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Messages - rj2

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Investors - LC / Folio is closed, how'd you do?
« on: August 27, 2020, 02:00:35 PM »

Since they announced it was closing I sold 705 notes, which was 80% of my holdings. All that's left now are notes maturing in 6 months or less, plus a handful of "hardship" loans I was unable to sell. In six months I'll transfer the remaining cash out of my account, "gift" any remaining hardship loans to LC, and be gone.

Investors - LC / Re: Worst Month Yet
« on: August 12, 2020, 11:54:44 PM »
Folio is dead.
I finished liquidating my Lending Club investment "under the wire" by 8 months using Folio sales.
I'm thankful that I got it done in time (and it was only a matter of time). Turns out it was a good time to invest in stocks.

I had started liquidating in a very slow way a year ago, stopped buying fresh notes and bought only on folio seasoned notes with X months left, starting with X=18 months and reducing it by 1 every month. At the same time I listed everything for sale that had more time than that left--at a small premium, idea being I had 18 months to sell it all.

When this hit I was only buying notes with 8 months left, and had slowly sold most of the older ones. But not all. So the last few days I listed everything over 6 months at a small discount and have managed to clear most of it out. The headache is a bunch of "hardship" notes that are mostly 9-10 months but there's a couple of longer ones in there, I think, one is 16 months or so. Can't even list those for sale because of their status..

Investors - LC / Re: Folio ending August 28th.
« on: August 12, 2020, 01:51:32 AM »
Folio closing creates an issue for me. I don't know how I can exit from  LC without paying that annual fee.

My next annual fee is not for nearly 10 months, so it's a long way off, but, with folio closing whatever is going to happen is going to happen THIS month.

I have listed every note that had a maturity date later than my next annual fee, and they have been selling pretty well. There's only two particularly stubborn notes left with poor payment histories, I'm sure eventually I'll discount them enough someone will buy them. I hope... in the next week. The rest of my notes will all mature before the fee.

EXCEPT FOR the "hardship" notes that I can't sell. There are only a couple of them with maturity dates after my annual fee--but if even ONE note is left? Then my account doesn't close and I'm going to have to pony up $100/year or whatever it is until that final notes pays off? I'll be paying $100/year for the privilege of holding what will be by then $5 or $10 note.

There has to be a way out.

Investors - LC / Re: Folio ending August 28th.
« on: August 09, 2020, 01:29:25 AM »
I've been liquidating as well, had sold everything with >12m left on it and was working on 9m to 11m. Lots of those are still "locked" and can't be sold so I guess I'm stuck dealing with LC for at least a year.

Is anyone doing anything other than liquidating at this point?

Investors - LC / Re: What is the lifecycle of a "hardship" loan?
« on: June 25, 2020, 12:25:11 AM »
Yup. I ended up buying a bunch of "hardship" loans by accident because they passed my "neverlate" filter, even though they hadn't actually been paid in a couple months.

Investors - LC / Re: What is the lifecycle of a "hardship" loan?
« on: June 23, 2020, 10:37:43 PM »
I think they can only be sold once the hardship period ends. At that point he loan will either be in grace period, or current, depending on whether the scheduled payment was made.

Investors - LC / Re: What is the lifecycle of a "hardship" loan?
« on: June 22, 2020, 08:38:26 PM »
A few of my loans, which haven't been paid in three months, are now in "grace period".

I guess we know the answer to the lifecycle question...

Investors - LC / Re: What is the lifecycle of a "hardship" loan?
« on: June 18, 2020, 06:33:01 PM »
Good!  For awhile they were allowing people to buy and sell hardship loans, but they never implemented reasonable user interface or API to allow buyers to see that they were buying hardship loans.  They failed big time in their fiduciary duty to buyers!

So now that's fixed.  Good.

Yes, I was the victim of that, bought a bunch of notes and only found out later they were "hardship", because I didn't click into each one.

I escalated it to LC support and their advice to me was to sell the notes on folio. Then the next day they blocked my ability to do that--at first silently, it's actually not been possible to sell the for awhile--they would look like they were listed, but no one could see them. Now you know for sure they aren't.

