries as a percent of amount invested for each of my 512 charged off notes.
These are predominantly D & E notes starting mid 2013 and continuing to date (8100 notes issued).

     Amount Recovered       Number of notes
         21% - 100%                   18
         14% - 20%                     36
         13% - 9%                     176
          8%  - 1%                      16
          0%                              266   

Recoveries are only a part of the picture.
Obviously payments made before the charge offs significantly mitigate the total losses.

With notes sorted in order of decreasing loss as a % of note principal:
   Cumulative Total Loss           Number of notes (and % of total number of notes)
                11%                           64 (12.5%)
                21%                         128 (25%)
                38%                         256 (50%)
                50%                         384 (75%)
                58%                         512 (100%)

For D & E loans 58% may be a good estimate of average loss given default.
Sound reasonable?
Title: Re: Worst Month Yet
Post by: mo on January 01, 2016, 09:57:18 PM
I've been recently cleaning my account out of high grade notes ...
Me, too.

I tightened my filters substantially for auto-investing about 14 months ago figuring eventually the economy will go south and I didn't want to be stuck with a bunch of CDEFG when it does.
Title: Re: Worst Month Yet
Post by: lascott on February 03, 2016, 11:21:02 AM
January was a crazy month for not only the number of notes but evenness of the grades.  I bought a bunch ... but as they cycle goes a lot of those are coming back out (borrower decided not to get loan, didn't supply all doc, etc reasons).

Image: http://i.imgur.com/u6Z0JJr.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fu6Z0JJr.png&hash=720189445d9bf128ac71235629ea4683)
Title: Re: Worst Month Yet
Post by: Rob L on February 05, 2016, 07:21:43 PM
Mentions of "Worst Month Ever" in November were just a prelude of things to come.
Got my January statement today. At least it's not a loss (yet).

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FInQ7Hqx.png&hash=3ca414dfe189fee4195b7a3c7f4ece53)
Title: Re: Worst Month Yet
Post by: Fred93 on February 05, 2016, 09:51:48 PM
I attempted to make a chart of Chargoffs / InterestReceived, but the numbers came out small, due to the fact that my I have been making deposits during 2015.  You start getting interest when a loan is 1 month old, but you don't start getting chargeoffs until a loan is 5 months old, so there's a skew, and the denominators included interest on loans which could not possibly charge off.  So I modified the spreadsheet, adding a 4 month skew.  The numerator is chargeoffs in the current month.  The denominator is interest received FOUR MONTHS AGO.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-chargeoff-ratios.png&hash=53e934d335cde0d2473847fe8acfa226)

I don't see a trend here.  I see random variations around 25%, which is same as it ever was. 

This of course applies to my account, given my loan selection criteria, and may not apply to others.
Title: Re: Worst Month Yet
Post by: dompazz on February 05, 2016, 10:56:09 PM
I wasn't making deposits in the fall, so the skew won't apply to my account.  Jan was my worst by far at 45%. 

I've had a backlog from the fall of loans sitting in the Late 31-120+ bucket.  That started working off last month and will continue, probably into March.  I haven't seen any new loans fall into that category since late Dec. and the 16-30 day bucket has it's normal handful.

I thought I was going to have my first ever no payments made default.  Had one sitting in 31-120, but they suddenly caught the loan up and made it current. 

I've got a smallish portfolio, so this is purely anecdotal.

Title: Re: Worst Month Yet
Post by: RaymondG on February 06, 2016, 02:17:31 PM
Note that the distribution on loan grades in the account has no material change since 1/2013. The low bars in mid 2014 are partly due to 20% new money injected in to my LC account. The trend line is MVA of 6 periods. The loss is adjusted with lates, defaults, and loss from selling on folio.
Title: Re: Worst Month Yet
Post by: newstreet on February 06, 2016, 02:26:45 PM
Mentions of "Worst Month Ever" in November were just a prelude of things to come.
Got my January statement today. At least it's not a loss (yet).

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FInQ7Hqx.png&hash=3ca414dfe189fee4195b7a3c7f4ece53)

Are you looking at these on a static basis?   Does lending club enable you to analyze static pools? 
Title: Re: Worst Month Yet
Post by: Rob L on February 06, 2016, 06:51:44 PM
Are you looking at these on a static basis?   Does lending club enable you to analyze static pools?

All the data comes from my monthly statements.
LC tells me how much interest I collected and the total charge offs for the month.
The graph goes back from my first statement with charge offs to my most recent.

FWIW, if doesn't seem like I'm buying loans that are terrible and I'm extremely diversified (almost all D's and E's though):

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F7bGK6Wr.png&hash=7ae9e117c92ba29b44c5185549e0e0d7)

Maybe it's just a run of bad luck.
Title: Re: Worst Month Yet
Post by: Rob L on February 07, 2016, 10:44:19 AM
It's interesting to keep things in perspective.
When I bought my first note on 5/17/2013 the S&P 500 (SPY ETF) was 157.95 (adjusted back for dividends).
This past Friday's SPY close was 187.95. A gain of 18.99%. My LC account as of today has gained 26.86%.
SPY would have to be at 200.37 for its gains to equal my LC gains.
I know it's apples to oranges but by comparison LC isn't looking too bad right now despite my recent setbacks.
Title: Re: Worst Month Yet
Post by: Rob L on February 09, 2016, 05:55:08 PM
Note that the distribution on loan grades in the account has no material change since 1/2013. The low bars in mid 2014 are partly due to 20% new money injected in to my LC account. The trend line is MVA of 6 periods. The loss is adjusted with lates, defaults, and loss from selling on folio.

Nice graph. MVA at a lifetime high. Maybe you're unlucky too. Guess time will tell if that's meaningful or not.
I don't trade Folio and did not adjust for lates and defaults. So, I have those to look forward to.
Title: Re: Worst Month Yet
Post by: janef on February 09, 2016, 06:43:20 PM
I thought I have some pretty bad months in 2014 and 2015.  Most of my notes are D since late of 2014 –  doesn't making any differences even when I had lots of A, B and C notes in the early years (2010 to 2014). The 278.13 default in April 2014 were mostly from B notes, and some were over 15 months.
Title: Re: Worst Month Yet
Post by: Rob L on February 14, 2016, 06:40:44 PM
And so it goes:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FHDbJwUW.png&hash=e5d64f4adaf26c59da8549fb6341bb0f)

It's not just my new loans that are flaking out, it's pretty much across the board. I started with LC in 5/13.
I'm not adding cash exponentially to my portfolio, but I am reinvesting principal and interest. No deposits since 2014.

Charge offs haven't flattened out at 12-14 months.
That seems to be my big problem. It's not simply that new loans are being quickly charged off.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F72zvM5y.png&hash=01eef84d4a9c5e12db3ca8f2c82e8af0)

Not giving up though; still trying to stay fully invested. The new interest rates are definitely helping in that regard.
Still could be simply a run of bad luck. It happens.

PS: Trend lines there to make Fred93 happy.   :)
Title: Re: Worst Month Yet
Post by: hzhou9 on February 14, 2016, 07:18:17 PM
A simple read of Rob's data - for the latest 4 bad month:
Jan 15: most bad loans from Jul~Aug 14 (As average charge-off age 16~17 months)
Dec 14: most bad loans from May~Jun 14 (As average charge-off age 18~19 months)
Nov 14: most bad loans from Jul~Aug 14 (As average charge-off age 15~16 months)
Oct 14: most bad loans from May~Jun 14 (As average charge-off age 16~17 months)

Looks likely there's loan quality control issue with LC during May to Aug 2014? Not sure whether this analysis is correct. 
Title: Re: Worst Month Yet
Post by: hfguy on February 14, 2016, 07:21:51 PM

Not giving up though; still trying to stay fully invested. The new interest rates are definitely helping in that regard.
Still could be simply a run of bad luck. It happens.


Ugh...dude, you're killing me. I sincerely feel bad. This will get worse before it gets better. Ask yourself what your opportunity cost is. The company has already admitted their algo's for this completely new asset class were wrong. Bad luck???
Title: Re: Worst Month Yet
Post by: Fred93 on February 14, 2016, 08:15:52 PM
And so it goes:

Your graphs are FUZZY and hard to read.  I see they are .png, but I suspect that the png were made from jpg or some other fuzzy form.  Please if possible switch to some less fuzzy scheme for future posts.

Looks like the vertical axis is NUMBER OF chargoff loans during period.  But we don't know how many loans you had.  Was number of loans in portfolio changing vs time?
Title: Re: Worst Month Yet
Post by: pourts on February 16, 2016, 11:48:04 PM

Not giving up though; still trying to stay fully invested. The new interest rates are definitely helping in that regard.
Still could be simply a run of bad luck. It happens.


Ugh...dude, you're killing me. I sincerely feel bad. This will get worse before it gets better. Ask yourself what your opportunity cost is. The company has already admitted their algo's for this completely new asset class were wrong. Bad luck???

Funny you mention opportunity cost.  For those of us who aren't fancy hedge fund guys like you, the opportunity cost is very low.  What do you recommend instead, 20 year corporate bonds yielding like 5%?
Title: Re: Worst Month Yet
Post by: SeattleSun on February 17, 2016, 12:42:05 AM

Just got this e-mail from Prosper.  Sorry the tables in the e-mail wouldn't copy.  Maybe somebody else can post them?

QUOTE
Effective today, Prosper has increased its estimated loss rates and the price charged for risk on the loans originated through the platform. We believe this move ensures that our borrower payment dependent note and whole loan products remain competitive for our investors in the current turbulent market environment that we have witnessed since the beginning of 2016. Since August of 2015, Prosper has been proactively raising the estimated loss rates and the price for risk in the loan products originated through the platform. We believe that these proactive moves will ensure that we continue to offer superior products to our investors.

Below, please find the new pricing table and the estimated portfolio impact of the changes (changes are based on a simulation of the new policies on January booked loans and actual portfolio composition will vary depending on how new applicants respond to offers and the relative marketing mix going forward vs. January):

Estimated Aggregate Impact to Prosper Portfolio of Loss and Price Changes:
Sorry Table Wouldn't Copy

Proposed Pricing Modifications for the Week of 2‌/15:
Sorry Table Wouldn't Copy
UNQUOTE
Title: Re: Worst Month Yet
Post by: SeattleSun on February 17, 2016, 12:57:25 AM
The data below is for both myself and my daughter who both have Prosper accounts and use similar "conservative" loan selection criteria. 

Two of which are "Debt Consolation Only" and to "never lend to anyone who has ever had a delinquency". 

I have 50% B's, 25% A's and 25% C's.  She has about equal number of B's and C's. 

I have a charge off "spike" in Nov, Dec and Jan 16 and she doesn't?

Edit: We both have the same 13 month average charge off as % of Interest of 44%.



Daughter   Charge Off       Dad      Charge Off
       as % of Interest         as % of Interest
Jan '16      45%         Jan '16   74%
Dec '15      58%         Dec '15   83%
Nov         63%         Nov      86%
Oct         60%         Oct      43%
Sept         72%         Sept      26%
Aug         64%         Aug      63%
July         26%         July      9%
June         29%         June      19%
May         53%         May      44%
Apr         28%         Apr      19%
Mar         50%         Mar      74%
Feb         14%         Feb      11%
Jan '15      20%         Jan '15   24%
Ave         44%               44%
Title: Re: Worst Month Yet
Post by: lascott on February 17, 2016, 01:22:58 AM
Not sure of how many notes you have but it appears random. There are months were hers is higher.
Oddly it evens out with 44% (average).

Re: I have 50% B's, 25% A's and 25% C's.  She has about equal number of B's and C's.
Given you both have about 50% Bs ... perhaps you have more C's defaulting but less A's.  Still this is too general just to go on grades.

Reformated with "code" tag and courier font
(code)
Code: [Select]
Daughter   Charge Off       Dad      Charge Off
           as % of Interest          as % of Interest
Jan '16     45%             Jan '16  74%
Dec '15     58%             Dec '15  83%
Nov         63%             Nov      86%
Oct         60%             Oct      43%
Sep         72%             Sep      26%
Aug         64%             Aug      63%
Jul         26%             Jul       9%
Jun         29%             Jun      19%
May         53%             May      44%
Apr         28%             Apr      19%
Mar         50%             Mar      74%
Feb         14%             Feb      11%
Jan '15     20%             Jan '15  24%
Sum         44%                      44%

(font=courier)
Daughter   Charge Off       Dad      Charge Off
           as % of Interest          as % of Interest
Jan '16     45%             Jan '16  74%
Dec '15     58%             Dec '15  83%
Nov         63%             Nov      86%
Oct         60%             Oct      43%
Sep         72%             Sep      26%
Aug         64%             Aug      63%
Jul         26%             Jul       9%
Jun         29%             Jun      19%
May         53%             May      44%
Apr         28%             Apr      19%
Mar         50%             Mar      74%
Feb         14%             Feb      11%
Jan '15     20%             Jan '15  24%
Sum         44%                      44%
Title: Re: Worst Month Yet
Post by: SeattleSun on February 17, 2016, 01:46:12 AM
Thanks lascott!

I was just going to ask for help with that post formatting.

Could you please explain what the "code tag" is?

Is it one of those small buttons above?

TIA
Title: Re: Worst Month Yet
Post by: Fred93 on February 17, 2016, 01:53:34 AM
Similar to what I observed in my account.  The number bounces all around, but doesn't fit the "worst month yet - things are going to hell" hypothesis.
Title: Re: Worst Month Yet
Post by: lascott on February 17, 2016, 02:13:15 AM
Could you please explain what the "code tag" is?
Is it one of those small buttons above?

If you quote my post you can just look to see the contents of it and see the code and courier font tags. Look for square brackets. Both force monospace spacing so each character takes up the same space. i vs m as an example. Code (#) is meant for "software languages" to show proper indentation, as an example.
Image: http://i.imgur.com/CYkElAA.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FCYkElAA.png&hash=a19d509aa660e84124424e6ced1b8495)
Title: Re: Worst Month Yet
Post by: SeattleSun on February 17, 2016, 12:15:27 PM
Not sure of how many notes you have but it appears random.
There are months were hers is higher.
Oddly it evens out with 44% (average).

Re: I have 50% B's, 25% A's and 25% C's.  She has about equal number of B's and C's.
Given you both have about 50% Bs ... perhaps you have more C's defaulting but less A's.  Still this is too general just to go on grades.

I have 1287 active loans out of a total of 2182 total loans.  My "seasoned return" is 8.41%

My daughter has 1050 active loans out of a total of 1627 total loans.  Her "seasoned return" is 10.15%.

Our normal "bet size" is $100 and keeping fully invested manually is challenging.  Yes I have done all those loans by hand over the last 5 years.

(She likes to point out her return is higher than mine)


LA Scott - And thanks for help with the "code".  The last code I wrote was in Fortran and it was on punch cards.  LOL

Title: Re: Worst Month Yet
Post by: lascott on February 17, 2016, 03:24:56 PM
Not sure of how many notes you have but it appears random.
There are months were hers is higher.
Oddly it evens out with 44% (average).

Re: I have 50% B's, 25% A's and 25% C's.  She has about equal number of B's and C's.
Given you both have about 50% Bs ... perhaps you have more C's defaulting but less A's.  Still this is too general just to go on grades.
I have 1287 active loans out of a total of 2182 total loans.  My "seasoned return" is 8.41%
My daughter has 1050 active loans out of a total of 1627 total loans.  Her "seasoned return" is 10.15%.
Our normal "bet size" is $100 and keeping fully invested manually is challenging.  Yes I have done all those loans by hand over the last 5 years.
(She likes to point out her return is higher than mine)
LA Scott - And thanks for help with the "code".  The last code I wrote was in Fortran and it was on punch cards.  LOL
I think it is great that you both have the common interest and she likes being a little ahead of dad. Good stuff.
You have quite a few notes for a great diversification.  Have you considered using LendingRobot and doing custom rules (filters) similar to what you like? You can also use their "expected return" rule which is like their "credit model" to help you pick notes and then add on some other criteria that you feel strongly about. Often "credit models" take into account a lot of relationships between criteria (i.e. if public records > 0 but occured a long time ago then still "ok"). You can use my referral link in my signature line (extra $5K for each of us of investing) or simple go directly to their site. No big deal either way to me. (I was a computer operator as a college job using punch cards ;) )
Title: Re: Worst Month Yet
Post by: SeattleSun on February 17, 2016, 08:15:44 PM
F & G grade charge offs seems to have taken off since May this year. Overall 2015 charge-offs are within the median +/- 95% CI for past 8 years on annual basis. The charge offs bottomed out in 2012 and have been rising since then. We are back to 2010 level in 2015.

January, March, October and December tend to be outside median +/- 95% CI on monthly basis.



http://www.lendacademy.com/forum/index.php?topic=3551.msg31436#msg31436


AnilG,

Great chart, thanks!

Can you post similar chart for PROSPER? 

TIA

SeattleSun
Title: Re: Worst Month Yet
Post by: SeattleSun on February 17, 2016, 08:42:59 PM

=================================================================================================
I think it is great that you both have the common interest and she likes being a little ahead of dad. Good stuff.

You have quite a few notes for a great diversification.  Have you considered using LendingRobot and doing custom rules (filters) similar to what you like? You can also use their "expected return" rule which is like their "credit model" to help you pick notes and then add on some other criteria that you feel strongly about. Often "credit models" take into account a lot of relationships between criteria (i.e. if public records > 0 but occured a long time ago then still "ok"). You can use my referral link in my signature line (extra $5K for each of us of investing) or simple go directly to their site. No big deal either way to me. (I was a computer operator as a college job using punch cards ;) )
[/quote]

=================================================================================================

LA Scott,


First, the only P2P accounts my family has are Prosper.  I was watching them for a few years and after Prosper 1.0 crashed and burned and after the Great Recession I worked up the nerve to open an account in the fall of 2012.  The Fed's ZIRP was a big motivator.  In hind sight I might have been better off with Lending Club but it is what it is.

I was very excited when Bryce Mason showed up with P2P in 2013(?) but it took forever for him to get around to Prosper and I lost interest.  I recently noted he has moved on.

Lately I  have been encouraged by the consolidation to only FOUR third party tools space for retail investors.  I like to let "natural selection" work and let the "market" reduce my number of options.  Assuming the strong survive.

NSR Invest
LendingRobot
BlueVestment
PeerCube

http://www.lendacademy.com/the-state-of-the-retail-investor-in-p2p-lending/

Recently I have looked at Lending Robot and went so far in their registration process to get on their "mailing list".  I was thinking of opening one of their small accounts (Less $5k) with the intent of running a trial.

Since Lending Robot is here in the Emerald City I also plotted their offices on Google Maps with the intention of making an unannounced visit when I was in the neighborhood.

I remember  :)   when doing DD on Prosper trying to penetrate their facility in SFran only to be rebuffed.  But I did manage to ambush a woman employee in the elevator and got lots of good info.  LOL

Last week I did click on all the links in your signature line and looked around.

I was considering starting a sting here with the intent of trying to collect the pros and cons of each of the remaining four providers.   Does anyone know if that thread already exists?  I have never seen it.

SeattleSun
Title: Re: Worst Month Yet
Post by: BruiserB on February 18, 2016, 11:46:02 AM
I calculate XIRR annually and YTD for current years.  Last year was my lowest year ever and YTD this year is lower than my last year's full year.

Title: Re: Worst Month Yet
Post by: hzhou9 on February 18, 2016, 01:56:33 PM
I calculate XIRR annually and YTD for current years.  Last year was my lowest year ever and YTD this year is lower than my last year's full year.

8.81% still looks good, and much better than S&P.

But BruiserB, I noticed that you deliberately said "lower than my last year's full year" and thus a bit confused - do you imply that the number will go down from now (Feb) to Dec? And how did you calculate the new investment when getting these numbers?
Title: Re: Worst Month Yet
Post by: lascott on February 18, 2016, 05:17:28 PM
I was considering starting a sting here with the intent of trying to collect the pros and cons of each of the remaining four providers.   Does anyone know if that thread already exists?  I have never seen it.
Some comparisons in this post/thread. http://www.lendacademy.com/forum/index.php?topic=3337.msg29876#msg29876

You should start a new thread about this in the "Investor - LC" sub thread ( here: http://www.lendacademy.com/forum/index.php?board=4.0 ) because we have taken this one off track.

Feel free to PM me.
Title: Worst Month Yet
Post by: BruiserB on February 19, 2016, 09:54:51 PM
I calculate XIRR annually and YTD for current years.  Last year was my lowest year ever and YTD this year is lower than my last year's full year.

8.81% still looks good, and much better than S&P.

But BruiserB, I noticed that you deliberately said "lower than my last year's full year" and thus a bit confused - do you imply that the number will go down from now (Feb) to Dec? And how did you calculate the new investment when getting these numbers?

I'm still satisfied, but am seeing lower performance. I have gotten pretty used to consistent 10-12% returns. Just was remarking that 8.81% so far to date this year is less than the 9.75% from last year. I'm hoping it doesn't keep dropping.

My calculations are on the overall return of my account. I track all deposits and withdrawals over time and use the current value of the account. I use the XIRR Excel function to calculate overall return.  I calculate my total return over the history of my account and each year's return by running the calculation from 1/1 to 12/31 each year.

I'm definitely seeing more defaults than in the past. Defaults used to be about 1/3 of my interest earned...now pushing closer to 1/2.  Contemplating moving to a more conservative strategy as I'm getting more defaults than I have capital gains to offset them with.

Sent from my iPhone using Tapatalk
Title: Re: Worst Month Yet
Post by: SeattleSun on February 22, 2016, 08:18:44 PM

Lending Club and Prosper Interest Rates, Loss Curves and Loan Performance

With recent interest rate changes and economic uncertainty, we look at the latest Lending Club and Prosper loss curves.

FEBRUARY 22, 2016
BY RYAN LICHTENWALD


http://www.lendacademy.com/lending-club-and-prosper-interest-rates-loss-curves-and-loan-performance/



Title: Re: Worst Month Yet
Post by: SeattleSun on February 22, 2016, 08:23:18 PM
I calculate XIRR annually and YTD for current years.  Last year was my lowest year ever and YTD this year is lower than my last year's full year.


I have always felt that the REAL RATE OF RETURN (Nominal - Inflation) is what it is all about yet I never seen any mention of it on very smart forums like this one.

I mean shouldn't BruiserB be interested in the real rate of return.

SS

PS  And I don't want to get into a conversation about how inflation is calculated, etc.
Title: Worst Month Yet
Post by: BruiserB on February 22, 2016, 10:02:56 PM

I calculate XIRR annually and YTD for current years.  Last year was my lowest year ever and YTD this year is lower than my last year's full year.


I have always felt that the REAL RATE OF RETURN (Nominal - Inflation) is what it is all about yet I never seen any mention of it on very smart forums like this one.

I mean shouldn't BruiserB be interested in the real rate of return.

SS

PS  And I don't want to get into a conversation about how inflation is calculated, etc.

And that's exactly why I said I'm still generally happy.  I'm making decent return in a relatively low inflation environment.

But I am seeing a change after several years of relatively consistent returns. And most of the change is due to higher defaults, not due to decreasing rates. I had been losing about 1/3 of my interest to defaults....it's been close to 1/2 recently.  Since losses offset capital gains and not interest earned, I need to re-evaluate my strategy.

I'm not panicking or running for the door....I was merely pointing out the changes I've seen.  Inflation has been low and relatively constant for years now, so I'm not sure of the relevance of your real rate of return comment?  It's not as if inflation has dramatically decreased so that my lower nominal returns represent an equal or improving real return.


Sent from my iPhone using Tapatalk
Title: Re: Worst Month Yet
Post by: SeattleSun on February 23, 2016, 11:44:17 AM

And that's exactly why I said I'm still generally happy.  I'm making decent return in a relatively low inflation environment.

But I am seeing a change after several years of relatively consistent returns. And most of the change is due to higher defaults, not due to decreasing rates. I had been losing about 1/3 of my interest to defaults....it's been close to 1/2 recently.  Since losses offset capital gains and not interest earned, I need to re-evaluate my strategy.

I'm not panicking or running for the door....I was merely pointing out the changes I've seen.  Inflation has been low and relatively constant for years now, so I'm not sure of the relevance of your real rate of return comment?  It's not as if inflation has dramatically decreased so that my lower nominal returns represent an equal or improving real return.


Sent from my iPhone using Tapatalk


First let me say my question was NOT directed to/at BrusierB but just a general question of "Why don't people (you) use the real rate of return when posting?"  But the question did pop into my head again when I read BrusierB post.

Here is an example I "cherry picked" from BrusierB stated returns of 2011 vs 2015.

Code: [Select]
2011    10.35% - 3.25% = 7.10% real rate of return
2015     9.75% - 0.00% = 9.75% real rate of return

And note that the CPI(U) when from a high of 4% in 2011 to a low of 0% in 2015 during the five full years that BrusierB was investing in P2P.  IMO a move of that size needs to be taken into account.

Note: I personally always use the "headline" or CPI(U) because I use a lot of "energy". 


(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi1257.photobucket.com%2Falbums%2Fii516%2FSeattleSun%2FCPI_zpsedxbvu2b.gif&hash=e0726ea73abedf04c2371bb8cd3e0a01) (http://s1257.photobucket.com/user/SeattleSun/media/CPI_zpsedxbvu2b.gif.html)
Title: Re: Worst Month Yet
Post by: dompazz on February 23, 2016, 02:00:49 PM
Quote
"Why don't people (you) use the real rate of return when posting?"

I do, but I do when making allocation decisions between asset classes.  Finding the optimal portfolio inside an asset class, it is easier to deal in nominal rates. 
Title: Re: Worst Month Yet
Post by: RaymondG on February 23, 2016, 02:01:29 PM
I don't feel the real rate return is better for me to monitor the performance trending of my LC portfolios which I care about most. The interest rates of LC loans and borrowers' behavior are not affected by the inflation rate materially. I may use the real rate return to measure the real value of total assets but I would not use it for tracking the performance of a portfolio.
Title: Worst Month Yet
Post by: Joe6Luck on February 23, 2016, 08:24:58 PM
Quote
"Why don't people (you) use the real rate of return when posting?"

There are valid use cases of considering CPI, but there are also other cases: e.g, if one needs to decide which one (cash, stock, bond, LC, prosper, etc) is a better investment option, then why bother complicating it with CPI and 'real' return? A direct comparison without CPI is easy to understand, when CPI has same impact on all these options.



Sent from my iPhone using Tapatalk
Title: Re: Worst Month Yet
Post by: Rob L on February 24, 2016, 06:42:57 PM
A bit of anecdotal evidence that fractional note demand has fallen of late.
My auto-invest program prevents me from investing twice in the same loan. Until recently this was a very rare occurrence as all the loans in a drop were fully funded before the next drop occurred (read "feeding frenzy"). The past few weeks I've seen increasing numbers of loans in which I invested that remained available for investment long enough to be present in the subsequent loan drop. Maybe it's just the higher risk D's and E's since that's all I'm still buying, I dunno ... Either a shift to less risky loans or less overall loan demand.
Title: Re: Worst Month Yet
Post by: PhilGD on February 24, 2016, 07:49:57 PM
The number of notes available for investment at any given time has been hovering around 2000 for weeks now. Anecdotally speaking, that number used to only be in the lower hundreds, on average, during the past few months. It doesn't look like each drop contains more than 80-100 notes, either, so I'd agree that demand seems to be low.
Title: Re: Worst Month Yet
Post by: hzhou9 on February 24, 2016, 09:07:48 PM
The number of notes available for investment at any given time has been hovering around 2000 for weeks now. Anecdotally speaking, that number used to only be in the lower hundreds, on average, during the past few months. It doesn't look like each drop contains more than 80-100 notes, either, so I'd agree that demand seems to be low.
I noticed the growth of available loans three weeks ago, starting from the week of Feb 1st:
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi68.tinypic.com%2Fkbf02f.jpg&hash=7a6803e25cec48e4d90901d3587e0d47)
As there is no obvious drop in loan sales (from weekly report on LC website), and neither did LC slowdown new loan supply, I tend to think this might be some kind of strategy change, e.g. controls the speed of purchase from Members Trust Program, as more available loans would be helpful if LC is trying to attract more retail investors.

Just some ideas from the clues I see, how do you guys think about my analysis above? :)
Title: Re: Worst Month Yet
Post by: SeanMCA on February 24, 2016, 09:53:00 PM
I don't know but I finally had to cave and up my note size to $50 a pop going forward. Haven't been enough notes lately for my filters at $25/each, at least as it's being conducted through Lending Robot. Cash just piles up.
Title: Re: Worst Month Yet
Post by: Rob L on February 25, 2016, 12:01:43 PM
Just some ideas from the clues I see, how do you guys think about my analysis above? :)

Not quite sure I understand. Didn't even know LC provided a weekly report, though I think the data is available on one or more third party's web sites. Either way, what is "Average Total Loans"? I could guess but I'm not clear on how it's computed. TIA.
Title: Re: Worst Month Yet
Post by: lascott on February 25, 2016, 02:02:21 PM
Just some ideas from the clues I see, how do you guys think about my analysis above? :)
Not quite sure I understand. Didn't even know LC provided a weekly report, though I think the data is available on one or more third party's web sites. Either way, what is "Average Total Loans"? I could guess but I'm not clear on how it's computed. TIA.
LC doesn't provide a weekly report. It looks like he snagged that from peercube.com without giving proper credit.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FVphMWhR.png&hash=c76da07128b7c257f93352d00dc048ca)

My impression is that there was some marketing effort that is bringing in this latest "group" of loans. Anecdotally, they seems to be of a lower quality just based on how many of them my filters are picking up plus seeing the average FICO drop from the past.
Title: Re: Worst Month Yet
Post by: hzhou9 on February 25, 2016, 04:43:43 PM
Just some ideas from the clues I see, how do you guys think about my analysis above? :)

Not quite sure I understand. Didn't even know LC provided a weekly report, though I think the data is available on one or more third party's web sites. Either way, what is "Average Total Loans"? I could guess but I'm not clear on how it's computed. TIA.

Hey Rob, LC do provide note sales on weekly basis, which you may find here:
https://www.lendingclub.com/info/sales-reports.action
The data is detailed to each loan and there is no obvious drop in loan "sold" volume  as far as I calculate.

"Average Total Loans" is taken from peercube.com, and it is quite simple:
When you choose "Browse Loans" on LC website, you will see the total number of loans on top right, like "Showing Loans 1 - 15 of 1836". Peercube collects this number several times an hour and then display the average number for each week as "Average Total Loans"  in this chart.

Hope I've made it clear:)

Title: Re: Worst Month Yet
Post by: rawraw on February 26, 2016, 03:19:26 AM
Ever read behavioral economics/finance about 'mental accounting'?  I think this is why you don't find much discussion of real returns.  Real returns is the only reason I'm in LC, as I think most other asset classes available to me have dimming prospects for over the next 5 years, except for perhaps rental real estate
Title: Re: Worst Month Yet
Post by: lascott on February 26, 2016, 09:53:38 AM
Ever read behavioral economics/finance about 'mental accounting'?  I think this is why you don't find much discussion of real returns.  Real returns is the only reason I'm in LC, as I think most other asset classes available to me have dimming prospects for over the next 5 years, except for perhaps rental real estate
You come up with some insightful analogies that lead me down interesting thought paths.  :)

Title: Behavioral Finance: Key Concepts - Mental Accounting
http://www.investopedia.com/university/behavioral_finance/behavioral5.asp
Title: Re: Worst Month Yet
Post by: Rob L on February 26, 2016, 11:44:59 AM
Hey Rob, LC do provide note sales on weekly basis, which you may find here:
https://www.lendingclub.com/info/sales-reports.action
Learn something new every day. Was totally unaware of this data.

"Average Total Loans" is taken from peercube.com, ....
Hope I've made it clear:)
Okay I got it now. Interesting chart. I wasn't saying sales had dropped as much as I was saying demand had abated.
Guess all the loans are still being fully funded, it's just taking longer. Not a major deal, just something seems a little different now.
Title: Re: Worst Month Yet
Post by: SeattleSun on March 04, 2016, 12:06:25 AM
Update Feb 2016
charged off as % of interest
Dad 33%
Daughter 33%

Plus thanks for that "Title: Behavioral Finance: Key Concepts - Mental Accounting"  I would never occurred to me that someone would do that.  lol




(code)
Code: [Select]
Daughter   Charge Off       Dad      Charge Off
           as % of Interest          as % of Interest
Jan '16     45%             Jan '16  74%
Dec '15     58%             Dec '15  83%
Nov         63%             Nov      86%
Oct         60%             Oct      43%
Sep         72%             Sep      26%
Aug         64%             Aug      63%
Jul         26%             Jul       9%
Jun         29%             Jun      19%
May         53%             May      44%
Apr         28%             Apr      19%
Mar         50%             Mar      74%
Feb         14%             Feb      11%
Jan '15     20%             Jan '15  24%
Sum         44%                      44%

[/font]
Title: Re: Worst Month Yet
Post by: Rob L on March 04, 2016, 09:59:45 AM
February was a much better month!
Charge offs as a % of Interest 51.3%. I can live with that!

See it was much better for you and your Daughter too!

Update Feb 2016
charged off as % of interest
Dad 33%
Daughter 33%

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FdtBs8iO.png&hash=107004e89e227847684944cf731cdb1b)
Title: Re: Worst Month Yet
Post by: lascott on March 04, 2016, 11:08:59 AM
February was a much better month!

Mine was back in line as well.

Taxable account (couple years - started 5/1/2014)
Image: http://i.imgur.com/0eQW8z5.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F0eQW8z5.png&hash=8f44e228c6633c7a67a963cb447ac421)

[update]
Roth account (young - started 5/1/2015)
Image: http://i.imgur.com/BD0YEOI.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FBD0YEOI.png&hash=4463ab00d9d56f7a45069631bfcc7ab8)
[/update]
Title: Re: Worst Month Yet
Post by: BruiserB on March 04, 2016, 12:16:26 PM
Mine was still out of line high....68.8% of interest lost as write-offs.  I'm wondering if it's because I made a significant deposit last July...hopefully the losses will tail off as those loans become seasoned.
Title: Re: Worst Month Yet
Post by: dompazz on March 04, 2016, 03:50:25 PM
Mine was still out of line high....68.8% of interest lost as write-offs.  I'm wondering if it's because I made a significant deposit last July...hopefully the losses will tail off as those loans become seasoned.
Same here, higher than average though not as high as 68%.  I, too, had larger than normal deposits last summer.
Title: Re: Worst Month Yet
Post by: jheizer on March 04, 2016, 03:52:26 PM
18%  Nice being too young to fail yet. :)
Title: Re: Worst Month Yet
Post by: Rob L on March 04, 2016, 06:38:48 PM
18%  Nice being too young to fail yet. :)

Just hang in there, okay.  ;)
Title: Re: Worst Month Yet
Post by: jheizer on March 04, 2016, 07:30:41 PM
6.5 month average so slowly starting too.  I'm spoiled.
Title: Re: Worst Month Yet
Post by: thezfunk on March 16, 2016, 03:02:03 PM
I have been keeping an eye on things since this thread was started.  The last two months for me have seen unprecedented numbers of notes going into grace and and higher than ever portion going into 16-30 days late.  Where I would have maybe 9-12 notes start down the default process a month I am easily double or more in the last two months. 
Title: Re: Worst Month Yet
Post by: hzhou9 on March 16, 2016, 07:03:10 PM
I have been keeping an eye on things since this thread was started.  The last two months for me have seen unprecedented numbers of notes going into grace and and higher than ever portion going into 16-30 days late.  Where I would have maybe 9-12 notes start down the default process a month I am easily double or more in the last two months.
hey thezfunk, how about also getting your monthly charge-off numbers updated in this thread? :)
Title: Re: Worst Month Yet
Post by: thezfunk on March 17, 2016, 11:06:15 AM
I have been keeping an eye on things since this thread was started.  The last two months for me have seen unprecedented numbers of notes going into grace and and higher than ever portion going into 16-30 days late.  Where I would have maybe 9-12 notes start down the default process a month I am easily double or more in the last two months.
hey thezfunk, how about also getting your monthly charge-off numbers updated in this thread? :)

Sure, but you'll have to wait until I get my home desktop setup again.  I moved recently and the new desk isn't setup yet.
Title: Re: Worst Month Yet
Post by: Fred93 on March 17, 2016, 05:05:48 PM
Hey Rob, LC do provide note sales on weekly basis, which you may find here:
https://www.lendingclub.com/info/sales-reports.action

Whoa!  How did you find that page?  ie what LC web site page links to that page?

Title: Re: Worst Month Yet
Post by: hzhou9 on March 17, 2016, 09:59:49 PM
Hey Rob, LC do provide note sales on weekly basis, which you may find here:
https://www.lendingclub.com/info/sales-reports.action

Whoa!  How did you find that page?  ie what LC web site page links to that page?

Hey Fred, the page could be accessed from lendingclub homepage > investing > prospectus > sales report. I don't think I spent too much time finding this:)
Title: Re: Worst Month Yet
Post by: P2PFact on March 17, 2016, 10:51:03 PM
Hey Fred, the page could be accessed from lendingclub homepage > investing > prospectus > sales report. I don't think I spent too much time finding this:)


In this sales report I notice a lot of loans "Aggregate principal amount of Notes sold" is much less than "Aggregate principal amount of Notes offered". For example loan 70846843 issued on 3/15/2016. But the loan details page show it's fully funded. Does anyone know why?
https://www.lendingclub.com/browse/loanDetail.action?loan_id=70846843

Title: Re: Worst Month Yet
Post by: RaymondG on March 17, 2016, 11:02:30 PM
For example loan 70846843 issued on 3/15/2016. But the loan details page show it's fully funded. Does anyone know why?
https://www.lendingclub.com/browse/loanDetail.action?loan_id=70846843

My guess is LC offered the notes for this loan but we retail investors only took a small portion of those notes. LC or other party filled the gap.
Title: Re: Worst Month Yet
Post by: Fred93 on March 17, 2016, 11:26:05 PM
loan 70846843 issued on 3/15/2016. But the loan details page show it's fully funded. Does anyone know why?
https://www.lendingclub.com/browse/loanDetail.action?loan_id=70846843

I just now looked at it, and it now shows "issued".
Title: Re: Worst Month Yet
Post by: Fred93 on March 17, 2016, 11:40:35 PM
In this sales report I notice a lot of loans "Aggregate principal amount of Notes sold" is much less than "Aggregate principal amount of Notes offered". For example loan 70846843 issued on 3/15/2016.

There are two ways that LC offers chunks of loans.  The first way is via "notes" which you and I buy, and which are covered by these filings, and the 2nd way is via "certificates" which is a different legal structure, and is used by some institutional investors.  Perhaps the difference between these two numbers is the amount that was purchased via certificates?  I originally thought that certificates were only for whole loans, but upon reading the certificate legal mumbo-jumbo I have discovered that certificate purchasers can buy fractions of loans as well.
Title: Re: Worst Month Yet
Post by: yojoakak on March 17, 2016, 11:46:52 PM
Hey Rob, LC do provide note sales on weekly basis, which you may find here:
https://www.lendingclub.com/info/sales-reports.action

Whoa!  How did you find that page?  ie what LC web site page links to that page?

Google says there are 14 pages that link to that page (13 if you include omitted results. WTF Google?!?) Guess I'll have to start reading their stupid blog again.


https://encrypted.google.com/search?num=50&hl=en&q=%22https%3A%2F%2Fwww.lendingclub.com%2Finfo%2Fsales-reports.action%22&oq=%22https%3A%2F%2Fwww.lendingclub.com%2Finfo%2Fsales-reports.action%22&gs_l=serp.3...12453.12696.0.12804.2.2.0.0.0.0.103.193.1j1.2.0....0...1c.1.64.serp..0.0.0.KgPbJfQf-cY


EDIT: I looked at one of the files. It's just the same thing you find on the SEC EDGAR search. https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001409970&owner=exclude&count=40&hidefilings=0
Title: Re: Worst Month Yet
Post by: P2PFact on March 18, 2016, 08:56:33 PM
There are two ways that LC offers chunks of loans.  The first way is via "notes" which you and I buy, and which are covered by these filings, and the 2nd way is via "certificates" which is a different legal structure, and is used by some institutional investors.  Perhaps the difference between these two numbers is the amount that was purchased via certificates?  I originally thought that certificates were only for whole loans, but upon reading the certificate legal mumbo-jumbo I have discovered that certificate purchasers can buy fractions of loans as well.

This is interesting. So we have not only whole or fractional but a combination of them. But looks to me the more likely situation is that the loan is not fully funded then LC related institutional investor took the rest to make sure the loan is issued. Notice for this loan it's more than a month between submission and issuance.
Title: Re: Worst Month Yet
Post by: Fred93 on April 01, 2016, 05:32:27 PM
Here's a useful way to look at the performance data.  We're used to looking at those cumulative vintage curves that appear many places, one curve for every "vintage" of loans, with a horizontal axis that is time-since-loan-issue, rather than date.  Insikt.com plots some LC performance data on a "historical" chart, where the horizontal axis is calendar date, and all the vintages are mixed together.

This chart shows "delinquency", ie late divided by all active loans, for the whole portfolio.  This number is not immediately useful in portfolio returns calculations, but it is an excellent early warning indicator of chargeoffs to come.  The portfolio is partitioned by loan grade.  Red is "A" loans ... purple is "G" loans.  In this chart, you can plainly see that performance of the higher risk grades degraded during all of 2015.  This is consistent with complaints in this thread from those whose portfolios tilt toward the high risk loans.

December 2015 is the last data point.  For more, we'll have to wait for the next (Q1) data dump from LC, a few weeks from now.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2Finsikt-lc-historical-delinquency.png&hash=cf629b6c9580aa0c18c62c292ae8ab99)

As you can see, recent changes in the performance of the higher risk grades is plainly visible. 

I've been watching the all-consumer-loan-delinquency chart from the St Louis Fed.  It shows that delinquencies have stopped sinking and have leveled off, but you really can't see a recent increase.  In the LC data, you can see an increase.  The Fed graph is quarterly, so we should get a Q1 data point a few weeks from now.  Will be interesting to see if it ticks up.
Title: Re: Worst Month Yet
Post by: Rob L on April 01, 2016, 06:44:04 PM
Here's a useful way to look at the performance data.

+1
It most certainly is! Thanks for the info.

Personally I've avoided all F and G loans; don't think there are enough of them to diversify away bad luck.
At least not when you limit yourself to 36 month loans as I do.
The ramp up in the D's and E's (even C's) is quite evident. We can look to the Fed data for a "macro" reason.

My past month was quite decent and the bleeding seems to have stopped for now.
Funny how my definition of quite decent has changed lately. Still the 5th worst month by the metric shown.
Wonder if the Inskit.com plot will show a similar trend next quarter.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FY7mRAEq.png&hash=1e27000ce79119185e5b9f09e76e0506)

Title: Re: Worst Month Yet
Post by: hzhou9 on April 02, 2016, 05:33:30 PM
Here's a useful way to look at the performance data.  We're used to looking at those cumulative vintage curves that appear many places, one curve for every "vintage" of loans, with a horizontal axis that is time-since-loan-issue, rather than date.  Insikt.com plots some LC performance data on a "historical" chart, where the horizontal axis is calendar date, and all the vintages are mixed together.

Hey Fred, could you share a webpage link to that chart? I really love it but could not find the link on Insikt.com myself :-\
Title: Re: Worst Month Yet
Post by: PhilGD on April 02, 2016, 06:22:34 PM
Here's a useful way to look at the performance data.  We're used to looking at those cumulative vintage curves that appear many places, one curve for every "vintage" of loans, with a horizontal axis that is time-since-loan-issue, rather than date.  Insikt.com plots some LC performance data on a "historical" chart, where the horizontal axis is calendar date, and all the vintages are mixed together.

Hey Fred, could you share a webpage link to that chart? I really love it but could not find the link on Insikt.com myself :-\

Looks like this is it:

https://insikt.com/#/invest/mycro/timeSeries/delinquency30dTS?po=Partner&or=LendingClub&fi=creditRating&lt=36,60

Pretty interesting tool to play around with.
Title: Re: Worst Month Yet
Post by: hzhou9 on April 02, 2016, 09:20:39 PM
Here's a useful way to look at the performance data.  We're used to looking at those cumulative vintage curves that appear many places, one curve for every "vintage" of loans, with a horizontal axis that is time-since-loan-issue, rather than date.  Insikt.com plots some LC performance data on a "historical" chart, where the horizontal axis is calendar date, and all the vintages are mixed together.

Hey Fred, could you share a webpage link to that chart? I really love it but could not find the link on Insikt.com myself :-\

Looks like this is it:

https://insikt.com/#/invest/mycro/timeSeries/delinquency30dTS?po=Partner&or=LendingClub&fi=creditRating&lt=36,60

Pretty interesting tool to play around with.

Thank you:)
Title: Re: Worst Month Yet
Post by: Rob L on May 04, 2016, 06:27:44 PM
Another decent month.
Meanwhile I'm holding my breath for LC's earnings announcement after the close next Monday PM.
It has not been a good week for marketplace lending (or whatever it's called these days).

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FfqxTwhD.png&hash=ede24fff0dd5964582cb115cc6e6c67f)
Title: Re: Worst Month Yet
Post by: lascott on May 04, 2016, 09:14:05 PM
Another decent month.
Meanwhile I'm holding my breath for LC's earnings announcement after the close next Monday PM.
It has not been a good week for marketplace lending (or whatever it's called these days).

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FfqxTwhD.png&hash=ede24fff0dd5964582cb115cc6e6c67f)
My equivalent:
Charge offs as a % of interest received
Image: http://i.imgur.com/FKB9VrZ.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FFKB9VrZ.png&hash=c72d88f06b66cccb8d05ef4a6901b5a0)

Charge offs as a % of interest received
Image: http://i.imgur.com/MbqT3ae.png
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FMbqT3ae.png&hash=65ae591dbc9d80fce03a396eb5fe9db6)
Title: Re: Worst Month Yet
Post by: SeattleSun on May 16, 2016, 08:42:25 PM
Sorry latest data on top. 

