Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: solongtj on January 12, 2017, 09:09:22 PM

Title: Deadbeats
Post by: solongtj on January 12, 2017, 09:09:22 PM
Why so many deadbeats out there who take out 25k loans and then don't make one payment and then file for bankruptcy. It's complete bull! Should be a crime and they shouldn't be able to get bankruptcy protection... especially so soon after taking that much cash out on a loan.
Title: Re: Deadbeats
Post by: .Ryan. on January 12, 2017, 11:03:11 PM
These rare, but increasing, deadbeat loans with 0 repayment will quickly devastate any positive returns on a portfolio. I've noticed a spike in them in my 2016 originations, and they are a significant reason why the returns for the year were lackluster.

Without explicitly admitting this was a problem, both LC & P have talked about new measures to tighten standards (and even share some information re: new loan applications) in order to stem the rise of these instances of, well, fraud.

Now, when I start ryansp2ploans.com, it will be just like LC, but just before Charge Off occurs, I will release the name/address/info of the borrower to the investors so that they can do their best to recover any remaining loan. Who's in??!?!! ;)
Title: Re: Deadbeats
Post by: Debt Free on January 13, 2017, 04:31:32 AM
Partner up with my startup... GuidoCollections.com and I'm in.
Title: Re: Deadbeats
Post by: SLCPaladin on January 13, 2017, 09:34:06 PM
There was a Chinese P2P lender that accepted naked selfies as loan collateral. If the borrower didn't pay, the pics got released. Probably not the best way to up the ante when it comes to lighting a fire under the borrower, but you've got to give them credit for creativity!

https://www.yahoo.com/news/naked-selfies-used-collateral-chinese-loans-111137036.html
Title: Re: Deadbeats
Post by: Fred93 on January 14, 2017, 02:26:11 PM
There was a Chinese P2P lender that accepted naked selfies as loan collateral. If the borrower didn't pay, the pics got released. Probably not the best way to up the ante when it comes to lighting a fire under the borrower, but you've got to give them credit for creativity!
https://www.yahoo.com/news/naked-selfies-used-collateral-chinese-loans-111137036.html

It was a great story, excellent click-bait headline ... but we never got to see any of the naked selfies.  Surely some people did not pay.  This makes me wonder if the story was real, or another example of fake news.
Title: Re: Deadbeats
Post by: SeanMCA on January 16, 2017, 12:04:54 PM
There was a Chinese P2P lender that accepted naked selfies as loan collateral. If the borrower didn't pay, the pics got released. Probably not the best way to up the ante when it comes to lighting a fire under the borrower, but you've got to give them credit for creativity!
https://www.yahoo.com/news/naked-selfies-used-collateral-chinese-loans-111137036.html

It was a great story, excellent click-bait headline ... but we never got to see any of the naked selfies.  Surely some people did not pay.  This makes me wonder if the story was real, or another example of fake news.

The story is real and the photos are indeed online. My recollection of when this story first broke months ago is that it wasn't so much about releasing the photos on to the internet, but about releasing the nude photos to the immediate family members of the borrower to "shame them." The threat of that alone was supposed to be a deterrent. The problem is that someone hacked the platform and dumped all the nude photos online anyway.
Title: Re: Deadbeats
Post by: Paulie2083 on January 16, 2017, 02:54:11 PM
Why so many deadbeats out there who take out 25k loans and then don't make one payment and then file for bankruptcy. It's complete bull! Should be a crime and they shouldn't be able to get bankruptcy protection... especially so soon after taking that much cash out on a loan.

how many of those have you had? Of my 1,100 loans i've only had one default without ever making a single payment and i have a hunch their identity was stolen. Ironically, the job title on their application was Deputy Sheriff.
Title: Re: Deadbeats
Post by: jennrod12 on January 17, 2017, 04:36:39 PM
Paulie, I have had 7 of those out of 1140 loans.  You are a better loan picker than I!

Jenn
Title: Re: Deadbeats
Post by: Rob L on January 17, 2017, 07:05:52 PM
I've had 25 rollers of 9450 notes purchased (0.26%). By "Note Issue Date":
2013 -9- C2, D4, C5, F2, D5, E1, D4, E2, E1
2014 -4- C4, D2, C2, D1
2015 -8- D2, C2, E1, E1, D3, E1, D2, E4
2016 -4- E2, E3, E4, E2

Of these the F2 in 2013 was a $100 note (big mistake)! Lesson learned.
It was one of my first rollers. I know from memory all the details of that borrower. I can see them in my sleep.