The ideal solution would be to list them for sale and have a tick box, "[] Include hardship loans", so that people could know what they are getting and pay and appropriate price.

Investors - LC / Re: What is the lifecycle of a "hardship" loan?
« on: June 15, 2020, 02:43:54 AM »

Today they cancelled all my posted sales of hardship loans and they cannot be relisted for sale. The little "!" appears next to the loans in folio and it says it cannot be sold because it's in hardship status.


We're stuck with them.

Investors - LC / Hardship loans an even bigger PITA than I thought?
« on: June 07, 2020, 04:46:08 PM »
I can't prove this yet, I need to watch what happens, and maybe others can watch and confirm or deny it.

I have listed my hardship loans for sale on folio and usually no-one buys them, but recently, some of them sold. Good news right?

Not so fast: It appears that the borrower made a payment, the loan reverted to current non-hardship status, AND folio did not remove my offer "payment pending", just kept it up. Of course since there is a recent payment my heavily discounted price is quite attractive! I saw 4-5 loans sell this way before I brought a halt to it.

I don't know if these are out of band payments? Like, the borrower got back on their feet and started paying off earlier than they needed to, or if they were scheduled hardship payments. But when I look at the loan history now I see "deferred, deferred, payment completed" with no indication that it was in hardship status, and the next payment is "scheduled".

I also believe that my offer of sale was not visible to anyone UNTIL that payment was processed. Originally I listed my hardship loans for sale at a steep discount. No one buys them. I believe this is because LC does not actually display them to anyone. I even tried discounting a couple of low value hardship loans by huge amounts (70%, 80%, 90%) just to see if anyone would buy them--no one does. So I think although I see them for sale in folio no one else does.

It's *possible* that I made a mistake, that the loans that sold had reverted to normal status, folio cancelled the offer, but I didn't notice, and then somehow I resubmitted my own deeply discounted offer without checking. But I don't think I did that. I will be watching more carefully going forward to see if I can prove it.

For now I am listing them at a price I am willing to sell IF the borrower makes a payment, and I am assuming they won't sell until the borrower does that.

Investors - LC / Slow exit strategy
« on: May 19, 2020, 01:24:58 PM »
About a year ago I decided to exit LC, and to take two years to do it. The idea was to end up with cash in my account that I could transfer out in one shot without having to sell at a steep discount. My LC account is an IRA so I only wanted to do the transfer once and not repeatedly.

So I stopped buying new notes, and only bought on folio, and specifically, I only bought notes with a maturity date on or before my exit date.

On the first day that meant I only bought notes with 24 months or less left. I had other filters, mainly a high enough credit score and a credit score that had gone up, and a few other things. But the main filter was 24 or fewer remaining payments.

And in the second month, that became 23. Then 22, 21, etc.

Simultaneously I went though and identified every loan with more than 24 payments left and moved them to a new portfolio called "over 24. I put them all up for sale continuously, but not at a discount. At a small premium. With 24 months to sell I figured I didn't need to take a loss, and every month I sold a few, reinvesting the proceeds in notes maturing ahead of my exit date.

Sometimes cash would pile up in my account for a few weeks and then I guess someone would dump a bunch of notes and I'd find enough to buy to stay fully invested. The rate at which I had to reinvest also accelerated as the shorter and shorter duration meant payments became a larger share of my capital.

I realized at some point I would not find enough to buy as the duration became very low and the incoming payments high--I was ok with that, it's an exit strategy. I figured that would happen at maybe 6 to 8 months left, where I'd just lose the ability to reinvest for lack of available inventory fitting my timeline.

I was at the point of buying only notes with 13 or fewer remaining payments when COVID-19 brought a halt to my strategy. There's nothing much available for sale that meets my criteria now and way too much risk. I got burned buying a few "hardship" loans without realizing it and so I'm done with buying now.

I have a handful of notes left over my target date, that I'm now having to discount slightly to sell, and my goal is to sell them over the next year, but that's less than 20 notes out of a portfolio with ordinary hundreds of notes, so I'm almost there.