Did this subject go away due to all the other news?

Both mine and my daughters are getting worse.

Me from 44% to 45% and her's from 44% to 48%.

SS

EDIT: I am only a Prosper investor.

(code)
Code: [Select]
Daughter   Charge Off       Dad      Charge Off
           as % of Interest          as % of Interest

Sum         48%                      45%
========================================= 
Apr          60%              Apr       44%
Mar         78%              Feb      77%
Feb         49%              Feb      33%
Jan '16     45%             Jan '16  74%
Dec '15     58%            Dec '15  83%
Nov         63%             Nov      86%
Oct         60%             Oct      43%
Sep         72%             Sep      26%
Aug         64%             Aug      63%
Jul         26%             Jul       9%
Jun         29%             Jun      19%
May         53%             May      44%
Apr         28%             Apr      19%
Mar         50%             Mar      74%
Feb         14%             Feb      11%
Jan '15     20%             Jan '15  24%


[/font]
[/quote]
Title: Re: Worst Month Yet
Post by: thezfunk on May 16, 2016, 09:02:48 PM
I thought the problem went away but I noticed that i just had 8 notes all go into grace in one day.  That used to be my whole monthly amount.  I don't know what is going on here.
Title: Re: Worst Month Yet
Post by: Rob L on May 16, 2016, 09:24:16 PM
Did this subject go away due to all the other news?

Still here; posting chart once a month. Mine has stabilized (see above).
Title: Re: Worst Month Yet
Post by: hzhou9 on May 16, 2016, 09:28:22 PM
I thought the problem went away but I noticed that i just had 8 notes all go into grace in one day.  That used to be my whole monthly amount.  I don't know what is going on here.

Which grade?
Title: Re: Worst Month Yet
Post by: investor88 on May 19, 2016, 10:30:14 PM
Did this subject go away due to all the other news?

Still here; posting chart once a month. Mine has stabilized (see above).

Hi Rob,
Are you still investing in new notes?
How much are you investing each month as a percentage of your total portfolio?
And are you investing in 36 month or 60 month loans?
Title: Re: Worst Month Yet
Post by: Rob L on May 19, 2016, 11:35:52 PM
Did this subject go away due to all the other news?

Still here; posting chart once a month. Mine has stabilized (see above).

Hi Rob,
Are you still investing in new notes?
How much are you investing each month as a percentage of your total portfolio?
And are you investing in 36 month or 60 month loans?

No, I turned off my auto-invest software in the am on Monday 5/9. Northing's yet happened make me revisit this decision.
All my notes have always been 36 month term.
I am continuing to reinvest in Prosper notes however.
Title: Re: Worst Month Yet
Post by: investor88 on May 26, 2016, 02:09:07 PM
Hi Rob,
6 months ago when you originally posted, i suggested that Lending Club D and E notes were not good investments.  I thought LC over-inflated the expected returns on these notes on the ‘view order’ page last year.
I stopped investing 18 months ago and for the past 6 months my charge offs continue to be about 100% of my interest with some months over 100%.   My ANAR was 8% 6 months ago and is now at 7% and continues to go lower.  there is some very scary snaking downward in the ‘Understanding Your Returns’ chart that suggests more recent notes might be performing much worse than notes from a couple years ago.
Thanks for keeping this thread updated and it will be interesting to see what your results are now that you stopped buying new notes.  Can you include the ‘weighted average age of your portfolio’ when you next post.
Title: Re: Worst Month Yet
Post by: Rob L on May 26, 2016, 07:06:03 PM
I'll post whatever happens. My weighted average is Interest rate 17.34% and ANAR is at 9.40%.
Weighted average age is 20.4 months so it's getting a bit long in the tooth.
Title: Re: Worst Month Yet
Post by: balto21 on June 03, 2016, 03:46:25 PM
In 2015, I was at 27% Charge off as Interest. This year, I am at 65%. With average age of 15.8 months and still reinvesting, this is a very interesting way to look at the account.

My ANAR is still at 11% but based on these numbers, that will probably change in the near future. The thought of, am I skewing my own returns because I keep on reinvesting popped back into my head again. Hmm...


Title: Re: Worst Month Yet
Post by: Lovinglifestyle on June 03, 2016, 06:16:54 PM
My May charge offs as % of interest were 23.5%.  Were it not for proactive selling on Folio that would have been higher.  The last three months of Folio sales have been net positive.

My concern now is that proactive selling requires deeper discounts, which may be counterproductive. 

Second concern is new Graces which are occurring now, after my "pruning" phase, recover more often than before-- so I've stopped automatically selling them.  This means more monitoring work. 

I use PeerCube's "Alerts" and "Notes at Risk" features to help locate potential problems.  Thanks, Anil!

Title: Re: Worst Month Yet
Post by: AnilG on June 03, 2016, 07:55:49 PM
Thanks for using PeerCube and providing feedback and suggestions for improvement. :)

Can you send me an email with your criteria for selling based on Alerts and Notes at Risk? I am trying to figure out if it could possibly be automated so that you don't even need to review alerts and notes at risk and then manually sell notes.

BTW, have you checked out Portfolio Statistics pages yet? These are new. I am planning to add the changes in stats with time for user portfolio, as PeerCube keeps history of your portfolio. We just haven't figured out yet how to do it fast enough to not let subscribers wait too long.

My May charge offs as % of interest were 23.5%.  Were it not for proactive selling on Folio that would have been higher.  The last three months of Folio sales have been net positive.

My concern now is that proactive selling requires deeper discounts, which may be counterproductive. 

Second concern is new Graces which are occurring now, after my "pruning" phase, recover more often than before-- so I've stopped automatically selling them.  This means more monitoring work. 

I use PeerCube's "Alerts" and "Notes at Risk" features to help locate potential problems.  Thanks, Anil!
Title: Re: Worst Month Yet
Post by: Rob L on June 03, 2016, 08:59:44 PM
Here's my July May charge offs as a percent of interest received. The storm seems to have passed for now.
I have begun selling on Folio but the $ amount was very small. All notes sold were young and could have not yet charged off.
However, since I stopped purchasing notes on 5/9/16 my cash is at its highest level since March 2014.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FborX4OW.png&hash=6c68bbcba290b6454c66e1ee82e85378)

Title: Re: Worst Month Yet
Post by: Lovinglifestyle on June 03, 2016, 09:43:06 PM
Coincidentally, I just found that statistics page about an hour ago, before reading your post!  I was trying out the Primary and Sales account choices there, trying to make heads out of tails for where the whole set of one of my portfolio's original notes disappeared to.  LC just shows what's left, with no way to look up what was sold.  I got excited when I saw Fico trends with a Sell button for a particular portfolio!

Yes, I'll send an email about criteria.  Not so sure I have anything coherent to communicate, but I'll try. 

Thanks for using PeerCube and providing feedback and suggestions for improvement. :)

Can you send me an email with your criteria for selling based on Alerts and Notes at Risk? I am trying to figure out if it could possibly be automated so that you don't even need to review alerts and notes at risk and then manually sell notes.

BTW, have you checked out Portfolio Statistics pages yet? These are new. I am planning to add the changes in stats with time for user portfolio, as PeerCube keeps history of your portfolio. We just haven't figured out yet how to do it fast enough to not let subscribers wait too long.

My May charge offs as % of interest were 23.5%.  Were it not for proactive selling on Folio that would have been higher.  The last three months of Folio sales have been net positive.

My concern now is that proactive selling requires deeper discounts, which may be counterproductive. 

Second concern is new Graces which are occurring now, after my "pruning" phase, recover more often than before-- so I've stopped automatically selling them.  This means more monitoring work. 

I use PeerCube's "Alerts" and "Notes at Risk" features to help locate potential problems.  Thanks, Anil!
Title: Re: Worst Month Yet
Post by: jz451 on June 04, 2016, 12:02:49 AM
Surprisingly, but not statistically significant yet after starting my account 2 1/3 months ago w/ 53 notes and a E 9%, F 30%, G 60% distribution w/ seasoned notes from Folio I have only had one note go into grace period, which went back to current after two weeks. This should not even be possible if roughly 18% of F-G notes are charged off.
Title: Re: Worst Month Yet
Post by: Rob L on June 04, 2016, 09:41:03 AM
My May charge offs as % of interest were 23.5%.  Were it not for proactive selling on Folio that would have been higher.  The last three months of Folio sales have been net positive.

My concern now is that proactive selling requires deeper discounts, which may be counterproductive. 

Second concern is new Graces which are occurring now, after my "pruning" phase, recover more often than before-- so I've stopped automatically selling them.  This means more monitoring work. 

I use PeerCube's "Alerts" and "Notes at Risk" features to help locate potential problems.  Thanks, Anil!

Right now I'm coming at it from the other end of the spectrum and concentrating on sale of performing loans. My plan is liquidation and performing loans are 96% of my account total. Also knowing how to price non-performers appears to me to be a much more difficult problem. So, as my liquidation proceeds I'll have fewer and fewer performing loans and an increasing number of non-performers. Seems natural that there will come a time when my interest / charge offs is well above 100%. We'll watch as it happens.
Title: Re: Worst Month Yet
Post by: SeattleSun on June 07, 2016, 01:15:31 AM
.
May charge offs were 50% and the long run remained 44%.

Prosper only lender since 2012 with 1300 active loans.
Title: Re: Worst Month Yet
Post by: lascott on June 07, 2016, 11:32:54 AM
May

Taxable
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FCtNlyhV.png&hash=9c7a7aaf138fb5cc60852b816ef53d93)

ROTH
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FbhRB45G.png&hash=ade2515e68eef8b22fe07d3cf9612f57)
Title: Re: Worst Month Yet
Post by: Rob L on July 03, 2016, 11:57:43 AM
Here's the update for June; a very good month.
I stopped all purchasing on 5/9 so no investments occurred this month. My Folio selling has been only a small percentage of my portfolio value and had almost no effect on the graph shown. Charge-offs as a percent of Principal Invested (another graph I maintain) ticked up a bit as would be expected. That will get worse. Cash available as a percent of portfolio value is now about 16%.

Almost forgot: ANAR 8.85%, Weighted Average Interest Rate 17.33%, Weighted Average Age of Portfolio 21.8 months.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fisb5C6P.png&hash=575e0834270389515e34decaaeb4a485)
Title: Re: Worst Month Yet
Post by: Lovinglifestyle on July 03, 2016, 12:44:29 PM
Now that you have Folio sales, how is your Combined ANAR doing?
Title: Re: Worst Month Yet
Post by: Rob L on July 03, 2016, 03:36:34 PM
Funny, but I hadn't even thought to look.
The primary ANAR is 8.85% and combined is 8.95%. Guess I haven't sold enough notes to matter much.
My Folio sales to date have only amounted to 3.3% of portfolio value; but I am working on it.
Keep thinking the giving away toasters thing would help.
Title: Re: Worst Month Yet
Post by: Lovinglifestyle on July 03, 2016, 04:38:00 PM
I'm sure the toaster thing would work!
Can't seem to sell any of my overdue notes this weekend, with Up FICO trend, so I stopped trying.
Maybe I can save enough to buy my own toaster with what some of them are ready to pay later.
Title: Re: Worst Month Yet
Post by: Rob L on July 03, 2016, 06:55:07 PM
I'm sure the toaster thing would work!
Can't seem to sell any of my overdue notes this weekend, with Up FICO trend, so I stopped trying.
Maybe I can save enough to buy my own toaster with what some of them are ready to pay later.

Okay, I'll see what I can find at "Toasters are Us" and maybe they'll cut me a deal.
I've only sold maybe 200-300 notes and only TWO have not been NeverLate if I remember correctly.
Last listing I upped the discounts for not NeverLates quite a bit; but apparently not nearly enough. Zero this weekend.
Think I put too much work into figuring that out. Better to simply assume NeverLate when listing notes. No matter that they are listed way too high as nobody's looking at them and they won't sell anyway.
Title: Re: Worst Month Yet
Post by: fliphusker on July 04, 2016, 12:13:31 AM
I am still buying some never late notes and over a 1% discount at 8 plus months. The Y TM is over 16.  I try not to buy notes that they listed YTM is under original YTM. Definitely do you see folio swinging back to more of a neutral Market
Title: Re: Worst Month Yet
Post by: Rob L on July 04, 2016, 10:15:59 AM
I am still buying some never late notes and over a 1% discount at 8 plus months. The Y TM is over 16.  I try not to buy notes that they listed YTM is under original YTM. Definitely do you see folio swinging back to more of a neutral Market

Maybe you'll be looking at some of mine. Would a free toaster sweeten the pot?
I've listed notes like you describe at 1% discount and more but they are down FICO. The up FICO ones are selling at a premium and are the most popular notes.

BTW; what do you use as a proxy for YTM at origination?
At 8 months YTM is not quite 1% below original interest rate just because of the aging of the note.
Whether it's sold or not the YTM of a note drops over time. You've probably seen this:
http://www.lendacademy.com/forum/index.php?topic=3979.msg36534#new (http://www.lendacademy.com/forum/index.php?topic=3979.msg36534#new)
Title: Re: Worst Month Yet
Post by: lascott on July 04, 2016, 12:25:15 PM
As a comparison here are my charts for my conservative accounts.  Currently not reinvesting.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F5ZsGGo8.png&hash=e35fa6dceacbc4e5d25b7591c415451c)
.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FLmYOKhc.png&hash=cabb1970f275e82116e6c7c58a2b4708)
Title: Re: Worst Month Yet
Post by: Rob L on July 04, 2016, 03:33:00 PM
As a comparison here are my charts for my conservative accounts.  Currently not reinvesting.

Ouch!
Title: Re: Worst Month Yet
Post by: Fred93 on July 04, 2016, 04:44:19 PM
Here's an updated chargeoff ratio chart for my account. 

In the first chart, the numerator is $ charged off in the current month, and the denominator is interest received in the current month.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-chargeoff-ratios-1-2016-07-01.png&hash=a41ba88e0697a49efdb1016545c286fd)

You can see that the trend looks positive.  However, there is a difficulty.  A loan can make its first payment after 1 month, but a loan can first chargeoff after 5 months.  In early 2015, I added considerable money to my account.  As a result of this for several months, the denominator (interest) is boosted by the new money, but the numerator (chargeoffs) is not.  This has the effect of depressing the ratio for a few months after new money is added.  Early 2015 is artificially depressed, so the trend looks positive.

A better ratio has chargeoffs in the current month in the numerator, and interest received four months ago in the denominator.  In this calculation, the numerator and denominator represent a comparable group of loans, so the ratio is more meaningful.  This is the chart I use.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-chargeoff-ratios-2-2016-07-01.png&hash=cdc68dfb00c2f33e8e7b37d03559923b)

In this chart, the trend is downward. 

In any case, this ratio bounces around a lot.  Even tho I have over 4000 loans, the number of loans that chargeoff in a month is a small number, which makes this a noisy statistic.  The trend is near flat, but could become a little positive or a little negative after a single month comes in with an extreme value.
Title: Re: Worst Month Yet
Post by: AnilG on July 04, 2016, 05:51:51 PM
I find pre-payment rate, delinquency rate and default/loss rate much better indicator of portfolio health than charged off to internet received ratio. There are numerous reasons that impact timing and amount of charged off and interest received that trend in ratio of these parameters is almost meaningless.
Title: Re: Worst Month Yet
Post by: Fred93 on July 04, 2016, 05:58:38 PM
I find pre-payment rate, delinquency rate and default/loss rate much better indicator of portfolio health than

Different metrics have different uses. 

I also track delinquency fraction. 

I have never tracked pre-payment rate.  What do you get out of that?
Title: Re: Worst Month Yet
Post by: Rob L on July 04, 2016, 06:15:09 PM
A better ratio has chargeoffs in the current month in the numerator, and interest received four months ago in the denominator.  In this calculation, the numerator and denominator represent a comparable group of loans, so the ratio is more meaningful.  This is the chart I use.

I agree that is a better metric overall. For me, I have not added external funds to my account for a long time. So, my interest received per month has been relatively static. Skewing back 4 months for me would not make any meaningful difference, but overall your approach seems a better way to go.
Title: Re: Worst Month Yet
Post by: Rob L on July 04, 2016, 06:21:46 PM
I find pre-payment rate, delinquency rate and default/loss rate much better indicator of portfolio health than charged off to internet received ratio. There are numerous reasons that impact timing and amount of charged off and interest received that trend in ratio of these parameters is almost meaningless.

Actually I get my first "heads up" when I see my much maligned ANAR headed south. But then LC changed it and I dunno what, if anything to attribute to their ANAR change, what to attribute to borrower performance and what to attribute to my newly instituted Folio selling. Too many moving parts. Guess it is what it is; even if I don't know what it is.
Title: Re: Worst Month Yet
Post by: Lovinglifestyle on July 04, 2016, 09:43:26 PM
I humor myself with a simple observation--is my unadjusted account value more or less at the end of the month than it was at the beginning?  I compare the value change to the interest earned to see how much of this month's income I get to keep, before taxes.  That way Folio results get included dollar-wise.  Does my pocketbook have money in it, or an IOU? This month I was behind, but I get to keep 51% of the interest (before taxes on about 100% of the interest).

This kind of thinking probably has no accounting or statistical value whatsoever.  It just helps me keep my head above the weeds so I can see ahead to something I understand, like the end result of a mowed patch of grass.
Title: Re: Worst Month Yet
Post by: jheizer on July 05, 2016, 10:45:41 AM
I like looking at the charged off % that everyone else has been looking at vs average age of loans.  I got nailed in June and I'm guess based on current lates July will be bad too, but somewhat expected based on my average age.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi91.photobucket.com%2Falbums%2Fk299%2Fheezer7%2Fsoffice.bin_2016-07-05_09-41-53_zpszwvksayz.png&hash=f48fcf2674b9b2beaac0a351609d5b8a)

Title: Re: Worst Month Yet
Post by: lascott on July 05, 2016, 10:46:17 AM
As a comparison here are my charts for my conservative accounts.  Currently not reinvesting.
Ouch!
I was chalking it up to my accounts 'coming of age'?  Make sense?!?
See loss rate and average age.

Taxable account
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FoRu8jcM.png&hash=ed93cca4a183200afdd296990ee04d6d)


ROTH account
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FVIzznBG.png&hash=fc0f5a79aa73cff7ac5a0c5c665c59d7)
Title: Re: Worst Month Yet
Post by: Rob L on July 05, 2016, 12:50:09 PM
As a comparison here are my charts for my conservative accounts.  Currently not reinvesting.
Ouch!
I was chalking it up to my accounts 'coming of age'?  Make sense?!?
See loss rate and average age.

Yeah, makes sense to me. Probably multiple factors.
Title: Re: Worst Month Yet
Post by: investor88 on August 04, 2016, 03:40:27 PM
what's the update for July?
Title: Re: Worst Month Yet
Post by: jheizer on August 04, 2016, 03:49:00 PM
In my case it was about what I was expecting. 

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi91.photobucket.com%2Falbums%2Fk299%2Fheezer7%2Fsoffice.bin_2016-08-04_14-48-05_zpsmvm3ysqp.png&hash=6102601d8f2eaa6244fbae4d46ef910b)

I think next month should improve some.
Title: Re: Worst Month Yet
Post by: Rob L on August 07, 2016, 11:05:14 AM
On 5/9 I stopped reinvesting and a month or so later started selling on Folio. All sales have been "Current" notes.
My amount invested is roughly 50% of what it was on 5/9.
This activity clearly reduced interest income, but the charge offs were already baked in.
To compensate and make the graph somewhat meaningful I used the trailing 5 months average interest for July, rather than actual interest.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FY2NfHjh.png&hash=18143c32c18156b6038174aad76b8215)
Title: Re: Worst Month Yet
Post by: SeattleSun on August 12, 2016, 02:33:45 PM
.
.
There is not enough time in the day and unfortunately keeping up with this forum is what gets missed.  My bad.

Will update my spreadsheet this weekend and post BUT

Just took a peak at my account which has been naturally unwinding since 1 June and the LATE numbers jumped out at me.

In June had 49 loans late out of 1250 or 3.92%

Now have 72 loans out of 1150 or 6.26%, many of these people do have a history of paying late but so far they has paid.

A fifty percent increase, 

SHOULD I BE CONCERNED OR IS THIS TYPICAL VARIATION?

TIA
Title: Re: Worst Month Yet
Post by: michael49 on August 12, 2016, 03:38:15 PM
Am I the only one here who is still actively investing in LC?   :)

FYI, here are my charge offs as a percentage of interest in 2016:

January  52.94%
February 55.08%
March     35.53%
April        41.70%
May        22.58%
June      25.83%
July       37.59%
Title: Re: Worst Month Yet
Post by: dr.everett on August 12, 2016, 03:50:51 PM
No. But I've moved away from new notes as much as possible and buying solely off of Folio. With so many people heading for the exits, I can't purchase the good notes fast enough. Buying about $1k of notes each day in 2 accounts, and still running out of money by mid morning. I have zero idle cash, and am thrilled.

May jinx myself by saying that I may have finally found a strategy that works for me. Will have to wait and see how things go after all my previously purchased bad notes finally shake out. I'm in the camp that saw a lot of bad notes over the last few years and am watching while they either default,CO, or go Bankrupt. Really want them to finish up so I know how the new strategy is working.
Title: Re: Worst Month Yet
Post by: michael49 on August 12, 2016, 04:00:19 PM
^ - the folio strategy is probably a good one.  I'm still buying new notes but only 36m for right now.

I just feel like there is so much of a "the sky is falling!!" attitude here.  My returns have gone down some like most peoples but I'm still earning more than I would in my savings account. :)

Lending club is only a small portion of my investments (as I hope is the case for most here) - its a place to try to make at least something off the money that I don't want to put into stocks/bonds.
Title: Re: Worst Month Yet
Post by: Fred93 on August 12, 2016, 04:12:58 PM
Just took a peak at my account which has been naturally unwinding since 1 June and the LATE numbers jumped out at me.
In June had 49 loans late out of 1250 or 3.92%
Now have 72 loans out of 1150 or 6.26%, many of these people do have a history of paying late but so far they has paid.
A fifty percent increase, 
SHOULD I BE CONCERNED OR IS THIS TYPICAL VARIATION?

The peak in lates occurs around 6-7 months after loans originate.  If you bought a lot of loans around 6-7 months ago, that natural bump might be contributing.  Also, depending on credit grade (ie especially in DEFG), credit quality did dip during 2015, so if you added money in 2015, so are heavy in 2015 vintage notes, then this will also drive a move up in your portfolio late fraction.

So when you say "typical variations", these are some things that may be driving your numbers, in a fashion that is similar to everybody else, and in that sense may be typical.

OTOH, maybe you chose a bad filter.

Lates are a step toward chargeoff, so if you're seeing substantial increase in lates now (as many are due to 2015), you will likely see an increase in chargeoffs a few months from now.
Title: Re: Worst Month Yet
Post by: dr.everett on August 12, 2016, 04:44:19 PM


I just feel like there is so much of a "the sky is falling!!" attitude here.  My returns have gone down some like most peoples but I'm still earning more than I would in my savings account. :).

Agreed. Not sure why everyone is so down. Yes the returns aren't anywhere as good for me as when I started, but they are better than elsewhere. And there aren't any stocks that interest me beyond LC so may as well put it in my account and lend it out. And buy out the "sky is falling" folks at a discount. ;)
Title: Re: Worst Month Yet
Post by: anabio on August 12, 2016, 06:54:14 PM

The peak in lates occurs around 6-7 months after loans originate.  If you bought a lot of loans around 6-7 months ago, that natural bump might be contributing. 

I need to present the other side of the picture from Fred93. As I have specified in another topic I no longer believe there is a "bump" at 6 (or 9 months) at which point you can breath easier. At one time I bought that mantra but not anymore. The majority of my loans are 24-26 months old. I agree that bad filters could cause a bump at 6 months...but bad filters can't be blamed for loans that have reached 1 or 2 years old but are going bad. In that other post I showed that almost half my charge offs had more than 12 months of payments. If I included my 30-120 day lates (the vast majority of which will default) more than half of my charge offs are from loans over 12 months old.

I have 7 loans 16-30 days late and 6 of the 7 have 24-25 months worth of payments. One has 20 months worth.

I have 19 30-120 lates. 9 of which have 20-25 months worth of payments. Another 8 have between 16 and 19 months worth of payments. The other 2 have 12-14 months worth of payments. To add perspective, I currently have about 700 loans left.

The silver lining is the fact that since these loans are quite old the remaining principal is low so the shock is not as great as for loans going bad in 6 months. But still when they go bad they more than wipe out any interest I had made on them.

I guess I won't really know what the final score is for "mature" loans for another 8 months when my loans are paid off (or not...)
Title: Re: Worst Month Yet
Post by: Rob L on August 12, 2016, 07:09:16 PM
I need to present the other side of the picture from Fred93. As I have specified ianother topic I no longer believe there is a "bump" at 6 (or 9 months) at which point you can breath easier. At one time I bought that mantra but not anymore. The majority of my loans are 24-26 months old. I agree that bad filters could cause a bump at 6 months...but bad filters can't be blamed for loans that have reached 1 or 2 years old but are going bad. In that other post I showed that almost half my charge offs had more than 12 months of payments. If I included my 30-120 day lates (the vast majority of which will default) more than half of my charge offs are from loans over 12 months old.

I have 7 loans 16-30 days late and 6 of the 7 have 24-25 months worth of payments. One has 20 months worth.

I have 19 30-120 lates. 9 of which have 20-25 months worth of payments. Another 8 have between 16 and 19 months worth of payments. The other 2 have 12-14 months worth of payments. To add perspective, I currently have about 700 loans left.

The silver lining is the fact that since these loans are quite old the remaining principal is low so the shock is not as great as for loans going bad in 6 months. But still when they go bad they more than wipe out any interest I had made on them.

I guess I won't really know what the final score is for "mature" loans for another 8 months when my loans are paid off (or not...)

There is great comfort in investing in high interest rate loans. We receive so much interest in those first 12 months or so that the payments they make cushion the blow of a charge off / default later. We get killed on loans that charge off on the first few months but after a year it's pretty much all profit.
Title: Re: Worst Month Yet
Post by: Fred93 on August 12, 2016, 08:21:56 PM
I need to present the other side of the picture from Fred93. As I have specified in another topic I no longer believe there is a "bump" at 6 (or 9 months) at which point you can breath easier.

Note that I never said "at which point you can breath easier", or anything like that.

Payment failures occur in every month. 

However, the curve is smooth, with a bump in the middle.  For LC loans that bump is around 6-7 months.  (And if you read the literature on credit, you will find this same shape appears for other kinds of loans, mortgages whatever.)

Some people casually interpret this as meaning that if you get past some date, the loan won't go bad, but that interpretation is of course silliness.

You can see the bump as easily as anybody else.  Just download the data from LC and process it yourself.

There is a blog, I think it is lendingrobot, that shows a curve.  His curve is slightly different.  I believe it shows chargeoffs rather than delinquency.  Of course chargeoffs happen a little later than the first nonpayment event, so the bump in that curve is a few months later.
 
Title: Re: Worst Month Yet
Post by: Rob L on August 13, 2016, 10:43:37 AM
There is a blog, I think it is lendingrobot, that shows a curve.  His curve is slightly different.  I believe it shows chargeoffs rather than delinquency.  Of course chargeoffs happen a little later than the first nonpayment event, so the bump in that curve is a few months later.

The Lending Robot "Lifetime Distribution" curve doesn't seem to have a bump.
The curve is based only on loans that charged off over a certain period and shows when they did.
It flattens dramatically after age 0.5 (at 18 months for 36 month loans or at 30 months for 60 month loans):

http://blog.lendingrobot.com/research/predicting-the-number-of-payments-in-peer-lending/ (http://blog.lendingrobot.com/research/predicting-the-number-of-payments-in-peer-lending/)
Title: Re: Worst Month Yet
Post by: PhilGD on August 13, 2016, 12:10:22 PM
There is a blog, I think it is lendingrobot, that shows a curve.  His curve is slightly different.  I believe it shows chargeoffs rather than delinquency.  Of course chargeoffs happen a little later than the first nonpayment event, so the bump in that curve is a few months later.

The Lending Robot "Lifetime Distribution" curve doesn't seem to have a bump.
The curve is based only on loans that charged off over a certain period and shows when they did.
It flattens dramatically after age 0.5 (at 18 months for 36 month loans or at 30 months for 60 month loans):

http://blog.lendingrobot.com/research/predicting-the-number-of-payments-in-peer-lending/ (http://blog.lendingrobot.com/research/predicting-the-number-of-payments-in-peer-lending/)


That's because their lifetime distribution curve is a cumulative representation. For instance, compare the two charts on the top of page two of this performance update from Prosper: https://www.prosper.com/about-us/wp-content/uploads/Prosper.Performance.Update.July_.pdf

The delinquency curve on the top right is not cumulative, it is month-to-month, and this is the type of relationship that Fred was referring to.
Title: Re: Worst Month Yet
Post by: Rob L on August 13, 2016, 01:41:59 PM
There is a blog, I think it is lendingrobot, that shows a curve.  His curve is slightly different.  I believe it shows chargeoffs rather than delinquency.  Of course chargeoffs happen a little later than the first nonpayment event, so the bump in that curve is a few months later.

The Lending Robot "Lifetime Distribution" curve doesn't seem to have a bump.
The curve is based only on loans that charged off over a certain period and shows when they did.
It flattens dramatically after age 0.5 (at 18 months for 36 month loans or at 30 months for 60 month loans):

http://blog.lendingrobot.com/research/predicting-the-number-of-payments-in-peer-lending/ (http://blog.lendingrobot.com/research/predicting-the-number-of-payments-in-peer-lending/)


That's because their lifetime distribution curve is a cumulative representation. For instance, compare the two charts on the top of page two of this performance update from Prosper: https://www.prosper.com/about-us/wp-content/uploads/Prosper.Performance.Update.July_.pdf

The delinquency curve on the top right is not cumulative, it is month-to-month, and this is the type of relationship that Fred was referring to.

Agree. Even though the underlying data is different, if you were to accumulate the Prosper data the shape would look like the LR chart. It wasn't clear to me the shape of the Prosper data was the "bump" described. If it is then the difference discussed is really just the shape and location of this "bump".
Title: Re: Worst Month Yet
Post by: Fred93 on August 13, 2016, 03:10:59 PM
The Lending Robot "Lifetime Distribution" curve doesn't seem to have a bump.
The curve is based only on loans that charged off over a certain period and shows when they did.

That's because that curve is CUMULATIVE.  It does have a steeper slope in the middle. 
Title: Re: Worst Month Yet
Post by: Fred93 on August 13, 2016, 04:49:35 PM
I found a very nice delinquency vs time chart published by Prosper.  This is of course for Prosper loans, not LC, and I think this is for the whole mix of loans, counting both 36 month and 60 month loans.  They've broken it out by vintage.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FCapture-prosper-delinquency-curve-2016-08.PNG&hash=8e2f4ae39c3976965b70b9757403e794)
Title: Re: Worst Month Yet
Post by: Rob L on August 13, 2016, 07:00:57 PM
I found a very nice delinquency vs time chart published by Prosper.  This is of course for Prosper loans, not LC, and I think this is for the whole mix of loans, counting both 36 month and 60 month loans.  They've broken it out by vintage.

Yeah, same chart that PhilGD posted a link to earlier. Very nice info from the Prosper folks.
Take the integral of the Prosper chart or the derivative of the LR chart and just about same shape.
Bottom line; probability of default rises sharply until the mid-payment then drops sharply thereafter (more or less). No?

Anecdotal evidence is that the demand (i.e. premium paid) for Folio notes aged mid-payment is very strong; even in this buyers market.
Title: Re: Worst Month Yet
Post by: Rob L on September 04, 2016, 04:01:01 PM
And here's the monthly update from my August 2016 statement.
This chart uses current charge-offs but uses interest earned five months prior as suggested by Fred93.
It's a more realistic comparison as my recent Folio selling has resulted in a 38% drop in interest earned. Charge offs were already baked in.
On the other hand, in absolute numbers, my charge offs were the highest dollar amount ever. That ain't good.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FwI02dag.png&hash=cc2682d695e05e9205e66f087e7965fe)
Title: Re: Worst Month Yet
Post by: jheizer on September 04, 2016, 04:14:47 PM
I got hammered this month

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi91.photobucket.com%2Falbums%2Fk299%2Fheezer7%2Fsoffice.bin_2016-09-04_15-13-25_zpshe7dvo0e.png&hash=48a3b57b51a4d6bb4e51dbe310f6c3a8)
Title: Re: Worst Month Yet
Post by: lascott on September 05, 2016, 12:46:48 PM
This age of account is not that much fun :(  - My XIRR is tracked carefully and I'm a bit of over 5% so above bonds which is what this investment was 'replacing' for me
NOTE: that I have not bought new notes for a few months tho.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FzjrSUK3.png&hash=78763641825ae9fecc6f0a73fb58c58a)

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FzEFwW4S.png&hash=ef4d3629b47138285187dbfa4579e3e8)
Title: Re: Worst Month Yet
Post by: dompazz on September 06, 2016, 11:32:44 AM
I, too, got smacked this month with charge offs being 74%.  Running 30% YTD.

Had my first ever deadbeat, 0 payments made, charge off. 
Title: Re: Worst Month Yet
Post by: Rob L on September 06, 2016, 11:35:53 AM
Had my first ever deadbeat, 0 payments made, charge off.

Welcome to the club  :(
Title: Re: Worst Month Yet
Post by: dompazz on September 06, 2016, 11:37:54 AM
Had my first ever deadbeat, 0 payments made, charge off.

Welcome to the club  :(
Considering I made my first deposit in Jan, 2014, I figure it was time.
Title: Re: Worst Month Yet
Post by: dbailey75 on September 06, 2016, 02:13:34 PM
another cease and desist Here.

I'm seeing these on notes that are current and in Grace, one would figure this would be a last resort to get a creditor off your back.
Title: Re: Worst Month Yet
Post by: stick109 on September 06, 2016, 07:15:28 PM
I found a very nice delinquency vs time chart published by Prosper.  This is of course for Prosper loans, not LC, and I think this is for the whole mix of loans, counting both 36 month and 60 month loans.  They've broken it out by vintage.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FCapture-prosper-delinquency-curve-2016-08.PNG&hash=8e2f4ae39c3976965b70b9757403e794)

This is still a bit misleading though. Number of "live" loans for a given tranche goes down with time, so it would make much more sense to chart monthly delinquency as a percentage of loans that are still "alive" at this month. That would give true probability of default as a function of loan age.
Title: Re: Worst Month Yet
Post by: fliphusker on September 06, 2016, 08:01:03 PM
Had my first ever deadbeat, 0 payments made, charge off.

Welcome to the club  :(
Considering I made my first deposit in Jan, 2014, I figure it was time.
Jealous, you made it 2 years, I did not make it 2 months before I had a BK.
Title: Re: Worst Month Yet
Post by: rawraw on September 08, 2016, 04:20:22 AM
I went several years on LC without any defaults.  I miss selling IGP notes :(
Title: Re: Worst Month Yet
Post by: Rob L on September 08, 2016, 10:03:19 AM
I went several years on LC without any defaults.  I miss selling IGP notes :(

Why did you stop?
Title: Re: Worst Month Yet
Post by: rawraw on September 08, 2016, 10:09:09 AM
I went several years on LC without any defaults.  I miss selling IGP notes :(

Why did you stop?
Because it either doesn't work anymore or I don't know the new tricks. They were sold at net gains, not discounts

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: ThinleyWangchuk on September 20, 2016, 01:58:00 PM
I went several years on LC without any defaults.  I miss selling IGP notes :(

Why did you stop?
Because it either doesn't work anymore or I don't know the new tricks. They were sold at net gains, not discounts

Sent from my SAMSUNG-SM-G935A using Tapatalk

Have you considered selling notes with upcoming payments (i.e in 1-2 days)?  If the borrower makes a payment, the pending sale is canceled.  If the borrower does not make payment, the loan is transferred to the seller.
Title: Worst Month Yet
Post by: rawraw on September 20, 2016, 04:19:34 PM
Interesting strategy. But doesn't payment processing occur regardless of if they pay? I thought it just canceled regardless

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: Rob L on September 20, 2016, 07:46:35 PM
Interesting strategy. But doesn't payment processing occur regardless of if they pay? I thought it just canceled regardless

Sent from my SAMSUNG-SM-G935A using Tapatalk

Think that's been my experience.
Title: Re: Worst Month Yet
Post by: ThinleyWangchuk on September 21, 2016, 01:47:54 AM
Interesting strategy. But doesn't payment processing occur regardless of if they pay? I thought it just canceled regardless

Sent from my SAMSUNG-SM-G935A using Tapatalk

Think that's been my experience.

I e-mailed LC a few days back about this.  Here is their response:

"Thank you for your e-mail and support of Lending Club. If a borrower makes a payment on a loan that is listed for sale on the secondary trading platform operated by Folio Investing, the note will be removed from the notes available for sale on the secondary trading platform. Receiving a payment causes the outstanding principal to change, which effects the pricing of the note. This note may be re-listed for sale.

If the sale of the Note has already processed. It will not be given back to the seller if the payment is not received. "

What do you guys think?
Title: Re: Worst Month Yet
Post by: Fred93 on September 21, 2016, 01:59:39 AM
I e-mailed LC a few days back about this.  Here is their response:

"Thank you for your e-mail and support of Lending Club. If a borrower makes a payment on a loan that is listed for sale on the secondary trading platform operated by Folio Investing, the note will be removed from the notes available for sale on the secondary trading platform. Receiving a payment causes the outstanding principal to change, which effects the pricing of the note. This note may be re-listed for sale.

The probably person who wrote that meant well but did not use the best wording, so this misinforms.

The problem is with the wording "If a borrower makes a payment".  This seems to presume an action on the part of the borrower.  That's not how payments work.  The way payments work is that on the date a payment is due, LC initiates an ACH "pull" from the borrowers bank account.  When that is initiated, loans are removed from folio, because no one knows whether that payment will succeed.  After a few days it is known whether the payment succeeded (ie account was still open, there were sufficient funds, LC got the money, etc) and in either case, the owner of the note may relist. 

Better wording would have been "When a payment is pulled".  The remainder of the LC person's statement is worded ok.
Title: Worst Month Yet
Post by: rawraw on September 21, 2016, 07:07:51 AM
Thanks Fred. FICO drop is the metric I use now to achieve similar ends

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: Rob L on October 03, 2016, 02:20:13 PM
Another month; another chart.
Here's hoping Oct, Nov, Dec and Jan from last year aren't the harbinger of things to come this one!

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FpZ5eeHL.png&hash=848e0aac320396fba84896ffa1216c48)

Title: Re: Worst Month Yet
Post by: lascott on October 04, 2016, 12:28:58 AM
Taxable - no new notes for several months
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FSZeQA3p.png&hash=f2019fa4394a3e320c0242eaa8898700)

ROTH - no new notes for several months
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FXscUIsZ.png&hash=81cd4bac64bf2cbe51c1b7a3c23eab14)
Title: Re: Worst Month Yet
Post by: nonattender on October 04, 2016, 06:28:58 AM
I went several years on LC without any defaults.  I miss selling IGP notes :(

Why did you stop?
Because it either doesn't work anymore or I don't know the new tricks. They were sold at net gains, not discounts

Sent from my SAMSUNG-SM-G935A using Tapatalk

Have you considered selling notes with upcoming payments (i.e in 1-2 days)?  If the borrower makes a payment, the pending sale is canceled.  If the borrower does not make payment, the loan is transferred to the seller.

Pretty sure they closed that loophole shortly before IPO.  Prior to that, it was the major secret sauce for some of the posters here who magically had accounts that would never, ever, under any circumstance, have even a late - much less a default - inside their portfolios.

(Original Prosper mgmt knew about this functionality - and that it was being (ab-)used at LC - and disabled "in processing" note sales.)

ETA:  I don't know any of the above to be true.  I just have a fanciful imagination or a long memory - or both.
Title: Re: Worst Month Yet
Post by: Randawl on October 06, 2016, 09:49:25 PM
Pretty sure they closed that loophole shortly before IPO.  Prior to that, it was the major secret sauce for some of the posters here who magically had accounts that would never, ever, under any circumstance, have even a late - much less a default - inside their portfolios.
. . .
ETA:  I don't know any of the above to be true.  I just have a fanciful imagination or a long memory - or both.

You are correct about them "fixing" that.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 07, 2016, 11:46:53 PM
I had another net loss this month, my 2nd month out of the last 3 months with a loss. I get that chargeoffs would eat into ever dwindling interest when you stop reinvesting, but one of the biggest killers has been early payoffs.
 
The weighted average age of my portfolio is only 19.8 months and 26% of my loans have paid off early already. I need that interest to offset my chargeoffs.

Who is paying off all these loans? Discover? Prosper? Is Lending Club giving the borrower a 2nd loan to pay off their first? I'm willing to bet that the borrower isn't coming up with the money on their own.
Title: Worst Month Yet
Post by: rawraw on October 08, 2016, 07:57:48 AM
This was my first negative month.   RIP track record of positive earnings. Pour one out for the homie

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: anabio on October 08, 2016, 12:25:25 PM
but one of the biggest killers has been early payoffs.
 
The weighted average age of my portfolio is only 19.8 months and 26% of my loans have paid off early already. I need that interest to offset my chargeoffs.

Who is paying off all these loans? Discover? Prosper? Is Lending Club giving the borrower a 2nd loan to pay off their first? I'm willing to bet that the borrower isn't coming up with the money on their own.

My weighted average age is 28.7 months. 43% of my loans have paid off early. It could be that they are refinancing but I doubt it since interest rates at LC have risen over the past couple of years. That plus having to pay the origination fee again makes me believe they are not re-financing. It could be they get better terms at Discover, etc. However, I think if you look at the fico scores of your borrowers you will find that those who paid off early have higher fico scores, probably many of them have much higher scores. That seems to indicate to me that they got their act together and whatever money they saved from their sky high credit card interest rate they have put towards paying off their loan early. They see the light at the end of the tunnel and want to get there faster.

Of course, if it is a real early payoff then they probably did refinance as you believe.

The above is entirely my opinion and could easily be wrong. I have been wrong before ;D
Title: Re: Worst Month Yet
Post by: anabio on October 08, 2016, 12:36:35 PM
However, I think if you look at the fico scores of your borrowers you will find that those who paid off early have higher fico scores, probably many of them have much higher scores. That seems to indicate to me that they got their act together and whatever money they saved from their sky high credit card interest rate they have put towards paying off their loan early. They see the light at the end of the tunnel and want to get there faster.

On second thought...the fact that many of these early payoffs have significantly higher Fico scores also means that they can get a much lower interest rate at LC and therefore much lower monthly payments... so you might be right...
Title: Re: Worst Month Yet
Post by: Rob L on October 08, 2016, 06:16:04 PM
I'm not sure how much I'd fault LC for the practice. They did make the concession to only charge 1% of scheduled payment amount for all payments made in the first 12 months, even when the whole loan is prepaid. Could be this is a tacit admission they solicit borrowers to refinance at lower rates in this period. LC isn't the borrower's only option so I find it hard to ding LC for doing it (if they do). Folks refinance their home mortgages all the time when rates go down. A home mortgage borrower would certainly refinance if they are paying PMI and find a lender that makes them a better deal with no PMI. From the perspective of us lenders it's not good but it will get worse before better as LC faces more competition in the future.

BTW: It would require a significant amount of work, but there's probably enough data available in the lstats downloads to make a convincing case one way or the other that LC is or is not doing this. They don't make it easy, but seems doable (easy to say for someone who hasn't done it).
Title: Re: Worst Month Yet
Post by: nonattender on October 08, 2016, 10:32:02 PM
This stuff partly goes to why the "industry" (whatever it's calling itself these days) is freaking out over "stacking" (multiple loans different platforms).

-Borrower w/$20k CC balance refi's via personal loan.
-Borrower's CC balances drop to $0, loan bal to $20k.
-Borrower's avail credit goes up by ~50%, util cut in half.
-Borrower's fico takes a hit from the initial hard inq upon loan orig - but a few months later significant fico rise in most cases.

(ETA:  And if there's an LC - or whomever - delay in reporting the installment line balance, a huge, initial fico jump will occur.)

A *very* high percentage of borrowers fall into the cc/debtcon usecase and that's exactly what happens with their scores...

Add in that there are now multiple players looking for LC/P/etc tradelines on CR's and doing direct mail (Discover/etc) to refi borrowers, without an origination fee and at a new, lower rate (totally leaving out Sean's concern over whether LC refi's its own customers) - and that pretty well sums up to what I believe you're all seeing wrt high prepayment behave and how it's crushing your portfolio returns...

Now, someone's gonna say:  "But isn't that the same thing that would happen if borrower did a balxfer to a new CC?" - and answer is partially, yes - but FICO is, itself, a little bit strange in how it treats revolving lines versus installment lines - they're used to 'discounts' regarding balance xfer behave and the algos 'pick up' on it when that happens - so, no huge score increase - but when the 'bal xfers' are structured as installment loans, most credit scoring algos are pretty stupid and won't 'pick up on it' - and may even give a further boost due to a blend of credit types (revolve+install+mortgage) being weighted as a positive factor.  Suddenly, this guy looks like he became responsible, has maybe a 20k car loan or something, low to no revolving debt - and the algos jump his score up far too high.

Cue the mad dash for everyone to try to capture him as a customer and refi him at a new, lower rate since he's been so responsible (or flood him w/new CC offers, which would explain some of the reported problems with "~5% borrower population who runs up new debt after LC debtcon").

So, anyway, keep that in mind when thinking about fico trends... I know some of you (selling FICO UP notes for premiums or watching early fico trends for drops - which really ought only to happen if someone is going on a spending spree w/their new fico) knew this, already, but it appears that some of you don't.  You're welcome.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 09, 2016, 01:43:23 PM
Suddenly, this guy looks like he became responsible, has maybe a 20k car loan or something, low to no revolving debt - and the algos jump his score up far too high.