My total investment was $1050, recoveries were $167, and estimated recovery charges $17.00.
Total loss was $900 = average $36 per note.
Title: Re: Deadbeats
Post by: solongtj on January 17, 2017, 08:16:11 PM
Why so many deadbeats out there who take out 25k loans and then don't make one payment and then file for bankruptcy. It's complete bull! Should be a crime and they shouldn't be able to get bankruptcy protection... especially so soon after taking that much cash out on a loan.

how many of those have you had? Of my 1,100 loans i've only had one default without ever making a single payment and i have a hunch their identity was stolen. Ironically, the job title on their application was Deputy Sheriff.

A handful of 110 notes. It's just infuriating.
Title: Re: Deadbeats
Post by: Paulie2083 on January 17, 2017, 10:18:44 PM
Why so many deadbeats out there who take out 25k loans and then don't make one payment and then file for bankruptcy. It's complete bull! Should be a crime and they shouldn't be able to get bankruptcy protection... especially so soon after taking that much cash out on a loan.

how many of those have you had? Of my 1,100 loans i've only had one default without ever making a single payment and i have a hunch their identity was stolen. Ironically, the job title on their application was Deputy Sheriff.

A handful of 110 notes. It's just infuriating.

its probably time to opt for stricter criteria when filtering loans. Without accounting for stolen identity and the like ; i would say people with a longer history of good credit would be less likely to take out a loan and run or declare bankruptcy. I would guess some of your defaults are people with a relatively short history of credit AKA "young people" who don't care about their credit score or dont realize how important it is. try filtering out people with a credit history of less than 10 years.
Title: Re: Deadbeats
Post by: Rob L on January 18, 2017, 10:48:26 AM
I've had 25 rollers of 9450 notes purchased (0.26%). By "Note Issue Date":
2013 -9- C2, D4, C5, F2, D5, E1, D4, E2, E1
2014 -4- C4, D2, C2, D1
2015 -8- D2, C2, E1, E1, D3, E1, D2, E4
2016 -4- E2, E3, E4, E2

Of these the F2 in 2013 was a $100 note (big mistake)! Lesson learned.
It was one of my first rollers. I know from memory all the details of that borrower. I can see them in my sleep.

My total investment was $1050, recoveries were $167, and estimated recovery charges $17.00.
Total loss was $900 = average $36 per note.

I should have added that my total number of charge offs is 1129.
So 2.2% of my charge offs were rollers (by number of notes). In dollar terms my loss to rollers was 2.6% (by dollars charged off).
It appears that my very broad diversification (large number of small notes) prevented rollers from being a disproportionately high percentage of my loss in dollars when compared with their percentage of total numbers of notes charged off. It seems rollers have not had a significant impact on my returns over the years as compared with plain old vanilla charge offs.
Title: Re: Deadbeats
Post by: bkcarolina on January 19, 2017, 05:05:28 PM
Why so many deadbeats out there who take out 25k loans and then don't make one payment and then file for bankruptcy. It's complete bull! Should be a crime and they shouldn't be able to get bankruptcy protection... especially so soon after taking that much cash out on a loan.

how many of those have you had? Of my 1,100 loans i've only had one default without ever making a single payment and i have a hunch their identity was stolen. Ironically, the job title on their application was Deputy Sheriff.

Of 195 defaults from 1617 loans, not one was without a single payment (but four of them only made one payment).
Title: Re: Deadbeats
Post by: cfb on February 22, 2017, 08:58:12 PM
I've actually had quite a flurry of those, 0-4 payments and then bankruptcy and it was across all credit grades.

It was funny, I said the word 'deadbeats' in an email to lending club (this was maybe 3.5-4 years ago) and the guy totally flipped out, insisting that I not call them that because LC doesn't pass through any "deadbeats".

Title: Re: Deadbeats
Post by: mrwhizzard on February 24, 2017, 03:48:23 PM
At Lending Club, I have had 2 notes charge-off with $0 payment (out of 371 notes with 41 charge-offs), and another 2 with only a single payment before charge-off.

My Prosper account has had 1 charge-off with $0 payment (out of 511 notes, with 28 charge-offs).
Title: Re: Deadbeats
Post by: Edward Reid on March 01, 2017, 12:04:54 PM
389 notes, various ages 0 to 33 months. 23 charge-offs. The worst of them made 3 payments. I am 94% grade C.

I tightened my selection criteria about three months after I started. 60% of my notes are from after then, but only one of the charge-offs is from after then.

Edward
Title: Re: Deadbeats
Post by: dbailey75 on March 01, 2017, 12:40:20 PM
I've actually had quite a flurry of those, 0-4 payments and then bankruptcy and it was across all credit grades.

It was funny, I said the word 'deadbeats' in an email to lending club (this was maybe 3.5-4 years ago) and the guy totally flipped out, insisting that I not call them that because LC doesn't pass through any "deadbeats".

maybe criminals or fraudsters is a more appropriate term.