So now I'm just going to let it run out and accept that I'm not going to be able to reinvest for the final 12 months, but on the flip side, I'm getting more than 1/12th of my investment out of notes into cash every month now just by collecting payments. I'm not reinvesting it, I'll live with that--I see it as rapidly reducing my risk.

Although, I've got 10% or so of my loans in "hardship" status, so I'm expecting to take a bath on that, and likely more will sour.

Investors - LC / What is the lifecycle of a "hardship" loan?
« on: May 12, 2020, 10:56:38 PM »
So what's the lifecycle of these hardship loans?

They are listed as current now, but not making payments. Presumably at some point they're supposed to start paying--can they just keep on deferring? For how long?

And once they start finally being "late", do they go through the usual lifecycle for a late loan, starting with 15-30 days, and then 120 days? Or does the lateness "backdate" to the original deferred payment once they are late?

And so how long from today, where it's marked hardship, to when LC is going to mark one of these loans as charged off?

Investors - LC / Re: hardship fields in spreadsheet wrong
« on: May 09, 2020, 01:00:49 PM »
It's an email exchange.

My first email raises the issue and requests that they reverse folio sales for "hardship" loans on the grounds that "never late" is misleading. They reply suggesting I sell them on to other unsuspecting people:

Quote from: LC
Thanks for reaching out to us.

Since borrowers now have the option the enroll in a hardship plan or
deferred payment plan due to the current economic crisis, this allows their
loans to remain in "Current" status for the time being. I understand how
this can affect your strategy for buying Notes on Folio however, and I'm
happy to forward your feedback along to the appropriate team to see if they
can adjust these recent changes for the Folio platform.

While all sales on Folio are final and we're unable to reverse these
transactions, you're always welcome to relist those Notes for sale. We
apologize for the inconvenience and appreciate your patience during this


LendingClub Investor Services

I reply with a very short email:

Quote from: me
Do you really think it is accurate, and not misleading, to call these loans "never late"?

and they reply with

Quote from: lc
The reason why they are showing as "never late" is because enrolling in these payment deferment plans prevent the loan status from going into an official "late" status, which would impact the borrowers' credit.

LendingClub feels strongly about providing options to help support borrowers during this financial crisis. Please know that we have never intended to present misleading information to our investors, however the options we are providing to borrowers are quickly changing due to the current conditions that we're in and because of that, Folio may not be able to stay up to date with all of the changes that we are making. I understand your concern, however, and will surely pass your feedback along to our management team.


LendingClub Investor Services

Investors - LC / Re: hardship fields in spreadsheet wrong
« on: May 08, 2020, 10:49:47 PM »
What really ticked me off is that in folio when you search for "never late" notes, these hardship notes are included in the results, even though they haven't made payments in a few months. They only way to identify them is to click through to the loan and see the "hardship" notation, there's no way I can see of filtering them out.

I complained to lending club and they insist they do not think it's misleading to list them as "never late".

I only discovered this after seeing discussion here, then went back and realized I had bought a bunch of "hardship" loans in folio without realizing it--and I paid full price for them, as though they were really never late.

Investors - LC / Total investment minus total payments: -$284.01
« on: March 16, 2020, 09:42:00 PM »
I know, I know it's the wrong way to look at a portfolio. But still. Today I went to LC web interface and moved all my completed notes into one portfolio, containing all and only notes that are either charged off or fully paid. Here's what it looked like:

Notes: 1153
Investment: $26928.83
Payments to Date: $26644.82

Principal: $22547.41
Interest: $4093.81
Late Fees Received: $3.60
Charged Off: $4439.39

WAIR: 15.04%
Composition: 1% A, 11% B, 26% C, 20% D, 29% E, 11% F, 3% G

NOW... Lending Club says that the ANAR on my account is 4.69%, and maybe it is, but I'd have expected better from a portfolio that has been running since 2015. Like actually coming out ahead on the notes that actually run to completion one way or the other.

Thankfully after 2017 I stopped adding money to this account (which is an IRA).

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