Cue the mad dash for everyone to try to capture him as a customer and refi him at a new, lower rate since he's been so responsible (or flood him w/new CC offers, which would explain some of the reported problems with "~5% borrower population who runs up new debt after LC debtcon").

I like this analysis.
Title: Re: Worst Month Yet
Post by: Rob L on October 09, 2016, 05:22:27 PM
I like it too. Interesting transition from  a "marketplace" loan to a "conventional" one. LC makes marketplace loans using other peoples money (ours for example). They profit from origination fees and also (in a much smaller way) from servicing fees, so their bottom line is only indirectly impacted by loan performance or early payoffs. Along comes Discover, et al, that use their own money to make loans and make profits from net interest margin. They scan CR's from the bureaus for LC. P, etc. borrowers that in Folio terms are several month never lates, up FICO's (and also a lot more info in the CR). Find a good candidate borrower, they offer a lower interest rate loan with no origination fee and there you go. Talk about targeted marketing... It;s like our notes are being sold on Folio (no fee of course), but we never put them up for sale.

Could be that cash drag from early payoffs is the least of our problems. It may be that we are losing what would be our best performing loans to this practice. The loans we are left with are the ones the balance sheet lenders didn't want.
Title: Re: Worst Month Yet
Post by: nonattender on October 09, 2016, 05:45:23 PM
1)  Industry players must be vigilant about reporting initial loan balance the moment the account is opened/loan originates - otherwise, there's a window in there where it looks like this guy just paid off $20k in revolving debt and his score is going to go up by triple digits.

2)  The "magic bullet" for this, for you guys (and for in-house quants) would be to look for an increment in # of total accounts after the first consolidation event - especially revolvers.  If they've opened new tradelines, it's probably a decline - or a very big modelrank "look out!" discount - or, for retails, a "sell signal" or "don't buy this guy" signal...  That weeds out the "stackers" and "spending spree" guys, somewhat - but it's going to require some humans to look at a lot of CR's in order to see what's really going on and build in a model fix, and, for you guys, all you get is a FICO trend - never an update on total # of accounts or total # of revolving accounts, so..... good luck!

3)  One can approximate/back-out those events from FICO trend, but it's... approximate.  There are lots of edgecases and anomalies...

4)  FICO/etc should probably adjust their algos/models to account for consolidation by personal loan - especially their credit card model, which sees these people with low to no revolving debt and just can't wait to hand them a huge credit line and capture that customer...

5)  Not so sure that the Discovers/etc who are poaching high-fico customers with LC/P/etc tradelines are getting what they think they are getting (same story as people buying FICO UP on folio).  They need to recognize the FICO flaw and become a little more selective.
Title: Re: Worst Month Yet
Post by: Fred93 on October 09, 2016, 05:54:54 PM
...Along comes Discover, et al,... They scan CR's from the bureaus for LC. P, etc. borrowers that in Folio terms are several month never lates, up FICO's (and also a lot more info in the CR). Find a good candidate borrower, they offer a lower interest rate loan...

Nice theory, but they can't do that.  They are not allowed to "scan" the database of credit files.  The Fair Credit Reporting Act (FCRA) restricts access this information to limited situations and for limited purposes. 

Title: Re: Worst Month Yet
Post by: nonattender on October 09, 2016, 06:07:21 PM
...Along comes Discover, et al,... They scan CR's from the bureaus for LC. P, etc. borrowers that in Folio terms are several month never lates, up FICO's (and also a lot more info in the CR). Find a good candidate borrower, they offer a lower interest rate loan...

Nice theory, but they can't do that.  They are not allowed to "scan" the database of credit files.  The Fair Credit Reporting Act (FCRA) restricts access this information to limited situations and for limited purposes.

No, they're allowed to build a scorecard and submit it to a CRA and let the CRA do it, for them, for a "small fee"... ;)

That's... umm... the entire business model of a CRA.  Then you have the third-parties - why do you think Discover suddenly got jealous of CreditKarma and cloned it?  I don't think you understand how this stuff works - maybe you need to become a little more "paranoid"! :)
Title: Re: Worst Month Yet
Post by: Rob L on October 09, 2016, 06:17:15 PM
I don't think you understand how this stuff works - maybe you need to become a little more "paranoid"! :)

No I do not know how this stuff works. Yes I should be more paranoid.
"Only the paranoid survive". --- Andy Grove  (I read the book)
Title: Re: Worst Month Yet
Post by: Fred93 on October 09, 2016, 06:33:47 PM
2)  The "magic bullet" for this, for you guys (and for in-house quants) would be to look for an increment in # of total accounts after the first consolidation event - especially revolvers.  If they've opened new tradelines, it's probably a decline - or a very big modelrank

Before you an do any of that, you'd have to identify two loans as being from the same person.  I'm not sure its possible. 

I believe that the "member id" field is essentially useless, as I believe they give each loan a new one.  I haven't checked over all time, but I did check one of the big excel history files, and found no loans contain the same member id.  So if we don't have an id on the borrower, what do you propose? 

One could try to match the credit history fields, but most of them naturally change over time. 

I don't want to think about this ... If I start thinking about the details, it will become a personal challenge.  I have some ideas but I'm trying to squash any thinking about them.  Its like trying to stop a tune that's playing in your head.
Title: Re: Worst Month Yet
Post by: nonattender on October 09, 2016, 06:41:39 PM
I don't own any LC notes, any more - you're not going to inject that tune into my head! :)
(I understand the frustration, but I am trying to play "bigger picture" and think 'industry'.)

[ETA:  By that, I mean:  LC's idiosyncratic data formats are a 'smallish' issue, and they only impact note investors looking for a solution/signalpickup on this - but, bigger picture, this is also a problem for originators/platforms, too - and they DO have the ability (regardless of what data LC provides to retail investors - member ID or whatever) to see the entire CR and, thereby, to identify the exact individual/member/borrower/whatchamacallit-at-xyz-platform.  That's the rabbit hole - the LC-specific one - that I don't want to, personally, go down - as every originator/platform/whatever has its own little data twists and turns - I'm trying to be "platform agnostic" - but I do "get" why you're focused on LC notes, though.]

That said, I know you well enough to know you won't let this go - and I look forward to hearing your (or any) solution(s) for note investors [or for industry] - which may scale up to (and probably will inform to some degree) a solution for industry, as well!
Title: Re: Worst Month Yet
Post by: Fred93 on October 09, 2016, 07:24:18 PM
That said, I know you well enough to know you won't let this go

Sad statement, isn't it.

Well I did a little fiddling with sorts and whatnot in Excel, and yes, one can locate repeat borrowers.

Example: Loan # 20741791 and loan # 14598837. 

A lot of fields match between these two.
  emp_title
  home_ownership
  annual_income
  zip_code (censored, but the 3 digits they let thru do match)
  earliest_credit (censored, but year and month that they let thru match)
  public_rec
  last_fico
  mort_acc went down by one
  many other credit fields close, adding confidence of a match

14598837 issued Apr 2014 grade D2 amount $2275  paid full.
20741791 issued July 2014 grade C4 amount $2270  current.

Sorta matches the  theory being discussed here.  Guy gets an LC loan, then shortly thereafter replaces the LC loan with a new one at a lower interest rate.  In this case, I believe the grade changed because 6 month inquiries dropped from 2 to 1, which would have been caused by two old inquiries falling off the 6 month window and the addition of the inquiry for the first LC loan.

We don't know that he was solicited for the 2nd loan.  This may just be a bright fellow who saw his credit grade change after a mortgage and some old inquiries fell off, and he took advantage of the fact.

Lots of technical triva ... For example, when does a mortgage account fall off? 

Date of first credit, latest FICO, and Zip seem like reliable fields for repeat borrower detection.  Several other fields look like they have a reasonable probability of matching in the repeat borrower case.
Title: Re: Worst Month Yet
Post by: nonattender on October 09, 2016, 07:44:45 PM
Yeah - so, that's why I didn't want to go down that rabbit hole.  My solution would be something stupid and common sense like:  "Hey, LC, you big dummies - why do you hide repeat borrowers by giving them a different member id in the data?  Stop doing that and fix the data!"

And that would solve for note investors who want to look into this / model it out / adjust their investments / use as a signal / whatever...

But the bigger issue, sitting on top of this, is that you guys shouldn't have to do this stuff - LC (or whatever other platform) should have a model fix that does all kinds of things around adjusting/identifying "stackers"/"spree-ers" or whatever one wants to call the scoring issue.

The people supplying the money - in every case, not just retail - want this issue fixed at the originator/scoringmodel level - not by a third party stop-gap/workaround/outsource-it-to-the-customer kind of solution.  So far, the response (AFAIK) has been just to raise the FICO qualification even higher - and lower the DTI qualification - but that doesn't really do much but lower volume(s) across the board, without addressing what really amount to "mispricings"/"disqualification" for pretty significant populations/TAMs....... but I digress.....

ETA:  Go here and look at how much the Policy Code 2 loans were contributing to growth - down in the comments section - http://www.lendacademy.com/policy-code-2-loans-lending-club/ - and you may see why I'm interested, from a variety of angles, about the reduction to TAM that the "stop-gap" model solution of +fico/-dti may be causing, related to this fico behaviour issue, wrt to TAM... and then the 5% reduction in TAM that LC, in particular, announced earlier this year when, i believe, it first started noticing (and then totally cut, via fico/dti - a very imprecise cut!) the population of borrowers that were loading massive amts of debt after taking out a consolidation loan.  Everyone - on the originator side - is afraid of this issue and doesn't want to be the last guy holding (or to have sold to its investors) a basket of mispriced (due to fico/in-house model trtmt) "stacker" notes, when the music stops and the fico algo begins to reflect the true underlying credit reality (or, worse, when port perform reflects it!)...

I digressed some more.  Ohwell.  I may do it again!
Title: Re: Worst Month Yet
Post by: Fred93 on October 09, 2016, 10:38:31 PM
...Along comes Discover, et al,... They scan CR's from the bureaus for LC. P, etc. borrowers that in Folio terms are several month never lates, up FICO's (and also a lot more info in the CR). Find a good candidate borrower, they offer a lower interest rate loan...

Nice theory, but they can't do that.  They are not allowed to "scan" the database of credit files.  The Fair Credit Reporting Act (FCRA) restricts access this information to limited situations and for limited purposes.

No, they're allowed to build a scorecard and submit it to a CRA and let the CRA do it, for them, for a "small fee"... ;)

Ah.  I see.  This gets around FCRA because FCRA limits the situations in which one can release a credit report, but in this case they aren't releasing the credit report ... just a list of names, addresses, etc of people who match your criteria.  CRA is running a lead generation business.

Given the level of competition between companies offering credit these days, I don't see this stopping any time soon.

Title: Re: Worst Month Yet
Post by: nonattender on October 09, 2016, 11:20:23 PM
...Along comes Discover, et al,... They scan CR's from the bureaus for LC. P, etc. borrowers that in Folio terms are several month never lates, up FICO's (and also a lot more info in the CR). Find a good candidate borrower, they offer a lower interest rate loan...

Nice theory, but they can't do that.  They are not allowed to "scan" the database of credit files.  The Fair Credit Reporting Act (FCRA) restricts access this information to limited situations and for limited purposes.

No, they're allowed to build a scorecard and submit it to a CRA and let the CRA do it, for them, for a "small fee"... ;)

Ah.  I see.  This gets around FCRA because FCRA limits the situations in which one can release a credit report, but in this case they aren't releasing the credit report ... just a list of names, addresses, etc of people who match your criteria.  CRA is running a lead generation business.

Where've you been?  :o

Also, Marissa Mayer didn't insta-fold and allow gov to snoop on YHOO user emails - she just did it for them and reported back.

Big difference!  Yuuuuge!  She's a classy, stand-up, woman-lady CEO of whom all of our children-daughters should be proud...

(Anything else I can 'splain for ya?  My "style" of writing seems to get in the way sometimes, but I know my stuff.  Believe me!)

ETA:  P.S.  Those nice ladies from Welcome Wagon who came around to give you a gift basket in the 80's were getting paid. :)

(I think the way the kids say it is "If the service is free, your information is the product being sold" or some such formulation...)
Title: Re: Worst Month Yet
Post by: Fred93 on October 10, 2016, 05:27:18 AM
Those nice ladys?
Title: Re: Worst Month Yet
Post by: nonattender on October 10, 2016, 06:29:28 AM
Very hard for me to calibrate who may know what about what in a setting like this;  apologies:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-History-of-Credit/td-p/19935

Long story short, Welcome Wagon ladies (in the 50's to 80's) were funded/reported-to CRA's.

ETA:  Nothing says "joke fell flat" more than having to explain it and google to provide a link...
Title: Re: Worst Month Yet
Post by: nonattender on October 10, 2016, 11:55:03 AM
Ok, well, I've basically written a couple of whitepapers on this in private messages at this point.  I'm not getting paid to investigate/fix this, so, I have to withdraw now to save my hands the wear.

But, before I go, major point (largely about scope of issue) is:

The failure of FICO to timely (or at all) detect and appropriately discount scores for "card consolidation via installment loan" (versus "card consolidation via balance transfer to new card") may be "infecting" the entire FICO-reliant ecosystem (banks, card issuers, everyone) for borrower population who consolidates credit card debt via an installment instrument.  If that's happening, there are some "big issues" - beyond just how LC's retail note investors should react to mitigate a couple of points of compression due to a lot of loan pre-payment...

Think about it.   Until FICO rolls out new update - which could take years - anyone reliant on FICO for decisioning should be very careful when evaluating/underwriting borrowers who have a score which has been affected ("very positively") by xferring CC debt to an install.

Prior to a few years ago, personal loans were dead - now, they're everyone's favorite new way to do debtcon. (Did anyone alert FICO?)

Guess we'll see...
Title: Re: Worst Month Yet
Post by: Larry321 on October 10, 2016, 04:39:52 PM
Well, kids, I made some oney with Lending Club, but I am slowly withdrawing money as it accumulates in my account.  I went from earning 8-9% to hovering something over 5%.

Time to return to mutual fund over at Fidelity.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 10, 2016, 05:13:37 PM
Looks like early payoffs have indeed recently increased among LC's high grade borrowers.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 10, 2016, 05:19:37 PM
And here's the data on 60 month loans. Check out the recent A grades!
Title: Re: Worst Month Yet
Post by: Rob L on October 10, 2016, 06:36:54 PM
Thanks for the nice work. I was in the middle of doing the same analysis when I checked the board and there it was; don't see any surprises. Very nice.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 10, 2016, 10:03:43 PM
Thanks for the nice work. I was in the middle of doing the same analysis when I checked the board and there it was; don't see any surprises. Very nice.

This is from Compass Point, not me. It circulated this morning.
Title: Re: Worst Month Yet
Post by: nonattender on October 11, 2016, 05:24:26 PM
Looks like early payoffs have indeed recently increased among LC's high grade borrowers.

The more telling thing, I think, is the early payoffs in the lower E/F/G grades in first 1-3 months.  That's the population (lowest fico) which would see the biggest fico score jump after a "cc -> install" consolidation event and somehow 5% of them are doing total refi in ~3 mo's.

If somebody with a mid-600's fico did a balance transfer, you can damn well bet that their fico wouldn't support another one that quickly, assuming fico were reacting how it would after a traditional CC balance transfer/consolidation event.  But, FICO is running from ~2008...

Crazy stuff.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 11, 2016, 08:57:42 PM
What's really awful about this is that investors/lenders pay a penalty on early payoffs that occur after the 12th month in the form of a 1% fee on the outstanding principal. These charts show that early payoffs are basically inevitable and predictable. Prepayment is such a material part of the system that investors need to factor in the penalties they will have to pay on these payoffs.
Title: Re: Worst Month Yet
Post by: SLCPaladin on October 11, 2016, 10:21:24 PM
What's really awful about this is that investors/lenders pay a penalty on early payoffs that occur after the 12th month in the form of a 1% fee on the outstanding principal.

Can you explain this to me? I don't understand why lenders pay a 1% fee after 12 months.
Title: Re: Worst Month Yet
Post by: SeanMCA on October 11, 2016, 10:54:33 PM
What's really awful about this is that investors/lenders pay a penalty on early payoffs that occur after the 12th month in the form of a 1% fee on the outstanding principal.

Can you explain this to me? I don't understand why lenders pay a 1% fee after 12 months.

The way Lending Club's service fee works is that they charge 1% of payments they receive from the borrower, which naturally would be a combination of principal and interest. But when a borrower pays off the loan in full early, Lending Club charges 1% on the entire amount paid, even though it will be almost entirely the investor's principal. In effect, there's a penalty assessed to the investor for an early payoff.

Previously, investors were actually losing money on borrowers who paid off their loans in full in the first few months because the 1% fee on outstanding principal would exceed interest earned in that short amount of time. So Lending Club made an exception for the first 12 months. Now investors only pay a 1% fee on the contractual payments in the first 12 months. If paid off early after 12 months, the investor eats a 1% fee on outstanding principal.

Basically early payoffs can be a bad thing.

https://help.lendingclub.com/hc/en-us/articles/216118597-What-happens-if-a-loan-is-repaid-early-
Title: Re: Worst Month Yet
Post by: SLCPaladin on October 12, 2016, 01:24:58 PM
Thanks for explaining that, makes total sense now.
Title: Re: Worst Month Yet
Post by: nonattender on October 16, 2016, 05:35:21 PM
I don't think you understand how this stuff works - maybe you need to become a little more "paranoid"! :)

No I do not know how this stuff works. Yes I should be more paranoid.
"Only the paranoid survive". --- Andy Grove  (I read the book)

Got this a few days ago.  Especially enjoyed his lessons on "Cassandra"s - in the context of CEO's being the last to know, front line people having their brains picked for intel, and front-line people extending beyond the company itself into the customer base, in the forum(s) where they naturally gather... (in re:  some crazy professor finding the FPU bug in the Pentium rollout...)  Thanks for rec! :)
Title: Re: Worst Month Yet
Post by: Rob L on October 16, 2016, 09:42:26 PM
Glad you enjoyed it!  :)
Title: Re: Worst Month Yet
Post by: nonattender on October 28, 2016, 08:11:37 PM
1)  Industry players must be vigilant about reporting initial loan balance the moment the account is opened/loan originates - otherwise, there's a window in there where it looks like this guy just paid off $20k in revolving debt and his score is going to go up by triple digits.

2)  The "magic bullet" for this, for you guys (and for in-house quants) would be to look for an increment in # of total accounts after the first consolidation event - especially revolvers.  If they've opened new tradelines, it's probably a decline - or a very big modelrank "look out!" discount - or, for retails, a "sell signal" or "don't buy this guy" signal...  That weeds out the "stackers" and "spending spree" guys, somewhat - but it's going to require some humans to look at a lot of CR's in order to see what's really going on and build in a model fix, and, for you guys, all you get is a FICO trend - never an update on total # of accounts or total # of revolving accounts, so..... good luck!

3)  One can approximate/back-out those events from FICO trend, but it's... approximate.  There are lots of edgecases and anomalies...

4)  FICO/etc should probably adjust their algos/models to account for consolidation by personal loan - especially their credit card model, which sees these people with low to no revolving debt and just can't wait to hand them a huge credit line and capture that customer...

5)  Not so sure that the Discovers/etc who are poaching high-fico customers with LC/P/etc tradelines are getting what they think they are getting (same story as people buying FICO UP on folio).  They need to recognize the FICO flaw and become a little more selective.

http://www.lendacademy.com/online-lending-network-combat-fraud/

You're welcome.  Let us know how much fraud you guys catch, okay?
(It's a positive signal for investors to know you're protecting them...)

Also, pretty much anybody who goes for an immediate second loan from another platform should be flagged for halting the disburse of original proceeds (if not yet sent) or subject to an immediate clawback.  Put legal on that, because you're on the hook to us for those.
Title: Worst Month Yet
Post by: BruiserB on November 01, 2016, 08:47:16 AM
Well, October 2016 just went down as my first month with more charge offs than interest earned. And I get to pay tax on all of the interest but have more losses this year than I'll be able to write off against other investment capital gains.  I can carry it forward, but I can't keep going with this trend. I'm moving to more conservative notes in my taxable account, but if the losses continue, I'll be reducing my account significantly.  Have gone from 9-10% returns to barely holding flat this year.  LC better get its act together.


Sent from my iPad using Tapatalk
Title: Re: Worst Month Yet
Post by: jheizer on November 01, 2016, 09:43:50 AM
Loan Status Date in October and in charged off status I assume is the same as what will be in the monthly statement?  If so I am going to get hammered this month too.
Title: Re: Worst Month Yet
Post by: anabio on November 01, 2016, 04:25:18 PM
... LC better get its act together.
Sent from my iPad using Tapatalk
I'm not convinced it is an LC problem. Everyone has been talking about problems with 2016 loans...but I am seeing very similar results in my loans, all of which were funded in 2014. I have not invested since Jan, 2015.

It might be partly LC's problem because of that 2016 miscalculation, but that does not explain why I am having loans that have 27-30 months worth of payments going IGP and late 16-30...a lot of them with no missed payments or only 1 grace since inception. And mind you, all my loans are in A-B-C buckets, about equal in quantity.

Two weeks ago I had 12 out of 630 active notes go IGP (none of which had less than 22 payments; most had between 25-30 payments). So far only 3 of them have paid. 8 went 16-30 late and the other one SHOULD have gone 16-30...it's 17 days late (same as another two notes who DID go 16-30) but for some reason LC hasn't popped it over to 16-30 yet.

Last week I had 9 notes go IGP. So far none of them have paid up. They are still in IGP but are getting close to 16-30 territory.

I can't remember ever having this many IGP notes not paying up; usually a big majority (supposedly around 66%) of IGP notes pay up. What has changed? Could it be too many people in oil have lost their jobs? or could it be the big R rearing its ugly head...or something else???
Title: Re: Worst Month Yet
Post by: jz451 on November 01, 2016, 05:45:45 PM
I'm having a similar situation myself where I've had 4 loans go bad out of 89 active notes. One I sold in the beginning of the month which went bad in September for 90% off when it went Late 16-30 days. Another is also Late 16-30 days but went on a paymen plan, which is frustrating me since it doesn't pay until 11/30, 55 days past due. The other two are IGP but were notes I just bought off Folio, one which is hasn't paid but shows no contact log, and is in payment processing for the past eight days, so I can't sell it, the other is also on a payment plan, for three months. Luckily for me none of my notes in my seven months of investing have gone bad, luckily by selling them once they go IGP.


I'm not convinced it is an LC problem. Everyone has been talking about problems with 2016 loans...but I am seeing very similar results in my loans, all of which were funded in 2014. I have not invested since Jan, 2015.

It might be partly LC's problem because of that 2016 miscalculation, but that does not explain why I am having loans that have 27-30 months worth of payments going IGP and late 16-30...a lot of them with no missed payments or only 1 grace since inception. And mind you, all my loans are in A-B-C buckets, about equal in quantity.

Two weeks ago I had 12 out of 630 active notes go IGP (none of which had less than 22 payments; most had between 25-30 payments). So far only 3 of them have paid. 8 went 16-30 late and the other one SHOULD have gone 16-30...it's 17 days late (same as another two notes who DID go 16-30) but for some reason LC hasn't popped it over to 16-30 yet.

Last week I had 9 notes go IGP. So far none of them have paid up. They are still in IGP but are getting close to 16-30 territory.

I can't remember ever having this many IGP notes not paying up; usually a big majority (supposedly around 66%) of IGP notes pay up. What has changed? Could it be too many people in oil have lost their jobs? or could it be the big R rearing its ugly head...or something else???
Title: Re: Worst Month Yet
Post by: dmcnic on November 01, 2016, 09:59:54 PM
I have a new D2 loan that is now IGP. I'm surprised there wasn't even one payment. I don't have a good feeling the loan will ever make a payment, y'know?
Title: Re: Worst Month Yet
Post by: Rob L on November 02, 2016, 10:47:07 AM
I have a new D2 loan that is now IGP. I'm surprised there wasn't even one payment. I don't have a good feeling the loan will ever make a payment, y'know?

Rollers:
There are 366 notes of 36 month term loans that did not make the first payment (in full) listed on Folio at the present.
There are 326 similar notes of 60 month term loans.
These are note counts, not loan counts. A single loan may and probably does have multiple notes listed.
On the other hand, there are no doubt  many such loans have no notes listed on Folio at all.
Title: Re: Worst Month Yet
Post by: investor88 on November 03, 2016, 05:11:54 AM
Hey Rob, How is your account performing now?
When you started this thread 11 months ago, I recommended that you stop investing in LC... - that they were over-inflating returns for investors and that the charge-offs were starting to snowball.  Take a look at the current 'Understanding Your Return Chart'.  A year ago, it didn't show anyone with a negative return and now a lot of people have negative returns.  (in the 6 month to 15 month range) and it will get worse for them as their portfolio ages.   
For some reason Fred93 would not let me speak about my experience with LC and must have ulterior motives to silence any detractors.  LC is failing and anyone who invested in 2014, 2015 and 2016 will soon see the staggering losses coming their way.  A year from now the 'Understanding Your Returns' chart will look like a blood bath and I have a feeling LC will soon stop producing that chart or I recommend they rename it "Understanding Our Downturn"
Title: Re: Worst Month Yet
Post by: Fred93 on November 03, 2016, 05:53:07 AM
Fred93 would not let me speak about my experience with LC

For the record, I don't have that power.  I hope you speak your mind. 

Quote
LC is failing and anyone who investing in 2014, 2015 and 2016 will soon see the staggering losses coming their way.

I agree with part of that statement.  2015 & 2016 vintage loan performance has been significantly worse than recent prior years.  I am anxious to learn whether 2016Q3 vintage will perform yet again worse, or show some turnaround and do better.

LC is scheduled to release earnings on Monday 11/7.  At that time we should also get the updated statistics files which will give us our first look at 2016Q3 vintage performance.
Title: Re: Worst Month Yet
Post by: mindbowels on November 03, 2016, 09:05:10 AM
Quote
will soon see the staggering losses coming their way.

Yep, just saw my November statement.  The last 3 months have been a slightly net negative returned but I got slaughtered in November. 

I've been an investor since 2009 but I'm done.  I stopped investing in new notes at the beginning of the year and I've been trying to sell out on Folio for the last 6 months.  Hoping by the end of 2016 to have shut the books on Lending Club.  Sad.
Title: Re: Worst Month Yet
Post by: apc3161 on November 03, 2016, 09:32:10 AM
This was also my worst month, I lost money at a rate of 5%.

LC clearly lowered lending standards after going public in an attempt to keep their loan volume growth in exponential territory, at the expense of the investors. Until they fix this, I'm done buying notes and will be withdrawing my cash as it comes in.
Title: Re: Worst Month Yet
Post by: jheizer on November 03, 2016, 09:35:55 AM
WOW, twice the losses of a normal month for me.  And the notes.csv Charged off with a LoansStatueDate in Oct is definitely not equal to the statement's losses amount.  Statement has another $150.  No wonder they changed the search screens to show the principal lost to 0.  It'd be nice if I could easily see which notes were charged off for a given statement.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi91.photobucket.com%2Falbums%2Fk299%2Fheezer7%2Foct_zpsuzlkj7ai.png&hash=826dd7dff79c5ba22b0f48a60e2fb8f1)
Title: Re: Worst Month Yet
Post by: jheizer on November 03, 2016, 09:57:10 AM
Well, I have joined the stop buying party.  Maybe I'll fire back up my folio buyer only looking for super good deals, but for now I'm done. 

Just sold my stock too.  I have a feeling their reports monday are going to have to include talk on increasing defaults and its noing to drop.  It was only meant to be a short play anyway.  Probably made more there since May than I'll make in the notes total with a whole lot less money on the line.
Title: Re: Worst Month Yet
Post by: SeanMCA on November 03, 2016, 10:57:52 AM
When did the "Understanding your returns" chart update to show so many investors below 0%?
Title: Re: Worst Month Yet
Post by: DLIFVOIP on November 03, 2016, 11:59:47 AM
Guys, I will admit that I have not read every post in this thread, but I am shocked to be reading that people are losing money on monthly basis.

What kind of loans are you buying that you are experiencing default/charge off rates that are greater than 10% (hard to believe anyone has average interest rate lower than 10%). 

Seems to me that you are being greedy and focusing most of your investment into riskier loans.  I am also thinking that those that are losing money are not investing an appropriate amount of $ to achieve the correct diversification.

The most important thing about investing in LC is diversification.  But not just diversification in the number of loans you hold, but also diversification over time. 

If you have $5,000, to invest you can not invest that in a 1-2 week period (even at $25 per loan) and expect solid returns.  You have to spread your investment over a longer period of time and be really picky about the loans you purchase.  Especially if you can not hold/buy a significant amount of loans.  LC and several other sites will talk about a magic number of loans to hold to achieve diversification, to me that number is a min. of 1,000 $25 loans. 

Last month was my best month ever regarding $ return.  Yes, my net return has decreased from 10.xx% to 8.28% over the last 2-3 years, but it has been a very slow decline and cannot imagine losing money.  I have an average interest rate of  11.49% and per LC have a Combined Return NAR of 8.28%.  I know of 21 LC accounts with positive returns, lowest Combined Return NAR is 7.95%.

Maybe I am missing the bigger picture of this thread, as I have not read every post, but seems like those who are losing money are making big mistakes in how they are deploying their funds.  I am not saying LC has not done things to hurt their investors, but I do not think anything they have done would cause investors to be losing money.

I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.
Title: Re: Worst Month Yet
Post by: investor88 on November 03, 2016, 12:09:51 PM
When did the "Understanding your returns" chart update to show so many investors below 0%?

The “Understanding your Returns” chart  that I posted is  for a weighted average portfolio of 20-21% which is heavy in D and E notes that the OP was originally discussing.  This chart has been looking worsening over the past year.  For a comparative chart, here is what a similar weighted average portfolio looked like August 20, 2015.  In the 6 to 15 month range all investors are above 5%.  Now half of them are below 5% by that time.  Since the chart goes down over time, I think most of those investors will be below zero by 30 months when their portfolios age out.
Title: Re: Worst Month Yet
Post by: BruiserB on November 03, 2016, 12:19:07 PM
Shutting down my reinvesting on my taxable account for a while.  Will let the Roth IRA continue for a while as my performance has actually been starting to turn around there.

The understanding your returns graph is very misrepresentative of how our accounts are currently performing, since, like the "interest earned" on the login page, it goes back to day 1 of opening our accounts.  I have 5 years of decent earnings that will take a lot of losses to drag down.  It would be a lot more enlightening to be able to see YTD or a rolling 12 months' performance or something along those lines.
Title: Re: Worst Month Yet
Post by: Rob L on November 03, 2016, 01:19:48 PM
Here's my latest. In absolute terms I had my highest dollar amount charged off this month.
The past 3 months charge offs in absolute terms have been unusually high.
Decided to add the stacked bars to be able to observe what I hope to be the convergence of % charge offs back to steady state on par with my new portfolio size.

Still in the throes of having reduced my holdings by about 50% over the months of July and August. All of my Folio sales were current notes. I bought no new notes May through August then resumed purchases, reinvesting payments and resuming maintenance of a zero cash balance on what is now my downsized portfolio. Hopefully the backlog of charge offs that was already baked into my portfolio before May will have worked its way through within the next couple of months and my charge offs will settle down to a level commensurate with the my new portfolio size (blue bars and red bars about the same size). What that level might be is anyone's guess. The portfolio is about 65% D's and 35% E's, WAIR 17.38% and combined ANAR 8.08%.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FBf7UU8X.png&hash=024d8424402b4db5aa6b6b06c34765f3)

Title: Re: Worst Month Yet
Post by: apc3161 on November 03, 2016, 01:46:00 PM

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FBf7UU8X.png&hash=024d8424402b4db5aa6b6b06c34765f3)


What is scary about this chart, is that supposedly the economy is doing alright. So, to what extent did lending club lower their lending standards in order to achieve their loan volume targets?

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fwww.lendingmemo.com%2Fwp-content%2Fuploads%2F2015%2F05%2FLendig-Club-Total-Issued-Loans-2015.png&hash=e6132f275e54420c783a39d03f60493b)

To achieve that exponential growth, they had to attract a lot of new borrowers, and their only way to do that was to basically complete relax their underwriting standards, at the expense of the investors. I should have known this would happen after going public.
Title: Re: Worst Month Yet
Post by: jz451 on November 03, 2016, 03:57:01 PM
Piggy backing off of what CircleT009 has said I want to say that grade and loan selection is a big determining factor of portfolio performance. I suspect that people who are saying they want to stop investing are weighted more in lower grade notes E-G, maybe even being too weighted in D, which is causing lower returns due to losses. If this is the problem then being able to optimize grade distributions, which I'm trying to do by using an efficient frontier model (If anyone has seen my post about that earlier in the week and can lend a hand that would be great.) to reduce portfolio variance.

You all must think I'm crazy to say the following but my returns have been relatively stable the past seven months when I started investing and any drop in performance is easily explained. As a warning I've only invested in Folio so my returns will be higher than others due to selecting older notes vs investing in new notes. The attached pictures show my weights for each grade as well as performance since I've started. My weights are broken down as (5.5% D), (28.1%, E), (37%, F), (29.5%, G) and steadily heading toward the higher grade notes as I get away from F-G. Over these seven months I've averaged between 18-20% returns with the only drops being from an influx of $500 for a 50% increase of funds I invested in July, and selling 1 out of my 89 notes at a 90% loss in October.

Now my question to you all is are you going to do something about to improve your returns as I assume most will as rational investors, or for the select few will you just say that everything is falling apart and there is nothing you can do to improve your situation and withdraw from Lending Club?
Guys, I will admit that I have not read every post in this thread, but I am shocked to be reading that people are losing money on monthly basis.

What kind of loans are you buying that you are experiencing default/charge off rates that are greater than 10% (hard to believe anyone has average interest rate lower than 10%). 

Seems to me that you are being greedy and focusing most of your investment into riskier loans.  I am also thinking that those that are losing money are not investing an appropriate amount of $ to achieve the correct diversification.

The most important thing about investing in LC is diversification.  But not just diversification in the number of loans you hold, but also diversification over time. 

If you have $5,000, to invest you can not invest that in a 1-2 week period (even at $25 per loan) and expect solid returns.  You have to spread your investment over a longer period of time and be really picky about the loans you purchase.  Especially if you can not hold/buy a significant amount of loans.  LC and several other sites will talk about a magic number of loans to hold to achieve diversification, to me that number is a min. of 1,000 $25 loans. 

Last month was my best month ever regarding $ return.  Yes, my net return has decreased from 10.xx% to 8.28% over the last 2-3 years, but it has been a very slow decline and cannot imagine losing money.  I have an average interest rate of  11.49% and per LC have a Combined Return NAR of 8.28%.  I know of 21 LC accounts with positive returns, lowest Combined Return NAR is 7.95%.

Maybe I am missing the bigger picture of this thread, as I have not read every post, but seems like those who are losing money are making big mistakes in how they are deploying their funds.  I am not saying LC has not done things to hurt their investors, but I do not think anything they have done would cause investors to be losing money.

I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.
Title: Re: Worst Month Yet
Post by: anabio on November 03, 2016, 04:55:36 PM
Now my question to you all is are you going to do something about to improve your returns as I assume most will as rational investors, or for the select few will you just say that everything is falling apart and there is nothing you can do to improve your situation and withdraw from Lending Club?
I guess I'm one of those irrational/select few. I stopped investing in Jan 2015 because of an interpretation error...but I'm glad I did. As I have said before, I don't believe all the problems are caused by LC relaxing their standards. I am having notes fail that were purchased in 2014 and have 25+ payments.

Then again, maybe those you label as irrational might just be the most rational of all...only time will tell. I know there are those who belittle those of us who believe a recession is coming. I can't see how the chewing gum/bailing wire/duct tape that has been going on since 2008 can hold the finger in the dike much longer. There will either be a recession or rampant inflation as the government tries to print it's way out of the mess it has created.

Remember, LC has not really been through  a recession. They (and we) have no idea about how bad defaults will get during a recession. I know LC was around in 2008 but with a very limited role...they even suspended operations for a part of that year. So for all practical purposes LC has NOT weathered a storm. I think (and you could disagree with me) that there will be he-doubleL to pay when the recession does hit sometime in the next year. I think we are starting to see the precursors of that recession right now.

Remember, LC's clientele are not anywhere near the cream of the crop. There will be "bookoo" defaults and it will hit the riskier (D/E/F/G...) loans real heavy.

I don't know if I'll still be watching this board in a year; most of my loans will be gone by next May...but if I am I will be the first to admit I was wrong if a recession did not come...but I will be among the first to say "I told you  so" if it does.
Title: Re: Worst Month Yet
Post by: jz451 on November 03, 2016, 05:32:44 PM
You bring up a point that is always on the back of my mind that we won't know until the economy reverses itself, which is why in addition to the limited supply of quality low grade notes on Folio I'm moving toward the higher grades. Now do you think that as a whole if I invested in a market portfolio of notes that my returns will be better or worse during a recession than if I invested stocks, mutual funds, and ETFs?


I guess I'm one of those irrational/select few. I stopped investing in Jan 2015 because of an interpretation error...but I'm glad I did. As I have said before, I don't believe all the problems are caused by LC relaxing their standards. I am having notes fail that were purchased in 2014 and have 25+ payments.

Then again, maybe those you label as irrational might just be the most rational of all...only time will tell. I know there are those who belittle those of us who believe a recession is coming. I can't see how the chewing gum/bailing wire/duct tape that has been going on since 2008 can hold the finger in the dike much longer. There will either be a recession or rampant inflation as the government tries to print it's way out of the mess it has created.

Remember, LC has not really been through  a recession. They (and we) have no idea about how bad defaults will get during a recession. I know LC was around in 2008 but with a very limited role...they even suspended operations for a part of that year. So for all practical purposes LC has NOT weathered a storm. I think (and you could disagree with me) that there will be he-doubleL to pay when the recession does hit sometime in the next year. I think we are starting to see the precursors of that recession right now.

Remember, LC's clientele are not anywhere near the cream of the crop. There will be "bookoo" defaults and it will hit the riskier (D/E/F/G...) loans real heavy.

I don't know if I'll still be watching this board in a year; most of my loans will be gone by next May...but if I am I will be the first to admit I was wrong if a recession did not come...but I will be among the first to say "I told you  so" if it does.
Title: Re: Worst Month Yet
Post by: lascott on November 03, 2016, 05:58:50 PM
<snip>
I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.
It does look like you've shift about 14% from A to 8.5% B and 5.5% C in the past year, however.  That is great tho as you took a little more risk but still have very reasonable returns.
Title: Re: Worst Month Yet
Post by: storm on November 03, 2016, 06:03:16 PM
I guess I'm one of those irrational/select few. I stopped investing in Jan 2015 because of an interpretation error...but I'm glad I did. As I have said before, I don't believe all the problems are caused by LC relaxing their standards. I am having notes fail that were purchased in 2014 and have 25+ payments.

Then again, maybe those you label as irrational might just be the most rational of all...only time will tell. I know there are those who belittle those of us who believe a recession is coming. I can't see how the chewing gum/bailing wire/duct tape that has been going on since 2008 can hold the finger in the dike much longer. There will either be a recession or rampant inflation as the government tries to print it's way out of the mess it has created.

Remember, LC has not really been through  a recession. They (and we) have no idea about how bad defaults will get during a recession. I know LC was around in 2008 but with a very limited role...they even suspended operations for a part of that year. So for all practical purposes LC has NOT weathered a storm. I think (and you could disagree with me) that there will be he-doubleL to pay when the recession does hit sometime in the next year. I think we are starting to see the precursors of that recession right now.

Remember, LC's clientele are not anywhere near the cream of the crop. There will be "bookoo" defaults and it will hit the riskier (D/E/F/G...) loans real heavy.

I don't know if I'll still be watching this board in a year; most of my loans will be gone by next May...but if I am I will be the first to admit I was wrong if a recession did not come...but I will be among the first to say "I told you  so" if it does.

Maybe we are headed towards another recession, and maybe we aren't.  The economy has been limping along the last 8 years, so it wouldn't surprise me if the GDP goes slightly negative.  I don't think it will be a very deep recession.  I've read opinions from Federal Reserve board members and scholarly economists that have said the Fed has done about all it can do to stimulate the economy, and it is up to Congress to encourage economic growth.  Our tax laws haven't been reformed since Reagan was in office.  Given the nastiness of this election season, I don't really see anything changing after Tuesday no matter who wins.

I'm interested in what Lending Club has to say when they release their Q3 results.  I sold off a bunch of late loans last month for pennies on the dollar, and posted less than a $20 gain after interest on my "good" loans.  So much for my dream of retiring and living off of the interest.  I'm holding mostly C notes and then some of the lower grades.  Something is really wrong, and I don't think it is all about the economy.
Title: Re: Worst Month Yet
Post by: BruiserB on November 03, 2016, 06:09:10 PM
Piggy backing off of what CircleT009 has said I want to say that grade and loan selection is a big determining factor of portfolio performance. I suspect that people who are saying they want to stop investing are weighted more in lower grade notes E-G, maybe even being too weighted in D, which is causing lower returns due to losses. If this is the problem then being able to optimize grade distributions, which I'm trying to do by using an efficient frontier model (If anyone has seen my post about that earlier in the week and can lend a hand that would be great.) to reduce portfolio variance.

You all must think I'm crazy to say the following but my returns have been relatively stable the past seven months when I started investing and any drop in performance is easily explained. As a warning I've only invested in Folio so my returns will be higher than others due to selecting older notes vs investing in new notes. The attached pictures show my weights for each grade as well as performance since I've started. My weights are broken down as (5.5% D), (28.1%, E), (37%, F), (29.5%, G) and steadily heading toward the higher grade notes as I get away from F-G. Over these seven months I've averaged between 18-20% returns with the only drops being from an influx of $500 for a 50% increase of funds I invested in July, and selling 1 out of my 89 notes at a 90% loss in October.

Now my question to you all is are you going to do something about to improve your returns as I assume most will as rational investors, or for the select few will you just say that everything is falling apart and there is nothing you can do to improve your situation and withdraw from Lending Club?
Guys, I will admit that I have not read every post in this thread, but I am shocked to be reading that people are losing money on monthly basis.

What kind of loans are you buying that you are experiencing default/charge off rates that are greater than 10% (hard to believe anyone has average interest rate lower than 10%). 

Seems to me that you are being greedy and focusing most of your investment into riskier loans.  I am also thinking that those that are losing money are not investing an appropriate amount of $ to achieve the correct diversification.

The most important thing about investing in LC is diversification.  But not just diversification in the number of loans you hold, but also diversification over time. 

If you have $5,000, to invest you can not invest that in a 1-2 week period (even at $25 per loan) and expect solid returns.  You have to spread your investment over a longer period of time and be really picky about the loans you purchase.  Especially if you can not hold/buy a significant amount of loans.  LC and several other sites will talk about a magic number of loans to hold to achieve diversification, to me that number is a min. of 1,000 $25 loans. 

Last month was my best month ever regarding $ return.  Yes, my net return has decreased from 10.xx% to 8.28% over the last 2-3 years, but it has been a very slow decline and cannot imagine losing money.  I have an average interest rate of  11.49% and per LC have a Combined Return NAR of 8.28%.  I know of 21 LC accounts with positive returns, lowest Combined Return NAR is 7.95%.

Maybe I am missing the bigger picture of this thread, as I have not read every post, but seems like those who are losing money are making big mistakes in how they are deploying their funds.  I am not saying LC has not done things to hurt their investors, but I do not think anything they have done would cause investors to be losing money.

I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.

I don't have the time to individually manage notes in my account as both my time has gone down and my number of notes has gone up over time.  I need this investment to work with one of the automated 3rd party options.  I was able to do that for several years and had 10-12% returns.  Last year fell to 9%.  This year YTD I'm in the 5% range.  This past month I had chargeoffs equal to 110% of the interest I earned.  I can see a trend and I don't like it.

I don't think the sky is falling and I'm not going to fire sale my notes.  But I will probably withdraw payments as they're made for a while now and dollar cost average them into a portfolio of ETFs I've put together.  It does seem a bit silly to panic with one month over 6 years of losses compared to the volatility of the stock market, but the way I see it is that LC is much less volatile than the stock market.  Because of that, performance trends aren't likely to instantly reverse either.  As previously mentioned it will take time for these bad loans to cycle out.  I already changed to a much more conservative approach in my account back in May.  Already about 1/3 of my account is these more conservative notes.  I want to make sure there aren't default problems there before continuing to invest. 

Overall I probably have too much in this asset class, so I'm taking this as an opportunity to hit the pause button and see what happens for a while.
Title: Re: Worst Month Yet
Post by: anabio on November 03, 2016, 06:12:28 PM
You bring up a point that is always on the back of my mind that we won't know until the economy reverses itself, which is why in addition to the limited supply of quality low grade notes on Folio I'm moving toward the higher grades. Now do you think that as a whole if I invested in a market portfolio of notes that my returns will be better or worse during a recession than if I invested stocks, mutual funds, and ETFs?

I would never answer that question as a financial advisor but since you asked my opinion I will give you my opinion.

Even during the worst (2007-2009)...well...I'm not even considering the 1930's... the SP500 was down (I believe) 40%. Do I think you stand a good chance of losing more than 40% of your Lending Club investment?

YES, especially if you have loans below A/B. Even A/B clients are none to stellar (in my opinion). What type of stellar consumer should need to borrow LC funds to pay off Credit card balances that any "reasonable" consumer would not have in the first place???

Of course, that's just my unprofessional opinion.
Title: Re: Worst Month Yet
Post by: DLIFVOIP on November 03, 2016, 06:23:43 PM
<snip>
I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.
It does look like you've shift about 14% from A to 8% B and 6% C in the past year, however.  That is great tho as you took a little more risk but still have very reasonable returns.

