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Messages - twigster

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1
Investors - LC / Re: wide range of FICO scores for A loans
« on: September 30, 2017, 03:34:57 PM »
Quote
FICO doesn't have the income data. I suspect this is a key variable (DTI, etc) that allows low FICO in A. Not positive though



I did take a closer look, the one bad loan with a very low FICO did have $7,500 per month income and also it was verified income.  So I would agree that it does look like this is a factor.  They must be underwriting 'correctly' in that by backtesting higher FICO scores on nsr yields lower results.  I am still though starting to screen on FICO as these (nsr) are historical results and the differential in results is not that great.   

2
Investors - LC / wide range of FICO scores for A loans
« on: September 27, 2017, 12:40:51 PM »
I started converting over my portfolio to A loans since December of 2016.  At that time I had basically no A loans, now I have about 1100.  Since they are all fairly new loans (just reinvesting to buy new A loans), there haven't been that many bad loans yet, so far there are 6 in late 16+ through charged off.  I notice that there is a tendency for the bad loans to have lower initial fico scores (say 680-684) and the initial FICO range is very broad for A loans in general. 

I will note that I backtested screening on FICO in nsr and that screening on FICO has a slight negative outcome historically.

Yesterday I did a screen on existing loans to invest in with FICO greater than 750.  Most of those returned were A loans, although there was a wide range.  There were even some E and F loans in there.  I didn't see right off why the E and F loans with above a 750 FICO would be assigned that grade level.  I have attached screen shots of two of the these high FICO high interest rate loans.

I have general confusion of how lending club uses FICO in the underwriting process and why certain loans with lousy FICO could get an A grade and loans with really good FICO could get a E grade.  I would expect the assigned grade to be more correlated with FICO than it appears to be.  An insights appreciated.


3
I started liquidating Prosper a while ago by turning off re investment.  We will see how long it takes to run the entire accounts out (ROTH and regular).  I had less in there than in LC.  The returns were lagging LC and then when they took away the secondary market that kind of cinched it.

4
2017-09-17

Adjusted Net Annualized Return:   6.73%
Weighted Average Interest Rate:   12.20%
Weighted Average Age of Portfolio:   20.7 mos
Number of Notes:   3793

Grade: A (37.7%) B (2.4%) C (35.6%) D (17.6%) E (6.5%) F (.2%) G (.1%)
Term: Payments  36 (46.3%) 60 (53.7%)

vs All Accounts: 84.95
vs Similar Age Accounts: 96.43
vs Similar Age and WAIR Accounts: 95.61

_______________________________________________________________
I continue converting to grade A loans since December of 2016.  So now I am buying just A loans and started with zero in December.  Out of 1100 loans so far 1 has charged off and there are 3 which are headed that way.  In the meantime my returns have been negative or about zero for the past few months as there are a lot of charge off on the other loans.  Looks fairly dismal but still waiting to see how it goes with the new A loans. 

lascott:  good luck on the surgery. 

5
General P2P Lending Discussion / Re: Peerstreet looking good to me
« on: April 04, 2017, 04:32:01 AM »
Here is another update on peerstreet.  Notes on peerstreet are deemed 'late' if the payment for the specific month is over two weeks late.  Those considered late get a comment posted to the position that states the following:  'Borrower payment not confirmed. PeerStreet is in contact with originator and servicer.'
So now on April 4th there have been a series of loan payments made and posted as of April 3rd, many are for the period of March, but some of for February.  Those now paid through February 28th will not be deemed late until the middle of this month, (April 16th).

So here is my experience with late payments across all sites I have dealt with as follows:
total number of loan experiences (either current or paid off)/total ever late payments/total current lates
realtymogul: 1/0/0
patchofland: 3/1/0
realtyshares: 2/0/0
fundthatflip: 5/0/0
lendinghome: 18/1/0
peerstreet: 26/7/1

Note that peerstreet seems to have a higher incidence of lates, although this is based on a small sample size. 

