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Messages - Edward Reid

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Investors - LC / Re: RIP Lendingclub Notes
« on: October 09, 2020, 03:56:05 PM »
I think they're talking about IRA custodian fees for account maintenance and transfer which can be substantial.

Ah, thanks.

Investors - LC / Re: RIP Lendingclub Notes
« on: October 09, 2020, 02:36:26 PM »
as the amount invested in notes slowly declines as payments are made, we are exposed to fees for as long as five years if we hold 60 month notes

Aren't all LC fees directly proportional to the note or payment size? And thus will decrease along with the remaining principal?


Investors - LC / Re: RIP Lendingclub Notes
« on: October 07, 2020, 11:27:04 AM »
Sad, but it hardly makes any difference to me. I've been blocked from buying notes for about a year now, and it's been obvious that restoring my capability was not on LC's radar. I've been pulling cash out as it accumulates, and assuming that the game has already ended.

It will be convenient (slightly) to have these transfers done automatically. They trumpet a "high yield" savings account. Did no one notice that "high yield" is associated with low grade bonds? Of course it's actually an FDIC insured account, but the use of those words is poor marketing.

And what will that yield be? That's conspicuously missing from the email. Perhaps 0.05% instead of 0.01%? Oh joy. Capital One has recently been advertising accounts paying "five times the national average" without saying exactly how close to zero that average is.


Investors - LC / Re: Returns during Covid-19 Economy
« on: April 30, 2020, 08:27:43 AM »
I am indeed making a supposition:  that notes in “hardship plan” are not included in the "deduction for estimated future losses on loans based on status.”
Under normal conditions, this would make sense to me. AIUI, a hardship plan is normally negotiated by the borrower, indicating that said borrower is in active contact with LC. Although those people are in financial straits, they are making an effort. The ones I think most likely to default are the ones who have simply broken off contact.

But (again AIUI) LC has changed the way borrowers get into a hardship plan due to the crisis. And based on Fred's and Jim's observation about the spreadsheet data, perhaps they have a new flag that's being displayed as "hardship" but is actually a new category. And since none of us knows how this is going to turn out, it's reasonable not to adjust the calculation at this time.

Lots more suppositions of course.


Investors - LC / Re: Total investment minus total payments: -$284.01
« on: March 25, 2020, 11:58:55 AM »
By considering only completed loans, you are biasing your sample toward charge-offs. Consider that you are dividing your notes into three pots: succeeded, failed, and in-progress. By excluding the in-progress, you include a larger proportion of failed. The bias is stronger because failures occur sooner than successes.

Your profile is very risky. Almost 2/3 in the risky DEFG categories, and over 40% the very risky EFG. Some investors make money on such profiles, but the risk is high, so it's likely that you have fallen on the unlucky side of the risk line. Also, such a risky profile means a higher proportion of charge-offs (even when balanced by more profit on the successes), and this exacerbates the bias from excluding in-progress.


Investors - LC / Re: Crisis management - stop charge-offs ?
« on: March 25, 2020, 11:30:23 AM »
Basically you are saying, LC should help borrowers more due to the crisis. This is a good thought.

But LC already does a lot for those late on payments. Look at the collection log for notes which have been charged off. Many phone calls, messages left, emails sent, paper letters sent, over usually a four-month period. Almost invariably I see one or more of the following:
  • Borrower stops answering the phone.
  • Borrower does not respond to emails.
  • Borrower does not respond to paper letters.
  • Borrower tells LC to stop calling (a legal right).
  • LC is informed that the borrower is in bankruptcy.
For example, I just looked at a recent charge-off: 130 phone calls (none answered), 3 messages left, 7 emails sent, 3 paper letters sent. (Obviously LC finds phone calls more effective at getting responses.)

I do see loans where LC contacts the borrower and they set up a new payment schedule. Often this doesn't work -- clearly a borrower who is behind in payments is already in trouble -- but the possibility is offered.

As Fred points out, the borrower can still pay off the loan even after it's been charged off. Perhaps someone here with a larger number of notes has seen this happen. I haven't.

If I were a borrower and unable to make a payment, I'd be answering every phone call, explaining my situation, asking what I can do. I don't know how long I'd be able to string it out, but I'd try. The difference of course is that I've never gotten into that situation. Very likely most P2P investors have always been astute enough to avoid that situation.

So really the only thing that might change is at what point LC sends a black mark to the credit reporting agencies. I don't know when that happens -- likely when payments are 30+ days overdue. It might indeed be reasonable to delay that reporting during a crisis.

But what do you do when the borrower won't answer the phone?


anyone heard an update to this? I still can't invest

I'd go with your previous comment ... don't get your hopes up.  :o


Personally I'm not expecting any updates. As others have pointed out, LC has little incentive to work on keeping individual investors. If my state gets brought back into the fold, I'll reinvest, but until/unless that happens, I'l just take my payments and run.


If LC opens it up again, I'll invest again. I'm not planning on it though. I'm withdrawing cash as it accumulates and spending my time thinking about other stuff. Lending Club? Sounds vaguely familiar. Was that a basketball team?


individual investors now represent only 5% of originations

I wonder ... is this due to lack of retail investor interest? Or did the large investors simply gain interest and push out retail by being faster and cheaper and easier for LC to deal with?


This theory seems to fit the facts.

Makes sense to me ... if anything does.  ;)


If anyone figures out what's really going on, I'm interested. Clearly it's something that happened at LC, not in the states, since several got restricted at the same moment. (I'm in Florida.)


Investors - LC / Re: Collection logs no longer published?
« on: April 06, 2019, 10:46:21 AM »
Got email from LC yesterday saying they are working on it. Today I see collection logs.


Investors - LC / Re: Collection logs no longer published?
« on: April 04, 2019, 02:44:32 PM »
I came here with the same question. I'm guessing it's a bug.

still says investors can see collection activity. Just like always. I think they would have fixed that had the change been planned.


General P2P Lending Discussion / Re: FICO score inflation
« on: January 08, 2019, 11:23:38 AM »
the WSJ should be ashamed of graphing it in a way that is misleading
Why would they do something like that though? Do you think it was malicious or just an oversight?

I'd say ignorance of proper and honest presentation of statistics. Also, very likely the graphic was produced by someone other than the author and the two were joined by a harried editor.

Still, this is one of the most basic and well known errors in data presentation. The WSJ should be ashamed. I don't read it, but based on this I would not trust them with numbers.


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