Once interest rates on A's fell below 8%, I stopped buying A grade loans. 
Title: Re: Worst Month Yet
Post by: BruiserB on November 03, 2016, 06:26:06 PM
A few additional frustrations:

It, more so than ever, feels like LC is figuring out what it wants to be and what value it adds.  Is it for retail or institutional investors?  We're definitely the smaller fish, so we're getting no attention.  I don't see anything changing that. 

The debacle in May has caused them to lose any momentum and focus that they did have.  Now they're concentrating on recovery rather than growth.  Before that they were distracted with getting ready for IPO and the first quarters of being publicly traded.

Over all of that time, nothing of note has changed in our experience.  The data and statistics on the logon pages don't really reflect reality as they don't allow you to look at your performance on a Month to Date or Year to Date level.  Everything is based on the complete history of your account.  I had hoped that would improve over time.  It hasn't.  And now they're distracted again.

Title: Re: Worst Month Yet
Post by: anabio on November 03, 2016, 06:33:03 PM
Maybe we are headed towards another recession, and maybe we aren't.  The economy has been limping along the last 8 years, so it wouldn't surprise me if the GDP goes slightly negative.  I don't think it will be a very deep recession.

You  have a lot more faith in the powers that be than I have. What would have happened in 2008 if the government had not rescued AIG? How many people have insurance, annuities, etc through that behemoth? And AIG was just one of the many that was rescued. Can you imagine the snowball effect?

The government had the tools to fight that recession and...to be honest I think they are still fighting that recession...and they have frittered away all those tools. I don't think we ever exited that recession. The government defines the parameters that decide a recession. Do they fudge the numbers??? well...who out there REALLY BELIEVES  that we only have a 5% unemployment rate? Those that believe probably also believe that LC borrowers report their actual salary...and # of years worked...and reason for the loan...and job title...

As far as I am concerned we are are going to have a recession in a recession.
Title: Re: Worst Month Yet
Post by: lascott on November 03, 2016, 06:42:14 PM
Stopped investing for several months. Starting again with tighter criteria in my taxable account.  Will get Roth to about 2/5th the level it was and will then reinvest there too.

Remember that my accounts were to be the some of the 'bond' part of my asset allocation so for that I am still happy.

Taxable XIRR: 5.21%



Taxable account
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FCARUVEx.png&hash=8cc0fa726907668fd779a1d317a21016)
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FB2ULqfD.png&hash=01c03c20b98b206ff7cd6acd6337c7e3)
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FJnTQUWp.png&hash=1d78b9da7c51707f5b8dcbc1efb34e9f)

ROTH account
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F0mW7xle.png&hash=5fc9de685ffd1f3776932af61a5cc639)
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Ffw8cjmK.png&hash=5a0606986f6b52b445924201e414a4dd)
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FneUmDs1.png&hash=7b968c7bf9b4a9347053a5ce46e9b128)
Title: Re: Worst Month Yet
Post by: Fred93 on November 03, 2016, 07:47:29 PM
Update for my account.  Movin' on up.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-chargeoff-ratio-2016-11-03.png&hash=809532bade5f2a7e3ac6bb9350a93c21)
Title: Re: Worst Month Yet
Post by: Rob L on November 03, 2016, 09:31:04 PM
Update for my account.  Movin' on up.

You and the Jefferson's.
Title: Re: Worst Month Yet
Post by: fliphusker on November 04, 2016, 01:17:19 AM
My first 2 chargeoffs so guess that would qualify for the worst month yet.  4 more warming up in the bullpen so they will not get lonely.  Frustrated with some of my FOLIO notes that were perfectly fine right up until I bought them now IGP.  If I was more like Art Bell would say that something is up. 
Title: Worst Month Yet
Post by: rawraw on November 04, 2016, 08:01:25 AM
Do the monthly statement reflect charge offs correctly for purchased notes? Meaning reflecting the investment not principal amount?

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: anabio on November 09, 2016, 11:47:36 PM
...
I can't see how the chewing gum/bailing wire/duct tape that has been going on since 2008 can hold the finger in the dike much longer. There will either be a recession or rampant inflation as the government tries to print it's way out of the mess it has created.
...

I don't know if I'll still be watching this board in a year; most of my loans will be gone by next May...but if I am I will be the first to admit I was wrong if a recession did not come...but I will be among the first to say "I told you  so" if it does.
I might be admitting that I was wrong about the recession coming. After Trump's speech last night it seems that a WPA program (the likes of which has not been seen since the 1930's) is on it's way. If such a WPA project is in play I think it will keep the recession away (at least for the next few years).

UNFORTUNATELY I am believing the second half of my prediction is  now in play. There is no way the government can pay for such a program except by printing money. Printing money will mean a huge increase in interest rates (just who will accept the current measly 2% to purchase 3 to 6 trillion dollars of additional US BONDS...especially considering how much the US already is in debt for... and don't forget they will also need to purchase bonds to start paying back the trillions of IOU's social security has on its book now that Social Security is taking in less money than it is paying out). I'm afraid Greece will have nothing on us at that point in time.

I am sure most of you realize what that means...large increases in interest rates so the 3 to 5 year loans you are funding now which seem to be making enough interest for you right now may not compare very well to what you could make with your money elsewhere in a year or so; and you can't sell on Folio because the notes will have lost a huge part of their principal because of the higher interest rates new notes will have.

I remember getting 11.5% for a one year cd circa 1981 from a local savings and loan...at which time my mortgage for my old house was 12% (as opposed to 3.125% now).

but then... maybe you shouldn't care because at least you will not be losing money since such a WPA project hopefully would keep people working and maybe not  defaulting on their loans.

of course that then starts the clock ticking on just what will happen 4-5 years from now...the piper must be paid eventually...
Title: Re: Worst Month Yet
Post by: rawraw on November 13, 2016, 04:51:01 AM
This month I'm back to breakeven.  Trending in the right direction!
Title: Re: Worst Month Yet
Post by: dr.everett on November 17, 2016, 02:55:52 PM
So I thought I'd chime in- been following this thread with keen interest.

I have 2 accounts- one IRA and one Taxable. My IRA account was my first LC account, and the Taxable one followed. I made the mistakes on the IRA just due to it being the first account, and having less money to put into the Taxable account during the times that everyone suspects lesser quality loans were available.

I'm dealing with two issues right now in both accounts:

1. FICO Drops- I have ~800-1300 FICO Down notes in each account- previously didn't have a good sell strategy for when these occurred other than manual processing. And for my size accounts (6-7K active notes in each account), this was not scalable. I now have an automated approach to doing this with LR- it's not great, but it works. I'm selling these notes for an average discount of around 5-7%. I'll still have several months of selling to go before they are all sold, but it's a work in progress. Selling the FICO drops should address a large part of my losses going forward.

2. Late notes in general- My FICO issues when scores dropped enough turned into my late notes- used to have a good way of handling these, but the tool I used stopped working well. (IR) That led to my change of tools to LR and having to rethink/adapt my strategy based on the limitations of LR- and there are a lot. I think I'm close to where I was before- I now see a fair number of my late notes selling prior to the dreaded 90% discount right before they are charged off.

With all of that said- my IRA account looks like it'll be even for the year, and my Taxable account might make a small return. Not looking forward to seeing what the losses are at tax time, I'm sure that will be depressing.

For those looking to compare- my size accounts typically have ~250-350 notes in varying stages of lateness each month. I'm typically seeing $1500-2K in chargeoffs a month. I am heavily biased towards the D-G notes, only buying seasoned (Buying the new notes is what got me in trouble), and trying to sell good notes for a markup to offset the losses. (Surprisingly I sell quite a few notes at 8-10% markup, just not enough yet...)
Title: Re: Worst Month Yet
Post by: dmcnic on November 17, 2016, 08:16:13 PM
You actually get sales with a markup? That's amazing, but I always have to remember that not everyone is like me and looking for a bargain.
Title: Re: Worst Month Yet
Post by: fliphusker on November 17, 2016, 11:11:21 PM
I second this as well.  Guess people are ok with paying a premium for their certain YTM on notes. 
You actually get sales with a markup? That's amazing, but I always have to remember that not everyone is like me and looking for a bargain.
Title: Re: Worst Month Yet
Post by: jz451 on November 17, 2016, 11:30:46 PM
I'm one of those who early on realized that buying at a premium is not that big of a deal when I'm mainly buying E-G notes. I've limited it to 2.5%.
I second this as well.  Guess people are ok with paying a premium for their certain YTM on notes. 

Title: Re: Worst Month Yet
Post by: dr.everett on November 18, 2016, 12:26:06 AM
You actually get sales with a markup? That's amazing, but I always have to remember that not everyone is like me and looking for a bargain.

I'm the same way- I don't buy anything more than 3%, and that's actually rare. I find many of the notes I want at discount, sometimes significantly discounted.
My purchasing spread is usually -3% to around 2%, with most being at 0-1%

At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

As much as I would rather not sell the notes, if someone is willing to pay 9-10% for them, I'll sell them and continue buying others.
Title: Re: Worst Month Yet
Post by: jz451 on November 18, 2016, 11:36:40 AM
I just checked what my disocunt/premium for the notes I bought and the min is -2% and max is 4%, soon to be 5.5%, and a median of 1.25%. Not bad I would say.


I'm the same way- I don't buy anything more than 3%, and that's actually rare. I find many of the notes I want at discount, sometimes significantly discounted.
My purchasing spread is usually -3% to around 2%, with most being at 0-1%

At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

As much as I would rather not sell the notes, if someone is willing to pay 9-10% for them, I'll sell them and continue buying others.
Title: Re: Worst Month Yet
Post by: fliphusker on November 18, 2016, 03:31:45 PM
How did you check that?
I just checked what my disocunt/premium for the notes I bought and the min is -2% and max is 4%, soon to be 5.5%, and a median of 1.25%. Not bad I would say.


I'm the same way- I don't buy anything more than 3%, and that's actually rare. I find many of the notes I want at discount, sometimes significantly discounted.
My purchasing spread is usually -3% to around 2%, with most being at 0-1%

At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

As much as I would rather not sell the notes, if someone is willing to pay 9-10% for them, I'll sell them and continue buying others.
Title: Re: Worst Month Yet
Post by: jz451 on November 18, 2016, 06:03:48 PM
I have a spreadsheet will different info of each note bought/sold for tax purposes.

How did you check that?
I just checked what my disocunt/premium for the notes I bought and the min is -2% and max is 4%, soon to be 5.5%, and a median of 1.25%. Not bad I would say.


I'm the same way- I don't buy anything more than 3%, and that's actually rare. I find many of the notes I want at discount, sometimes significantly discounted.
My purchasing spread is usually -3% to around 2%, with most being at 0-1%

At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

As much as I would rather not sell the notes, if someone is willing to pay 9-10% for them, I'll sell them and continue buying others.
Title: Re: Worst Month Yet
Post by: dmcnic on November 19, 2016, 01:01:47 AM
At the risk of sounding bad, when people get scared and dump their notes, I can't buy them fast enough.

That doesn't sound bad; that sounds prudent. I've dropped a few investment newsletters when they sell a stock after it crashes. Seems like that is the time to be buying. If people are selling, I'm like Rodney Dangerfield on the golf course, "Buy! Buy!"
Title: Re: Worst Month Yet
Post by: ThinleyWangchuk on November 20, 2016, 01:29:07 PM
I'm giving up on P2P unless the interest rate on C loans and below increase 10%+. Same underwriting standards but going to earn ~0% net of losses. Disappointed.

http://247wallst.com/banking-finance/2016/11/16/surge-in-online-loan-defaults-sends-shockwaves-through-the-industry/
Title: Re: Worst Month Yet
Post by: jz451 on November 20, 2016, 02:28:23 PM
If you read the whole article it says that subprime auto loans are at a six year high for defaults, so it's not just a P2P thing, but an industry wide problem. In any case won't stop me or many others to continue to lend.

I'm giving up on P2P unless the interest rate on C loans and below increase 10%+. Same underwriting standards but going to earn ~0% net of losses. Disappointed.

http://247wallst.com/banking-finance/2016/11/16/surge-in-online-loan-defaults-sends-shockwaves-through-the-industry/
Title: Re: Worst Month Yet
Post by: Larry321 on November 28, 2016, 09:35:39 AM
I have lost as much money to defaults as I have made in Lending Club.
I am still ahead and have made money, but I would make more money if I shifted my money to Fidelity and polaced it in a DJ linked fund.
Slowly, I am moving my funds out, not reinvesting.
Title: Re: Worst Month Yet
Post by: rawraw on November 28, 2016, 10:20:41 AM
I have lost as much money to defaults as I have made in Lending Club.
I am still ahead and have made money, but I would make more money if I shifted my money to Fidelity and polaced it in a DJ linked fund.
Slowly, I am moving my funds out, not reinvesting.
Did you know that the average retail investor receives half of the average returns of mutual funds because of them leaving and entering at inopportune times? I've always found that statistic fascinating. Good luck but just chasing returns never seems to work out well for the majority who try.

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: daniel2023 on November 28, 2016, 01:48:29 PM
My charge offs are currently higher than my interest earned YTD -- but that's because I've been selling off performing notes to exit the LC market.

LC doesn't even respond to simple bug fixes, like the attached screenshot of my e-mail account on a weekly basis when all my Folio notes get de-listed -- though 200+ notes are done in a single transaction, they insist on blowing up my e-mail account and phone with a random smattering of 40+ emails over 10 minutes.  Complained about this issue in March and several other times -- they claimed they would address it, but that was last March.

In the last 4 years, I've averaged 7.3 percent return -- ultimately decided there is really not a market exposure/diversification benefit to this and its not worth the hassle.
Title: Re: Worst Month Yet
Post by: fliphusker on November 28, 2016, 02:10:00 PM
FOLIO is not ran by LC.  When they come into my gmail account I can click on the first one and delete them all. 
My charge offs are currently higher than my interest earned YTD -- but that's because I've been selling off performing notes to exit the LC market.

LC doesn't even respond to simple bug fixes, like the attached screenshot of my e-mail account on a weekly basis when all my Folio notes get de-listed -- though 200+ notes are done in a single transaction, they insist on blowing up my e-mail account and phone with a random smattering of 40+ emails over 10 minutes.  Complained about this issue in March and several other times -- they claimed they would address it, but that was last March.

In the last 4 years, I've averaged 7.3 percent return -- ultimately decided there is really not a market exposure/diversification benefit to this and its not worth the hassle.
Title: Re: Worst Month Yet
Post by: SMWinnie on November 29, 2016, 08:34:57 AM
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP


So, payment on 7 of the 140 notes which have come up on their first payment date failed.

Collection logs indicate most were NSF, but a couple of the logs showed no entry for the type of payment failure. One collection log is completely blank.
Title: Re: Worst Month Yet
Post by: apc3161 on November 29, 2016, 08:51:14 AM
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP


So, payment on 7 of the 140 notes which have come up on their first payment date failed.

Collection logs indicate most were NSF, but a couple of the logs showed no entry for the type of payment failure. One collection log is completely blank.

Jesus, what is LC thinking with lowering their lending standards /underwriting so badly? Sure, you get a few quarters of increase loan volume/fees/revenue, but long term all the capital is going to leave...
Title: Re: Worst Month Yet
Post by: SMWinnie on November 29, 2016, 09:52:37 AM
Jesus, what is LC thinking with lowering their lending standards /underwriting so badly? Sure, you get a few quarters of increase loan volume/fees/revenue, but long term all the capital is going to leave...
My uninformed guess is that the standards haven't changed, but we're starting to see what those standards do when the market tightens a bit. (LC doesn't really have a history of PTP loans in a contracting credit environment.)

My real concern is servicing. If LC scaled that for credit performance in 2014, then increased volume times increased IGP/late/default means they will be woefully understaffed to get decent recovery rates.
Title: Re: Worst Month Yet
Post by: Rob L on November 29, 2016, 10:28:08 AM
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP


So, payment on 7 of the 140 notes which have come up on their first payment date failed.

Collection logs indicate most were NSF, but a couple of the logs showed no entry for the type of payment failure. One collection log is completely blank.

I'm not usually the voice of optimism but there's a possibility you may have been the victim of simple bad luck.
165 notes is a pretty small sample size. You're only $4k into your $8k investment. (unless you're buying $50 notes) so maybe things will improve over the next 155 notes. Even 320 notes is still a rather small sample size though others here would likely disagree.
Please keep us up to date.
Title: Re: Worst Month Yet
Post by: rawraw on November 29, 2016, 12:26:22 PM
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP


So, payment on 7 of the 140 notes which have come up on their first payment date failed.

Collection logs indicate most were NSF, but a couple of the logs showed no entry for the type of payment failure. One collection log is completely blank.
Thanks for sharing. There was discussion a couple years ago that LC automated investing had a selection bias in the sense it invests in what is left over. Not sure if this is true or not, but something to keep in mind.

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: SMWinnie on November 29, 2016, 12:49:49 PM
There was discussion a couple years ago that LC automated investing had a selection bias in the sense it invests in what is left over. Not sure if this is true or not, but something to keep in mind.
Could anyone expand on this? I went looking for the LC allocation policy on Notes and didn't find it.
Title: Re: Worst Month Yet
Post by: Half Right on November 29, 2016, 02:47:28 PM
out of 12 portfolios my worst performing portfolio was the one invested by LC.
Title: Re: Worst Month Yet
Post by: Fred93 on November 29, 2016, 04:13:17 PM
I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP

So, payment on 7 of the 140 notes which have come up on their first payment date failed.

That seems really bad. 

It is difficult to know how to rate your experience, because there are no good statistics for IGP.  The only data that LC publishes for "payments" is the giant payments file, and it only contains monthly information.  Was the monthly payment made or not.  Because of this, it contains almost no "IGP" or "Late16-" entries.  Most months are marked "current" or "late31-".  Just a result of the monthly sampling.  What happens on shorter time scale is lost.  Many folks have processed the payments file (including me) to try to get some stats on what happens to late loans.  While we can see the "Late31-" we can't see the shorter-lived statuses, so have computed no statistics about them. 

I therefore have no idea what fraction of loans one should expect to go IGP on 1st month for various grades etc, or whether this has increased or decreased over the years etc.

We do of course have the one number that LC has produced, which is their statement that 27% of IGP outstanding balance reaches charge off status within 9 months. 
https://www.lendingclub.com/info/demand-and-credit-profile.action

Investors can access more detailed info on the individual web pages for notes, but one can only access notes that you own, or that are offered for sale on folio.  Also, of course, LC discourages non-human consumption of these web pages (ie screen scraping).



Title: Re: Worst Month Yet
Post by: daniel2023 on November 29, 2016, 04:22:37 PM
FOLIO is not ran by LC.  When they come into my gmail account I can click on the first one and delete them all. 

Not True.  They may be separate legal entities, but it's the same engineers behind both platforms.  That's why LC staff respond to Folio issues, and it was clear from my communications with them that the same engineers work on both.
Title: Re: Worst Month Yet
Post by: anabio on November 29, 2016, 04:30:55 PM
My uninformed guess is that the standards haven't changed, but we're starting to see what those standards do when the market tightens a bit. (LC doesn't really have a history of PTP loans in a contracting credit environment.)
I tend to agree with you...or if the standards have changed they changed around 2014 just after their IPO (in order to get more loans serviced for their shareholders.)

I think it is the economy and wonder if Trumps WPA project will be too little too late to stave off a recession. 

I invested in 2014 and stopped in Jan 2015. In the past month of my 596 current notes 32 of them went into grace with way too many of those being never lates. A few of those have came back current but no where near the amount I would have expected to pay  up in the past. 32 of 596 ratio wise is worse than SMWinnie's 7 of 165...but there are 22 of those 165 that have not reached their first payment yet so it might get a little worse for SMWinnie. Remember, these are circa 2014 notes not 2016. So  whatever is happening it does not only affect recent loans.

Lucky for me that all these notes are very mature and I only have $5-$7 dollars of principal to lose if they default.
Title: Re: Worst Month Yet
Post by: anabio on November 29, 2016, 04:37:21 PM
I invested in 2014 and stopped in Jan 2015. In the past month of my 596 current notes 32 of them went into grace with way too many of those being never lates.

BTW...I forgot to mention that (like SMWinnie) I used LC auto invest the first three months so the vast majority of my initial 1400+ notes were purchased with auto invest. I only used my own filtering techniques to buy notes when re-investing my proceeds.
Title: Re: Worst Month Yet
Post by: Larry321 on November 30, 2016, 09:31:26 AM
RawRaw,

Who is leaving the mutual fund at inopportune times? The managers of the fund or investors like us?
I measure all my investments against what I could get if I just left my money in an S&P 500 linked fund. 

At the moment (actually, for the past 10 years) my Fidelity investments have been earning me more, way more, than the 4-5% I am getting from LC right now.

I am convinced that if I understood the statistical tool of factor analysis, I could use it to choose LC loans more effectively.


I have lost as much money to defaults as I have made in Lending Club.
I am still ahead and have made money, but I would make more money if I shifted my money to Fidelity and polaced it in a DJ linked fund.
Slowly, I am moving my funds out, not reinvesting.
Did you know that the average retail investor receives half of the average returns of mutual funds because of them leaving and entering at inopportune times? I've always found that statistic fascinating. Good luck but just chasing returns never seems to work out well for the majority who try.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Title: Re: Worst Month Yet
Post by: rawraw on November 30, 2016, 09:50:04 AM
RawRaw,

Who is leaving the mutual fund at inopportune times? The managers of the fund or investors like us?
I measure all my investments against what I could get if I just left my money in an S&P 500 linked fund. 

At the moment (actually, for the past 10 years) my Fidelity investments have been earning me more, way more, than the 4-5% I am getting from LC right now.

I am convinced that if I understood the statistical tool of factor analysis, I could use it to choose LC loans more effectively.


I have lost as much money to defaults as I have made in Lending Club.
I am still ahead and have made money, but I would make more money if I shifted my money to Fidelity and polaced it in a DJ linked fund.
Slowly, I am moving my funds out, not reinvesting.
Did you know that the average retail investor receives half of the average returns of mutual funds because of them leaving and entering at inopportune times? I've always found that statistic fascinating. Good luck but just chasing returns never seems to work out well for the majority who try.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Investors like us. We get roughly half the returns the managers actually do (and disclose) because of the buying selling.

I'm not arguing you shouldn't exit LC because it's not for everyone, but this is a bond equivalent. It shouldn't be compared to stock market, but rather be considered as an asset in your overall Allocation. It's benefits come partly from less correlation with markets than other equities. This may reduce your overall return in a given year but overtime it should make your returns less volatile. And volatility increases the odds of us making rash decisions.

I think anyone getting into LC should decide up front what their goal and process is. And they should stick to it until something changes. Returns are not a good process imo. Overtime good investment process does help returns, but the outcome in any individual quarter or year can't be based on achieving the absolute returns.

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: anabio on November 30, 2016, 11:18:23 AM
I'm not arguing you shouldn't exit LC because it's not for everyone, but this is a bond equivalent. It shouldn't be compared to stock market, but rather be considered as an asset in your overall Allocation.

I agree, it is in the bond world...but people have to realize that it is in the junk bond world, not the muni, treasury bill, corporate bond world.

The question investors have to ask themselves is: Has the world changed in the recent past and what does that mean for future returns? Are past expectations going to be realized in the months or years ahead? If you  think they aren't then you need to decide if that change fits in with your risk tolerance and act accordingly.
Title: Re: Worst Month Yet
Post by: rawraw on November 30, 2016, 11:27:27 AM
I'm not arguing you shouldn't exit LC because it's not for everyone, but this is a bond equivalent. It shouldn't be compared to stock market, but rather be considered as an asset in your overall Allocation.

I agree, it is in the bond world...but people have to realize that it is in the junk bond world, not the muni, treasury bill, corporate bond world.

The question investors have to ask themselves is: Has the world changed in the recent past and what does that mean for future returns? Are past expectations going to be realized in the months or years ahead? If you  think they aren't then you need to decide if that change fits in with your risk tolerance and act accordingly.
I wouldn't say it's like junk bonds. Structurally, junk bonds are secured with similar rates (so higher risk of default, but lower lgd). Maybe net returns are similar, but I'm skeptical they'd be similar in all environments.  It also depends where in LC credit spectrum. A lot of the origination are in grades many in this forum underweight. A lot of people here are severely exposed to a very small sliver of LC market returns. But better to assume it's junk vs treasury at the start for sure

But I agree on risk. I've redirected new investments into A and B since I can't reprice the lower spectrum loans like a lender can.  I also sold some new vintage low grade notes to remix into a and B. My weighted average rate has declined roughly 75bps as a result and still Trending down.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Title: Re: Worst Month Yet
Post by: lascott on December 03, 2016, 11:17:40 AM
FYI, Nov statements are available.  Took a loss on my taxable account for the first time. Disturbing. ROTH is still good. May need to get even more conservative on my taxable account.

Taxable - stopped investing for 6 months - restarted
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FTWW23fw.png&hash=fabee12013e4fa3a30e71e4baab5fa9d)

ROTH - stopped investing 6 months ago - not restarted
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FzAPa8TW.png&hash=92d54a1b5adeba918e1fa617f4f8cbe4)

Added charting showing my percentage of lates and charge offs relative to me stop purchasing notes.

Taxable - Interest Radar tracking data charted
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fi9RFqCj.png&hash=3e1b117d3930b3691d278a073b4f3ffd)
Title: Re: Worst Month Yet
Post by: Rob L on December 03, 2016, 01:29:48 PM
Another statement and another new month.
All D' and E's; WAIR 17.43%, Weighted average age 26.9 months.
Primary notes returns 7.18%, Traded notes returns 16.73% and Combined returns are 7.96%.
 
Much of this was to be expected. I stopped reinvesting on 5/9 and did not resume until 8/30.
Also I sold half my portfolio in July - August and virtually all notes sold were current, never late. I kept all the bad stuff.
So, maybe 5 or so months of 2x charge offs were already baked in.
I'm expecting to see the blue and red bars begin to converge. Unfortunately it's looking like that might be in the 60% to 80% range.
This was absolutely my worst month dollars wise, but in the long run I still think Jan 16 was my worst overall.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fvlg6O54.png&hash=98cc1c24c0fba7d00f7bd7fa59f4e763)

I do have some optimism for the future; my delinquency rate has begun to drop. Hopefully a leading indicator of better things to come.
This is not to suggest that LC delinquency rates are falling; quite the opposite.
Only that the effects of the reduction of my portfolio size has begun to reduce my overly high delinquency rate to whatever's appropriate for a portfolio of that new size.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FReNxazX.png&hash=c743564b9b86e7bf008659d4809a0818)

Title: Re: Worst Month Yet
Post by: jheizer on December 03, 2016, 02:10:50 PM
My numbers this month look a lot.better but I also realized I have sold more late notes than before.  I need to sit down and go through my folio statements and look at the amount lost per late sale per month and see how that effects things.
Title: Re: Worst Month Yet
Post by: SeanMCA on December 03, 2016, 02:26:59 PM
This was my 3rd negative month since July. July, September and November all generated losses. Those losses for the most part wiped out all the gains in August and October. I haven't purchased any new loans since early June.

Considering my IGP and late categories aren't seeing any slowdown, I don't think I'll really be on a positive trajectory for a long while at this point.

What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years yet so the first note I ever bought hasn't even run its course to maturity. If all the good borrowers pay off early then this whole system doesn't make sense. And if they pay off after 12 months, we are hit with an early payoff penalty in the form of 1% of the outstanding balance to make it even worse.

If defaults and early payoffs hold steady, it's possible that I will only break even or experience losses going forward.


Title: Re: Worst Month Yet
Post by: lascott on December 03, 2016, 02:54:15 PM
<snip>
What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years ...
<snip>
I think our more conservative notes (A,B,C) just pay off more.
My paid off early percentage are:
28% on my 2.8 yr old account and
19% on my 1.5 yr old account
Title: Re: Worst Month Yet
Post by: SeanMCA on December 03, 2016, 03:16:50 PM
<snip>
What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years ...
<snip>
I think our more conservative notes (A,B,C) just pay off more.
My paid off early percentage are:
28% on my 2.8 yr old account and
19% on my 1.5 yr old account

I am forever curious as to "how" they're paying off. Is Marcus refinancing them? Is it Discover? Is LC giving them a new loan to pay off their previous loan? I don't get it. This phenomenon is absurdly material. I don't think we should accept that the best borrowers are just disappearing out of our portfolios en masse without a detailed explanation from Lending Club. I've already emailed them.

I think they should reimburse everyone the 1% penalty assessed on all applicable early payoffs.
Title: Re: Worst Month Yet
Post by: Rob L on December 03, 2016, 06:18:25 PM
Personally I think that going forward LC, Prosper (mpl's), et al will find themselves unable to compete with Marcus, Discover, et al for the most credit worthy borrowers. The "banks" have the advantage and desire to make loans to the most credit worthy borrowers (LC A and top B grades) and they probably aren't very much interested in the more risky loans. LC borrowers in this most credit worthy category are prime targets for poaching. The day will likely come when mpl's are relegated to making only the more risky loans the "banks" don't want on their balance sheets.
Title: Re: Worst Month Yet
Post by: SMWinnie on December 04, 2016, 10:54:47 AM
(Snip)
In the past month of my 596 current notes 32 of them went into grace with way too many of those being never lates. A few of those have came back current but no where near the amount I would have expected to pay  up in the past.
Of the seven mid-October notes that went IGP, one borrower has come current and two have slipped into the Late 16-30 bucket.

Along with anabio's experience, it would appear that: (1) there is a sharp, recent decline in credit quailty; and (2) it is a population issue, not just a vintage issue.
Title: Re: Worst Month Yet
Post by: jheizer on December 05, 2016, 10:31:52 AM
Kind of what I was afraid of.  I had been lazy listing late notes since they hadn't really been selling lately.  But last month they did more than average.

(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2016-12-05_09-27-14_zpsjurm1xfn.png)

So the sales stopped the losses from being larger, but also hid that the month wasn't as good as we'd like.
Title: Re: Worst Month Yet
Post by: SMWinnie on December 06, 2016, 10:54:54 AM
New "investor" here. I started an account with $8K of mad money about a month ago as an educational project. I wanted to see what a passive source of funds would experience, so I let LC auto-invest for me evenly split A/B/C/D.

I thought I would share the experience here, since this isolates mid-to-late October issuance. First month quality:

165  issued notes
  3  notes paid in full in first month
 22  notes have not reached 1st payment (or are processing/current)
  7  notes IGP

So, payment on 7 of the 140 notes which have come up on their first payment date failed.
Updating:

168  issued notes
  3  notes paid in full in first month, principal recycled into new notes included in 168 above
165  issued notes, net of bridge loans
 13  notes have not reached 1st payment (or are processing/current)
152  notes that reached 1st payment
  8  notes IGP
  3  notes (of 8 that ever went IGP) now Late 16-30
  3  notes (of 8 that ever went IGP) now Current
  2  notes (of 8 that ever went IGP) still IGP
Title: Re: Worst Month Yet
Post by: Booleans on December 06, 2016, 03:04:20 PM
I had liquidated my taxable account in anticipation of rolling over a Roth IRA to Lending Club for 2017. This thread is one of the reasons I'm hesitating now.
Title: Re: Worst Month Yet
Post by: lascott on December 07, 2016, 11:13:05 AM
<snip>
What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years ...
<snip>
I think our more conservative notes (A,B,C) just pay off more.
My paid off early percentage are:
28% on my 2.8 yr old account and
19% on my 1.5 yr old account
Well I was looking at PeerCube for my accounts and it's chart shows it is more than my conservative notes.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FQhPN3NY.png&hash=742712841e4288f13af39161825dd69e)
** The portfolio fully paid rate is the count of notes fully paid as percentage of portfolio notes lent through primary platform.
Title: Re: Worst Month Yet
Post by: SeanMCA on December 07, 2016, 11:36:54 AM
<snip>
What has killed me the most as I've mentioned previously is early payoffs. I've had 928 loans pay off early. That's 28% of all the notes I ever bought. My LC account hasn't even been open 3 years ...
<snip>
I think our more conservative notes (A,B,C) just pay off more.
My paid off early percentage are:
28% on my 2.8 yr old account and
19% on my 1.5 yr old account

Well I was looking at PeerCube for my accounts and it's chart shows it is more than my conservative notes.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FQhPN3NY.png&hash=742712841e4288f13af39161825dd69e)
** The portfolio fully paid rate is the count of notes fully paid as percentage of portfolio notes lent through primary platform.

Those Ds have to be getting refinanced either through LC or a competitor. 
Title: Re: Worst Month Yet
Post by: .Ryan. on December 07, 2016, 01:16:54 PM

Those Ds have to be getting refinanced either through LC or a competitor.

This is the reason I found LC's response to combating the effects of rising delinquencies was in part to raise rates. Raising rates will only increase defaults and promote early refinancing vs. actually increasing the overall return to investors IMO.
Title: Re: Worst Month Yet
Post by: Rob L on December 07, 2016, 02:53:29 PM
Those Ds have to be getting refinanced either through LC or a competitor.

Just so happens that I received a pre-approved offer from Discover in the mail today.
In the letter they tout same day approval, loan terms of 3, 4, 5, 6 or 7 years, up to $35k and no origination or closing fees.
There's a "Compare the Benefits" table including LC, Prosper, Citibank Personal Loan and PNC bank. No Marcus.
Top line of the table; zero origination or closing fees for all but LC and Prosper (which they estimate to be about $675 for both).
Anyone with a loan at a Discover competitor like LC would likely pick up the phone and call Discover. It's free and easy. No downside.

Us having a lot of pre-paid loans might not be such a terrible thing. If no borrowers are pre-paying that might indicate LC is underpricing our loans.
That would be much worse.
Title: Re: Worst Month Yet
Post by: SLCPaladin on December 07, 2016, 04:13:03 PM

Those Ds have to be getting refinanced either through LC or a competitor.

This is the reason I found LC's response to combating the effects of rising delinquencies was in part to raise rates. Raising rates will only increase defaults and promote early refinancing vs. actually increasing the overall return to investors IMO.

I'm not sure if I totally agree. My thoughts are that raising rates may or may not increase defaults. I think there is probably an inflection point such that raising rates beyond a certain threshold will (1) prompt some users to pay off early (assuming they are able to), (2) prompt some users to refinance, or (3) cause some borrowers to default. But below that unknown threshold, raising rates is most likely to increase overall portfolio returns. It's difficult to know how an impact on rate adjustments will influence customer behavior, but I would rather that LC err on the side of raising rates rather than lowering them. All things being equal, I'd rather rates be higher than lower in order to cushion defaults.
Title: Re: Worst Month Yet
Post by: nonattender on December 08, 2016, 08:40:59 PM
Those Ds have to be getting refinanced either through LC or a competitor.

Just so happens that I received a pre-approved offer from Discover in the mail today.
In the letter they tout same day approval, loan terms of 3, 4, 5, 6 or 7 years, up to $35k and no origination or closing fees.
There's a "Compare the Benefits" table including LC, Prosper, Citibank Personal Loan and PNC bank. No Marcus.
Top line of the table; zero origination or closing fees for all but LC and Prosper (which they estimate to be about $675 for both).
Anyone with a loan at a Discover competitor like LC would likely pick up the phone and call Discover. It's free and easy. No downside.

Got one of those about six months ago and posted it here, before I started running a little experiment with my own FICO - for other reasons - which sits at well >800 with ~0% util (I've been doing PIF, even before they report balances, each month - though a couple hundred bucks here or there will show up on a card or two, last day or so of the month, and get reported)...  I decided to look like a good, Christmas-shopping consumer this month (instead of a deadbeat/tightwad) and loaded up a 0% card with a ton of stuff which I'm going to let get reported, before PIF in January (maybe, depending on if any interesting rate arb opportunities arise, w/fed move).

I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)
Title: Re: Worst Month Yet
Post by: .Ryan. on December 08, 2016, 08:50:41 PM


I'm not sure if I totally agree. My thoughts are that raising rates may or may not increase defaults. I think there is probably an inflection point such that raising rates beyond a certain threshold will (1) prompt some users to pay off early (assuming they are able to), (2) prompt some users to refinance, or (3) cause some borrowers to default. But below that unknown threshold, raising rates is most likely to increase overall portfolio returns. It's difficult to know how an impact on rate adjustments will influence customer behavior, but I would rather that LC err on the side of raising rates rather than lowering them. All things being equal, I'd rather rates be higher than lower in order to cushion defaults.

Makes total sense. Hope you're right SLC!!!
Title: Re: Worst Month Yet
Post by: Lovinglifestyle on December 08, 2016, 11:09:16 PM


I'm not sure if I totally agree. My thoughts are that raising rates may or may not increase defaults. I think there is probably an inflection point such that raising rates beyond a certain threshold will (1) prompt some users to pay off early (assuming they are able to), (2) prompt some users to refinance, or (3) cause some borrowers to default. But below that unknown threshold, raising rates is most likely to increase overall portfolio returns. It's difficult to know how an impact on rate adjustments will influence customer behavior, but I would rather that LC err on the side of raising rates rather than lowering them. All things being equal, I'd rather rates be higher than lower in order to cushion defaults.

Makes total sense. Hope you're right SLC!!!

I'd especially like the E1 rates to go higher.  Anecdotally, I don't feel the risk of E1 is being adequately compensated compared to E2.  My Nov. acc't value ended up only plus $12.18, net of fees, due to selling lates at low prices.  Maybe I'll quit doing that.
Title: Re: Worst Month Yet
Post by: Booleans on December 09, 2016, 07:59:08 AM
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.
Title: Re: Worst Month Yet
Post by: fliphusker on December 09, 2016, 10:26:53 AM
Higher utilization does not lower your FICO?
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.
Title: Re: Worst Month Yet
Post by: Shawnthgreta on December 09, 2016, 11:33:20 AM
Higher utilization does not lower your FICO?
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.

It does lower FICO. I would imagine not materially through the very low utilization area (say less than 10%).
Title: Re: Worst Month Yet
Post by: Booleans on December 09, 2016, 12:06:45 PM
Higher utilization does not lower your FICO?
I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

It sounds like you already are. Raising your utilization from 0 will have no effect. It's a myth that a utilization >0% raises your credit score.

Your FICO score drops as your utilization gets beyond certain ranges. For example, there's no difference between 0% utilization and 5% utilization. But then once you get to 10% it might drop a little, then 30%, etc...

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FJEMxI43.png&hash=03560bd45c5930cb2522d2c46b22054d)
Title: Re: Worst Month Yet
Post by: nonattender on December 09, 2016, 12:12:12 PM
5 digits of cc bal in jan combined with score around 795 (after util goes up, score will go down) will = sweet spot for debtcon junkmail.

i was holding everything fairly steady, for a while, at ~0% util, experimenting with combining multiple cards from a single issuer into a single line - ie, going from 2 x $1k amex to 1 x $2k amex kind of thing - as well as seeing what i could learn re: effects of average age.

won't share my findings there, but will say that the old authorized user trick still seems to work - took friend from ~650 to ~770 w/an authorized user tradeline from one of my cards (had no negative effect on me, but fico 08 jumped friend's score as soon as reported).

algorithms are fun.  i get bored easily.  i want to know how stuff works.  etc.
Title: Re: Worst Month Yet
Post by: thezfunk on December 09, 2016, 05:46:37 PM
Those Ds have to be getting refinanced either through LC or a competitor.

Just so happens that I received a pre-approved offer from Discover in the mail today.
In the letter they tout same day approval, loan terms of 3, 4, 5, 6 or 7 years, up to $35k and no origination or closing fees.
There's a "Compare the Benefits" table including LC, Prosper, Citibank Personal Loan and PNC bank. No Marcus.
Top line of the table; zero origination or closing fees for all but LC and Prosper (which they estimate to be about $675 for both).
Anyone with a loan at a Discover competitor like LC would likely pick up the phone and call Discover. It's free and easy. No downside.

Got one of those about six months ago and posted it here, before I started running a little experiment with my own FICO - for other reasons - which sits at well >800 with ~0% util (I've been doing PIF, even before they report balances, each month - though a couple hundred bucks here or there will show up on a card or two, last day or so of the month, and get reported)...  I decided to look like a good, Christmas-shopping consumer this month (instead of a deadbeat/tightwad) and loaded up a 0% card with a ton of stuff which I'm going to let get reported, before PIF in January (maybe, depending on if any interesting rate arb opportunities arise, w/fed move).

I should be in the sweet spot for LC/P/GS/STI/DFS loan offers, both on the credit side and on the amount side - I expect to learn a lot from my January junkmail about who's doing what... ;)

What do you want to know?  My wife literally gets at least one Prosper or Lending Club mailer a week.  They are getting sneaky now on the envelope.  They used to say who they were from and I would throw it out without opening it.  Now they are unmarked.  I'll show you whatever comes in if you want.  Blocking out key details, of course.

I imagine we are a target because we bought a house in Jan 2016 and promptly took our 0% offers on two credit cards and two store financing options to get things like floors, windows, and two bathrooms remodeled (I was a busy beaver, still am).  My budget has them all getting paid off before the 0% expires so I am paying in the neighborhood of ~3k a month towards these debts.  I keep track of FICO and credit reports via Credit Karma and I see our high balances dropping like a stone.
Title: Re: Worst Month Yet
Post by: thezfunk on December 09, 2016, 05:54:39 PM
You guys are right on utilization hitting FICO.  Using my house buying and remodeling experiment I can say that I went from almost 0% utilization and a score around 780 and within a month or two I had a mortgage and $40k in financed debt at 0%.  My score dropped to 660-670 range and my utilization jumped over 60%.  I am now down to about 30% utilization and saw the biggest single jump since I started paying it all off.  30% utilization is a magic number on your overall score but also on individual cards it seems.  To maximize a score I would keep overall utilization below 30% and all of the individual lines of credit below 30% as well.

I should have everything but the mortgage paid off by next fall.  It has been an interesting ride...credit wise. 

The authorized user thing worked for me too.  My score was higher than the wife's and making her an authorized user on mine jumped her score significantly and didn't impact mine at all.
Title: Re: Worst Month Yet
Post by: Rob L on December 09, 2016, 06:35:32 PM
won't share my findings there, but will say that the old authorized user trick still seems to work - took friend from ~650 to ~770 w/an authorized user tradeline from one of my cards (had no negative effect on me, but fico 08 jumped friend's score as soon as reported).

I'll validate that one. Been there, done that. Didn't even know it was a "trick". Yeah, 100+ FICO points, easily. Even more.
On the other hand maybe FICO isn't so stupid in that regard. If someone with an 800+ authorizes someone else to use their credit card then there's probably more than simple friendship involved. The 800+ is going to pay that card for sure and very probably a whole lots of other bills.
Title: Re: Worst Month Yet
Post by: Rob L on December 09, 2016, 06:46:15 PM
The authorized user thing worked for me too.  My score was higher than the wife's and making her an authorized user on mine jumped her score significantly and didn't impact mine at all.
My wife's FICO is always higher than mine. She has a few dozens of $2k limit cards at retail outlets that make the difference. We always get a laugh about it. She last worked outside the home in the 70's (except to keep the books for my company which she did exceptionally well; at least I hope she did).  :)
Title: Re: Worst Month Yet
Post by: Rob L on December 09, 2016, 06:49:43 PM
I imagine we are a target because we bought a house in Jan 2016 and promptly took our 0% offers on two credit cards and two store financing options to get things like floors, windows, and two bathrooms remodeled (I was a busy beaver, still am).  My budget has them all getting paid off before the 0% expires so I am paying in the neighborhood of ~3k a month towards these debts.  I keep track of FICO and credit reports via Credit Karma and I see our high balances dropping like a stone.

What a great arbitrage opportunity!!
Whoa... wait... never mind!  :)
Title: Re: Worst Month Yet
Post by: thezfunk on December 09, 2016, 07:52:33 PM
I imagine we are a target because we bought a house in Jan 2016 and promptly took our 0% offers on two credit cards and two store financing options to get things like floors, windows, and two bathrooms remodeled (I was a busy beaver, still am).  My budget has them all getting paid off before the 0% expires so I am paying in the neighborhood of ~3k a month towards these debts.  I keep track of FICO and credit reports via Credit Karma and I see our high balances dropping like a stone.

What a great arbitrage opportunity!!
Whoa... wait... never mind!  :)

I am, of course, getting a ton of new credit card offers.  I am keeping an eye out for 0% balance transfer cards that DON'T CHARGE A FEE OR HAVE A MINIMUM FEE.  I already used the only one I know of.  If I wanted to ease up on my aggressive payoff schedule to get more work done on the house, I could push out 0% longer.  If you have any ideas, let me know :-)
Title: Re: Worst Month Yet
Post by: thezfunk on December 09, 2016, 09:26:55 PM
So, I am paying some bills and did another check.  This last month I had a ton of work related expenses that all hit at once.  I run those through my card instead of work so that I can get the rewards points for it.  They are quick to pay and I don't have to float it very long.  Those expenses pushed me back up over the 30% usage for the month and dropped by FICO by 20 points.  30% is definitely a breaking point.
Title: Re: Worst Month Yet
Post by: anabio on December 09, 2016, 11:58:15 PM
For quite a long time my fico was around 804. Within the past year I went on a "application spree". Got an AARP Visa, PENFED Visa, Amex Blue. Already had Freedom, CapOne, DoubleCash and USAA. The AARP and Amex Blue came with a 12 month and 18 month interest free period. Had no decent balance transfer so I didn't do that. What I did do was charge the heck out of the AARP & Amex. Amex had limit of $20,000. Up to a month ago I had that up to $11,000 (over 50%). AARP had limit of $15,000. Up to a month ago I had that up to $3,400 (20%)

A few months ago I got a balance transfer offer of 0% 18 months 2% fee from Capone. I grabbed that. Limit was $20,000. I wrote checks to myself for $17,000. That put me at 85% utilization. A short time later I got an offer from Freedom for 0% for 12 months with NO fee. I grabbed that. Limit is $17,000. Took out all 17,000. 100% utilization.

In case you are wondering, I planned this and did it for a special purpose. Just got REAL lucky with that FREEDOM offer.