One other thing; most of these sites boast zero loss of principal.  I had a conversation with fundthatflip as a fairly representative example asking for stats on their entire loan book.  Of all the loans they had done 5% had gone past the due date (default), of that 5%, 2.5% were still making monthly interest payments, this is about in line with other sites I have looked at.  Because of fees built in to the collection process they normally make money on defaulting loans so there has yet been no loss of principal (for any of the sites), but yet it is early days for realty based p2p sites.



6
twigster ROTH:
Your Notes purchased on the Lending Club platform
Adjusted Net Annualized Return:   7.94%
Weighted Average Interest Rate:   13.50%
Weighted Average Age of Portfolio:   19.0 mos
Number of Notes: 3,039

A(14.3%) B (4.0%) C(49.5%) D(23.6%) E(8.3%) F(0.3%) G(0.1%)
Payments  36(37.3%) 60(62.7%)

vs All Accounts: 88.32
vs Similar Age Accounts: 96.82
vs Similar Age and WAIR Accounts: 96.15
_______________________________________

twigster:
Your Notes purchased on the Lending Club platform
Adjusted Net Annualized Return:   8.56%
Weighted Average Interest Rate:   13.81%
Weighted Average Age of Portfolio:   26.4 mos
Number of Notes: 1,127

A(12.2%) B (9.3%) C(43.6%) D(34.9%) E(0.1%) F(0.0%) G(0.0%)
Payments  36(46%) 60(54%)

vs All Accounts: 91.47
vs Similar Age Accounts: 96.79
vs Similar Age and WAIR Accounts: 96.89

_______________________________________________________________________________________________
Have been transitioning over to A notes starting beginning of December, so main account is up to 14.3% A notes (from 0%) in about 3 months by just reinvesting payments in new A notes.  Still no negative months, and returns look like they are starting to stabilize a bit.  No unexpected churning on the A notes and so far no lates.   

7
General P2P Lending Discussion / Re: Peerstreet looking good to me
« on: March 05, 2017, 09:03:40 AM »
I have been investing in peerstreet since August of 2016 and started using there autoinvest tool in December of 2016.  Since that time I have invested in 25 deals (1 for 5k and the others for 1k each).  I was disappointed by the number of late payers that popped up in the batch of December loans.  Out of 23 loans, 5 were late pays by end of Feb.  Of the 5 lates one is not current and the other 4 are still behind in interest payments.  I would say out of about a dozen deals at other real estate debt sites I have had no late pays.  Since getting hit with these all near the same time I have decided to stop investing in peerstreet (for the time being) and see how the loans iron themselves out.  There are a lot of these sites that so far have 0% loss of principal (because of booming real estate market, lack of deals completed), but excessive late pays would be the canary in the coal mine for me. 

Also noticed that with the peerstreet website it is harder to see lates as compared with other sites.  Other sites tend to show a 'last paid' column or other indicator of whether the loan is current or not on the summary page, for peerstreet you need to see if there is a comment on the loan, or click on each loan to check the last payment date.


8
twigster ROTH:
Your Notes purchased on the Lending Club platform
Adjusted Net Annualized Return:   8.17%
Weighted Average Interest Rate:   14.11%
Weighted Average Age of Portfolio:   18.5 mos
Number of Notes: 2,799

A(4.3%) B (4.6%) C(55.3%) D(26.2%) E(9.3%) F(0.3%) G(0.1%)
Payments  36(29.9%) 60(70.1%)

vs All Accounts: 89.37
vs Similar Age Accounts: 96.92
vs Similar Age and WAIR Accounts: 95.67
_______________________________________

twigster:
Your Notes purchased on the Lending Club platform
Adjusted Net Annualized Return:   8.95%
Weighted Average Interest Rate:   14.13%
Weighted Average Age of Portfolio:   25.3 mos
Number of Notes: 1,066