All told I had around $123,000 in  credit limit on these cards. My overall utilization across all cards was 40%. My Fico went from 804 to 733.

Decided to change  my Penfed HELOC to a 5/5 plan (to lock in the 3.75% for the next 5 years...inflation WILL come back you know). Worried about my fico hurting my chance for that rate so paid down cards to get utilization down somewhat.

Took Amex down to $9,000.  Utilization is 45%
Took freedom down to $8,000. Utilization  is 48%
Took Capone down to $13,800. Utilization is 69%
Too AARP down to $3,000. Utilization is 20%
Overall utilization now at 27.5%.

Just checked my Fico from 4 different Credit Cards (offering free fico scores) and Fico ranges from 765 to 773 with above utilization.

So apparently my score only tumbled around 70 points with the heaviest utilization. It only dropped around 20 points with my latest utilization.
Title: Re: Worst Month Yet
Post by: nonattender on December 10, 2016, 12:17:06 AM
What do you want to know?  My wife literally gets at least one Prosper or Lending Club mailer a week.  They are getting sneaky now on the envelope.  They used to say who they were from and I would throw it out without opening it.  Now they are unmarked.  I'll show you whatever comes in if you want.  Blocking out key details, of course.

I'd love to see anything from Marcus (Goldman), DFS (Discover), Suntrust ("LightStream"), and Synchrony Financial (formerly GE) - but happy to see any others about whom I may not yet know... ;)

Marketing points the way, in these kinds of businesses, I think.

I took a big (for me) position in Suntrust, after taking very close look at their LightStream online portal, early 2016 - at the time, their site was very wonky and they were only acquiring online - very tight underwriting, not very automated, paper/human intensive - but saw they'd recognized the opportunity early and were moving in the right direction.  Think they've done a little over $2 billion, this yr, automated a whole lot of the underwriting/orig/servicing - have opened up to non-Suntrust banking clients and lowered qualification.

I know that DFS knocked off CreditKarma and is "giving" away free credit scores (while upselling their own loans and cards) - they are the first that I saw doing direct mail solicitations (comp chart, as someone mentioned, included both LendingClub and Prosper - which, naturally, caught some very serious attention from me - "use us instead of p2p and save about a grand" was compelling marketing). ;)  I believe they're also innovating around a student loan/home loan hybrid product, not sure if that'll work, but it appears to be "novel".

Synchrony Financial (formerly GE, before they sold it to ditch "too big to fail") is also doing some interesting stuff online, lately - I have not seen straight up consumer loan offerings, but they appear to be doing their own "free score" platform, too, so, they are coming...

Then there's Goldman/Marcus... I've never actually seen an ad or mailer - though I do see ads for the 1.05% apy deposit side of that.

Those are the big kids on my potential 'p2p-poachers' list, but there may be others - and, back to FICO, due to some flaws/quirks, I'm not sure that they're poaching what they think they're poaching, credit-quality wise, given my observe re: cc->unsecured loan xfers - but I don't think any of them are too dependent / solely focused on just poaching p2p/mpl borrowers, so, they'll be fine in aggregate.
Title: Re: Worst Month Yet
Post by: nonattender on December 10, 2016, 12:26:12 AM
won't share my findings there, but will say that the old authorized user trick still seems to work - took friend from ~650 to ~770 w/an authorized user tradeline from one of my cards (had no negative effect on me, but fico 08 jumped friend's score as soon as reported).

I'll validate that one. Been there, done that. Didn't even know it was a "trick". Yeah, 100+ FICO points, easily. Even more.
On the other hand maybe FICO isn't so stupid in that regard. If someone with an 800+ authorizes someone else to use their credit card then there's probably more than simple friendship involved. The 800+ is going to pay that card for sure and very probably a whole lots of other bills.

Yeah - you and me, nothing for them to worry about.  But, way back, in old people like me days, when p2p was just getting started / I was just beginning to "not believe"/"want to test" fico/etc, discovered there was a black market for tradelines.  This was pre-housing crash - and a lot of mortgage/re types were pointing clients to sites where they could "rent-a-tradeline"... combined with NINJA loans, that was big business.  FICO came out and claimed, after the crash, that they'd closed the AU "loop-hole" - but it appears to live on - there are some cases (husband/wife) where it makes sense, and maybe they're smart about that, but I wanted to check.  I believe - now - that the way they 'closed' that little loop-hole was to have a guy write up a press release saying it wouldn't work anymore.  :)
Title: Re: Worst Month Yet
Post by: thezfunk on December 10, 2016, 03:19:54 AM
Here is the latest from Prosper that came today.  They are way past their 'second attempt'.

http://imgur.com/a/YuNZ9 (http://imgur.com/a/YuNZ9)
Title: Re: Worst Month Yet
Post by: nonattender on December 10, 2016, 05:22:09 PM
Here is the latest from Prosper that came today.  They are way past their 'second attempt'.

http://imgur.com/a/YuNZ9 (http://imgur.com/a/YuNZ9)

That's cute.  First thing I noticed was that Chris Larsen's signature is still on the check, so, good to know Prosper is keeping the marketing fresh.  ::)

(Also, that "second attempt" language - stamped bright red! - is straight out of collections letters - who the hell thought that looked "enticing"?)

I had about 30 (no hyperbole) Discover offers from the last 12-18 months sitting around that I threw away a few weeks ago - they'd at least try to trick me in new and different formats.  I do think someone in their marketing office is totally OCD about testing out different envelope colors and sizes;  looked like I was closing down a stationery store when I finally dumped all that stuff into the garbage can...

ETA:  Just got the mail.  It's their 0% discover card product, today, in a standard-sized gold-ish envelope w/bright pink credit card on it - perhaps adding that (male) friend as an AU on one of my cards has painted me (mistakenly) as homosexual - and now i get new, flamboyant colors?

I'd really like to see their direct mail response rates based upon envelope size/color/etc, now...  Surely it can't matter so much --- can it?
Title: Re: Worst Month Yet
Post by: Rob L on December 20, 2016, 05:29:14 PM
About one year ago:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FG8Oqc2W.png&hash=f7d19b7fece325f1a22dabe7ffbd4816)

Today:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FCtY6uKP.png&hash=374d9069753931108cd9b36eba36f31e)

Kinda says it all doesn't it. I'm not talking about my own dot, but the whole of the data.

Title: Re: Worst Month Yet
Post by: jheizer on December 20, 2016, 05:48:43 PM
Wow, your image had me really depressed looking at the dip in the graph that appears around 13 months.  Especially since I am at 14.5months.  It made me wonder what the average return for a given average age was.

(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2016-12-20_16-45-10_zps5xyhw5t4.png)

Note that it is based on number of accounts, not dollar value, but still it is pretty damn obvious.  :(


This also reminded me I promised to add graphs to the my site.  I'll try to do that soon.
Title: Re: Worst Month Yet
Post by: apc3161 on December 20, 2016, 10:30:56 PM
Is anybody NOT taking money out? I know I am taking out all the cash as it comes in now and investing elsewhere. I mean c'mon, tax free bonds have better returns than LC p2p right now. Do they think investors will just accept these returns? 4-5% is not worth the trouble/risk.
Title: Re: Worst Month Yet
Post by: Fred93 on December 20, 2016, 11:26:29 PM
I mean c'mon, tax free bonds have better returns than LC p2p right now.

Nonsense.  If you look at 1 to 1.5 year duration tax free  bonds, you'll have trouble getting 1% let alone 5%

I'm not taking money out.
Title: Re: Worst Month Yet
Post by: anabio on December 21, 2016, 09:57:34 AM
I mean c'mon, tax free bonds have better returns than LC p2p right now.

Nonsense.  If you look at 1 to 1.5 year duration tax free  bonds, you'll have trouble getting 1% let alone 5%

I'm not taking money out.

I somewhat agree with fred93. There is no way to get LC interest in any type of "safe" savings/CD/bond right now.

However, I am pulling money out. I keep vacillating between there will be a big recession in the next year to there won't be. When I started pulling my money out of LC 2+ years ago I thought there would be a recession within a year of the next presidency (you know...the new president forces a recession in order to get it over with and blame the old administration). Then does everything in his/her power to end it before his/her term is over so he/she can boast that they ended the misery the previous administration caused).

But with Trump's public works plan I thought maybe the recession would be delayed. Now I am thinking that plan is too little to late.

It all comes down to what I am comfortable with and I am not comfortable with LC. I could very well be wrong and there is no recession in the next 3 years...but if I came back to LC I would worry every day about "maybe there might be". So, for my temperament anyway, 3% or difference is not worth the aggravation....7% would be but not 3%.
Title: Re: Worst Month Yet
Post by: Rob L on December 21, 2016, 10:11:33 AM
Think we were hit with a double wammy of lower interest rates over about 18 months and degredation of borrower performance more recently. Interest rates have been significantly increased and that's a big plus. LC claims they've tightened their lending standards but we have yet to see evidence of that. Hope it's true. Yes, I scaled back my investment in July-August by about 50% but have now resumed reinvestments and have zero cash available.

FWIW the loans I'm buying today on average have the best risk / reward score of any time since I began with LC four years ago. However, risk has definitely risen and it's by no means certain I'm adequately reflecting this increased risk. Time will tell, but I'm strangely optimistic. There's either a light at the end of the tunnel or an oncoming train.
Title: Re: Worst Month Yet
Post by: jheizer on December 21, 2016, 10:13:48 AM
I am collecting cash from payments, but just letting it sit in LC for now.  All of my loans are from 2015 and early 2016, which has shown to be a dud vintage.  It seems like the vintage is more important than just about anything else right now.  Until Fred93's awesome vintage chart looks better (http://forum.lendacademy.com/index.php/topic,4113.msg38557.html#msg38557) I am on hold.  Maybe I'll buy some A-C grades before that, but we'll see.
Title: Re: Worst Month Yet
Post by: thezfunk on December 21, 2016, 11:45:43 PM
I have just been buying aged notes on the secondary platform with LendingRobot at least 10 months old.  I have yet to graph my misery like the rest of you as I haven't had the time.  I should post my login information so one of you can do it for me  ;D

I stopped trying to think about it. 

However, I did sell all my equities in my Roth IRA and they are sitting in cash and I moved my entire 401k out of equities and in the safest option I had (I wish cash was an option).  I have a feeling after the baseless euphoria wears off...there might be some revaluation in the stock market.  Just a hunch.

Be fearful when others are greedy and greedy when others are fearful.
Title: Re: Worst Month Yet
Post by: dr.everett on December 22, 2016, 01:17:02 PM
I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.
Title: Re: Worst Month Yet
Post by: fliphusker on December 22, 2016, 03:10:17 PM
Are you seeing that FICO has really dried up?  Might actually start having to buy notes with a markup that meets my YTM.  :(:(:(
Sure wish I would have just started out with FOLIO as notes from the primary market just continue to tank. 
I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.
Title: Re: Worst Month Yet
Post by: dr.everett on December 22, 2016, 04:02:03 PM
Are you seeing that FICO has really dried up?  Might actually start having to buy notes with a markup that meets my YTM.  :(:(:(
Sure wish I would have just started out with FOLIO as notes from the primary market just continue to tank. 
I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.

Nope- still pretty strong buying for my FICO criteria on Folio. I just can't get my problem FICOs sold fast enough for my liking. I'm not willing to take more of a bath on them than I already am.
Title: Re: Worst Month Yet
Post by: mchu168 on December 23, 2016, 09:49:23 AM
Is anybody NOT taking money out? I know I am taking out all the cash as it comes in now and investing elsewhere. I mean c'mon, tax free bonds have better returns than LC p2p right now. Do they think investors will just accept these returns? 4-5% is not worth the trouble/risk.

Not sure what you're talking about. If you've been in muni's over the past few months, you've experienced (relatively) big draw downs and underperformance vs. most other asset classes. Depending on the economy and the duration of your muni portfolio, more pain could be in store.

I'm not taking money out but am not adding either due to my concerns about the credit cycle peaking out soon.
Title: Re: Worst Month Yet--Moving money out of LC into Fidelity
Post by: Larry321 on December 23, 2016, 02:11:25 PM
Here is more confirmation of the vaidity of my devcision to migrate out of LC.

http://seekingalpha.com/news/3232417-lendingclub-loss-rates-picking-compass-point?app=1&dr=1&uprof=45&utoken=b62127f07c7665796cfda9e0cbac8e9b707e3d77#email_link

I have been doing well with Fidelity using the advice I get on www.fmandi.com
Title: Re: Worst Month Yet
Post by: Rob L on December 23, 2016, 05:41:37 PM
But with Trump's public works plan I thought maybe the recession would be delayed. Now I am thinking that plan is too little to late.

Even the folks that officially date the start and end of recessions only do it after the fact.
Doesn't seem to be one imminent but over a three year period it's a really tough call.
Here's the latest from dshort; I think a reasonably credible source (if there is one in this matter):

https://www.advisorperspectives.com/dshort/updates/2016/12/22/recessionalert-weekly-leading-index-update (https://www.advisorperspectives.com/dshort/updates/2016/12/22/recessionalert-weekly-leading-index-update)
Title: Re: Worst Month Yet
Post by: anabio on December 23, 2016, 08:07:46 PM
But with Trump's public works plan I thought maybe the recession would be delayed. Now I am thinking that plan is too little to late.

Even the folks that officially date the start and end of recessions only do it after the fact.

You  are so true on that point. I can't disagree.

Doesn't seem to be one imminent but over a three year period it's a really tough call.

Might have to disagree with you on this one...(warning...I'm generally a pessimistic kind of guy when it comes to the economy.)
But it's a gut feel. Over the past 4 or so months I have had way too many loans go grace/late/default that have never even missed a payment before...and a lot of those notes have 27-31 months worth of on time payments. Why do so many with that kind of history suddenly go bad? My loans are 2014, not the "toxic" 2015/2016 era. A lot of them had an unremarkable FICO trend that all of a sudden dropped big time from one month to the next. That drop came before or at the same time as their going into grace so LC loan could not have had much impact on that FICO drop. What would? Well...losing a job would definitely fit the bill. Enough people lose their job and viola=recession.

To be honest, I truly believe that we lend money to the "fringe", those who can't borrow money any other way to pay off their other higher interest debts. Who feels the hint of a recession first? The fringe is my guess.

Of the 24 notes I currently have in 31-120 late, 14 of them were never lates.  4 had 1 or a few graces. Only 6 had a lot of grace or worse lates.

Something is going on.

Title: Re: Worst Month Yet
Post by: Fred93 on December 23, 2016, 08:12:43 PM
Of the 24 notes I currently have in 31-120 late, 14 of them were never lates.

Something is going on.

 ;D ;D ;D  All loans are "never late" until they ARE late.   ;D ;D ;D
Title: Re: Worst Month Yet
Post by: fliphusker on December 24, 2016, 04:00:35 AM
Of the 24 notes I currently have in 31-120 late, 14 of them were never lates.

Something is going on.

 ;D ;D ;D  All loans are "never late" until they ARE late.   ;D ;D ;D

Define late.  :)
I guess I am the silly one who does not give up on late.  I ride the rails on Folio, on late. 
Title: Re: Worst Month Yet
Post by: Rob L on December 24, 2016, 12:05:59 PM
To be honest, I truly believe that we lend money to the "fringe", those who can't borrow money any other way to pay off their other higher interest debts. Who feels the hint of a recession first? The fringe is my guess.

Maybe a nice new recession leading indicator.  :)
Title: Re: Worst Month Yet
Post by: rawraw on December 24, 2016, 11:30:54 PM
What evidence is there that we lend on the fringe?
Title: Re: Worst Month Yet
Post by: nonattender on December 25, 2016, 07:31:28 AM
What evidence is there that we lend on the fringe?

I'd be curious to know that, too;  I see pretty broad market.
(I'm also not buying into the recession talk; things look OK!)
Title: Re: Worst Month Yet
Post by: mchu168 on December 25, 2016, 09:30:07 AM
What evidence is there that we lend on the fringe?

I'd be curious to know that, too;  I see pretty broad market.
(I'm also not buying into the recession talk; things look OK!)

I also want to clarify what I said earlier. I think the credit cycle might be peaking soon, but a recession is probably a few years out. And given the potential for lower taxes, less regulations and other stimulus being proposed by the new administration, I think the credit cycle has been extended. Rather than imminent recession, I think the greater risk today is overheating in the economy and potentially a more pronounced boom/bust cycle sometime down the road.
Title: Re: Worst Month Yet
Post by: anabio on December 25, 2016, 09:59:27 AM
What evidence is there that we lend on the fringe?

Come on...we are the last resort before payday loans. Now that banks are getting involved LC will be even more into the fringe. Banks will take the A-B and maybe C away.

I followed these threads in the past. Up until very recently a lot of you were buying e-f-g loans so you could get your ANAR sky high. Most of the time there were always A-B loans to be had. Don't tell me that someone borrowing at D (17%) E (23%) F (29%) G (30%) are not fringe. Who in their right mind would pay those ridiculously high rates unless they were on the fringe? The answer to that can only be those who have 20%+ credit card rates. These days, who do you think only qualifies for those high rates?
Title: Re: Worst Month Yet
Post by: rawraw on December 25, 2016, 10:30:44 AM
We are nowhere near a peak for the credit cycle. On nearly any metric, we are still near all time lows. I'd be careful to keep this in mind when framing your expectations.

What evidence is there that we lend on the fringe?

Come on...we are the last resort before payday loans. Now that banks are getting involved LC will be even more into the fringe. Banks will take the A-B and maybe C away.

I followed these threads in the past. Up until very recently a lot of you were buying e-f-g loans so you could get your ANAR sky high. Most of the time there were always A-B loans to be had. Don't tell me that someone borrowing at D (17%) E (23%) F (29%) G (30%) are not fringe. Who in their right mind would pay those ridiculously high rates unless they were on the fringe? The answer to that can only be those who have 20%+ credit card rates. These days, who do you think only qualifies for those high rates?
Well it seems like you haven't read many of my posts. But you are quite the prophet, pointing out the errors in people decisions after the results have occurred.

You are offering no basis for your claims. But you are free to operate whatever perception of reality you like!  The good thing about it, is I can make predictions before they happen and be pretty sure I'm right. I will take you on the other side of this trade any day!

Merry Christmas everyone



Title: Re: Worst Month Yet
Post by: mchu168 on December 26, 2016, 02:11:55 AM
We are nowhere near a peak for the credit cycle. On nearly any metric, we are still near all time lows. I'd be careful to keep this in mind when framing your expectations.


Peak means nearing the point where defaults are nearing a cyclical low.  You think this can get a whole lot better?

https://www.federalreserve.gov/releases/chargeoff/delallsa.htm
Title: Re: Worst Month Yet
Post by: anabio on December 26, 2016, 09:20:26 AM
What evidence is there that we lend on the fringe?

Come on...we are the last resort before payday loans. Now that banks are getting involved LC will be even more into the fringe. Banks will take the A-B and maybe C away.

I followed these threads in the past. Up until very recently a lot of you were buying e-f-g loans so you could get your ANAR sky high. Most of the time there were always A-B loans to be had. Don't tell me that someone borrowing at D (17%) E (23%) F (29%) G (30%) are not fringe. Who in their right mind would pay those ridiculously high rates unless they were on the fringe? The answer to that can only be those who have 20%+ credit card rates. These days, who do you think only qualifies for those high rates?
.... But you are quite the prophet...
Not quite sure why you are calling me a prophet on this particular post. You asked me for my evidence on why we lend to fringe and i gave it. No fortune telling involved.

You are offering no basis for your claims.
I gave a basis to my fringe claim. If you believe this is not sufficient evidence that we lend to the fringe, then we will agree to disagree.

Merry Christmas everyone
Title: Re: Worst Month Yet
Post by: fliphusker on December 26, 2016, 01:51:26 PM
The average household owes $16k in credit card debt.  That is $747B total.  They pay an average of almost $1,300/yr of interest alone.  Total personal debt of Americans is over $12 trillion.  The average American has a FICO score at 695.  For many Americans getting an LC loan is a step in the direction of rebuilding their credit score and saving themselves money. 
Debt consolidation can save hundreds of dollars a month, just in interest alone for a lot of these people.  You call them fringe, I call them typical Americans from all walks of life.  Could they get better loans from Banks?  Why are they not there and are here instead?  A and B are definitely the safest, no disputing that, but there are also plenty G notes that are safe too. 
On a personal note, I have 6 credit cards, not one of them under 22%.  I would not care if they were all over 40%, I do not carry a balance.  I have not asked for an APR reduction, just no need to.  Do I consider myself on the fringe?  I guess if having over 750 FICO, fringe. 
Not many of my notes I buy on FOLIO are under C.  But it is not the grade I care about its the YTM.  Yes, it is because of the ANAR.  My ANAR is killed by having so many A/B notes that were accidently bought when I opened my account. 
What evidence is there that we lend on the fringe?

Come on...we are the last resort before payday loans. Now that banks are getting involved LC will be even more into the fringe. Banks will take the A-B and maybe C away.

I followed these threads in the past. Up until very recently a lot of you were buying e-f-g loans so you could get your ANAR sky high. Most of the time there were always A-B loans to be had. Don't tell me that someone borrowing at D (17%) E (23%) F (29%) G (30%) are not fringe. Who in their right mind would pay those ridiculously high rates unless they were on the fringe? The answer to that can only be those who have 20%+ credit card rates. These days, who do you think only qualifies for those high rates?
Title: Re: Worst Month Yet
Post by: lascott on December 26, 2016, 03:25:01 PM
We are nowhere near a peak for the credit cycle. On nearly any metric, we are still near all time lows. I'd be careful to keep this in mind when framing your expectations.
Peak means nearing the point where defaults are nearing a cyclical low.  You think this can get a whole lot better?
https://www.federalreserve.gov/releases/chargeoff/delallsa.htm
I cut-n-pasted that credit card data into a google sheet for a chart.  Credit cards delinquency rates are low.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FB37QenF.png&hash=5ef7d9221b0d83a1fa0695f7ce8b61e5)
Title: Re: Worst Month Yet
Post by: BruiserB on December 26, 2016, 06:32:26 PM
We are nowhere near a peak for the credit cycle. On nearly any metric, we are still near all time lows. I'd be careful to keep this in mind when framing your expectations.
Peak means nearing the point where defaults are nearing a cyclical low.  You think this can get a whole lot better?
https://www.federalreserve.gov/releases/chargeoff/delallsa.htm
I cut-n-pasted that credit card data into a google sheet for a chart.  Credit cards delinquency rates are low.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FB37QenF.png&hash=5ef7d9221b0d83a1fa0695f7ce8b61e5)

I guess because people are refinancing them with LendingClub and then defaulting!  :-/


Sent from my iPhone using Tapatalk
Title: Re: Worst Month Yet
Post by: AnilG on December 27, 2016, 06:58:43 AM
Delinquency rate is hard to interpret without knowing whether magnitude of delinquent amount is low or magnitude of outstanding balance is high and without knowing the growth rate in delinquent amount and in outstanding balance. Based on recent news articles, I believe delinquency rate is low not because delinquencies are down but because outstanding balance on credit cards is rising at faster rate. Delinquency rate is not going to rise significantly until credit card issuers slow down extending credit that will make delinquency rate a trailing indicator.

We are nowhere near a peak for the credit cycle. On nearly any metric, we are still near all time lows. I'd be careful to keep this in mind when framing your expectations.
Peak means nearing the point where defaults are nearing a cyclical low.  You think this can get a whole lot better?
https://www.federalreserve.gov/releases/chargeoff/delallsa.htm
I cut-n-pasted that credit card data into a google sheet for a chart.  Credit cards delinquency rates are low.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FB37QenF.png&hash=5ef7d9221b0d83a1fa0695f7ce8b61e5)
Title: Re: Worst Month Yet
Post by: rawraw on December 27, 2016, 09:05:00 AM
Anil, some of the credit agencies publish vintage delinquency curves. May be a good place to look. From what I've seen as I haphazardly read the reports, most credit metrics are still exceptionally good.

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: Rob L on December 29, 2016, 04:14:00 PM
I log a daily snapshot of my account details (well, my software does) and I thought it would be interesting to take a look at Adjustments for Past Due Notes as a percentage of Principal Balance. This data isn't available in the monthly statements. Adjustment percentages are the standard LC 9 month loss estimates for In Grace, Late 16-30, Late 31-120 and Default: https://www.lendingclub.com/account/investorReturnsAdjustments.action (https://www.lendingclub.com/account/investorReturnsAdjustments.action).

The following chart takes a look at my account since February this year on a weekly basis:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fnw218Ed.png&hash=c94b0215d16f2dfce2910eacf2caf7a7)

All things equal the adjustment percentage should fall back to the 3% level at some point in time after the principal balance stabilized in mid-September. However all things aren't equal and in my view the percentage has remained stubbornly high (5.2%). Doesn't look like it's coming down to 3% anytime soon. It's likely another confirmation of the erosion of loan performance since late May and it will be very interesting to see where this value finally settles out. At this level my account essentially breaks even. I'd sure be interested in the value others are seeing, particularly those with WAIR's in the 17% area.
Title: Re: Worst Month Yet
Post by: jheizer on December 29, 2016, 04:41:57 PM
WAIR 15% on 1670 active notes average age of 14.8 months mine is at 4.0%   And I stopped everything just over 2 months ago so not really many new notes to skew that value much vs the average age.
Title: Re: Worst Month Yet
Post by: dr.everett on December 31, 2016, 01:03:12 AM
Are you seeing that FICO has really dried up?  Might actually start having to buy notes with a markup that meets my YTM.  :(:(:(
Sure wish I would have just started out with FOLIO as notes from the primary market just continue to tank. 
I too have just been buying aged notes on the secondary platform with Lending Robot, and in addition selling my notes that have FICO issues. Unfortunately I've had many (1k or so) FICO notes in each account. This year will largely be a loss in terms of income when the FICO sales are combined with my charge offs. Buying very few new notes as many don't meet my criteria.  Hoping once the FICO sales are done my returns will return to positive.

Nope- still pretty strong buying for my FICO criteria on Folio. I just can't get my problem FICOs sold fast enough for my liking. I'm not willing to take more of a bath on them than I already am.

Adding to my earlier statement- fliphusker's question made me take a closer look at my automation strategy- and in what I can only describe as a moment of rare clarity- realized I was missing purchasing in a section of notes that I should be. Ran some tests using the missing criteria and found about 70 or so more notes a week I could be purchasing. So yes- there are still quite a few good buys out there on Folio for even the most stringent buyers. And yes- I now have 2 more filters in each account to catch additional notes. While they won't purchase as high of YTM notes as my other rules, when the high YTM notes aren't there- they'll get fed with slightly lower YTM notes with less of a premium. (And if my testing holds true possibly no premium at all)
Title: Re: Worst Month Yet
Post by: JohnnyP on January 02, 2017, 06:42:57 PM
I log a daily snapshot of my account details (well, my software does) and I thought it would be interesting to take a look at Adjustments for Past Due Notes as a percentage of Principal Balance. This data isn't available in the monthly statements. Adjustment percentages are the standard LC 9 month loss estimates for In Grace, Late 16-30, Late 31-120 and Default: https://www.lendingclub.com/account/investorReturnsAdjustments.action (https://www.lendingclub.com/account/investorReturnsAdjustments.action).

The following chart takes a look at my account since February this year on a weekly basis:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fnw218Ed.png&hash=c94b0215d16f2dfce2910eacf2caf7a7)

All things equal the adjustment percentage should fall back to the 3% level at some point in time after the principal balance stabilized in mid-September. However all things aren't equal and in my view the percentage has remained stubbornly high (5.2%). Doesn't look like it's coming down to 3% anytime soon. It's likely another confirmation of the erosion of loan performance since late May and it will be very interesting to see where this value finally settles out. At this level my account essentially breaks even. I'd sure be interested in the value others are seeing, particularly those with WAIR's in the 17% area.

My average weighted interest rate is 20.9%. My adjustment as a percentage of my gross outstanding principle is 7.6%. I stopped buying two months ago. My XIRR for 2016 was 1.8% with last quarter at -1.2%. My 3-year XIRR is 8.1%. The numbers explain my story quite well. I was enjoying great returns with note grades in the D and E range. I got lazy and was not paying attention very closely as these higher risk notes started heading south. By the time I took action (starting buying more conservative and then stopped buying), it was too late. Now I have a bunch of notes that will take a LONG time to weather off.  Just shows that one must watch these "alternative" investments very closely.
Title: Re: Worst Month Yet
Post by: rawraw on January 03, 2017, 07:23:13 AM
Success!  I returned to profitability this month.

I don't track IRR, but seems like a ~5-6% return this year, which is down from prior  years.  And my stocks went up 30%.  Have to love uncorrelated assets!

And I disagree that the conclusion is you have to watch "alternative" investments (you should!   just wrong conclusion).  The conclusion is you shouldn't just lend to the riskier people and expect defaults never to occur.
Title: Re: Worst Month Yet
Post by: thezfunk on January 03, 2017, 04:19:31 PM
The conclusion is you shouldn't just lend to the riskier people and expect defaults never to occur.

blasphemy!  Tar and feather that man!
Title: Re: Worst Month Yet
Post by: Rob L on January 04, 2017, 07:50:52 PM
Five months of consecutive losses. Charge offs as a percent of trailing 5 months interest (blue bars) very near an all time high. The only good news is that I'm "only" losing half what I would have if not for downsizing my portfolio. Part of this could be seasonal and I'm not giving up completely quite yet.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F1fY6lY0.png&hash=a2bb3455cc73ed8411129febede94f85)

Title: Re: Worst Month Yet
Post by: JohnnyP on January 04, 2017, 08:39:17 PM
The jump in your red bars is astonishing. It is not like the charge-offs slowly increased, they basically shot up very quickly.
Title: Re: Worst Month Yet
Post by: BruiserB on January 04, 2017, 08:57:20 PM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.
Title: Re: Worst Month Yet
Post by: screwedbylendingclub on January 04, 2017, 11:17:52 PM
I knew lending club was a scam as soon as the rep called me asking me why I was trying to withdraw from my account. Right after that, the liquidity in the market dried up, bringing my 20% down to a -1% return in a few months. I now have a slew of charge offs.

The model is completely unsustainable since they do not hire the right credit analysts/statisticians and severely underestimate the risk of their borrowers. The platform only benefits debtors esp. those that commit financial fraud.

-As for me,

I am pulling out of Lending Club ASAP and looking for a partner to start a real, legit payday loans company.
Title: Re: Worst Month Yet
Post by: fliphusker on January 05, 2017, 12:49:39 AM
The liquidity in the FOLIO market dried up?  You took 20% returns and turned them into -1% in a few months?   
When you bail out taking losses, what do you expect your returns to do?  I remember reading, might have been your initial post, but you were buying notes that were 31-120 days late.  Personally I think that is the craziest strategy for someone just getting into FOLIO, could ever do and just playing with fire.  Absolutely you are going to have a slew of charge-offs with this kind of excessively risky strategy.  I can only guess that you were overpaying for notes at 31-120 days late and then turned around and tried to sell them at the same discount and could not find any takers. 
I knew lending club was a scam as soon as the rep called me asking me why I was trying to withdraw from my account. Right after that, the liquidity in the market dried up, bringing my 20% down to a -1% return in a few months. I now have a slew of charge offs.

The model is completely unsustainable since they do not hire the right credit analysts/statisticians and severely underestimate the risk of their borrowers. The platform only benefits debtors esp. those that commit financial fraud.

-As for me,

I am pulling out of Lending Club ASAP and looking for a partner to start a real, legit payday loans company.
Title: Re: Worst Month Yet
Post by: apc3161 on January 05, 2017, 07:55:27 AM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.

Same here. I wonder what LC's most recent quarterly report is going to say. I would imagine a lot of people are pulling their money out. I'm currently at a 1-2% return this year. No reason to keep my money with them.
Title: Re: Worst Month Yet
Post by: rawraw on January 05, 2017, 09:44:39 AM
The liquidity in the FOLIO market dried up?  You took 20% returns and turned them into -1% in a few months?   
When you bail out taking losses, what do you expect your returns to do?  I remember reading, might have been your initial post, but you were buying notes that were 31-120 days late.  Personally I think that is the craziest strategy for someone just getting into FOLIO, could ever do and just playing with fire.  Absolutely you are going to have a slew of charge-offs with this kind of excessively risky strategy.  I can only guess that you were overpaying for notes at 31-120 days late and then turned around and tried to sell them at the same discount and could not find any takers. 
I knew lending club was a scam as soon as the rep called me asking me why I was trying to withdraw from my account. Right after that, the liquidity in the market dried up, bringing my 20% down to a -1% return in a few months. I now have a slew of charge offs.

The model is completely unsustainable since they do not hire the right credit analysts/statisticians and severely underestimate the risk of their borrowers. The platform only benefits debtors esp. those that commit financial fraud.

-As for me,

I am pulling out of Lending Club ASAP and looking for a partner to start a real, legit payday loans company.
He may have been one of these guys loading up on the riskiest stuff and selling it on Folio when it looked like it was going bad.  I have always vocally felt this is a poor strategy and you  should be willing to live with the consequences of a strategy if Folio disappears.  Needless to say, posts like the above are amusing.  I'm so glad I work in an area of finance isolated from retail investors lol
Title: Re: Worst Month Yet
Post by: dr.everett on January 05, 2017, 03:15:10 PM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.

Same here. I wonder what LC's most recent quarterly report is going to say. I would imagine a lot of people are pulling their money out. I'm currently at a 1-2% return this year. No reason to keep my money with them.

I wonder as well. I'm surprised we haven't seen any lawyers poking around for "negligence" or any of the many other terms used when one doesn't live up to their fiduciary duties. If one does show up and is successful- I would get onboard. I have $40K in losses since day one between two accounts that I'd like to get some of back. In the meantime I'll continue to sell my low FICO notes and replace them with better ones.
Title: Re: Worst Month Yet
Post by: lascott on January 05, 2017, 04:01:31 PM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.

Same here. I wonder what LC's most recent quarterly report is going to say. I would imagine a lot of people are pulling their money out. I'm currently at a 1-2% return this year. No reason to keep my money with them.

I wonder as well. I'm surprised we haven't seen any lawyers poking around for "negligence" or any of the many other terms used when one doesn't live up to their fiduciary duties. If one does show up and is successful- I would get onboard. I have $40K in losses since day one between two accounts that I'd like to get some of back. In the meantime I'll continue to sell my low FICO notes and replace them with better ones.
Does really amount to $40K if you offset it with gains on your taxes or the using the rolling $3K annual tax claim a deduction against the loss?
Title: Re: Worst Month Yet
Post by: fliphusker on January 05, 2017, 04:56:20 PM
This is his post I was referring to.  I hope I am not sounding like a jerk to him, just questioning his post and his extremely risky strategy.
Quote
1. Say I change my maintain cash level from $300 (current) to $500. How does the program decide how to price/markdown notes? Is there a way to set the max discount?

2. I've recently started buying in grace period and 31-120 day late notes as part of a more aggressive investment strategy, will PLS mess with these?
Thanks in Advance,

The liquidity in the FOLIO market dried up?  You took 20% returns and turned them into -1% in a few months?   
When you bail out taking losses, what do you expect your returns to do?  I remember reading, might have been your initial post, but you were buying notes that were 31-120 days late.  Personally I think that is the craziest strategy for someone just getting into FOLIO, could ever do and just playing with fire.  Absolutely you are going to have a slew of charge-offs with this kind of excessively risky strategy.  I can only guess that you were overpaying for notes at 31-120 days late and then turned around and tried to sell them at the same discount and could not find any takers. 
I knew lending club was a scam as soon as the rep called me asking me why I was trying to withdraw from my account. Right after that, the liquidity in the market dried up, bringing my 20% down to a -1% return in a few months. I now have a slew of charge offs.

The model is completely unsustainable since they do not hire the right credit analysts/statisticians and severely underestimate the risk of their borrowers. The platform only benefits debtors esp. those that commit financial fraud.

-As for me,

I am pulling out of Lending Club ASAP and looking for a partner to start a real, legit payday loans company.
He may have been one of these guys loading up on the riskiest stuff and selling it on Folio when it looked like it was going bad.  I have always vocally felt this is a poor strategy and you  should be willing to live with the consequences of a strategy if Folio disappears.  Needless to say, posts like the above are amusing.  I'm so glad I work in an area of finance isolated from retail investors lol
Title: Re: Worst Month Yet
Post by: rawraw on January 05, 2017, 05:02:40 PM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.

Same here. I wonder what LC's most recent quarterly report is going to say. I would imagine a lot of people are pulling their money out. I'm currently at a 1-2% return this year. No reason to keep my money with them.

I wonder as well. I'm surprised we haven't seen any lawyers poking around for "negligence" or any of the many other terms used when one doesn't live up to their fiduciary duties. If one does show up and is successful- I would get onboard. I have $40K in losses since day one between two accounts that I'd like to get some of back. In the meantime I'll continue to sell my low FICO notes and replace them with better ones.
I don't think risky borrowers defaulting is negligence. They'd have to lie about the data disclosed at loan listing or something similar. At most i expect it to be in the risks section, given it impacts potential volumes

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: BruiserB on January 05, 2017, 05:17:13 PM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.

Same here. I wonder what LC's most recent quarterly report is going to say. I would imagine a lot of people are pulling their money out. I'm currently at a 1-2% return this year. No reason to keep my money with them.

I wonder as well. I'm surprised we haven't seen any lawyers poking around for "negligence" or any of the many other terms used when one doesn't live up to their fiduciary duties. If one does show up and is successful- I would get onboard. I have $40K in losses since day one between two accounts that I'd like to get some of back. In the meantime I'll continue to sell my low FICO notes and replace them with better ones.
Does really amount to $40K if you offset it with gains on your taxes or the using the rolling $3K annual tax claim a deduction against the loss?

My rough example with numbers rounded off:

Interest Earned: $25,000
Losses in Past Years: $8,000
Losses in 2016: $20,000

I believe I am in the 28% tax bracket, but I could pay long term capital gains tax of only 15%.

If I had no other stock sales:
In past years I would have had a profit of $17,000 and paid tax of 0.28*(25,000-3,000)= $6160 and I could carry $5,000 losses to a future year.
Last year I had a profit of $5,000 and will pay tax of 0.28*(25,000-3,000) = $6160 and I could carry $17,000 losses to the future.
But note that I will now pay more in tax than I actually made in profit!

Now I do have capital gains that I can offset with my $17,000 loss.  Let's just say $10,000 worth....so now I will get that 10,000 gain tax free (a savings of $1500 since it was long term gain).  But I had to pay $2800 in tax on $10,000 in interest that I didn't really earn from Lending Club because of my losses.  So it has the effect of wiping out the benefit on the Long Term Capital Gains tax rate.  It uses up my deduction that would eventually be worth $2800 to wipe out a tax of $1500.

This was somewhat manageable when losses were around a third of interest paid.  But now that they are 80+% (and over 100% the last few months).  This investment makes no sense in a taxable account.  :-(
Title: Re: Worst Month Yet
Post by: dr.everett on January 05, 2017, 05:31:17 PM
My full year losses were nearly 80% of the interest I earned.  My early years with LC this ratio was more of a constant 33%.  My last few months, the losses have exceeded my interest earned.  This better improve soon.  I've stopped reinvesting my taxable account for the foreseeable future.

Same here. I wonder what LC's most recent quarterly report is going to say. I would imagine a lot of people are pulling their money out. I'm currently at a 1-2% return this year. No reason to keep my money with them.

I wonder as well. I'm surprised we haven't seen any lawyers poking around for "negligence" or any of the many other terms used when one doesn't live up to their fiduciary duties. If one does show up and is successful- I would get onboard. I have $40K in losses since day one between two accounts that I'd like to get some of back. In the meantime I'll continue to sell my low FICO notes and replace them with better ones.
Does really amount to $40K if you offset it with gains on your taxes or the using the rolling $3K annual tax claim a deduction against the loss?

I claim my losses every year against my taxes- that said I have tended to be a buy and hold person as of late with little stock activity, so not a lot to offset with. This year will be no different except for a lot more losses to claim.
Title: Re: Worst Month Yet
Post by: screwedbylendingclub on January 05, 2017, 09:32:46 PM
This is his post I was referring to.  I hope I am not sounding like a jerk to him, just questioning his post and his extremely risky strategy.
Quote
1. Say I change my maintain cash level from $300 (current) to $500. How does the program decide how to price/markdown notes? Is there a way to set the max discount?

2. I've recently started buying in grace period and 31-120 day late notes as part of a more aggressive investment strategy, will PLS mess with these?
Thanks in Advance,

The liquidity in the FOLIO market dried up?  You took 20% returns and turned them into -1% in a few months?   
When you bail out taking losses, what do you expect your returns to do?  I remember reading, might have been your initial post, but you were buying notes that were 31-120 days late.  Personally I think that is the craziest strategy for someone just getting into FOLIO, could ever do and just playing with fire.  Absolutely you are going to have a slew of charge-offs with this kind of excessively risky strategy.  I can only guess that you were overpaying for notes at 31-120 days late and then turned around and tried to sell them at the same discount and could not find any takers. 
I knew lending club was a scam as soon as the rep called me asking me why I was trying to withdraw from my account. Right after that, the liquidity in the market dried up, bringing my 20% down to a -1% return in a few months. I now have a slew of charge offs.

The model is completely unsustainable since they do not hire the right credit analysts/statisticians and severely underestimate the risk of their borrowers. The platform only benefits debtors esp. those that commit financial fraud.

-As for me,

I am pulling out of Lending Club ASAP and looking for a partner to start a real, legit payday loans company.
He may have been one of these guys loading up on the riskiest stuff and selling it on Folio when it looked like it was going bad.  I have always vocally felt this is a poor strategy and you  should be willing to live with the consequences of a strategy if Folio disappears.  Needless to say, posts like the above are amusing.  I'm so glad I work in an area of finance isolated from retail investors lol

Yeah, just because I mentioned it, does not mean I carried through with it. I bought one 31+ day late note (had buyer passed away) for under around $1.5 that charged off. Since I only invest in $25 notes, it's not a viable strategy. Before, I had all new notes in the 17-25 interest range, which I hand picked to have the lowest risk (no CA, TX, DC, NY; Credit Score Above 640; no delinquencies 60 months; <2 inquiries etc...)... so I had maybe a 21/22% return and then the rep calls me because 1/3 of my portfolio is liquidated at that point and I have the rest lined up to sell.

All of a sudden, these same notes (like 95% are current), which are perfect are unable to be moved at a 1% premium or discount. Long story short, I ended up withdrawing maybe $600, so the -1.5% return I'm at is not that big a deal. I did buy some high interest notes at a discount later. I examined them closely and they had a perfect payment history (no in-grace or lates), no delinquents, no TX/FL/CA/NY, but the thing is Lending Club screwed me on 2! They were marked Debt Consolidation, but they gave me "credit card loan," and two days after they were processed, they were charged off. I didn't buy that many discounted notes , but I made sure I was getting a deal where the guy needed to liquidate for a discount.

So, no, I'm not leaving yet. I still think they are more opportunities on folio to take advantage of people's emotions. I'd like to get my money back and some, but I really don't see it as a good investment long term if you're a serious investor. It's investors eating other investors being eaten by Lending Club; kind of like our government. Okay, not that it's as hard to make money as something like acting, but you'd see better returns doing almost anything else: muni bond funds, private equity, oil/gas, real estate aren't a waste of time. In fact, for the young/inclined, it'd be better to open a prop trading account. Having low risk under 40 is too big of a risk!

I won't reveal the full details of my strategy, but I incorporate a lot of due diligence: I split my notes up between fresh notes with stellar credentials from 15-27% interest (under 60%), 18-27% interest notes with 45 payments left and discount up to 5%, and in-grace notes (though that market is so thin, I might need to make some sort of script).
Title: Re: Worst Month Yet
Post by: screwedbylendingclub on January 07, 2017, 10:06:49 PM
Based on my qualitative assessment, I wouldn't even pay 50% for it. The borrower  was 16-30 days late how many times? Yeah, that's a big risk of default; might as well be 16-30 days late already and those are selling up to 75% (or even more) discount.
Title: Re: Worst Month Yet
Post by: Fred93 on January 07, 2017, 10:13:33 PM
Based on my qualitative assessment, I wouldn't even pay 50% for it.

When setting a price, a qualitative assessment is worthless.  One needs  a quantitative approach, because price is a number.
Title: Re: Worst Month Yet
Post by: Rob L on January 11, 2017, 10:08:31 PM
Now that 2016 is over I decided to take a look at year over year profitability since I began investing in LC in May of 2013. The computation was simple. Just took the change in Account Value for each year and divided by the starting Account Value of that year. My LC results were:

2013    6.2%  (partial year, began investing in May, or about 10.6% annualized)
2014  12.1%
2015    7.6%
2016    3.1%  (paused reinvesting May-Sept, sold about 50% of account value on Folio Aug-Sept)

I was really spoiled early with great returns.
Maybe this thread should be "Worst Year Yet".

FWIW my Prosper results were:
2014   1.5%  (partial year, began investing in Jul, very slowly invested, lots of cash drag)
2015   7.1%
2016   2.7%  (stopped investing in late October and have no plans to resume)

Here's to a better 2017!
Title: Re: Worst Month Yet
Post by: .Ryan. on January 12, 2017, 01:14:49 AM
Now that 2016 is over I decided to take a look at year over year profitability since I began investing in LC in May of 2013. The computation was simple. Just took the change in Account Value for each year and divided by the starting Account Value of that year. My LC results were:

Thanks for the detail Rob. I've done some rudimentary analysis on my own portfolio, and let's just say that 2016 was not a banner year for me as well.

I'm curious as to you're reasoning for not reinvesting in Prosper. I've made the same decision based upon some platform & other concerns, even though my Prosper returns seem to outpace that of my LC portfolio.

Here's to a better 2017!

Amen to that, brother!
Title: Re: Worst Month Yet
Post by: Rob L on January 12, 2017, 09:46:56 AM
Thanks for the detail Rob. I've done some rudimentary analysis on my own portfolio, and let's just say that 2016 was not a banner year for me as well.

I'm curious as to you're reasoning for not reinvesting in Prosper. I've made the same decision based upon some platform & other concerns, even though my Prosper returns seem to outpace that of my LC portfolio.

When Prosper dropped its relationship with Folio I decided to pull the plug and let the account run off. I valued the liquidity that Folio provided should I want or need it and never would have invested with them in the first place without it. Not a fan of changing the rules in the middle of the game by fiat. Felt like a slap in the face. There were a few other annoyances but loss of Folio was the deal breaker.
Title: Re: Worst Month Yet
Post by: investor88 on January 13, 2017, 07:16:32 PM
Here's to a better 2017!
[/quote]

Based on the downward trajectory of the data on the 'Understanding Your Returns' chart, 2017 will be a bad year for LC investors.  Lending Club is now advertising that note investors earn 5-7% but that is based on portfolios over an age of 30 months.  The portfolios at 12-18 months are actually earning  -8% to 8%.   In a couple of years once these portfolios age out and go down over time, the 30 month age portfolio return will be at -10% to 0%. By mid-2018, I forecast that the returns on portfolios that average 30 months on the 'Understanding Your Returns' chart will be negative.
Amazing that the returns are this bad even with an okay economy.  If there is a recession in the next couple of years, these returns will be lower than -10%.  As I warned the OP Rob in December 2015 when he originally posted, stop investing in LC.  Much better investments out there with better returns with much less risk.
Title: Re: Worst Month Yet
Post by: storm on January 13, 2017, 08:26:06 PM
Much better investments out there with better returns with much less risk.

Like what?
Title: Re: Worst Month Yet
Post by: michael49 on January 14, 2017, 09:33:40 AM
Here's to a better 2017!

Based on the downward trajectory of the data on the 'Understanding Your Returns' chart, 2017 will be a bad year for LC investors.  Lending Club is now advertising that note investors earn 5-7% but that is based on portfolios over an age of 30 months.  The portfolios at 12-18 months are actually earning  -8% to 8%.   In a couple of years once these portfolios age out and go down over time, the 30 month age portfolio return will be at -10% to 0%. By mid-2018, I forecast that the returns on portfolios that average 30 months on the 'Understanding Your Returns' chart will be negative.
Amazing that the returns are this bad even with an okay economy.  If there is a recession in the next couple of years, these returns will be lower than -10%.  As I warned the OP Rob in December 2015 when he originally posted, stop investing in LC.  Much better investments out there with better returns with much less risk.
[/quote]

That's a very negative assessment.  I've seen my returns on LC drop this year and I certainly don't expect any double digit returns in the future, but my expectations for my LC investments going forward are certainly not as downtrodden as yours.
Title: Re: Worst Month Yet
Post by: Osito on January 14, 2017, 10:09:56 AM


Based on the downward trajectory of the data on the 'Understanding Your Returns' chart, 2017 will be a bad year for LC investors.  Lending Club is now advertising that note investors earn 5-7% but that is based on portfolios over an age of 30 months.  The portfolios at 12-18 months are actually earning  -8% to 8%.   In a couple of years once these portfolios age out and go down over time, the 30 month age portfolio return will be at -10% to 0%. By mid-2018, I forecast that the returns on portfolios that average 30 months on the 'Understanding Your Returns' chart will be negative.
Amazing that the returns are this bad even with an okay economy.  If there is a recession in the next couple of years, these returns will be lower than -10%.  As I warned the OP Rob in December 2015 when he originally posted, stop investing in LC.  Much better investments out there with better returns with much less risk.

Could it be that since it is based on portfolio of an average of 30 months would also include maybe those that jumped in with very little diversment and put all of what they had in high risk g notes and just lost it then complained that they lost their money? Or just went away?
 It would seem to me that if these people were or are included in that, that would explain lower return rates being posted.
Title: Re: Worst Month Yet
Post by: JohnnyP on January 14, 2017, 09:12:38 PM
Here's to a better 2017!

Based on the downward trajectory of the data on the 'Understanding Your Returns' chart, 2017 will be a bad year for LC investors.  Lending Club is now advertising that note investors earn 5-7% but that is based on portfolios over an age of 30 months.  The portfolios at 12-18 months are actually earning  -8% to 8%.   In a couple of years once these portfolios age out and go down over time, the 30 month age portfolio return will be at -10% to 0%. By mid-2018, I forecast that the returns on portfolios that average 30 months on the 'Understanding Your Returns' chart will be negative.
Amazing that the returns are this bad even with an okay economy.  If there is a recession in the next couple of years, these returns will be lower than -10%.  As I warned the OP Rob in December 2015 when he originally posted, stop investing in LC.  Much better investments out there with better returns with much less risk.
[/quote]

OK, I will bite. What other investments are you looking at?
Title: Re: Worst Month Yet
Post by: Fred93 on January 15, 2017, 01:56:14 AM
Based on the downward trajectory of the data on the 'Understanding Your Returns' chart, 2017 will be a bad year for LC investors.

All the data on that chart is for a single point in time, so it has no "trajectory".


Quote
Lending Club is now advertising that note investors earn 5-7% but that is based on portfolios over an age of 30 months.

Don't know how you come to that conclusion.  You can easily see, if you care to, that the average around 15 months is something near 5%.


 The portfolios at 12-18 months are actually earning  -8% to 8%.   In a couple of years once these portfolios age out and go down over time, the 30 month age portfolio return will be at -10% to 0%. By mid-2018, I forecast that the returns on portfolios that average 30 months on the 'Understanding Your Returns' chart will be negative.
Amazing that the returns are this bad even with an okay economy.  If there is a recession in the next couple of years, these returns will be lower than -10%.  As I warned the OP Rob in December 2015 when he originally posted, stop investing in LC.  Much better investments out there with better returns with much less risk.
[/quote]

OK, I will bite. What other investments are you looking at?
[/quote]
Title: Re: Worst Month Yet
Post by: Joleran on January 15, 2017, 12:29:28 PM
I've started cutting back from around $50k to around $25k invested, mostly passively but I think I want to accelerate that slightly now.  I expect LC returns to slowly improve from the last 5 months and stabilize at some point, but it will be lower than the historical returns.  I don't expect any sharp improvement, and I'm very uncertain of the final EV, which is why I'm drawing back.

At any rate, I would note that this is seasonally the time of year for things to go south with late payments and defaults, so the default merely not getting worse for the next few months might indicate a positive trend.
Title: Re: Worst Month Yet
Post by: Rob L on January 15, 2017, 03:47:28 PM
I've started cutting back from around $50k to around $25k invested, mostly passively but I think I want to accelerate that slightly now.  I expect LC returns to slowly improve from the last 5 months and stabilize at some point, but it will be lower than the historical returns.  I don't expect any sharp improvement, and I'm very uncertain of the final EV, which is why I'm drawing back.

At any rate, I would note that this is seasonally the time of year for things to go south with late payments and defaults, so the default merely not getting worse for the next few months might indicate a positive trend.

EV?? Sorry, what's that?
Title: Re: Worst Month Yet
Post by: Joleran on January 15, 2017, 04:37:24 PM
EV?? Sorry, what's that?

Expected value, effectively I meant expected final return rate for an average portfolio.
Title: Re: Worst Month Yet
Post by: Rob L on January 15, 2017, 04:48:36 PM
Okay, thanks.
Title: Re: Worst Month Yet
Post by: ruthjoec on January 16, 2017, 11:41:16 PM
I started investing in 2014 and added most of my money in the first quarter of 2015.  I haven't added anything since then, but have reinvested, mostly in C,D, E notes.  I invest in both new and resale notes.  I have over 1000 notes bought new and an average weighted interest rate of 16.45%.  The average age is 17.9 mos and my blue dot is near the top of the crowd--I don't stand out from the crowd, but I'm near the top of it.  My adjusted ANR is 6.37% and my non-adjusted is 8.97.  That being said, I've noticed a definite increase in bad loans the past few months.  My adjustment is higher than it has ever been.  However, according to the press, that is not unusual, in fact LC has raised its rates twice in the last few months because losses have exceeded expectations.
Title: Re: Worst Month Yet
Post by: investor88 on January 31, 2017, 10:52:32 PM

[/quote]
OK, I will bite. What other investments are you looking at?
[/quote]



I am just referring to normal traditional investments like stocks and bonds.  If looking for more diversification, you can add high yielding utility stocks or REITs, or high-yield bonds or foreign bonds, but I don't think LC loans are needed in any investor's portfolio.  If LC investments had realized the 10% return that they were projecting a few years ago it would be a good investment.  But many LC's investors portfolios are now earning less than 0%.  And LC is now projecting 5% for current investments but the reality will be much worse.  Long Term Treasuries and Government agency bonds are now paying 3-4%.  Why bother with the extra trouble and risk to invest in LC loans.
Title: Re: Worst Month Yet
Post by: dbailey75 on February 01, 2017, 10:21:03 AM
Here' an interesting charge off, Loan id: 65108282, customer last paid in August, but looking at the call log, LC barely even attempted to collect, I can only assume this was a C&D, but they didn't list it in the call log.  I have another loan similar to this one with limited details in the call log before getting charging it.

And yes, this is one of those where the borrow says, the checks will be mailed and to never be heard from again.

This was not my worst month, still interest positive for now, this tread seemed like the best place post this. 
Title: Re: Worst Month Yet
Post by: dbailey75 on February 01, 2017, 11:07:16 AM
here's another one, failed payment 12/7, nothing else listed in a call log. Has something changed with LC's call logging or collections process?  Anyone else seeing similar?

Loan id Loan id: 64008463
Title: Re: Worst Month Yet
Post by: jennrod12 on February 01, 2017, 01:22:47 PM
here's another one, failed payment 12/7, nothing else listed in a call log. Has something changed with LC's call logging or collections process?

I can only guess that they are getting more delinquencies than they have time/staff to follow up on!  :-\

Jenn
Title: Re: Worst Month Yet
Post by: Rob L on February 01, 2017, 02:05:36 PM
here's another one, failed payment 12/7, nothing else listed in a call log. Has something changed with LC's call logging or collections process?

I can only guess that they are getting more delinquencies than they have time/staff to follow up on!  :-\

Jenn

From LC's most recent 8-k (Jan 18, 2017):

"As you may recall, 2016 changes included higher interest rates (a weighted average increase of approximately 118 basis points in total from November 2015 to October 2016) as well as credit policy tightening designed to remove borrower populations with an increased propensity to accumulate debt. We also invested in additional tools to drive collections effectiveness."

Does make you wonder what's going on.


Title: Re: Worst Month Yet
Post by: dbailey75 on February 01, 2017, 02:51:04 PM
here's another one, failed payment 12/7, nothing else listed in a call log. Has something changed with LC's call logging or collections process?

I can only guess that they are getting more delinquencies than they have time/staff to follow up on!  :-\

Jenn

If that's the case, we are in some serious trouble.   :o
Title: Re: Worst Month Yet
Post by: rawraw on February 01, 2017, 04:41:51 PM
It isn't uncommon in consumer lending to use models to determine which customers should be contacted first. LendingClub may rely on this sort of model to focus collections on where it seems to make the most sense.  But over the years I think we've learned those logs are often inaccurate and miss events that occur.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Title: Re: Worst Month Yet
Post by: jz451 on February 02, 2017, 02:14:14 PM
If they are forgetting to log when they contact the borrower, then that is a bigger problem altogether, and a failure of internal controls and compliance on LC's part. I've had several notes I've had to sell because the notes go into grace period and there is no log of contact from the time the payment is due to the supposed settlement date and after that date.  At some point I am going to call customer service to see what is up about that, because from this and logs with multiple calls but no message left is simply frustrating. When I worked at Springleaf, now OneMain, from last June to September all late borrowers got left a message if they didn't answer the phone.
It isn't uncommon in consumer lending to use models to determine which customers should be contacted first. LendingClub may rely on this sort of model to focus collections on where it seems to make the most sense.  But over the years I think we've learned those logs are often inaccurate and miss events that occur.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Title: Re: Worst Month Yet
Post by: rawraw on February 02, 2017, 02:27:15 PM
If they are forgetting to log when they contact the borrower, then that is a bigger problem altogether, and a failure of internal controls and compliance on LC's part. I've had several notes I've had to sell because the notes go into grace period and there is no log of contact from the time the payment is due to the supposed settlement date and after that date.  At some point I am going to call customer service to see what is up about that, because from this and logs with multiple calls but no message left is simply frustrating. When I worked at Springleaf, now OneMain, from last June to September all late borrowers got left a message if they didn't answer the phone.
It isn't uncommon in consumer lending to use models to determine which customers should be contacted first. LendingClub may rely on this sort of model to focus collections on where it seems to make the most sense.  But over the years I think we've learned those logs are often inaccurate and miss events that occur.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Core use to post about how bad the logs are. He was convinced there was a secret log. May be useful to find his posts (he was quite the character)
Title: Re: Worst Month Yet
Post by: SeanMCA on February 03, 2017, 10:19:06 AM
Another monthly statement, another loss.

I was down in July, up in August, down in September, up in October, down in November, up in December, and now down in January. Basically breakeven over the last 7 months.

Early payoffs have been devastating. 
Title: Re: Worst Month Yet
Post by: jheizer on February 03, 2017, 10:26:35 AM
Oh man!  I just got slammed.

(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2017-02-03_09-25-51_zpsht01ecc5.png)
Title: Re: Worst Month Yet
Post by: rubicon on February 03, 2017, 12:02:20 PM
Jan was one of my worst months ever!
Title: Re: Worst Month Yet
Post by: newstreet on February 03, 2017, 12:16:51 PM
Oh man!  I just got slammed.

(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2017-02-03_09-25-51_zpsht01ecc5.png)

WOW.....ya think they pushed bad debt to January to avoid reporting in year end numbers.  Come on.....how insanely obvious is this.  Analysts should be all over January defauts on the call.
Title: Re: Worst Month Yet
Post by: newstreet on February 03, 2017, 12:21:00 PM
Another monthly statement, another loss.

I was down in July, up in August, down in September, up in October, down in November, up in December, and now down in January. Basically breakeven over the last 7 months.

Early payoffs have been devastating.

Can you check to see if your early payoff was a refinance by LC.  They would get fees on both sides and juice "originations".  I know I'm right about this. Nuts.
Title: Re: Worst Month Yet
Post by: dbailey75 on February 03, 2017, 12:24:57 PM
If they are forgetting to log when they contact the borrower, then that is a bigger problem altogether, and a failure of internal controls and compliance on LC's part. I've had several notes I've had to sell because the notes go into grace period and there is no log of contact from the time the payment is due to the supposed settlement date and after that date.  At some point I am going to call customer service to see what is up about that, because from this and logs with multiple calls but no message left is simply frustrating. When I worked at Springleaf, now OneMain, from last June to September all late borrowers got left a message if they didn't answer the phone.
It isn't uncommon in consumer lending to use models to determine which customers should be contacted first. LendingClub may rely on this sort of model to focus collections on where it seems to make the most sense.  But over the years I think we've learned those logs are often inaccurate and miss events that occur.

Sent from my SAMSUNG-SM-G935A using Tapatalk
Core use to post about how bad the logs are. He was convinced there was a secret log. May be useful to find his posts (he was quite the character)

I don't think I'd call it a "secret log", but i'd be will to guess there's an official log that has more than just canned response's, I just like to see that something is being doing, canned responses are fine, If I knew the details of why deadbeats aren't paying, I'm might be inclined to go find them them, ;-) it's better we don't see/know the gritty details.
Title: Re: Worst Month Yet
Post by: rawraw on February 03, 2017, 12:27:22 PM
Another monthly statement, another loss.

I was down in July, up in August, down in September, up in October, down in November, up in December, and now down in January. Basically breakeven over the last 7 months.

Early payoffs have been devastating.

Can you check to see if your early payoff was a refinance by LC.  They would get fees on both sides and juice "originations".  I know I'm right about this. Nuts.
You can check it, by using borrower data to make inferences. Some people used statistical techniques to spot multiple loans to similar borrowers before. But it's not a field or easy to do

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: SeanMCA on February 03, 2017, 01:03:23 PM
Another monthly statement, another loss.

I was down in July, up in August, down in September, up in October, down in November, up in December, and now down in January. Basically breakeven over the last 7 months.

Early payoffs have been devastating.

Can you check to see if your early payoff was a refinance by LC.  They would get fees on both sides and juice "originations".  I know I'm right about this. Nuts.

no, there is no way to know how or why a loan was paid off. We're not allowed to know.
Title: Re: Worst Month Yet
Post by: SeanMCA on February 03, 2017, 01:21:28 PM
It's hard to grasp that more than 30% of borrowers are paying off their loans early and we're not allowed to know why. I mean, hey we're just retail investors, what business is it of ours to know about the industry's strangest anomaly where we lose out on tons of interest, causing in my case to generate repeated negative monthly returns?

Oh and Lending Club charges the retail investor a 1% penalty on early payoffs on the outstanding principal for any loan older than 12 months. So we pay a fee but we're not allowed to know what's leading to these early payoffs.

Lending Club has no problem sending out solicitations to invest even more money though.
Title: Re: Worst Month Yet
Post by: newstreet on February 03, 2017, 02:27:07 PM
It's hard to grasp that more than 30% of borrowers are paying off their loans early and we're not allowed to know why. I mean, hey we're just retail investors, what business is it of ours to know about the industry's strangest anomaly where we lose out on tons of interest, causing in my case to generate repeated negative monthly returns?

Oh and Lending Club charges the retail investor a 1% penalty on early payoffs on the outstanding principal for any loan older than 12 months. So we pay a fee but we're not allowed to know what's leading to these early payoffs.

Lending Club has no problem sending out solicitations to invest even more money though.

LOL-It is so obvious that they are churning accounts.  This is baby stuff.  It's funny the MCA industry gets the bad wrap when these guys, led by their boards, (QED sound familiar) do this crap to show growth. Rather brazen after they were already nailed for fraud.  They must be very desperate.  There is massive demand for these assets. But I don't think Lending Club and Prosper being around in 24 months.  Sean-don't write about this before Lendit! Lending Club is the primary sponsor and wouldn't want you to lose your award! ;)
Title: Re: Worst Month Yet
Post by: squarebob on February 03, 2017, 04:33:20 PM
January was my first negative month since opening my LC account in 2010. More distressingly, I opened a 2nd account in 2014 and it was negative in January, too, despite normally being uncorrelated with my initial account. Something is rotten in Denmark, methinks.
Title: Re: Worst Month Yet
Post by: storm on February 03, 2017, 05:21:17 PM
It's hard to grasp that more than 30% of borrowers are paying off their loans early and we're not allowed to know why. I mean, hey we're just retail investors, what business is it of ours to know about the industry's strangest anomaly where we lose out on tons of interest, causing in my case to generate repeated negative monthly returns?

Oh and Lending Club charges the retail investor a 1% penalty on early payoffs on the outstanding principal for any loan older than 12 months. So we pay a fee but we're not allowed to know what's leading to these early payoffs.

Lending Club has no problem sending out solicitations to invest even more money though.

Have you ever taken out a loan?  Lenders don't usually ask why borrowers are paying off their loan early, and it is really none of their business.  Either the borrower came into some money, or the rate is not competitive.  It is that simple.
Title: Re: Worst Month Yet
Post by: Fred93 on February 03, 2017, 05:25:51 PM
LOL-It is so obvious that they are churning accounts.  This is baby stuff.

Possible, but not obvious.  Where is your evidence?
Title: Re: Worst Month Yet
Post by: Rob L on February 03, 2017, 06:30:55 PM
Certainly not my worst month. For the first month in six I was in the black ($110.33; zowie).
Blue and read bars converging so maybe the effects of my Folio sales in the fall are behind me.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fr4DmwRd.png&hash=de4dc4824fb83fbac90f136143b3f425)

The bad news is that my delinquency rate is rising again. Future isn't lookin good ...

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F6ioLWKQ.png&hash=fd473a525ad8af00600d47e8fa3aa5f9)
Title: Re: Worst Month Yet
Post by: rawraw on February 03, 2017, 08:19:29 PM
I made money again this month.  Second month of profitability after a dip due to credit.  But 65% of my portfolio is ABC grades.  Seems like my returns have stabilized

Also, prepayments occur in all consumer lending.  The existence of prepayments isn't alarming by itself.  but coupled with LC's revenue model, it is something to pay attention to.
Title: Re: Worst Month Yet
Post by: .Ryan. on February 03, 2017, 09:17:01 PM
Also, prepayments occur in all consumer lending.  The existence of prepayments isn't alarming by itself.  but coupled with LC's revenue model, it is something to pay attention to.

Totally concur rawraw. For me, its when yours (YOU) and your partners (LC) interests diverge, there is where you need to keep a keen eye on. And the rules have been set that prepayments benefit one of those at the direct cost of the other.
Title: Re: Worst Month Yet
Post by: newstreet on February 03, 2017, 09:33:20 PM
Also, prepayments occur in all consumer lending.  The existence of prepayments isn't alarming by itself.  but coupled with LC's revenue model, it is something to pay attention to.

Totally concur rawraw. For me, its when yours (YOU) and your partners (LC) interests diverge, there is where you need to keep a keen eye on. And the rules have been set that prepayments benefit one of those at the direct cost of the other.

Exactly----ya think institutional investos are paying the 1% prepayment fee?  lol
Title: Re: Worst Month Yet
Post by: newstreet on February 03, 2017, 09:44:44 PM
It's hard to grasp that more than 30% of borrowers are paying off their loans early and we're not allowed to know why. I mean, hey we're just retail investors, what business is it of ours to know about the industry's strangest anomaly where we lose out on tons of interest, causing in my case to generate repeated negative monthly returns?

Oh and Lending Club charges the retail investor a 1% penalty on early payoffs on the outstanding principal for any loan older than 12 months. So we pay a fee but we're not allowed to know what's leading to these early payoffs.

Lending Club has no problem sending out solicitations to invest even more money though.

 



Have you ever taken out a loan?  Lenders don't usually ask why borrowers are paying off their loan early, and it is really none of their business.  Either the borrower came into some money, or the rate is not competitive.  It is that simple.

Creditor's usually have a make whole provision in the event of prepayment.  Lending Club CHARGES the investor if there is a prepayment. Lending Club could refinance all their deals and get points on either side.  Prepayments substanital above industry standards.  The more prepayments-the greater revenue to LC-lower returns to investors.  That my friend, is the simple math.  Hilarious
Title: Re: Worst Month Yet
Post by: michael49 on February 05, 2017, 08:26:15 AM
I took a loss in both my taxable and IRA accounts in January (been up and down this year). I've been investing with BP aggressive filter for a while now - I'm going to keep with it for another 6 months or so but I'm not convinced I'm making a wise decision. :(
Title: Re: Worst Month Yet
Post by: Rob L on February 05, 2017, 10:24:53 AM
Oh man!  I just got slammed.

(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2017-02-03_09-25-51_zpsht01ecc5.png)

Ouch! Looks like you've got the Jan "prize" for worst month yet. Really ugly.
I notice from the "Understanding ..." thread that you have more C's than any other grade, followed by D's and E's.
Compared with my month (almost exclusively D's and E's) the lower risk C's didn't help your results.
Title: Re: Worst Month Yet
Post by: jheizer on February 06, 2017, 09:31:53 AM
Yeah.  its kind of frustration.  At the very beginning of Jan I started investing in Bs and a tiny % of Cs again.  Then you all talked about it in a few thread and made me feel better about my decision.  I was actually about to up the investment per note to help catch up from the large cash backup I have and then this happens.  Not sure what I am going to do now.

FWIW my default/charged off by grade

(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2017-02-06_08-06-59_zpsqi2ukgwn.png)

And my notes per month of issue date.

(https://i91.photobucket.com/albums/k299/heezer7/chrome_2017-02-06_08-26-28_zpsqye1xevw.png)

I'm concentrated in such a small range of dates of a defunct vintage.  I'm not sure there is anything I could have done to prevent any of this.  Well other than not having switched to folio excluding buying after the May mess because that just concentrated my notes even more.  Discounted loss...
Title: Re: Worst Month Yet
Post by: Rob L on February 07, 2017, 10:19:55 AM
From the looks of it you've already done a lot. It appears you pretty much stopped reinvesting last May. Only about 15% of your notes are in the May 16 through Jan 17 period so you took a lot of cash off the LC table during that period. That was probably a good thing; particularly with what we now know from LC's recent 8-k filing.

Since you made a very substantial change in invested dollars over the past 6 months you might want to chart chargeoffs lagged by 5 or 6 months versus interest received to get a better picture of "badness". Another data point to help decide what to do next.
Title: Re: Worst Month Yet
Post by: jheizer on February 07, 2017, 10:40:06 AM
Well, I stopped making deposits in Jan of 2016 as I had as much money in LC as I wanted.  I wanted to give it a year or so to see how things actually progressed.  Kind of glad I did...  So that last spike up is that money investing.  On May 5th I stop investing in new loans and wrote an automated folio buyer buying at deep discounts.  Which in turn made even more of my loans late 2015/early 2016.  The stepping down from there is just a result of 2016 loans slowly coming available on folio.

If its not clear:
(https://i91.photobucket.com/albums/k299/heezer7/soffice.bin_2017-02-07_09-38-32_zpsgzb2wk3w.png)
Title: Re: Worst Month Yet
Post by: screwedbylendingclub on February 07, 2017, 04:55:26 PM
Here are the results for the strategy:

(https://s28.postimg.org/5xio0ot6h/lendingclubstrategy.png) (https://postimg.org/image/5xio0ot6h/)

After checking Lending Club maybe a dozen times, I've come to the conclusion that buying in-grace notes is simply not a viable strategy. Lack of liquidity is the issue: there are simply not enough notes available. Even if you could develop a computer vision robot, you'd be lucky to even snag 5 25/50 notes per month. In theory, the cure rate should be more than 65% (and even more than the cure rate of regular in-grace notes), but even if only 50% cure, you would end up with a 38-45% return. I've defaulted back to the penny note strategy for E/F/G notes. This seems to be safer than buying them straight out. Right now, my combined return is -2.04%. I'll update when I get positive/change services.
Title: Re: Worst Month Yet
Post by: Rob L on February 07, 2017, 05:04:33 PM
Well, I stopped making deposits in Jan of 2016 as I had as much money in LC as I wanted.  I wanted to give it a year or so to see how things actually progressed.  Kind of glad I did...  So that last spike up is that money investing.  On May 5th I stop investing in new loans and wrote an automated folio buyer buying at deep discounts.  Which in turn made even more of my loans late 2015/early 2016.  The stepping down from there is just a result of 2016 loans slowly coming available on folio.

Well obviously it's just a guess but I'd think you're better off by having paused contributions in Jan changed strategies on 5 May. Cash accumulated and you possibly picked up some better deals from Folio than would have been the case if you'd bought newly minted notes. You certainly have a choice now as to where to go from here that you would not have had otherwise. That's gotta be a good thing.
Title: Re: Worst Month Yet
Post by: AnilG on February 07, 2017, 05:29:55 PM
You might be interested in my blog posts on delinquent notes in secondary market.

Selling Delinquent Notes on Lending Club Folio Secondary Market, Part 1: Loss Aversion
https://www.peercube.com/blog/post/selling-delinquent-notes-on-lending-club-folio-secondary-market-part-1-loss-aversion

Trading Delinquent Notes, Part 2: Needle in the Haystack
https://www.peercube.com/blog/post/trading-delinquent-notes-part-2-needle-in-the-haystack

I haven't got around to posting the third part in this series yet though wrote draft soon after publishing part 2 (draft needed too much cleanup based on feedback and other higher priority stuff showed up).

Here are the results for the strategy:

(https://s28.postimg.org/5xio0ot6h/lendingclubstrategy.png) (https://postimg.org/image/5xio0ot6h/)

After checking Lending Club maybe a dozen times, I've come to the conclusion that buying in-grace notes is simply not a viable strategy. Lack of liquidity is the issue: there are simply not enough notes available. Even if you could develop a computer vision robot, you'd be lucky to even snag 5 25/50 notes per month. In theory, the cure rate should be more than 65% (and even more than the cure rate of regular in-grace notes), but even if only 50% cure, you would end up with a 38-45% return. I've defaulted back to the penny note strategy for E/F/G notes. This seems to be safer than buying them straight out. Right now, my combined return is -2.04%. I'll update when I get positive/change services.
Title: Re: Worst Month Yet
Post by: screwedbylendingclub on February 08, 2017, 08:21:40 PM
Very insightful. I hadn't even taken the collection fees into account. Your commentator is spot on: it pretty much kills all incentive to invest in them.
Title: Re: Worst Month Yet
Post by: anabio on February 16, 2017, 07:11:19 AM
It looks like I finally turned the corner with notes going IGP...its about time :-\. Only have 1 note in grace right now (out of 533 current). In January I had around 6-7 in grace at any given time. Previous months I mostly had double digit graces at any given time.

I figure the reason might be that since most of my notes only have 2-4 more payments left (weighted average age is 33 months) my borrowers have finally figured out that they might as well "stick it out" and just continue paying. I have no real proof of that except anecdotally. I notice a few of my notes taking a plunge in Fico score but still remaining current in payments (so far). I think they are making those payments because they realize they only have a few more payments left. In the past I think they would have just said "to heck with this stuff" and stopped.
Title: Re: Worst Month Yet
Post by: anabio on February 24, 2017, 07:55:25 PM
It looks like I finally turned the corner with notes going IGP...its about time :-\. Only have 1 note in grace right now (out of 533 current). In January I had around 6-7 in grace at any given time. Previous months I mostly had double digit graces at any given time.

Well...if that don't beat all... I mentioned I only  had one note in IGP and what happens??? 5 trade days later...whomp!...I now have 12. Would have been 13 but the one I had IGP on the 16th went 16-30 days late.
Title: Re: Worst Month Yet
Post by: Rob L on February 24, 2017, 08:23:52 PM
It looks like I finally turned the corner with notes going IGP...its about time :-\. Only have 1 note in grace right now (out of 533 current). In January I had around 6-7 in grace at any given time. Previous months I mostly had double digit graces at any given time.

Well...if that don't beat all... I mentioned I only  had one note in IGP and what happens??? 5 trade days later...whomp!...I now have 12. Would have been 13 but the one I had IGP on the 16th went 16-30 days late.
"If it weren't for bad luck I'd have no luck at all ..."
Title: Re: Worst Month Yet
Post by: anabio on February 24, 2017, 09:04:54 PM
"If it weren't for bad luck I'd have no luck at all ..."

Gloom, despair and agony on me. Deep dark depression, excessive misery. If it weren't for bad luck I'd have no luck at all...Gloom, despair and agony on me ;)

Heard this tune sung many times on a deeply philosophical tv show named HeeHaw during the late 60's!!!
https://www.youtube.com/watch?v=BkzE23pyME4
Title: Re: Worst Month Yet
Post by: lascott on February 25, 2017, 11:49:55 AM
"If it weren't for bad luck I'd have no luck at all ..."

Gloom, despair and agony on me. Deep dark depression, excessive misery. If it weren't for bad luck I'd have no luck at all...Gloom, despair and agony on me ;)

Heard this tune sung many times on a deeply philosophical tv show named HeeHaw during the late 60's!!!
https://www.youtube.com/watch?v=BkzE23pyME4
That was hilarious! My wife and I reminisced about watching that show on Sunday nights with our families. We just watched several youtube videos.

BTW, I currently have 51 IGPs and I'm at the fairly conservative end of the note grade investor!!
Title: Re: Worst Month Yet
Post by: anabio on February 25, 2017, 01:50:07 PM
"If it weren't for bad luck I'd have no luck at all ..."

Gloom, despair and agony on me. Deep dark depression, excessive misery. If it weren't for bad luck I'd have no luck at all...Gloom, despair and agony on me ;)

Heard this tune sung many times on a deeply philosophical tv show named HeeHaw during the late 60's!!!
https://www.youtube.com/watch?v=BkzE23pyME4
That was hilarious! My wife and I reminisced about watching that show on Sunday nights with our families. We just watched several youtube videos.

BTW, I currently have 51 IGPs and I'm at the fairly conservative end of the note grade investor!!

Dang it...had that song echoing through my mind yesterday...finally got rid of it after a couple of hours....now you just went and started it up all over again. :o

Hee Hee Hee, Haw Haw...
Hee Hee Hee, Haw Haw...
Title: Re: Worst Month Yet
Post by: Rob L on February 26, 2017, 12:34:49 AM
"If it weren't for bad luck I'd have no luck at all ..."

Gloom, despair and agony on me. Deep dark depression, excessive misery. If it weren't for bad luck I'd have no luck at all...Gloom, despair and agony on me ;)

Heard this tune sung many times on a deeply philosophical tv show named HeeHaw during the late 60's!!!
https://www.youtube.com/watch?v=BkzE23pyME4
That was hilarious! My wife and I reminisced about watching that show on Sunday nights with our families. We just watched several youtube videos.

BTW, I currently have 51 IGPs and I'm at the fairly conservative end of the note grade investor!!

Dang it...had that song echoing through my mind yesterday...finally got rid of it after a couple of hours....now you just went and started it up all over again. :o

Hee Hee Hee, Haw Haw...
Hee Hee Hee, Haw Haw...

LOL  ;D
Title: Re: Worst Month Yet
Post by: BruiserB on March 01, 2017, 12:14:06 PM
After conclusion of February, both my Taxable and IRA accounts have Year to Date XIRR of -1.35%  :-(
Title: Re: Worst Month Yet
Post by: jheizer on March 03, 2017, 09:14:38 AM
Monthly statements are up...

Not worst month yet, but still pretty crap.

(https://lh3.googleusercontent.com/-g2V_x5W7Wxw/WLl5QYoWUdI/AAAAAAAAF8o/Ploth8C9s4o/s0/soffice.bin_2017-03-03_08-10-09.png)

My interest - losses netted $0.27.  Glad this chart doesn't account for the 1% payment fees....

I also decided to plot a new piece of data the other night.  This is the total number of loans in each status for a given month going back 14 months.   While the graces have been holding high, the lates are dropping.  But check out that Charged off curve!

(https://lh3.googleusercontent.com/-1mpczolSYl8/WLl5UWv--0I/AAAAAAAAF8s/XIbcyAfLFG8/s0/soffice.bin_2017-03-03_08-10-25.png)
Title: Re: Worst Month Yet
Post by: apc3161 on March 03, 2017, 09:45:08 AM
I got crushed in February, my worst month since I started more than 3 years ago. That makes two months in a row with personal record-setting net losses and judging by the amount of loans I still have going into grace, late, default and early payoff, It's likely I could be booking a rather big net loss in 2017. It hurts to think about erasing gains from prior years.

I stopped reinvesting in June of last year and it has been painful ever since, monthly net losses in 5 of the last 8 months, with charge-offs accelerating each month and interest dropping fast.

I know I keep harping on this but more than 1,100 of my notes to date have paid off in full early. That's a lot of borrowers whose interest I needed each month to offset this nagging problem of defaults. I don't think it's fair that LC brushes over this pre-payment phenomenon. We know they give second loans to borrowers and we know that some percentage of borrowers use their second loans to pay off their first ones. As someone who is probably going to lose more than $1,000 this year with LC, I think it's long overdue that LC eliminates the 1% penalty assessed to investors on early pre-payments and that LC discloses everything it knows about pre-payments and allow us to decide how to act on that data.

I do not appreciate that LC refers to retail investors as resilient in an earnings call, while going on to talk about how banks are basically their only priority.

I want to know everything they know about early payoffs. I want the 1% penalty eliminated. I don't want to hear about how resilient I am while looking down the road at losses while they pat themselves on the back for transparency and celebrate how many banks they've brought on board.

This was also my worst month. Sadly, the only thing you can do is stop investing money there, withdraw, and explain to them what they need to do in order to get your money brought back into LC.
Title: Re: Worst Month Yet
Post by: apc3161 on March 03, 2017, 10:28:37 AM
Looking at LC most recent quarter statement (see attached), it's clear retail investors have been pulling out to a large extent (rightfully so, we just don't feel like a priority at all). We are now a small percentage of their funding. Either LC will take large steps to retain us by addressing all of our concerns (such actions will be obvious), or they will simply write us off as not worth the trouble, address none of our concerns, and be content with us leaving and focus more on banks, hedge funds, etc.
Title: Re: Worst Month Yet
Post by: nonattender on March 03, 2017, 12:27:06 PM

  • A retail investor buys the note of a borrower's first loan with LC
  • LC offers borrower a 2nd loan after positive performance
  • A bank (or any other investor) buys that note
  • Borrower pays off their first loan with their second loan
  • Retail investor gets hit with a 1% penalty on outstanding principal for an early payoff
  • Retail investor loses a good paying note
  • Bank gains a tried and tested borrower at the expense of a retail investor
  • Bank wins, retail investor foots the bill

Edit, above.  I realize it's tempting to blame the banks, but the notes are callable (as you are discovering) with no call cushion (prepayment penalty), which leads to reinvestment risk, at scale, when either borrowers seek to refinance to a lower rate / longer duration or when originators seek to refinance those borrowers, pull vs push, due to either borrower or platform's discovery of an altered perception/profile of risk.  That part, I believe, you have generally correct.  But this can affect any investor, not just a retail investor - unless you've discovered that banks are getting some preferential treatment, as far as being the lenders on new notes resulting from the call of the existing notes.  I think that may just be an artifact of the reinvestment risk / no prepayment fee / no front-end loading of interest that you've "newly" discovered, since banks invest primarily in A/B/C notes, anyway, and would most likely therefore be the benefitors of this cycle.  (Joke:  "How do you best invest in E/F/G notes?  Wait 9 months and buy A/B/C notes!")

ETA:  Or, if you're feeling particularly conspiratorial, maybe you should tilt at the windmill of "Does LC solicit bank-owned whole loans for refinance at the same rate that it does for fractionals - or is there something contractual precluding that?"  Good luck with that one... ;)
Title: Re: Worst Month Yet
Post by: Fred93 on March 03, 2017, 12:30:39 PM
Here's one potential conflict of interest I see:
  • A retail investor buys the note of a borrower's first loan with LC
  • LC offers borrower a 2nd loan after positive performance
  • A bank buys that note
...

This is a narrative you invented.  That's all.  There is NO evidence that this happens at a rate which makes it significant.  People have found A FEW pairs of loans where the borrower's credit history matches between the two loans, but not enough to make an argument that you are being hurt by this hypothesized behavior.

Here's another potential conflict of interest: A flying saucer lands on the Lending Club roof every day, providing them with information about he future, allowing them to sell to banks the loans that are going to pay off, while dumping the bad loans on you.
Title: Re: Worst Month Yet
Post by: SeanMCA on March 03, 2017, 12:45:44 PM
Rule #1: If it can happen, and they can make money on it, it will happen.

Title: Re: Worst Month Yet
Post by: nonattender on March 03, 2017, 12:57:18 PM
There is NO evidence that this happens at a rate which makes it significant.  People have found A FEW pairs of loans where the borrower's credit history matches between the two loans, but not enough to make an argument that you are being hurt by this hypothesized behavior.

In Sean's defense, it's a real phenomenon.  We have Renaud Laplanche on the record saying that 14% of orig at one time were refi's...  Reinvestment risk is as real in the bond market as it is with these notes.  The notes are callable and subject to being paid off and refi'd whenever rates and/or risk profiles change (or are perceived to have changed).  The "argument" is over magnitude of the effect - not if there's really an effect.  As far as some guy doing loose-matching with who-knows-what criteria to "identify repeat borrowers", I can do that ninety different ways and come out with just about any answer I set out to find.  Sean's correct that only LC "really knows" the #s.

http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/reinvestment-risk.asp
http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/reinvestment-income-reinvestment-risk.asp

Have fun storming the castle.
Title: Re: Worst Month Yet
Post by: Fred93 on March 03, 2017, 12:59:50 PM
I'm hurt that you're not moving forward with the flying saucer idea.
Title: Re: Worst Month Yet
Post by: nonattender on March 03, 2017, 01:02:51 PM
I'm hurt that you're not moving forward with the flying saucer idea.

I would, but I am too afraid of the black helicopters and have to console myself with inserting links to educational articles at investopedia.
Title: Re: Worst Month Yet
Post by: jheizer on March 03, 2017, 01:06:18 PM
Said loose matching guy had offered to run any combination that anyone wanted FWIW and I even ran out someone's 20% scenario (though you gave no specific details)

Edit: Bah, I crossed names.  Tell me what you want and I'll do it.
Title: Re: Worst Month Yet
Post by: nonattender on March 03, 2017, 01:15:21 PM
Said loose matching guy had offered to run any combination that anyone wanted FWIW and I even ran out someone's 20% scenario (though you gave no specific details)

Edit: Bah, I crossed names.  Tell me what you want and I'll do it.

Nothing personal.  I just don't think it can be done very well / don't want to figure it out, personally.  I think that "Grade" (as a dependent variable, set by LC on a case-by-case/combinatoric basis) being included in the analysis destroys any credibility.  I don't see a clear way...

When an "A" can have a FICO of 680 and an "E" can have a FICO of 770, you have to, effectively, reverse engineer LC's Grading algo...

Not my cup of tea - I'll settle for the saucer.
Title: Re: Worst Month Yet
Post by: investor88 on March 06, 2017, 02:01:16 PM
If you look at the ‘Understanding Your Returns’ chart, the interest rate falls very far over time.  Once your portfolio is over 18-24 months, the returns really start slipping to between 6-8%

That is misleading.  Most of the data in that chart is from 36 month loans, and with a portfolio of 36 month loans, you really cant get beyond about 15 months average age unless you stop investing.  I believe the data points for higher average age are people who have stopped investing.  It is possible that these people stopped investing because they were doing poorly.  That's a selection bias.

Hi Fred, now that 15 months have passed since you made your comment, I would like to hear what you have to say now that we have the benefit of time.  You said that the people with aged portfolios stopped investing because they were poor at investing at LC.  Sounds like you are the one who wasn't seeing the forest for the trees. The people who stopped investing realized much earlier than you that LC was having poor returns.  With the current 'Understand Your Returns' chart it looks like the people who stopped investing and let their portfolios age out did much better than the currently active investors with portfolios in the 9-15 month range.
Title: Re: Worst Month Yet
Post by: JohnnyP on March 06, 2017, 09:18:49 PM
Oooo.... ripped.
Title: Re: Worst Month Yet
Post by: Rob L on March 07, 2017, 12:49:56 PM
Feb 2017 was my best month in quite some time (5.3% annualized net profitable return).
The red and blue have converged so the effects of my selling last year have passed.
Red and blue will begin to diverge again as I have paused reinvestments.


(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FE1fNjQI.png&hash=2615f953e8db2d596ff4a625ebd6ec94)

However, as you see delinquencies seem to have leveled off at about 2X 18 months ago.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F37ZjI3V.png&hash=5d4ac8903927f64ca58a24956f37a477)


Title: Re: Worst Month Yet
Post by: Fred93 on March 07, 2017, 04:13:16 PM
If you look at the ‘Understanding Your Returns’ chart, the interest rate falls very far over time. Once your portfolio is over 18-24 months, the returns really start slipping to between 6-8%

That is misleading.  Most of the data in that chart is from 36 month loans, and with a portfolio of 36 month loans, you really cant get beyond about 15 months average age unless you stop investing. I believe the data points for higher average age are people who have stopped investing.  It is possible that these people stopped investing because they were doing poorly.  That's a selection bias.

Hi Fred, now that 15 months have passed since you made your comment, I would like to hear what you have to say now that we have the benefit of time.

My position is the same.  However, I see that you have misquoted me, and misinterpreted what I said, so I'll explain that in more detail below.

Quote
You said that the people with aged portfolios stopped investing because they were poor at investing at LC.

Bzzt.  I never said that.  The quote box above contains what I did say.  First I said "I believe the data points for higher average age are people who have stopped investing."  That's simple math.  As a result of this, we know that the mix of loans held by these accounts are different, and they are different in important ways that makes direct comparison of results flaky at best. 

There are several things that are different about these accounts.  I listed one of them.  Specifically that the people who stopped probably stopped for a reason.  I never said "they were poor at investing".  I never characterized the individuals or their skills in any way.  You wrote that in yourself.

Even if you believe that these people stopped investing for a really good reason (they're smarter than me) or perhaps no reason at all, we still have the situation that these portfolios that stopped investing before 2015 (for example) don't contain 2015 vintage loans, which we know perform more poorly.  Its an apples vs oranges comparison.

This apples vs oranges thing is important, because at the time of our earlier exchange, it was common for some folk to claim that LC's return numbers were somehow bogus because accounts that were run off had lower returns than accounts in steady state (near the middle of that curve).  Actually, if the loan qualities (vintages etc) were similar, they would have similar results.  The difference comes from comparing apples vs oranges.  Different stuff in the accounts.  At that time, most people saw the curve drifiting down toward the right.  Now most people see it as drifting up toward the right (which is easy to understand, because the recent vintage loans have performed more poorly.)

Your original statement, "Once your portfolio is over 18-24 months, the returns really start slipping" is just wrong.

It just doesn't make sense to compare points in the middle vs points at the right end.

Quote
The people who stopped investing realized much earlier than you that LC was having poor returns.  With the current 'Understand Your Returns' chart it looks like the people who stopped investing and let their portfolios age out did much better than the currently active investors with portfolios in the 9-15 month range.

Perhaps.  Depends on how they deployed the money that they diverted.  If they left it in their bank account, then I did better.

If your argument is that you were more prescient than I, perhaps you are right, but golly we never saw you make a prediction about the performance of future vintages.  You didn't say "I predict that the 2015 and 2016 vintages will perform more poorly than recent year vintages".  What you said was "Once your portfolio is over 18-24 months, the returns really start slipping".

If you do believe in comparing points on that curve at different ages, then lets do that comparison now.  Under those rules, your statement can't be correct, because the curve moves UP as we move toward the right!  Under those rules your statement is backwards.

You can't have it both ways.