A(3.1%) B (10.2%) C(48.0%) D(38.6%) E(0.1%) F(0.0%) G(0.0%)
Payments  36(39.2%) 60(60.8%)

vs All Accounts: 93.55
vs Similar Age Accounts: 97.22
vs Similar Age and WAIR Accounts: 97.44

_____________________________________
notes;  I have become somewhat disenchanted with the loan returns in the last 6 months as it seems that charge offs are too high in a non recession period.  Beginning in early December 2016 I decided to only purchase A notes (A2 through A5 as A1 interest rate is much lower, A2 = 6.99%, A5 = 7.99%) as an experiment.  Will see if paid in fulls go down (it should because no incentive to churn the loans) and stability of returns go up (at a much lower level).  Should be able to tell something in about 12 months.  Note on ROTH account: by re-investing all payments in A notes went from 0% to 4.3% in just under a month. 

9
Investors - LC / Re: 2015 & recent loan quality
« on: October 10, 2016, 11:40:53 PM »
Quote
Average Interest Rate has been declining since 2013.

Thanks for that and the graph, trying to square this declining interest rate data with what I've heard about lc increasing interest rates this year.  The data they show here:
https://www.lendingclub.com/public/rates-and-fees.action

has been increasing in 2016 as announced has it not (increased in most loan grades, especially lower grades)?

10
General P2P Lending Discussion / US vs UK Tax Treatment of Peer to Peer
« on: October 01, 2016, 01:33:10 PM »
From this podcast:
http://www.lendacademy.com/podcast-75-mike-baliman-london-fintech-podcast/

I gather that the UK used to have similar tax treatment of p2p lending, ie. inability to write off capital loss against interest from other p2p loans.  Now they have changed it as follows in the UK tax law:
Quote
If a peer to peer loan isnít repaid the lender can set the loss they suffer on the loan against the interest they receive on other peer to peer loans before the income is taxed.
from https://www.gov.uk/guidance/peer-to-peer-lending

Wonder if anything is going on to clear up this seemingly unfair aspect of the US tax code as it relates to p2p loans?  Anyone know if this subject is before the IRS to get a ruling?

I don't think that the authors of the tax system anticipated the obvious unfairness of this.  A simple example is you have 10 p2p loans at 10% interest and one goes bad in one year, so you basically break even.  Due to US tax law the loss on the one is not allowed to offset the interest gain so you pay taxes on the interest of the 9 good p2p loans (limit capital loss to $3k) -- so it would seem logical that at some point the IRS would address this. 

11
General P2P Lending Discussion / Re: My RealtyMogul Returns
« on: September 12, 2016, 12:43:57 PM »
I invested in one realty mogul debt deal this year which had a stated interest rate of 6.5% and paid off early for whatever reason.  My XIRR for the deal was 6.90% for the short period the funds where invested.  I have mostly been looking towards other sites that focus more on debt only deals but would invest with realty mogul again if a suitable debt deal came up again.

12
This was from an email I got from Sofi back in July:
Quote
The prior fund is now closed. We are launching a new fund in the next couple of weeks. It will be open to "Qualified Purchasers," defined as those having "not less than $5MM in investments."

So the bar is raised once again! 


13
It looks like my 6/8/2016 updates are no longer in the current chart.  I see them in the chart posted on July 6th 2016:
Twigster IRA 9.30% (not 10.25%)
Twigster 10.11% (not 10.13%)

14
Investors - LC / Re: Over 200 loans and flat return after ~ 3 months
« on: June 15, 2016, 07:52:01 AM »
Quote
I already have 5-6 late payments (which after I count as zero value)

It may easier to compare your results with others if you use the default loan loss ratios as opposed to custom ratios.  In grace period (late) loans, for example, have an expected default loss rate of 28%. 

15
Investors - LC / Re: Lending Club Site is Down
« on: June 10, 2016, 12:27:55 AM »
site down for maintenance again!

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