Title: Re: Worst Month Yet
Post by: Half Right on March 09, 2017, 04:33:50 PM
The average age of my portfolio is now 37.5 months.
I stopped reinvesting the minute the news hit about Laplance, having learned my lesson from Madoff, Platinum Partners etc.
By luck that was the right time to stop.
All my notes were 36 month notes and I withdraw funds daily.
I should have my initial investment out in about 3 more months.
As for the yield it has been staying at a consistent 6-7% since I stopped reinvesting.
No complaints, and I will probably keep reinvesting my earnings as soon as my principal is out.
Title: Re: Worst Month Yet
Post by: investor88 on March 10, 2017, 06:12:30 PM
Perhaps.  Depends on how they deployed the money that they diverted.  If they left it in their bank account, then I did better.

If your argument is that you were more prescient than I, perhaps you are right, but golly we never saw you make a prediction about the performance of future vintages.  You didn't say "I predict that the 2015 and 2016 vintages will perform more poorly than recent year vintages".  What you said was "Once your portfolio is over 18-24 months, the returns really start slipping".

If you do believe in comparing points on that curve at different ages, then lets do that comparison now.  Under those rules, your statement can't be correct, because the curve moves UP as we move toward the right!  Under those rules your statement is backwards.

You can't have it both ways.

Rob started this thread because he noticed his portfolio of D and E notes were starting to do poorly and he had a very bad month.  I warned him that this was a problem with LC as his portfolio aged and that LC was performing really bad and to stop investing in it.   
Since Rob started this thread LC has underperformed almost every type of investment (bonds, stocks, reits, international). Probably it has also underperformed every investment if you look at 3-year, 5-year, 10-year period.  You mention that you did better than people who left their money in the bank earning 0%.  Look at the chart I posted a few days ago.  Many people are below zero.  All those dots earning less than 0%.  And as the portfolios age, the performance will go down.  The 5% average of 12-15 month portfolios will mean that in one year the 24-27 month portfolios will be averaging less than 5%... maybe as low as 2%.  Lending Club is a bad investment.  That is what I was saying to Rob in December 2015.  I will wait a year to check in on this thread and by then the 'Understanding Your Returns' chart will look like a bloodbath - if LC is still even willing to provide that chart.
Title: Re: Worst Month Yet
Post by: Fred93 on March 10, 2017, 08:11:55 PM
Since Rob started this thread LC has underperformed almost every type of investment (bonds, stocks, reits, international).

... Look at the chart I posted a few days ago.  Many people are below zero.  All those dots earning less than 0%.

You are certainly correct that the D&E loans have degraded severely.  As for whether they will continue to get worse, I don't know.

I do think it is a little odd that you first seem to be recommending stocks, which as we all know crash by more than a factor of 2 every few years, and then in the same breath complain that some LC investors have earned less than 0%.   If you're trying to compare stock market returns to LC note returns you must consider the fact that stock market returns are sometimes considerably less than 0%. 

Most of us have money in stocks, but stocks have volatile periods, occasionally dropping by a factor of 2 or so, and we seek something to diversify away from the stock market risks.  That leads most to some kind of fixed income investment.  When comparing performance of LC notes to something, it therefore makes sense to compare vs fixed income investment alternatives.

In particular, it makes sense to compare LC notes vs other short duration fixed income things.  Short term corporate notes and CDs are earning below 1% nowadays.  (matched to the duration of LC notes)  In recent times I've been earning 4% to 6% on my LC notes (depending on how you account for estimated future defaults etc).  Sure this 4% to 6% is a lot less than the >10% I used to make here, so I'm bummed that the return fell.  The big picture however is that I'm still doin' better than other reasonably comparable fixed income alternatives.  The difference is no longer so big that it makes me as certain as I used to be, but I'm still doin' ok.

As for the future... I'm not good at the future, but I suspect that LC's public company situation is going to continue to make them feel pressured to grow, and that the competitive environment in lending is going to continue to get more competitive, so sadly it does seem likely that they may grow by pushing a lot of wrongly-priced junk.  In this, I suspect we are in agreement.

I'll try not to be the guy who buys the junk.  (I mean the future junk.  I already bought a lot of 2015 junk.)  Doesn't matter much to me how the distribution in that chart of all investors comes out at some date in the future.  Only matters to me where my dot is.  If I were the management of LC, I would care, but I'm not, and I have no power to influence them to value note investor returns over their earnings growth, so I gave up on worrying about that a long time ago. 

If they go too far, pushing too much junk, then all those banks they have worked so hard to gain as buyers of their stuff will go away, and the company will crash.  The company has sized up to support bank-sized customers, so is now dependent on them.

As I said, I do agree with some of what you are saying.

Title: Re: Worst Month Yet
Post by: jheizer on April 03, 2017, 03:41:16 PM
I had a net positive month!

(https://myibiza.tv/wp-content/uploads/sites/12/2016/12/ushuaia_closing_party_ibiza_2016_featured.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on April 03, 2017, 04:37:32 PM
Congratulations!! Where's the party??  :)

Meanwhile, back at the ranch, I lost money again.  :(
This month for the first time since June of 16 my charge offs exceeded my 5 month lagged interest.
Also exceeded my interest this month; thus the net monthly loss.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FbRZImVe.png&hash=9241da67a1cc1d734f827801d41f43cd)

No improvement in delinquencies either:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FlPnui4H.png&hash=4765af5af4c36a516da1fb2df651cadf)

No way to put a positive spin on things other than my cash continues to rise and losses in dollar terms are quite small.
At least that's something.
Title: Re: Worst Month Yet
Post by: lascott on April 07, 2017, 01:25:34 PM
Taxable account - Nov & Dec were months where I loss more than earned but things are looking up.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fd4GouGl.jpg&hash=cb73c987eff224a439121043071fde6f)

ROTH account - this account was even more conservative than my taxable one but had very similar patterns
I have been withdrawing from this account for several months. I plan on start reinvesting in a 2 or 3 months when I hit an set amount.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2Fgm04n3m.jpg&hash=528a2b91c2385acc162a93fa7e96b6ed)


Looking forward to seeing everyone's numbers improve in this table too.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FruIY6Zu.jpg&hash=4b7b72426a7bf7c409945f7af828c026)
Via: http://forum.lendacademy.com/index.php/topic,3365.570.html
Title: Re: Worst Month Yet
Post by: Fred93 on April 08, 2017, 02:49:28 AM
Update for March.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-chargeoff-ratio-2017-04-07.png&hash=4faf2fb83812b14a92dff64dbbbc1617)

The 3 mo moving average looks like its still moving up. 
Title: Re: Worst Month Yet
Post by: Rob L on May 03, 2017, 10:51:39 PM
Another month, another loss. That's losses in 7 of the past 9 months.
Watched "The Big Short" again last night. Feels like my LC portfolio is one big sub-prime MBS (okay its tiny).
And, I know, it could get a whole lot worse.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FGBfVwtC.png&hash=75b69132bc3a5c1e135efa7fdbd86aa5)

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FqX5DMHb.png&hash=93fc2dd7150b484413cf46188ec08403)
Title: Re: Worst Month Yet
Post by: jheizer on May 03, 2017, 11:15:33 PM
I almost exactly match last month.  Though interestingly enough the amount of interest and the loss amount is rather different.
(https://lh3.googleusercontent.com/-Z-l2VTmH6r4/WQqcW4wVbmI/AAAAAAAAGxQ/m5TP-nZ3OI4l-fT38nag2iw1OO6278JOgCHM/s0/soffice.bin_2017-05-03_22-13-30.png)

Number of lates are still trending down
(https://lh3.googleusercontent.com/-sdpJrtaUysc/WQqcdNkWueI/AAAAAAAAGxU/8pTP_4PYM-YbNIQrYh0a8IadinYnOKqZQCHM/s0/soffice.bin_2017-05-03_22-13-56.png)
Title: Re: Worst Month Yet
Post by: lascott on May 04, 2017, 01:10:30 AM
Number of lates are still trending down
(https://lh3.googleusercontent.com/-sdpJrtaUysc/WQqcdNkWueI/AAAAAAAAGxU/8pTP_4PYM-YbNIQrYh0a8IadinYnOKqZQCHM/s0/soffice.bin_2017-05-03_22-13-56.png)

Is that because they are moving to the charged off bucket sooner or more quickly than the past? That red charged off line is fairly steep.

My taxable $ chart that includes loss:
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FUvWZI9B.jpg&hash=173ba80f40a2a3c074477f3980c342a8)

My roth $ chart that includes loss:
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FhHiAvMS.jpg&hash=258deb8d022018b212d040a7fb0cf9f4)
Title: Re: Worst Month Yet
Post by: Fred93 on May 04, 2017, 01:16:40 AM
Is that because they are moving to the charged off bucket sooner or more quickly than the past?

I think no.

Quote
That red charged off line is fairly steep.

My analysis (of my account) shows that the chargeoff rate (ie slope of that red curve) correlates pretty strongly to the delinquency rate TWO MONTHS AGO.  If you look at those charts, I think they show same relationship.  That there is a delay from delinquency to chargeoff seems reasonable.  If this relationship continues to hold, then lower delinquency rate now will mean lower chargeoff rate a couple of months from now.

Mind you ... no guarantees  ::)
Title: Re: Worst Month Yet
Post by: rawraw on May 04, 2017, 09:17:13 AM
Is that because they are moving to the charged off bucket sooner or more quickly than the past?

I think no.

Quote
That red charged off line is fairly steep.

My analysis (of my account) shows that the chargeoff rate (ie slope of that red curve) correlates pretty strongly to the delinquency rate TWO MONTHS AGO.  If you look at those charts, I think they show same relationship.  That there is a delay from delinquency to chargeoff seems reasonable.  If this relationship continues to hold, then lower delinquency rate now will mean lower chargeoff rate a couple of months from now.

Mind you ... no guarantees  ::)
By definition, doesn't the past dues have to go up for charge offs to increase? I get what you are saying though. The pull through rate of past due notes to charge off is the missing variable I guess

Sent from my SAMSUNG-SM-G935A using Tapatalk

Title: Re: Worst Month Yet
Post by: fliphusker on May 04, 2017, 09:59:21 PM
In the midst of a pretty good bloodbath myself. April was solid, but now a very big spike in BKs. Dumb me, part was my fault with buying the same note 4x on FOLIO. One of the big pitfalls with using NSR.
Bad luck, or bad strategy on my part? Starting to wonder. My returns are still good for what I expect, just not as good as I want.
Title: Re: Worst Month Yet
Post by: Rob L on June 04, 2017, 03:18:05 PM
Another month, another statement (May 2017), but this month a profit ($21.63 or 0.03% of principal invested)!
Same old, same old as you see:

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FTWhwTdD.png&hash=67752c7d0224d6e04c835b503f0363be)

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FkFFsLhw.png&hash=90ded122c20c329ed754dafcab125a9c)


Title: Re: Worst Month Yet
Post by: Fred93 on June 04, 2017, 06:40:03 PM
My updates including May data...

Chargeoffs in my account were really low this month.  Don't know why.  I have over 5000 loans, which you would expect to be large enough so that random variation from month to month would not be this large, yet I am skeptical, as I don't see such a drop in other folks' accounts.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-chargeoff-ratio-2017-06-04.png&hash=9c2e43a0adc97c9058b724858fcb0891)

My late ratio chart shows not only my account, but also LC's broad based fund, and consumer credit delinquency reported by the St Lous Fed.  Reports from the fund and the fed take longer to get.  What you see is latest available.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FLC-late-ratio-2017-06-04.png&hash=673848dbc300af2c0740f3f438ede011)

So things look like they've stabilized, ie not getting worse at the moment. 
Title: Re: Worst Month Yet
Post by: jheizer on June 04, 2017, 08:30:28 PM
I have been really anxious for this month's statements to be released with so many people in the understanding your returns thread talking bout pulling out.  My numbers are still improving and my number of late and grace notes are still trending down.

(https://lh3.googleusercontent.com/-mSuGcHGsAwk/WTSlEws-tII/AAAAAAAAHQk/Zqh89F9K5VYqEfOrC8U17kFq0t6osT__ACHM/s0/soffice.bin_2017-06-04_19-25-54.png)
Title: Re: Worst Month Yet
Post by: Rob L on June 07, 2017, 06:28:39 PM
I have been really anxious for this month's statements to be released with so many people in the understanding your returns thread talking bout pulling out.  My numbers are still improving and my number of late and grace notes are still trending down.

Love the chart. Wish it were mine.
Delinquencies (not including grace) may be our best canary in the coal mine for the future.
Bet (at your convenience  :)  ) you could whip out a late / (late + current) chart pretty easily and we could see what you are seeing.
My delinquencies have been pretty flat since last November (and not particularly good). Certainly not dropping significantly.
Also, for all of us, it would be good to include the WAIR of our current and late notes as a comment on the charts to be able to identify low risk and high risk portfolios.
Obviously this isn't the LC WAIR that includes all notes from all times, just the current and late ones.
Title: Re: Worst Month Yet
Post by: jheizer on June 07, 2017, 08:05:49 PM
I'm about 80% $25 notes, rest $50 and $75
Just straight averages here as I only have a few minutes vs WAIR
Current: 13.99
Grace: 16.33
Late: 16.19

I don't have the dollar values for late available off hand, but I do have the counts.
(https://lh3.googleusercontent.com/-sgOja_H3eWA/WTiS9KC3f9I/AAAAAAAAHS4/_JDCtHrmZJ4L4KDT2eJX4SEVg2PEwMqUgCHM/s0/soffice.bin_2017-06-07_18-57-40.png)
(https://lh3.googleusercontent.com/-qoNfwEqcnvE/WTiTFq78HiI/AAAAAAAAHS8/NCQYaOpFDL4CLCIvnHsiPgQyVPeXEqJwQCHM/s0/soffice.bin_2017-06-07_18-58-14.png)

Slight uptick in Late 31 with a drop in grace to match as expected.

(https://lh3.googleusercontent.com/-lQ7uuRfVgHA/WTiUnumYVsI/AAAAAAAAHTI/44IVz3DY-2wTl03jQ5D8_2N3Ys88A1omQCHM/s0/soffice.bin_2017-06-07_19-04-46.png)
Title: Re: Worst Month Yet
Post by: Rob L on June 08, 2017, 11:24:55 AM
I'm about 80% $25 notes, rest $50 and $75
Just straight averages here as I only have a few minutes vs WAIR
Current: 13.99
Grace: 16.33
Late: 16.19

Very nice! Thanks for the info.
Title: Re: Worst Month Yet
Post by: Rob L on July 03, 2017, 06:17:45 PM
Déjà vu, another losing month.
However, I'm pleased the losses are extremely small and my outstanding principal is declining at about 9% per month.
What's the saying?? "All good things must come to an end" ...

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FsjrsDMX.png&hash=c5291ba3829917ab311100645139c7c8)


(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F3s8caUi.png&hash=4de191fd9027b05811bfead2f8199a03)
Title: Re: Worst Month Yet
Post by: Rob L on August 04, 2017, 06:59:05 PM
Things are not improving for me. Delinquencies heading towards a new high and another losing month.
Thought things might be getting better, but I was wrong.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2FfDLnaDI.png&hash=344086a54206f4b32737b1930a45abd8)

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F1kapPjO.png&hash=9e12b508148fc9d3b6dba17b2c136857)

Title: Re: Worst Month Yet
Post by: jheizer on August 04, 2017, 07:39:17 PM
Man. Stinks.  My month was still improving more.  My charge off as percent of interest is sub 35%. Though I did have a slight uptick in the 31 day + late count.
Title: Re: Worst Month Yet
Post by: Rob L on August 04, 2017, 08:18:43 PM
Man. Stinks.  My month was still improving more.  My charge off as percent of interest is sub 35%. Though I did have a slight uptick in the 31 day + late count.

Yeah, I thought maybe things were getting better for me, but alas... On the other hand, my losses in dollar terms are trivial and I'm really glad for that. Actually, I would take the status quo as is until my portfolio runs off if things don't get worse. Money is money, but my investment is almost down to profits made in the early years. I don't EVER subscribe to the "playing with house money" theory since every dollar is just as real as every other dollar. No one should do that! If I could walk away today with what I have I'd be a very happy camper. Meanwhile I've bought my last note and my fate out of my hands lest I resort to another round of Folio selling which I do not anticipate.
Title: Re: Worst Month Yet
Post by: michael49 on August 05, 2017, 08:51:08 AM
I stopped re-investing months ago in my main LC acct (except for the small amount in my IRA acct).  I'm not selling on folio, I'm just letting things naturally wind down  I haven't had a positive month in quite a while. Thankfully, I'm only losing a small amount each month, but still, its sad to see. :(
Title: Re: Worst Month Yet
Post by: dr.everett on August 05, 2017, 06:40:27 PM
Same here. Taxable account is halfway liquidated- When I get a bit more sold off, the focus will become the IRA account. I want to take what I've learned liquidating my Taxable account and apply it to the IRA so I can get it disposed of quickly and get the money back into a money making mode.
Title: Re: Worst Month Yet
Post by: Lovinglifestyle on August 05, 2017, 07:39:42 PM
This was my first ever negative month, after taxes and charge offs.  I brought it on myself by deliberately changing my standards for the Dec. 2016 portfolio.
Title: Re: Worst Month Yet
Post by: Rob L on September 04, 2017, 03:12:22 PM
Sadly no improvement and another losing month.

There have been some discussions in other threads about whether chargeoffs are simply getting back to their pre-crisis status and how bad could things get when the next recession comes along. Take a look at the "NET ANNUALIZED RETURN BY VINTAGE" interactive chart at: https://www.lendingclub.com/info/demand-and-credit-profile.action (https://www.lendingclub.com/info/demand-and-credit-profile.action). Current NAR performance for many grades and terms is at or below 2008 and/or 2009 levels. For example C grade, 36 month, 2015 vintage at 20 months on book are the lowest in history. The 2016 vintage curve for same is at the same level as the 2015 vintage curve at 8 MOB. There's some really interesting data here. Its reinforced my view that the current and seemingly persistent depressed NAR levels are the result of the combination of the lowering of interest rates and the expansion of chargeoffs. The expansion of chargeoffs is a result of both consumer behavior and lowered underwriting criteria. I'm not seeing any turnarounds and these problems won't fix themselves.

(https://i.imgur.com/A3ROL9D.png)

(https://i.imgur.com/ebXS3Nk.png)


Title: Re: Worst Month Yet
Post by: SeanMCA on October 03, 2017, 06:23:22 PM
Got my Sept statement. I still have a net loss YTD. Kind of sucks.
Title: Re: Worst Month Yet
Post by: Rob L on October 04, 2017, 03:51:23 PM
More of the same. Another losing month. Delinquencies near all time highs.
Better times are on the way though; LC said so.

(https://i.imgur.com/Cs6gKp5.png)

(https://i.imgur.com/oAk6Duq.png)
Title: Re: Worst Month Yet
Post by: au88 on October 07, 2017, 08:32:23 AM
Yep, I am negative for the year now.
Title: Re: Worst Month Yet
Post by: michael49 on October 14, 2017, 08:37:08 AM
I’m letting my taxable account slowly wind down naturally.  I continue to have negative months, but thankfully not losing much.

Question: how do I move money out of my IRA acct (thankfully only about 5k) without inciting a penalty?
Title: Re: Worst Month Yet
Post by: Rob L on October 14, 2017, 10:43:25 AM
If by "penalty" you mean IRS penalty then I think the safest way is as follows:

1) Log into your LC account and use "TRANSFER" and "WITHDRAW FUNDS" to move cash from your LC IRA account to your LC IRA custodian account (typically SDIRA).

2) If you do not already have it, open the same type of IRA account (Traditional, Roth, etc.) where you want the LC money to be moved. That institution will have a form for you to use to request a direct "trustee-to-trustee transfer" of assets from SDIRA to them. This is NOT a rollover (see https://www.irs.gov/retirement-plans/ira-one-rollover-per-year-rule) (https://www.irs.gov/retirement-plans/ira-one-rollover-per-year-rule)).

3) Fill out their form and return it to them signed and possibly notarized.

4) Upon receipt they will sign it as the receiving custodial trustee and then mail it to SDIRA requesting the transfer of cash to them.

5) When SDIRA receives the form they will send them your money as a "trustee-to-trustee" direct transfer".

All of this will take quite a while. You should first contact the institution to where you want your money moved and verify the correct procedure; it's been a while and I may have it wrong.

I believe SDIRA charges $100 for each transfer (partial account termination) $250 to close an account (see https://quikforms.com/viewform/zpWO-bdqRaBQN) (https://quikforms.com/viewform/zpWO-bdqRaBQN)). LC only pays your $100 annual SDIRA account fee if your LC balance is above a certain amount (I forget how much). You should keep this in mind when timing your exit and possibly use Folio to sell notes at the end to avoid paying an annual SDIRA fee yourself. I've never seen a post by anyone who has completely closed out their LC and SDIRA accounts. Once all the notes are fully paid or charged off there's still the possibility some small amount will accrue to an LC account due to recoveries. Wonder how this works after the accounts are closed?
Title: Re: Worst Month Yet
Post by: thezfunk on October 14, 2017, 11:44:02 AM
Well, I am about to find out as I am currently dumping my notes on Folio.  I have about $1K left.  Someone has been getting good deals on mature notes.

Sent from my XT1650 using Tapatalk

Title: Re: Worst Month Yet
Post by: lascott on October 14, 2017, 01:56:15 PM
...
I believe SDIRA charges $100 for each transfer (partial account termination) $250 to close an account (see https://quikforms.com/viewform/zpWO-bdqRaBQN) (https://quikforms.com/viewform/zpWO-bdqRaBQN)). LC only pays your $100 annual SDIRA account fee if your LC balance is above a certain amount (I forget how much). You should keep this in mind when timing your exit and possibly use Folio to sell notes at the end to avoid paying an annual SDIRA fee yourself. I've never seen a post by anyone who has completely closed out their LC and SDIRA accounts. Once all the notes are fully paid or charged off there's still the possibility some small amount will accrue to an LC account due to recoveries. Wonder how this works after the accounts are closed?
I think the amount is $10K to avoid the $100 fee. My kid has a ROTH IRA with less than that which he was going to push over $10K to avoid it.  Now we are looking to close that account down and you make a good point on the recoveries!
Title: Re: Worst Month Yet
Post by: HalfABubbleOff on October 14, 2017, 02:44:57 PM
Yep, I am negative for the year now.
Ouch!
I'm not there yet, but it wouldn't take much.  YTD for me only $0.28 of every interest dollar of mine is making it to the total line after charge offs, and if I have one more month like August I will around $0.00 of every interest dollar. 
Title: Re: Worst Month Yet
Post by: Rob L on October 14, 2017, 05:33:34 PM
...
I believe SDIRA charges $100 for each transfer (partial account termination) $250 to close an account (see https://quikforms.com/viewform/zpWO-bdqRaBQN) (https://quikforms.com/viewform/zpWO-bdqRaBQN)). LC only pays your $100 annual SDIRA account fee if your LC balance is above a certain amount (I forget how much). You should keep this in mind when timing your exit and possibly use Folio to sell notes at the end to avoid paying an annual SDIRA fee yourself. I've never seen a post by anyone who has completely closed out their LC and SDIRA accounts. Once all the notes are fully paid or charged off there's still the possibility some small amount will accrue to an LC account due to recoveries. Wonder how this works after the accounts are closed?
I think the amount is $10K to avoid the $100 fee. My kid has a ROTH IRA with less than that which he was going to push over $10K to avoid it.  Now we are looking to close that account down and you make a good point on the recoveries!
If $10k is the limit and your account is $5k then the $100 annual fee is 2% of your investment. When under the limit the best strategy has to be to completely liquidate using Folio and then close the account before incurring another annual fee. Doesn't have to be in a big rush depending on time remaining until next annual fee charge, but ultimately that's the deadline. 
Title: Re: Worst Month Yet
Post by: lascott on October 15, 2017, 01:27:39 AM
...
I believe SDIRA charges $100 for each transfer (partial account termination) $250 to close an account (see https://quikforms.com/viewform/zpWO-bdqRaBQN) (https://quikforms.com/viewform/zpWO-bdqRaBQN)). LC only pays your $100 annual SDIRA account fee if your LC balance is above a certain amount (I forget how much). You should keep this in mind when timing your exit and possibly use Folio to sell notes at the end to avoid paying an annual SDIRA fee yourself. I've never seen a post by anyone who has completely closed out their LC and SDIRA accounts. Once all the notes are fully paid or charged off there's still the possibility some small amount will accrue to an LC account due to recoveries. Wonder how this works after the accounts are closed?
I think the amount is $10K to avoid the $100 fee. My kid has a ROTH IRA with less than that which he was going to push over $10K to avoid it.  Now we are looking to close that account down and you make a good point on the recoveries!
If $10k is the limit and your account is $5k then the $100 annual fee is 2% of your investment. When under the limit the best strategy has to be to completely liquidate using Folio and then close the account before incurring another annual fee. Doesn't have to be in a big rush depending on time remaining until next annual fee charge, but ultimately that's the deadline.
Indeed, I understood it was a lot and in this example I was paying that fee for them to help pave their way to retirement. Just realized that there are better and simpler choices than LC now.
In our case it looks like the fee does not reoccur until the end of July.  Here is what the 'Transaction' looks like on the Strata (formerly SDIRA) site:

https://innovue21.innovestsystems.com/r4.1prod/sdi/Portfolio/Transactions
Code: [Select]
Date Transaction# Transaction Code Amount Security Additional Information Tax Code
7/28/2017 21720902539 Fee Invoice Generated Fee Invoice Generated Amount:($100.00) Annual Fee - Basic IRA
Title: Re: Worst Month Yet
Post by: AnilG on October 15, 2017, 02:35:04 AM
Has anyone looked into the possibility of selling notes in IRA and buying same notes in Taxable account as IRA liquidation strategy? I don't know the IRS/tax consequences of such strategy and not a tax expert but can't imagine anything being wrong with an exchange at fair market value. Sell your Current notes at par value from IRA and then buying same notes in taxable account might speed up the IRA liquidation. Sell delinquent notes at maximum discount listed on Folio for same loan or at LC claimed loss rates might be a fair value exchange between IRA and Taxable account.
 
Indeed, I understood it was a lot and in this example I was paying that fee for them to help pave their way to retirement. Just realized that there are better and simpler choices than LC now.
In our case it looks like the fee does not reoccur until the end of July.  Here is what the 'Transaction' looks like on the Strata (formerly SDIRA) site:

https://innovue21.innovestsystems.com/r4.1prod/sdi/Portfolio/Transactions
Code: [Select]
Date Transaction# Transaction Code Amount Security Additional Information Tax Code
7/28/2017 21720902535 Fee Invoice Generated Fee Invoice Generated Amount:($100.00) Annual Fee - Basic IRA
Title: Re: Worst Month Yet
Post by: PennySaved on October 15, 2017, 02:13:47 PM
Interesting idea.  I have been liquidating both my regular and Roth IRA LendingClub accounts for a little over a year now.  I am now down to about $8,000 in the Roth IRA account.

I know there was a long thread some time ago about selling and buying between the regular and Roth IRA accounts.  I think the conclusion was it was not a good idea and  probably violated the self-dealing restrictions on IRAs.  But I remember that discussion being about theoretically selling regular LC notes at a loss in the regular account and taking the losses off your taxes.  One's LC IRA would buy them at the discount price and reap the profit (with no taxes if a Roth IRA) in the higher true value.  Which is not what you are suggesting, of course.

The other thing that bothers me about the IRA account is that I have some recovery money coming in from old chargeoffs.  Someone else said you can still close the IRA account to get out of paying fees, but you have to agree to forfeit future recoveries from charged off IRA Notes.  Probably not worth it to pay a $100 annual fee plus $50 fee if one wants to transfer the money to my Vanguard IRA.  My net recovery amount for Sept 2017 was about $10.
Title: Re: Worst Month Yet
Post by: PennySaved on October 15, 2017, 02:33:13 PM
Here are a couple of threads about selling notes between regular and IRA accounts:

http://forum.lendacademy.com/?topic=506

http://forum.lendacademy.com/?topic=883

This thread below was about someone selling from IRA to regular account, selling at inflated price in order to get more money into the IRA than the annual contribution limit (so not relevant to our liquidation discussion here, but interesting otherwise).

http://forum.lendacademy.com/?topic=1130
Title: Re: Worst Month Yet
Post by: Rob L on October 16, 2017, 09:30:18 AM
Probably not worth it to pay a $100 annual fee plus $50 fee if one wants to transfer the money to my Vanguard IRA.  My net recovery amount for Sept 2017 was about $10.
Vanguard charges $50 to transfer money into your IRA account?
I'm surprised. Don't think Fidelity charges any fees to transfer money in or out of an IRA (except if you select transfer by wire). At least I don't remember paying any.
Title: Re: Worst Month Yet
Post by: kib on October 16, 2017, 10:49:51 AM
After being on mental auto pilot for a while I took a look at my own returns and had a small stroke.  I'm sure this has been addressed, but is anyone else flaming mad over LC going public, basically creating a legal mandate for increasing their own profit that trumps profit or even any protection for the people actually taking the risk (us)?  In a nutshell, now they Have to prioritize their own profit by law, and whether they get it from the lenders or the borrowers is irrelevant.  As we can see. 

Basically, stockholders are betting on *US* to go on providing a good return for LC regardless of what the borrowers are doing, as opposed to the earning model in which the borrowers are the ones generating income for the company. We've gone from paying fees to cover the cost of the middleman to "promising" a return for investors who have nothing to do with the social process of P2P lending.  We are providing great stability for lending club's stockholders, at our own cost.  Our profit is at risk from deadbeat borrowers as has always been the case and is the risk we signed up for, but now it also gets tugged at from the other side, from the middleman twiddling with lending standards and - I think - quicker charge-offs, that leave us holding the bag.  As far as I know, we never got the option of opting out when LC decided to exchange our support for borrowers to support for profiteers, other than the arduous and sometimes expensive process of liquidating our loans one by one.  Basically, we got put in chains as far as being beholden to stockholders.

I predicted this decline in anything good for us when LC first went public, and I think the current swamp is at least in good part that chicken coming home to roost.   Good grief and, I think, good riddance already. Arduous and expensive is probably still better than being a patsy.
Title: Re: Worst Month Yet
Post by: apc3161 on October 16, 2017, 01:50:42 PM
They definitely lowered standards and lowered rates after going public to try and increase revenue, but LC has been hurting as well (just look at their profits, stock price, etc.). I think the big difference is just the increased competition in the field. Before it was just LC and prosper. Now Goldman Sachs, American Express, Discover financial, Sofi, Earnest, Bestegg, etc. are all in the same field. There is just so much competition. As a result, both LC stockholders and LC investors are hurting. The only people who are benefiting from all of this are borrowers (especially the ones who just take their $40,000 and run away, lol).
Title: Re: Worst Month Yet
Post by: Rob L on October 16, 2017, 05:19:25 PM
They definitely lowered standards and lowered rates after going public to try and increase revenue, but LC has been hurting as well (just look at their profits, stock price, etc.). I think the big difference is just the increased competition in the field. Before it was just LC and prosper. Now Goldman Sachs, American Express, Discover financial, Sofi, Earnest, Bestegg, etc. are all in the same field. There is just so much competition. As a result, both LC stockholders and LC investors are hurting. The only people who are benefiting from all of this are lenders (especially the ones who just take their $40,000 and run away, lol).

Pretty sure you meant borrowers rather than lenders above (bold).
However, I'm a lender and am running away as fast as I reasonably can.  :)

Meanwhile I haven't seen ANY posts by individual investors that are bullish on (or happy with) LC notes. Some say the time to buy is when everyone else is selling, so now is the time, but that's about it. There's gotta be a statistical outlier out there that's actually very happy with their LC returns. Care to chime in??
Title: Re: Worst Month Yet
Post by: PennySaved on October 16, 2017, 11:15:39 PM
Probably not worth it to pay a $100 annual fee plus $50 fee if one wants to transfer the money to my Vanguard IRA.  My net recovery amount for Sept 2017 was about $10.
Vanguard charges $50 to transfer money into your IRA account?
I'm surprised. Don't think Fidelity charges any fees to transfer money in or out of an IRA (except if you select transfer by wire). At least I don't remember paying any.
Vanguard did not charge me a fee.  It was SDIRA that charged me a $50 transaction fee to transfer cash from my SDIRA Roth IRA cash account to my Vanguard Roth IRA.  I think it is listed as the $50 per asset fee (for Roth conversion or recharacterization) listed on SDIRA's IRA fee schedule. 

Also, SDIRA is now STRATA Trust Company.  Website is now https://www.stratatrust.com

Also the account termination fee for the self-directed IRA is $250.  That is another hit I will have to take to close things out once all my IRA notes are paid back or sold.
Title: Re: Worst Month Yet
Post by: anabio on October 17, 2017, 09:09:31 AM
I'm sure this has been addressed, but is anyone else flaming mad over LC going public, basically creating a legal mandate for increasing their own profit that trumps profit or even any protection for the people actually taking the risk (us)?  In a nutshell, now they Have to prioritize their own profit by law, and whether they get it from the lenders or the borrowers is irrelevant.  As we can see. 

In the past I stated that I felt LC going public turned out to be a bad idea for precisely this reason. That was a BIG turnaround for me because I watched LC for a long time, waiting for it to go public before investing. I figured when it went public it would be more stable. Well....phooey on me...
Title: Re: Worst Month Yet
Post by: Rob L on October 17, 2017, 08:00:06 PM
Probably not worth it to pay a $100 annual fee plus $50 fee if one wants to transfer the money to my Vanguard IRA.  My net recovery amount for Sept 2017 was about $10.
Vanguard charges $50 to transfer money into your IRA account?
I'm surprised. Don't think Fidelity charges any fees to transfer money in or out of an IRA (except if you select transfer by wire). At least I don't remember paying any.
Vanguard did not charge me a fee.  It was SDIRA that charged me a $50 transaction fee to transfer cash from my SDIRA Roth IRA cash account to my Vanguard Roth IRA.  I think it is listed as the $50 per asset fee (for Roth conversion or recharacterization) listed on SDIRA's IRA fee schedule. 

Also, SDIRA is now STRATA Trust Company.  Website is now https://www.stratatrust.com

Also the account termination fee for the self-directed IRA is $250.  That is another hit I will have to take to close things out once all my IRA notes are paid back or sold.xesxes

A few months ago SDIRA charged me $100 to transfer cash to Fidelity as a "partial termination" fee I guess. My current plan is to have enough in LC for them to pay the annual fee, then over the following year sell everything and close out for $250 before the next $100 annual fee comes due. I'm resigned to the fact that the $250 termination fee is like death and taxes (unavoidable).
Title: Re: Worst Month Yet
Post by: Rob L on November 04, 2017, 09:55:57 AM
So much for my tongue in cheek "better times ahead" comment last month. Need I even say it; another losing month.
Delinquencies have now risen to an all time high. I'm gonna need a bigger boat (well, bigger y-axis maximum value).
I've added a third graph tracking monthly profitability as an annualized percentage of principal invested and fondly look back on the likely-never-to-be seen-again good old days.

(https://i.imgur.com/JpzuIiW.png)

(https://i.imgur.com/g8PjxGL.png)

(https://i.imgur.com/eDEIbDm.png)
Title: Re: Worst Month Yet
Post by: dr.everett on November 04, 2017, 11:44:10 AM
Your last graph says it all. I too miss the 14% days. People ask why we're leaving- show them that.  :'(
I see charts like that and I'm thankful I'm almost fully liquidated. It's taken way longer than I expected to do, but seeing the losses piling up for others as well, confirms I'm dong the right thing for me.
Title: Re: Worst Month Yet
Post by: jheizer on November 04, 2017, 12:36:22 PM
-$0.86 this month. First negative one in a few.
Title: Re: Worst Month Yet
Post by: anabio on November 05, 2017, 06:55:42 AM
It looks like I finally turned the corner with notes going IGP...its about time :-\. Only have 1 note in grace right now (out of 533 current). In January I had around 6-7 in grace at any given time. Previous months I mostly had double digit graces at any given time.

Well...if that don't beat all... I mentioned I only  had one note in IGP and what happens??? 5 trade days later...whomp!...I now have 12. Would have been 13 but the one I had IGP on the 16th went 16-30 days late.
"If it weren't for bad luck I'd have no luck at all ..."

Talk about no luck at all...well...I keep waiting and that corner just keeps sitting there in the far distant mist.

I now have only 44 loans left. 7 of those 44 are IGP and 3 of those IGP have only ONE payment left. I guess the saving grace is that most of those IGP don't have much left in principal for me to lose if they are charged off.

I doubt I'll see 0 IGP even in February when I will only have  6 loans left (all 60 months)...right now 1 of those 60 month loans is IGP and another one took a huge FICO hit and I figure it will go IGP on its next payment.
Title: Re: Worst Month Yet
Post by: Rob L on November 05, 2017, 09:15:18 AM
It looks like I finally turned the corner with notes going IGP...its about time :-\. Only have 1 note in grace right now (out of 533 current). In January I had around 6-7 in grace at any given time. Previous months I mostly had double digit graces at any given time.

Well...if that don't beat all... I mentioned I only  had one note in IGP and what happens??? 5 trade days later...whomp!...I now have 12. Would have been 13 but the one I had IGP on the 16th went 16-30 days late.
"If it weren't for bad luck I'd have no luck at all ..."

Talk about no luck at all...well...I keep waiting and that corner just keeps sitting there in the far distant mist.

I now have only 44 loans left. 7 of those 44 are IGP and 3 of those IGP have only ONE payment left. I guess the saving grace is that most of those IGP don't have much left in principal for me to lose if they are charged off.

I doubt I'll see 0 IGP even in February when I will only have  6 loans left (all 60 months)...right now 1 of those 60 month loans is IGP and another one took a huge FICO hit and I figure it will go IGP on its next payment.

What a messed up deal! Don't walk under any ladders, break any mirrors, etc.
Title: Re: Worst Month Yet
Post by: SeanMCA on November 05, 2017, 03:14:38 PM
I had a negative month too. Will definitely finish negative for the entire year.
Title: Re: Worst Month Yet
Post by: mschoenf on November 05, 2017, 11:45:00 PM
The most painful thing is paying taxes on an investment where you lose money for the year which will be my case.  It will take me years to use up all the capital losses.  That was my big mistake in pursuing this investment, not realizing that mismatch.  Your net return might be 3%, but you're paying taxes as if you earned 20% if you invested in low-grade loans while an investment in higher grade loans might net out very similarly but without that huge capital loss you can't use for years.
Title: Re: Worst Month Yet
Post by: lascott on November 06, 2017, 11:08:42 AM
The most painful thing is paying taxes on an investment where you lose money for the year which will be my case.  It will take me years to use up all the capital losses.  That was my big mistake in pursuing this investment, not realizing that mismatch.  Your net return might be 3%, but you're paying taxes as if you earned 20% if you invested in low-grade loans while an investment in higher grade loans might net out very similarly but without that huge capital loss you can't use for years.
Indeed. I'm sure some have been able to sell other investments as a gain to help offset but that is not my scenerio.
Quote
In the below if the blue vertical bars are below the 100% I made a modest profit.

ROTH IRA
(https://i.imgur.com/ztNtEIg.jpg)

Taxable account
(https://i.imgur.com/qyGFMTu.jpg)
Title: Re: Worst Month Yet
Post by: nonattender on November 06, 2017, 03:04:09 PM
The most painful thing is paying taxes on an investment where you lose money for the year which will be my case.  It will take me years to use up all the capital losses.  That was my big mistake in pursuing this investment, not realizing that mismatch.  Your net return might be 3%, but you're paying taxes as if you earned 20% if you invested in low-grade loans while an investment in higher grade loans might net out very similarly but without that huge capital loss you can't use for years.

Yeah.  Not tax-efficient.  If the platforms had tasked the lobbyists onto that "small" fix during the JOBS Act days, under Obama, or onto the Tax Cuts and Jobs Act under Trump --- instead of all wanting to go huge and carve out a responsibility-free bank charter --- it'd be YUGE. :)
Title: Re: Worst Month Yet
Post by: sensij on November 06, 2017, 04:31:15 PM
I'm trying to put these thread updates into context.  We know there is a *account* performance curve that bottoms out at around 15 mo, based on the weighted average age of the holdings within the account.  We know that an account with continuous re-investment of note payments (and little contribution of new funds) should eventually stabilize at a weighted age of around 15 mo, if heavily skewed towards 36 mo notes.  The curves that LC presents are not weighted by account *size*, however...  one hypothesis is that the performance distribution of accounts with a weighted age out 20-30 months are getting lifted by accounts skewed towards 60 mo notes that are still in re-investment, while masking the lower returns of smaller accounts that are winding down.

Since re-investment has been stopped, it seems like this thread is essentially presenting the play-by-play that feeds "performance by vintage" charts like what @Fred93 had posted in a few threads, for example: https://forum.lendacademy.com/index.php/topic,4113.msg40832.html#msg40832 (https://forum.lendacademy.com/index.php/topic,4113.msg40832.html#msg40832).

Has anyone with a more agile feel for these numbers gotten a sense of whether these results are basically consistent with what we'd expect for an account that is winding down (perhaps adjusted for the now-known poor quality of the last vintage purchased in this account)?  It may not drive my decision-making, but I'd like to refine my expectations of what the eventual wind-down period will look like, and how long the account needs to exist in the re-investment state to cover the wind down costs and still meet my goals.

Title: Re: Worst Month Yet
Post by: jd on November 06, 2017, 08:28:44 PM
Is anyone doing good?  I can't believe that every single investor is down.
Title: Re: Worst Month Yet
Post by: Rob L on November 07, 2017, 09:50:38 AM
Is anyone doing good?  I can't believe that every single investor is down.

It's not much but FWIW see:
https://forum.lendacademy.com/index.php/topic,4634.msg42228.html#msg42228 (https://forum.lendacademy.com/index.php/topic,4634.msg42228.html#msg42228)

However, these notes are quite young and, ever the LC optimist, I expect sub 4% annualized yield over the full life.
I'm thinking anything north of 3.5% annualized would be a decent outcome. Really setting the bar low. Just have to wait and see.
Guess the answer to your question lies in your definition of "good".
Title: Re: Worst Month Yet
Post by: jd on November 07, 2017, 10:36:28 AM
Quote
However, these notes are quite young and, ever the LC optimist, I expect sub 4% annualized yield over the full life.
I'm thinking anything north of 3.5% annualized would be a decent outcome. Really setting the bar low. Just have to wait and see.
Guess the answer to your question lies in your definition of "good".

True that.

I'm very new to game so I luckily missed the 2016 blood bath that you guys all unfortunately had to deal with. Be interesting to see how things work out for me going forward. At some point I'll put up my numbers for comparison but my account is very young. 

For now I'm doing great.  Two months, 100 notes, everyone has paid. We will see how that holds up.

Title: Re: Worst Month Yet
Post by: jheizer on November 07, 2017, 10:49:44 AM
I'm in the down but not out category.  I'll still make money this year, just not nearly as much as last year.  Sticking it out through next year to see how things go.

Interestingly I was talking about this with a friend earlier and I found an "Understanding your returns" chart I had screenshoted almost exactly a year ago.  Only a slight diference...  https://www.youtube.com/watch?v=XfQUr8yXu04&feature=youtu.be

Edit: I must have had different options selected, but the different colors makes it easier to see so left it that way.  Same idea.
Title: Re: Worst Month Yet
Post by: Rob L on November 07, 2017, 11:49:55 AM
Very neat video!
Here's an old screenshot of mine from 2 1/2 years ago, 4-20-2015 (i.e. the good old days).
Definitely more than a slight difference.
Interesting that by this time I had already purchased about 2/3 of the total number of notes ever owned (6,136 of 9,715).

(https://i.imgur.com/VVn6Mml.png?1)











Title: Re: Worst Month Yet
Post by: Rob L on December 05, 2017, 06:34:02 PM
This is the second anniversary of the LC "Worst Month Yet" thread. We need a birthday cake emoji.
They say time flies when you're having a good time, so it seems just like yesterday.  ::)
The thread pre-dated the LC scandal of May 2016 by 6 months so maybe it served as a canary in the coal mine for trouble ahead.
Little did I know how bad things would get. See the arrows on the charts indicating the start date of this thread.

The scandal probably saved me a lot of money on my investments in notes. I bought no notes between 5/21/2016 and 9/9/2016.
During that time I sold about half my notes on FolioFn and reduced my exposure to LC by half. My sales were quite profitable.
I count my blessings I didn't let it ride, though there were opinions shared here that those of us leaving at that time were panicking.
I think bugging out is why my losses now are very modest. They gotta be half what they would have been.
My biggest mistake was to begin reinvesting once again in D&E notes from 9/9 2016 until 1/24/17. DUH?? Why did I do that??
I invested in B only notes from 1/24/2017 and bought my last LC note on 2/27/2017.
As an parting gift this is now clearly the worst month yet (as a percent of principal invested thank goodness).
Now my principal invested is about equal to my profits over the years, and is maybe 20% of principal invested at the peak.
I could come back to LC as an investor but it would take a very big dose of Missouri (the "show-me" state) for that to happen.


(https://i.imgur.com/ztBvgAY.png)

(https://i.imgur.com/EL0FMEL.png)

(https://i.imgur.com/we1EdDg.png)






Title: Re: Worst Month Yet
Post by: rawraw on December 06, 2017, 07:20:22 PM
So far I've made money this year, but barely!  The account I manage that is mostly A/B has had a ~6% return this year.  Amazing what a few EFGs will do to a boy's returns :)
Title: Re: Worst Month Yet
Post by: Rob L on December 07, 2017, 09:58:40 AM
So far I've made money this year, but barely!  The account I manage that is mostly A/B has had a ~6% return this year.  Amazing what a few EFGs will do to a boy's returns :)

Even more amazing what a whole fist full of them will do.
However I don't own and F & G's; learned my lesson years ago on F's and never bought G's.
So, just a fist full of D's and E's do the trick.  :)
Title: Re: Worst Month Yet
Post by: lascott on January 06, 2018, 01:53:40 PM
I'm still drawing down.  Taxable account is the earlier account and that may be one reason it has fared better. They were both pretty conservative but I *thought* my ROTH was even more conservative.

(https://i.imgur.com/rMgMhJn.jpg)

(https://i.imgur.com/zgLvnb8.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on January 07, 2018, 02:47:01 PM
Back to another average down month. Total losses for the year were $986.56 and much less than they could have been.
Only good news was that I was able to move another $10k back over to SDIRA.

(https://i.imgur.com/2L8DhFp.png)

(https://i.imgur.com/L0jShpR.png)

(https://i.imgur.com/POHPXBB.png)
Title: Re: Worst Month Yet
Post by: SeanMCA on January 07, 2018, 06:14:18 PM
I finished with a negative return for the year on Both Lending Club and Prosper. Just terrible.
Title: Re: Worst Month Yet
Post by: jheizer on January 07, 2018, 06:25:02 PM
I finished the year positive a grand but my guess is after you account for the tax treatment and the payment fees I'm probably flat.
Title: Re: Worst Month Yet
Post by: au88 on January 13, 2018, 09:20:33 AM
Yea don't forget that only 3k of your losses actually count as losses. If you're like me and earned 30k in interest but lost 33k to defaults then you'll be paying taxes on 27k of phantom earnings. Ridiculous.
Title: Re: Worst Month Yet
Post by: .Ryan. on January 13, 2018, 12:47:10 PM
Yea don't forget that only 3k of your losses actually count as losses. If you're like me and earned 30k in interest but lost 33k to defaults then you'll be paying taxes on 27k of phantom earnings. Ridiculous.

au88, is this accurate? I believe the 3k limit you are referring to is actually 3k of losses that can be deducted beyond all gains.

In your example above, the first 30k of gains/losses offset, and the next 3k of losses are deductible against ordinary income. Any losses beyond that 3k would need to be carried forward.
Title: Re: Worst Month Yet
Post by: storm on January 14, 2018, 03:45:02 AM
au88, is this accurate? I believe the 3k limit you are referring to is actually 3k of losses that can be deducted beyond all gains.

In your example above, the first 30k of gains/losses offset, and the next 3k of losses are deductible against ordinary income. Any losses beyond that 3k would need to be carried forward.

Interest from LC is counted like regular income, not capital gains.  You can offset your capital losses only with capital gains.  For example, if au88 made a killing in the stock market this past year and had $5k in gains, he could reduce the amount of carried losses to $25k ($5k + $3k).
Title: Re: Worst Month Yet
Post by: lendingprosper23 on January 15, 2018, 07:52:50 PM
Invested in LC and Prosper since early 2016... decided to take 1/20th of what I invested in p2p lending and put it in crypto in september. I have now made literally 100x the net profit in 3 months than I have in 2 years in p2p lending.

and its impossible to sell down the portfolio in any reasonable time frame.

im out.
Title: Re: Worst Month Yet
Post by: thezfunk on January 15, 2018, 09:11:34 PM
Down to my last few notes.  When I get those gone, I won't be back.
Title: Re: Worst Month Yet
Post by: Rob L on January 16, 2018, 10:13:20 AM
Down to my last few notes.  When I get those gone, I won't be back.

Lucky you!  :)
Title: Re: Worst Month Yet
Post by: SeanMCA on January 17, 2018, 10:52:06 PM
Down to my last few notes.  When I get those gone, I won't be back.

Good luck on whatever journey you go on next.
Title: Re: Worst Month Yet
Post by: michael49 on January 21, 2018, 07:50:47 AM
I continue to let my primary LC account wind down.  I’ve lost money this year, but overall I’m still in the black since I started investing.

I’ve only got about 5k in my IRA account (luckily I only invested 1 year in the IRA).  This account I will continue to reinvest and see what happens, more out of curiosity than anything else.
Title: Re: Worst Month Yet
Post by: Rob L on February 03, 2018, 05:51:40 PM
New month; new year; same old same old.
For the record I entered 2017 with $84.7k outstanding principal in notes owned and closed out the year with $34.0k (no Folio selling).
Lending Club is currently advertising "Solid Returns: 4 - 6%". I lost ($986.56) this year (and haven't had any of those "disowned" F and G loans for years).
Since May 2016 I've lost about 10% of the profits made before that time and the losses continue as you see.
I can only count my blessings that I started in 2013 and accumulated very significant profits before the party ended. Others were not so lucky.
Maybe the later vintages are better; I wouldn't know. I don't own any.

(https://i.imgur.com/VbmAC2N.png)

(https://i.imgur.com/EsmJBSq.png)

(https://i.imgur.com/FZRqCjK.png)

Title: Re: Worst Month Yet
Post by: au88 on February 13, 2018, 10:01:39 PM
I'm right there with you. Lost $819 on ~100k invested last month.
Title: Re: Worst Month Yet
Post by: Rob L on February 14, 2018, 08:27:39 AM
I'm right there with you. Lost $819 on ~100k invested last month.

Wow! That's terrible!
What does your portfolio look like that produced that result?
Title: Re: Worst Month Yet
Post by: lascott on March 04, 2018, 03:37:37 PM
Is anyone factoring recovery amounts (recover-recovery_fees) into their 'profits' --- it may make you feel better :)

I'm just taking the two recover related values from the monthly statements (2nd page).

See my highlighted column data for my example.  I'm not getting rich by any stretch of the imagination.

Below is my taxable account that I am pulling money out of weekly.  My ROTH IRA is doing similar (yes, I have one less column in that sheet :) )

(https://i.imgur.com/03s1MLM.jpg)

(https://i.imgur.com/DZVaywh.jpg).(https://i.imgur.com/d4xfOPH.jpg).(https://i.imgur.com/qM65JWC.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on March 04, 2018, 05:32:30 PM
Yep, I've been including recoveries in my monthly profit / loss charts all along.
Recoveries are significant. For example my interest this month was $394.13 and recoveries were $146.19.
Think of it; my charged off loan recoveries were 37% of my total interest this month! Wow! Pretty unbelievable.
It's a sad commentary on the health of my loan portfolio as my charge offs were -($750.40), but I'll take what I can get.
Puts my loss this month at approximately $750 - $410 = $340 on $30k invested (about -13.6% annualized loss).
Title: Re: Worst Month Yet
Post by: Rob L on March 05, 2018, 09:07:04 AM
I'm right there with you. Lost $819 on ~100k invested last month.

Wow! That's terrible!
What does your portfolio look like that produced that result?

Actually my annualized percentage loss this month was worse.
I lost $340 on $30k invested equaling about -13.6% annualized loss.
You lost $819 on $100k equaling about -9.83% annualized loss.
I'll still go with: "Wow! That's terrible!" for both of us. Think I'd take lascott's portfolio above.
Title: Re: Worst Month Yet
Post by: jheizer on March 05, 2018, 09:12:33 AM
To be fair though, wouldn't it be safe to say you sold off all the best loans and are basically left with what didn't sell?  Kind of skews the results.

I've been slowly backing down my amount and not reinvesting for a bit just to lower the account and on the 30k I have in there now with a 22 month average age still pulling a profit most months.
Title: Re: Worst Month Yet
Post by: lascott on March 05, 2018, 09:30:34 AM
Graph of my taxable account recoveries-recover fees since I started. Curious that 02-2018 is the first February that I received recoveries. Note that on my taxable account that 2016 & 2017 I did not.

Taxable account
(https://i.imgur.com/5oNCjZ0.jpg)

ROTH IRA account
(https://i.imgur.com/PNTaeR6.jpg)

To be fair though, wouldn't it be safe to say you sold off all the best loans and are basically left with what didn't sell?  Kind of skews the results.
I was thinking the exact same thing/comment.
Title: Re: Worst Month Yet
Post by: Rob L on March 05, 2018, 05:15:55 PM
To be fair though, wouldn't it be safe to say you sold off all the best loans and are basically left with what didn't sell?  Kind of skews the results.

I've been slowly backing down my amount and not reinvesting for a bit just to lower the account and on the 30k I have in there now with a 22 month average age still pulling a profit most months.

Yes, that's true. However, I didn't buy any notes from about 5/15/2016 - 9/15/2016. A rather bad vintage era. That should skew things for the better.
But! I really stepped in it when I resumed buying D & E notes around 9/15/2016 through 2/15/2017. Those chickens are coming home to roost and I didn't sell any.
From around 2/15/2017 until 4/15/2017 I bought only B notes and they are probably giving my portfolio a bit of help here.
So, it's a bit of a mixed bag.

As a point of reference my nephew opened a LC account and I bought 544 D & E notes for him from 4/15/2016 through 5/13/2016.
A brief snapshot in time. No notes have been sold. His ANAR is 2.76%, WAIR is 19.34% and Weighted Age 22.5 months.
He was way too young to mess with this LC stuff. He should have put it into the market and forgotten about it. And, I should have told him so!

Title: Re: Worst Month Yet
Post by: Rob L on March 05, 2018, 05:22:08 PM
Graph of my taxable account recoveries-recover fees since I started. Curious that 02-2018 is the first February that I received recoveries. Note that on my taxable account that 2016 & 2017 I did not.

Curious indeed! I did not get any recoveries in February of 2016 or 2017 either.
I did in 2015, but not in 2014.
Title: Re: Worst Month Yet
Post by: Rob L on March 05, 2018, 06:36:19 PM
Box score for the month of February 2018. A little optimism in the delinquency chart!
But; largest charge offs as a percent of interest and largest loss as a percentage of principal invested yet.
So, I'm quietly optimistic this is the low water point (unless the real economy tanks). Thinking good thoughts.
Is it always darkest before the dawn; or before the lights go out completely?

PS: The annualized monthly profit/loss as a percent of principal invested chart is based on the month end principal invested.
That's unduly pessimistic. Obviously it's a bit better than that. I should have used the mean invested for the month.
Outstanding principal $30.5k invested at start of month and about $27.2k invested at end of month.
For the sake of consistency I won't change it now, but as the numbers get smaller the effect will get bigger.

(https://i.imgur.com/0UKaWaK.png)

 :)                                                                                                                                                                                  :)
(https://i.imgur.com/KMzzi2F.png)

(https://i.imgur.com/4axz5O0.png)
Title: Re: Worst Month Yet
Post by: Rob L on April 04, 2018, 07:06:48 PM
March 2018; a randomly good month? A PROFIT of $37.30 on $23,854 principal invested.
First non-losing month in memory. Yea!!  :)
Unfortunately delinquencies did not continue downtrend. Just flat. More stormy weather ahead?
For reference I've given back maybe 10% of my early profits over the past 18 months on the way out the door; but those early profits were awesome!
Some very good luck I invested heavily in mid 2013 in high yield notes. IMHO those days are gone forever.
The LC thinking now seems to be for investors to be happy with 3% to 4% returns and not risk adjusted.

(https://i.imgur.com/UEud94s.png)

(https://i.imgur.com/T2aTedq.png)

(https://i.imgur.com/6x9iSel.png)

(https://i.imgur.com/Dqo6AZO.png)
Title: Re: Worst Month Yet
Post by: SLCPaladin on April 07, 2018, 11:02:21 PM
As always Rob, thanks for sharing. Our experiences and portfolio sizes are roughly similar. You are about $10k ahead of me in your portfolio wind-down.
Title: Re: Worst Month Yet
Post by: Rob L on April 08, 2018, 10:08:58 AM
As always Rob, thanks for sharing. Our experiences and portfolio sizes are roughly similar. You are about $10k ahead of me in your portfolio wind-down.

Glad you find it interesting and somewhat helpful. Think there are a lot of "wind downers" out there.
Title: Re: Worst Month Yet
Post by: jheizer on April 08, 2018, 10:26:07 AM
YTD I'm at 2/3 of interest has been lost to default. So doing or ish so far.  Every month has been profitable.  I am still in cut my account value in half, but still plan to stay after that at least as of now.
Title: Re: Worst Month Yet
Post by: Rob L on April 08, 2018, 01:49:58 PM
YTD I'm at 2/3 of interest has been lost to default. So doing or ish so far.  Every month has been profitable.  I am still in cut my account value in half, but still plan to stay after that at least as of now.

Having substantial B's and C's is probably providing the counterweight to your D's and E's and are helping you stay profitable.
Are you now or do you plan to skew your reinvestments to the less risky notes and mostly forgo the D's and E's in the future?
Like where do you see your A,B,C,D,E,FG allocation a year from now?
Title: Re: Worst Month Yet
Post by: jheizer on April 08, 2018, 02:05:38 PM
Before I had decided to down size I had bought a bunch of Bs. Currently at
A (4.2%) B (36.3%) C (28.7%) D (17.6%) E (12.1%) F *** (0.7%) G *** (0.2%)

Have basically been ignoring the account and not sure what I'll buy back into.  Another 6k or so to withdraw before I need to decide.  I mostly just go hmm when this thread gets bumped since I know then that the statement is out.   Probably just B and C.
Title: Re: Worst Month Yet
Post by: SLCPaladin on April 08, 2018, 08:00:19 PM
Quote
Think there are a lot of "wind downers" out there.

For some reason when I read your post I couldn't help but think of "downwinders." I hope our fate hasn't been as bad as those guys! The party was good for a while!
Title: Re: Worst Month Yet
Post by: dr.everett on April 08, 2018, 11:13:34 PM
 ;D
Quote
Think there are a lot of "wind downers" out there.

For some reason when I read your post I couldn't help but think of "downwinders." I hope our fate hasn't been as bad as those guys! The party was good for a while!

 ;D

Thanks for making me smile- I do feel like a downwinder as of late.
Title: Re: Worst Month Yet
Post by: anabio on April 22, 2018, 09:37:42 AM
At this point in time I am mostly gone (so long...farewell...auf Wiedersehen...goodbye).

Have only 6 loans left. (Because of lack of vigilance, I mistakenly purchased some 5 year notes.) I log in very infrequently nowadays. Only have $42 worth of notes left.

I happened to do some math on my whole LC investment and found that my charge off's as a percent of interest over the life of my LC account is 47.63%.

If I include all the fee's and also recoveries my total losses as a percent of gain is 42.67%.

To give you an idea of the stability of my account I purchased 1,426 notes. My ANAR (for what it's worth) is 5.16%

NOTE: I stopped purchasing notes in early 2015 so missed out on those toxic loans of 2016

I only invested in A-B-C (and a couple of D's).
Title: Re: Worst Month Yet
Post by: Rob L on April 22, 2018, 04:53:40 PM
At this point in time I am mostly gone (so long...farewell...auf Wiedersehen...goodbye).

Have only 6 loans left. (Because of lack of vigilance, I mistakenly purchased some 5 year notes.) I log in very infrequently nowadays. Only have $42 worth of notes left.

I happened to do some math on my whole LC investment and found that my charge off's as a percent of interest over the life of my LC account is 47.63%.

If I include all the fee's and also recoveries my total losses as a percent of gain is 42.67%.

To give you an idea of the stability of my account I purchased 1,426 notes. My ANAR (for what it's worth) is 5.16%

NOTE: I stopped purchasing notes in early 2015 so missed out on those toxic loans of 2016

I only invested in A-B-C (and a couple of D's).

Seems like you hit the exit door at a very fortunate time. Looking back and if memory serves LC returns for investors began to take a major turn for the worse in 2015 Q1. It will be interesting to see if investors in any grade mix of notes post 2015 Q1 achieve returns of 5.16%. I would bet against. Meanwhile, well done!
Title: Re: Worst Month Yet
Post by: Fred93 on April 22, 2018, 08:13:14 PM
It will be interesting to see if investors in any grade mix of notes post 2015 Q1 achieve returns of 5.16%. I would bet against.

MY ANAR 6.99% (anar is a "for all time" measure)
My IRR (for all time) 7.47%
My IRR since 1/1/15 7.43%
My IRR since 1/1/16 6.24%

Those numbers are all above 5.16% .

My present mix of vintages (counts of still-active loans per origination year)
Code: [Select]
2013      6
2014    711
2015   1355
2016   1133
2017   1131
2018    835
So at this point I'm mostly in 2015 and later loans.

Title: Re: Worst Month Yet
Post by: Rob L on April 22, 2018, 10:11:47 PM
It will be interesting to see if investors in any grade mix of notes post 2015 Q1 achieve returns of 5.16%. I would bet against.

MY ANAR 6.99% (anar is a "for all time" measure)
My IRR (for all time) 7.47%
My IRR since 1/1/15 7.43%
My IRR since 1/1/16 6.24%

Those numbers are all above 5.16% .

My present mix of vintages (counts of still-active loans per origination year)
Code: [Select]
2013      6
2014    711
2015   1355
2016   1133
2017   1131
2018    835
So at this point I'm mostly in 2015 and later loans.

MY ANAR 7.00% (anar is a "for all time" measure) is remarkably similar to your own.

The best way to measure returns has been discussed thoroughly and I don't want to go there. Let me just say that the "ponzi scheme" nature of continuously reinvesting cash received into new notes paints IMO a rosy scenario of returns (IRR, XIRR, etc.). I've become quite the fan of ROI per vintage like the data presented by Insikt. I believe it was you who introduced me to their web site. That said, my bet is that when all is said and done (i.e. the loans/notes of a quarter are fully matured), few if any portfolios will post a quarterly ROI after 2015Q1 that is in excess of 5.16%. Looking at Insikt tonight that number seems just a tad low, but not by much. Quarterly ROI's after 2015Q1 only get worse and we have seen very few indications this has/will turn around.
Title: Re: Worst Month Yet
Post by: lascott on April 23, 2018, 05:47:19 PM
Here is what the Interest Radar by monthly vintage shows for my two accounts.
My notes breakdown are in this post: https://forum.lendacademy.com/index.php/topic,3365.msg42772.html#msg42772

(https://i.imgur.com/XsECFWO.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on April 24, 2018, 09:22:39 AM
Interesting numbers.
I'm no longer a subscriber to IR and I forget; what's their definition of "Loss Rate"?
Anyway, I really should take the time one of these days to work up a similar chart.
BTW, you must have decided in 2014-08 to significantly reduce the riskiness of your portfolio. Remember why?
Title: Re: Worst Month Yet
Post by: lascott on April 24, 2018, 02:00:56 PM
Interesting numbers.
I'm no longer a subscriber to IR and I forget; what's their definition of "Loss Rate"?
Anyway, I really should take the time one of these days to work up a similar chart.
BTW, you must have decided in 2014-08 to significantly reduce the riskiness of your portfolio. Remember why?
Here is their loss rate defn: https://interestradar.wordpress.com/2012/08/30/definition-loss-rate/

I think about 2014-08 I decided to continue investing after a little trial period but determined I wanted this to be an alternative to part of the 'bond' piece of my asset allocation pie ... so I just went more conservative.

(https://i.imgur.com/XFWAon5.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on April 25, 2018, 08:20:40 AM
Thanks.
Loss Rate appears to be something kinda like the Interest Radar version of ANAR.

Title: Re: Worst Month Yet
Post by: Rob L on May 05, 2018, 11:58:37 AM
The only good news about April is the drop in delinquencies. But hey; that's something.
Wonder what my losses in a recession would look like? Ouch!
Patiently holding on and waiting for notes to run off is an implicit bet that there will be no recession in the next two years.
There's a coin toss for ya.

EDIT: Added an Excel drawn linear trend line to the delinquencies chart. No doubt the slope is substantially greater than it would have otherwise been without my selling off my best notes in the fall of 2016. But even if you bring the endpoint down from 7.5% to say 5.5% a very sharp up slope remains. Just tells the same old story that things definitely got much worse for D,E lenders over the time frame pictured.

Also, take a look at the seasonality in the delinquencies chart. It's definitely there. There's always been a lull around this time of year (past 4 years, now this one). Wonder why?

(https://i.imgur.com/zUQ87q2.png)

(https://i.imgur.com/xfvQivc.png)

(https://i.imgur.com/NUvjLmp.png)

(https://i.imgur.com/6me8QRl.png)
Title: Re: Worst Month Yet
Post by: bluto on May 07, 2018, 09:21:28 AM
My assumption has always been the increase is the result of Christmas spending and the lull is the result of income tax refunds. 
Title: Re: Worst Month Yet
Post by: lascott on May 08, 2018, 12:57:51 AM
(https://i.imgur.com/NUvjLmp.png)

Looks like we had a similar plan for a while albeit I think I was in some more conservative grades.

(https://i.imgur.com/PbrXKIE.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on May 08, 2018, 08:59:40 AM
Sure does!
Title: Re: Worst Month Yet
Post by: Rob L on June 06, 2018, 07:40:06 PM
Same old same old. Losing money slowly.
Delinquencies still following trend of past few years. Wonder if I'll see the usual "July spike" in a couple of months?

(https://i.imgur.com/aW8uSmF.png)

(https://i.imgur.com/gzewK7p.png)

(https://i.imgur.com/FB8TQKS.png)

(https://i.imgur.com/NxNPLpq.png)
Title: Re: Worst Month Yet
Post by: dr.everett on June 07, 2018, 01:14:07 AM
I cringe when I see your charts every month. It just reaffirms I made the right decision last year when I started liquidating. I would have liked to have been as on top of things as you are with the charts and analysis, as I'm sure my numbers would have been similar, and as interesting. But I was too busy with trying to make my results better with manual operations, chasing the better "secret sauce", automation, and finally arriving at the conclusion that there were better investing options.

I say this with good intent- may your loans run off quickly and your losses during the runoff be minimal.  :D

My last IRA transfer left Strata today and is headed to Fundrise. All that's left for me is to see how many recoveries come in between now and November and if they amount to more than the $25 transfer fee-if they do I'll make one last transfer, then I plan to contact LC then and start the account closure process before the end of the year maintenance fee is charged by Strata.
Title: Re: Worst Month Yet
Post by: Fred93 on June 07, 2018, 08:31:40 AM
My updated returns...
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FFred93returns-2018-06-07.png&hash=bb0f2f9b03c38266d3cb082c6c27f0cd)

I put LC and Prosper data on the same chart.  They seem mostly similar except that Prosper numbers bounce around a hellofa lot.

I don't know why the LC numbers have jumped up recently.  Could be statistical fluctuation.  There have been movements around this size in the past that were just statistical wiggles, so shouldn't get excited about a couple of months of bump.  I believe I'm getting about 5% return at both P and LC, after you average out the wiggles.  In other words, I expect both the red and blue curve to continue to wiggle around 5%.


FYI, the orchard index comes from https://www.orchardindexes.com/
Title: Re: Worst Month Yet
Post by: jheizer on June 07, 2018, 09:29:57 AM
Since I had been trying to cut my account size down I've been really passive about all this lately.  Usually I just check out the monthly statement when ever this thread gets bumped, go oh, ok, and carry on.  I hadn't even updated my tracking spreadsheet in 7 months... until today.

(https://lh3.googleusercontent.com/-CWKWW8QAmUs/WxkyuxeixmI/AAAAAAAANK0/aQUf7YKgrPIu96vIwMGIzwFWAzXSLmlewCHMYCw/s0/soffice.bin_2018-06-07_08-27-24.png)


OUCH month!  Basically crushed 2018 profits in one hit.  Still positive, but damn.
Title: Re: Worst Month Yet
Post by: Rob L on June 07, 2018, 06:24:23 PM
I say this with good intent- may your loans run off quickly and your losses during the runoff be minimal.  :D

And may the force be with you!
Title: Re: Worst Month Yet
Post by: Rob L on June 07, 2018, 06:29:22 PM
I believe I'm getting about 5% return at both P and LC, after you average out the wiggles.  In other words, I expect both the red and blue curve to continue to wiggle around 5%.

Well somebody's making a little money around here! Nice to see!
Title: Re: Worst Month Yet
Post by: Rob L on June 07, 2018, 06:30:02 PM
OUCH month!  Basically crushed 2018 profits in one hit.  Still positive, but damn.

Yeah; OUCH!!
Title: Re: Worst Month Yet
Post by: JohnnyP on June 07, 2018, 10:35:56 PM
My updated returns...
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FFred93returns-2018-06-07.png&hash=bb0f2f9b03c38266d3cb082c6c27f0cd)

I put LC and Prosper data on the same chart.  They seem mostly similar except that Prosper numbers bounce around a hellofa lot.

I don't know why the LC numbers have jumped up recently.  Could be statistical fluctuation.  There have been movements around this size in the past that were just statistical wiggles, so shouldn't get excited about a couple of months of bump.  I believe I'm getting about 5% return at both P and LC, after you average out the wiggles.  In other words, I expect both the red and blue curve to continue to wiggle around 5%.


FYI, the orchard index comes from https://www.orchardindexes.com/

I wonder when the orchardindex is going to get updated. Its message is that things are better than a year ago - and much better than two years ago. I have seen this somewhat in my portfolio as well.
Title: Re: Worst Month Yet
Post by: Reginald on June 11, 2018, 05:56:55 PM
I havent been following this thread very closely, I guess it's part of the learning curve. Good posts. I share your pain.

My biggest worry is that lending club has become fraud central for anyone who is about to declare bankrupcy.

https://www.bloomberg.com/news/articles/2017-06-14/biggest-online-lenders-don-t-always-check-key-borrower-details
Title: Re: Worst Month Yet
Post by: kib on June 28, 2018, 12:10:12 PM
I'm 55 years old and I have been personally investing for 40 years in everything from EE bonds to REIT trusts to options trading.  May I summarize in nine words or less?

LENDING CLUB IS THE WORST INVESTMENT I'VE EVER MADE.

Well I should qualify that.  My LC Roth is the worst investment I've ever made, the regular LC account comes in second.

The returns are disastrous, the amount of control is non existent, the amount of DAILY work is insane compared to investments with a similar return, the question of fraud, non-compliance and malfeasance both by the company and the borrowers is ever present, avoiding middle-men was the whole reason I got into this and they betrayed my trust when they went public, and the glide path for getting out of this nightmare is five years - during which, for the Roth, I have to keep a note balance of $10,000 or incur a $100 annual fee no matter how bad the account is tanking through no fault of my own, which means a little tiny window of eligible maturities as I hang on and wait.  I wish I'd stuck this money under my mattress, or given it to a worthy charity, or maybe even flushed it down the toilet instead of giving it to a bunch of dishonest bureaucrats and outright deadbeat thieves who can't even manage their own credit cards, the pigs.
Title: Re: Worst Month Yet
Post by: Rob L on July 05, 2018, 07:05:32 PM
As Yogi would say this month is deja vu all over again.
Same old same old.
All things equal I'd rather be making $50 per month rather than losing it.

(https://i.imgur.com/D8F4T93.png)

(https://i.imgur.com/yZsIpZC.png)

(https://i.imgur.com/2uQ2PRY.png)

(https://i.imgur.com/KW22uJQ.png)
Title: Re: Worst Month Yet
Post by: Fred93 on July 05, 2018, 08:16:13 PM
My updated chart.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FFred93-returns-2018-07-05.png&hash=0c61acc3816242f58f2c1659b7f35bed)

LC doing well last few months, but Prosper dropped into the toilet.  Don't know why. 

Orchard hasn't updated their index for April yet.  I wonder if they're giving up, or just delayed.
Title: Re: Worst Month Yet
Post by: Rob L on July 06, 2018, 10:03:58 AM
My updated chart.
LC doing well last few months, but Prosper dropped into the toilet.  Don't know why. 
Orchard hasn't updated their index for April yet.  I wonder if they're giving up, or just delayed.

Another good LC month. Starting to look more like 5% to 6% reality rather than a statistical fluctuation.
My delinquency rate has been down the past 6 months. Another positive indicator.
Title: Re: Worst Month Yet
Post by: storm on July 06, 2018, 11:33:16 AM
Another good LC month. Starting to look more like 5% to 6% reality rather than a statistical fluctuation.
My delinquency rate has been down the past 6 months. Another positive indicator.

Really?  I'm investing in mostly B's and C's, and I'm hovering around a 4% annualized return.  Charge-offs have been steady since February (about .5%/month of my total portfolio).
Title: Re: Worst Month Yet
Post by: Rob L on July 07, 2018, 11:09:19 AM
Another good LC month. Starting to look more like 5% to 6% reality rather than a statistical fluctuation.
My delinquency rate has been down the past 6 months. Another positive indicator.

Really?  I'm investing in mostly B's and C's, and I'm hovering around a 4% annualized return.  Charge-offs have been steady since February (about .5%/month of my total portfolio).

I was commenting about Fred93's good month, not mine. Sorry that was unclear.
I'm plodding along at maybe -3% annualized, but only on $17k and dropping.
Title: Re: Worst Month Yet
Post by: Rob L on July 07, 2018, 11:46:51 AM
As you can see from my Outstanding Principal chart above, the runoff decline in the amount of my invested principal has been slowing each month (in absolute dollars). Totally expected of course. However, I wondered the percentage of principal decline month to month, thinking it was slowing or perhaps flat. The chart below was a surprise to me. It seems that as a percent of principal invested the decline is and has been increasing each month as my account has wound down. I'm thinking the reason is that as my portfolio ages I am receiving more principal and less interest each month (per loan amortization). So, the higher your weighted average portfolio age the quicker it will run off (as a percent of principal invested of course). Taking it one step further, the higher your weighted average interest rate the quicker it will run off as well (with same caveat).

(https://i.imgur.com/vQdkwlv.png)
Title: Re: Worst Month Yet
Post by: Rob L on July 11, 2018, 09:32:29 AM
The next logical step was to take the "Using the % change in Outstanding Principal" data trend line to project my runoff into the future.
The chart is below:

(https://i.imgur.com/k7nZSIJ.png)

By the end of the year I should receive another $10k, bringing the outstanding principal to around $7k.
Twelve months from now (6/2019) I should be down to $2,500 outstanding principal.
If Folio is still around I'll probably use it to sell all remaining notes by in the period 9/2019 - 12/2019.
All my notes are 36 month term and the term of the last note bought will end 2/2020.
Nice to have a plan. Will be interesting to see how well the projection holds up.

Title: Re: Worst Month Yet
Post by: Rob L on November 03, 2018, 01:09:46 PM
Four months later and the projection is tracking very nicely.
We'll see how that $7k at year's end projection holds up.

(https://i.imgur.com/Dxb47cu.png)
Title: Re: Worst Month Yet
Post by: hdsouza on November 04, 2018, 09:56:10 AM
When Notes turn delinquent they take out a huge chunk of the money we have earned in the form of interest received on the good notes. We really struggle to get the good notes and when one of them tuns bad it negates all the hard work put in.

LC really needs to do a better job of going behind the defaulters. But then, why should they. Its not their hard earned money. its ours.  Sorry I am ranting.
Title: Re: Worst Month Yet
Post by: Rob L on December 07, 2018, 09:38:17 AM
Still on track:

(https://i.imgur.com/50jxqXr.png)
Title: Re: Worst Month Yet
Post by: lascott on December 08, 2018, 08:29:09 PM
When Notes turn delinquent they take out a huge chunk of the money we have earned in the form of interest received on the good notes. We really struggle to get the good notes and when one of them tuns bad it negates all the hard work put in.

LC really needs to do a better job of going behind the defaulters. But then, why should they. Its not their hard earned money. its ours.  Sorry I am ranting.

I am thankful they have increased their efforts in the couple years. Keeps me 'positive'.

(https://i.imgur.com/iLdQDFs.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on December 10, 2018, 09:25:11 AM
When Notes turn delinquent they take out a huge chunk of the money we have earned in the form of interest received on the good notes. We really struggle to get the good notes and when one of them tuns bad it negates all the hard work put in.

LC really needs to do a better job of going behind the defaulters. But then, why should they. Its not their hard earned money. its ours.  Sorry I am ranting.

I am thankful they have increased their efforts in the couple years. Keeps me 'positive'.


Is the amount of principal in each account constant over the period shown?
If not then how do the numbers look as a percent of principal invested? TIA
Title: Re: Worst Month Yet
Post by: arcee49 on December 10, 2018, 12:09:22 PM
When Notes turn delinquent they take out a huge chunk of the money we have earned in the form of interest received on the good notes. We really struggle to get the good notes and when one of them tuns bad it negates all the hard work put in.

LC really needs to do a better job of going behind the defaulters. But then, why should they. Its not their hard earned money. its ours.  Sorry I am ranting.

I am thankful they have increased their efforts in the couple years. Keeps me 'positive'.


Is the amount of principal in each account constant over the period shown?
If not then how do the numbers look as a percent of principal invested? TIA

I was wondering this as well...but wouldn't recoveries as a percent of Charged Off Amount be more useful?  And as you get a recovery the Charged Off Amount would decrease for subsequent months.
Title: Re: Worst Month Yet
Post by: lascott on December 10, 2018, 10:20:03 PM
When Notes turn delinquent they take out a huge chunk of the money we have earned in the form of interest received on the good notes. We really struggle to get the good notes and when one of them tuns bad it negates all the hard work put in.
LC really needs to do a better job of going behind the defaulters. But then, why should they. Its not their hard earned money. its ours.  Sorry I am ranting.
I am thankful they have increased their efforts in the couple years. Keeps me 'positive'.
Is the amount of principal in each account constant over the period shown?
If not then how do the numbers look as a percent of principal invested? TIA

I've been taking money out almost daily for like 1.5 yrs I think.   I'm afraid my G sheet does not have Principle but it does have Charge Off Amount from the monthly statements.

Here is a percentage of Recovery-RecFees Amount compared to Charge Off Amount.  It appears they hired Guido in 2018-08 :)

(https://i.imgur.com/ATUakpJ.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on December 11, 2018, 09:37:34 AM
When Notes turn delinquent they take out a huge chunk of the money we have earned in the form of interest received on the good notes. We really struggle to get the good notes and when one of them tuns bad it negates all the hard work put in.
LC really needs to do a better job of going behind the defaulters. But then, why should they. Its not their hard earned money. its ours.  Sorry I am ranting.
I am thankful they have increased their efforts in the couple years. Keeps me 'positive'.
Is the amount of principal in each account constant over the period shown?
If not then how do the numbers look as a percent of principal invested? TIA

I've been taking money out almost daily for like 1.5 yrs I think.   I'm afraid my G sheet does not have Principle but it does have Charge Off Amount from the monthly statements.

Here is a percentage of Recovery-RecFees Amount compared to Charge Off Amount.  It appears they hired Guido in 2018-08 :)


Wow! that's a lot of kneecaps!
Nice uptrend too.
Title: Re: Worst Month Yet
Post by: Rob L on January 04, 2019, 04:14:35 PM
At the end of June projected run off to $7k outstanding principal at year end. Actual; $6,941.40.
Darn close.

(https://i.imgur.com/ZGiPx7P.png)

A new scale for the New Year:

(https://i.imgur.com/95UNTNU.png)


Title: Re: Worst Month Yet
Post by: rawraw on January 04, 2019, 08:27:21 PM
The predictability of your curve is a nice feature of this asset class.
Title: Re: Worst Month Yet
Post by: Rob L on March 04, 2019, 07:16:14 PM
Here's an update for February 2019. A bit more principal returned than expected; not a bad thing!
Maybe I'll be able to close out sooner than expected. We are getting down to very small amounts of principal invested.

(https://i.imgur.com/BuIfvSI.png)
Title: Re: Worst Month Yet
Post by: lascott on March 04, 2019, 10:21:13 PM
A bit more principal returned than expected
Do you consider this to be loans being paid back and recoveries (-  rec_fees)?

My recoveries are still pretty high. Glad they are still being aggressive with this (hopefully the majority are against bad actors).

(https://i.imgur.com/mtyKcVJ.jpg)

I like being above zero!

(https://i.imgur.com/rEbM6R0.jpg)
Title: Re: Worst Month Yet
Post by: Rob L on March 05, 2019, 11:28:27 AM
Well this is pretty interesting and seems to support your theory that LC has become more aggressive.
There are probably other factors in play here too possibly involving my portfolio runoff and decreasing principal outstanding.
I dunno. Whatever the reason it's welcomed.

(https://i.imgur.com/Vrzhnna.png)
Title: Re: Worst Month Yet
Post by: Andrewgupta on June 03, 2019, 02:58:42 PM
Yep, you are near the tipping point.

It will be rare for you to have negative monthly portfolio return with these loans mcdvoice (https://mcdvoice.dev/) unless you stopped lending cash in the account.

Background; my portfolio's weighted average age was maybe 15 months this past January and is approaching 18 months now.
Maybe I should just consider myself lucky that I at least made a profit.
Eyah totally agree with that. Didn't read all post but saw point in this
Title: Re: Worst Month Yet
Post by: Rob L on July 06, 2019, 02:35:43 PM
Mid-year report on my runoff; not quite under $2k. Slightly ahead of projection though (a good thing)  :)

(https://i.imgur.com/cBqtmO1.png)
Title: Re: Worst Month Yet
Post by: WES on July 06, 2019, 04:24:40 PM
Nice! This week my account is finally down to under 100 notes, and the balance is less than $700. I should be all done by early 2020.  :)
Title: Re: Worst Month Yet
Post by: Rob L on July 07, 2019, 03:01:19 PM
Nice! This week my account is finally down to under 100 notes, and the balance is less than $700. I should be all done by early 2020.  :)

Congrats!!
Title: Re: Worst Month Yet
Post by: HalfABubbleOff on July 27, 2019, 03:04:35 PM
Last two years interest hasn't covered write-offs and YTD same has held true, but did have a couple of months in the black this year.
I'm down to 89 issued/current notes, but with run out, it'll be another two years before I'm done. 
I can't totally complain, I've withdrawn more cash than I've put in now. 
My combined return is 5.41% (I've bought/sold notes on folio, so it's the closest to a real return number I have). 
In looking at the stats page, I guess I should be thankful for where I'm at with the 5.41% return.  I'm just going to chalk it up to putting in a lot of good filters to find the few notes here or there that hadn't been gobbled up in 3 nanoseconds of being listed.  Sticking with those filters when nothing good showed up.  And then turning off the spigot once the bad news started flowing out of LC. 
My weighted average interest rate is 15.85%, mostly 39% C's, 32% D's, and 21% E's.
Weighted average age of portfolio is now 49.1 months.

Title: Re: Worst Month Yet
Post by: Rob L on July 27, 2019, 10:06:27 PM
Sounds very familiar!
Title: Re: Worst Month Yet
Post by: rawraw on July 29, 2019, 09:33:38 AM
Sad to see everyone preparing to leave. It's been a fun ride
Title: Re: Worst Month Yet
Post by: Rob L on July 29, 2019, 02:06:15 PM
Sad to see everyone preparing to leave. It's been a fun ride

It certainly is and has been!
Title: Re: Worst Month Yet
Post by: .Ryan. on July 30, 2019, 10:06:54 AM
Sad to see everyone preparing to leave. It's been a fun ride

This is honestly the part I will miss the most.

After returns started to accelerate their slide to an unacceptable rate a couple of years ago, I made the hard decision to pull the plug on my main LC & P accounts. Going through the painful, drawn out process of liquidating my accounts (takes YEARS) only makes me feel better about the timing of my decision.

But I will miss you guys. I'll miss the comradery, the mentoring, and most of all, the journey.
Title: Re: Worst Month Yet
Post by: lascott on July 30, 2019, 11:08:32 PM
Sad to see everyone preparing to leave. It's been a fun ride
It definitely has been fun and insightful.  I've read, learned, and thought a lot more about credit since.
I do feel 'silly' since I invested so much thinking it was sustainable as a retail investor. It did seem so when I first entered. I had a bunch of fun playing with the tools available and thinking I was being so clever with my conservative stance. Haha, but I think I did as well as bonds which this was my alternative to. 

Aside: I ended up putting a fair amount now into Wunder Capital while they were offering 7.5% and credit LC with a note/loan model (regulatory approval).  Now Wunder Capital has moved on from retail investors as well for a while. I get payments (mostly interest) like clockwork and a balloon payment in a few years. All within my same ROTH IRA STRATA account.

Aside2: Moved some money (one of retirement buckets) into Vanguard Wellesley Income Fund Admiral Shares (VWIAX) and am pretty happy with that after a lot of research and comparisons. More info but most of you have your favs for sure: https://advisors.vanguard.com/investments/products/vwiax/vanguard-wellesley-income-fund-admiral-shares
Title: Re: Worst Month Yet
Post by: Jessica King on July 31, 2019, 03:13:00 AM
I am sorry to hear this. Yes, I think diversification is one of the most important factors to consider to reduce risks as this one.
Title: Re: Worst Month Yet
Post by: JDII on July 31, 2019, 09:11:01 PM
Sad to see everyone preparing to leave. It's been a fun ride

I'm staying.  My account is nothing like some of yours in regards to size but I'm building it. 
Title: Re: Worst Month Yet
Post by: Rob L on November 07, 2019, 06:55:52 PM
It's time for a fire sale:

(https://i.imgur.com/C3siAq6.png)

Only a little over $500 outstanding principal; considerably sooner than expected.
Higher charge offs than projected. I lost about $25 this month. Percentage wise it was truly the worst month ever, but money wise it was nothing.
Only about 250 notes now "un-dead". I should be able to blow them out on Folio manually and plan to discount them to whatever makes them go away.
About half are B grade so some decent bargains should pop up for the Folio Hawks. The rest are D's & E's; I'll probably have to give them away.
Fine with me; I just want to be done .. done before the end of the year.

Title: Re: Worst Month Yet
Post by: lctz on November 08, 2019, 08:00:04 PM
Interesting read.  Somehow I experienced better returns.  Most of my loans are B and C.  I started around 2015 with two accounts.  One is a testing account that I used to test various of models; the other is my main account controlled by stable models after I feel comfortable with my models.
My main account has return about 5.6% and test account about 4.6%.  I am starting to test secondary market models.  I'll share some of my model predicted secondary loan prices later.
Title: Re: Worst Month Yet
Post by: rawraw on November 08, 2019, 08:08:26 PM
I don't know about Rob specifically, but a lot of posters used to chase yields and that caught up to them. My account of B and C notes that started at the beginning of the deterioration has performed fine. I reduced my taxable account to zero though. Got sick of dealing with taxes once my losses exceeded the deductible amount
Title: Re: Worst Month Yet
Post by: Rob L on November 09, 2019, 09:48:29 AM
Interesting read.  Somehow I experienced better returns.  Most of my loans are B and C.  I started around 2015 with two accounts.  One is a testing account that I used to test various of models; the other is my main account controlled by stable models after I feel comfortable with my models.
My main account has return about 5.6% and test account about 4.6%.  I am starting to test secondary market models.  I'll share some of my model predicted secondary loan prices later.

Well, here's where I stand today; Combined, Primary, Traded notes and Cumulative Profits.
It hasn't been all bad; just since mid-2016 when the fraud was exposed and I decided to quit.

(https://i.imgur.com/AzqQW5k.png)

(https://i.imgur.com/ghaTxBT.png)

(https://i.imgur.com/ApfkBt0.png)

(https://i.imgur.com/yfC94Y5.png)
Title: Re: Worst Month Yet
Post by: Rob L on November 09, 2019, 10:20:03 AM
I don't know about Rob specifically, but a lot of posters used to chase yields and that caught up to them. My account of B and C notes that started at the beginning of the deterioration has performed fine. I reduced my taxable account to zero though. Got sick of dealing with taxes once my losses exceeded the deductible amount

Yeah, I was certainly chasing yield big time before I decided to quit LC. It was the thing to do until it wasn't.
IMO even today every LC investor is chasing yield, some more some less. However there isn't as much "more" as there once was.  :)

Title: Re: Worst Month Yet
Post by: lctz on November 09, 2019, 12:22:51 PM


Well, here's where I stand today; Combined, Primary, Traded notes and Cumulative Profits.
It hasn't been all bad; just since mid-2016 when the fraud was exposed and I decided to quit.



Your return is not bad at all given current CD rate floats around 2%.
Title: Re: Worst Month Yet
Post by: rawraw on November 09, 2019, 01:00:10 PM
Yes that is true if LC is viewed as fixed income. A lot of posters were investing here instead of equities, however.
Title: Re: Worst Month Yet
Post by: Rob L on November 12, 2019, 09:50:53 AM
My fire sale is mostly complete. I sold 200 notes mid-day Sunday. Anyone here buy any of them?
There were about 9 notes that were 31-120 late that I had to discount 95%. Who am I to argue with the market but that was a bit more than expected. I was thinking 85% - 90% would have been right.
Title: Re: Worst Month Yet
Post by: lctz on November 13, 2019, 08:54:34 PM
95% discount of the principal is about right.  Around 30% of late loans don't pay a penny.
Title: Re: Worst Month Yet
Post by: Rob L on November 14, 2019, 05:30:14 PM
Liquidity has value. In more active markets it's the called the bid-ask spread.
In my case I "hit the bid" so to speak and more than gladly paid the bidder for the liquidity provided.
The notes sold had from 1-4 payments remaining and I wanted to be rid of them now.
The bidder had a longer time horizon and will almost certainly profit from them (or from a "many like them" strategy applying law of large numbers).
I would have taken the other side of my trades, as did the buyer, if my own time horizon were longer.



Title: Re: Worst Month Yet
Post by: Rob L on November 15, 2019, 10:01:21 AM
I'm down to 26 notes on my Folio sell page. Of those 7 are run of the mill "in processing".
The remaining all show 0 payments remaining and less than $0.10 outstanding principal. Most show $0.00 outstanding principal.
Anyone know what's going on with them and how long it will take them to go away?
Title: Re: Worst Month Yet
Post by: Debt Free on November 15, 2019, 12:07:18 PM
Wondering the same thing.  I just sold the last note on two IRA's.  One shows $0.00 principal outstanding and 11/9/19 was supposed to be the last payment, but it now shows another payment owing in December.  Guessing some errant interest in the amount of something like $0.00032.
Title: Re: Worst Month Yet
Post by: Rob L on November 15, 2019, 03:46:10 PM
If a note has > $0.01 outstanding principal I can list it for $0.01 and it will be bought.
If a note has $0.01 outstanding principal I can list it but it will not be bought.
If a note has $0.00 outstanding principal I cannot even list it!
Why are there rules that prevent me from giving notes away for an asking price of $0.00 if I so choose?