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Messages - muflafler

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Foliofn - LC / Re: Why not buy notes with a premium???
« on: October 06, 2018, 04:53:11 PM »
Itís true you can lose the premium paid if a note pays off early, but is it more important to try to minimize a 3% loss from a prepayment, or a 100% loss from a default?

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Over the past few years Iíve moved to only investing in notes purchased on the secondary market.  My returns have been far in excess of my returns on my primary market notes.  Iíve found it is much better to be willing to pay a premium for notes that have paid on time for at least several months and have a rising FICO trend than to pay face value for primary market notes.  Losing 1%-3% of my purchase price when a note prepays is nothing compared to losing 100% when a note defaults, so I am simply trying to minimize my default rate and am not too worried about paying a premium.

I can see from my own returns that my secondary market strategy has been far superior to the primary market, but I was wondering if there are any tools out there that would allow a more scientific evaluation of it.  AFAIK, tools like NSR only allow you to see stats over the whole  life of a note, beginning at origination.  What I would love to see is something where you could mine the data from various points in a noteís life.  E.g., ďwhat is the average default rate for 36 month notes with a FICO of X and that have already made Y months of on-time payments?Ē 

Is there anything out there that could help me with that kind of analysis? 

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Foliofn - LC / Folio site is down?
« on: January 31, 2018, 05:37:49 PM »
The site has been crashing for me all day, every time I click 'Apply' to run a filter on the secondary market, I get the message "Internal Server Error - Read."  Looks like the site works and I'd be able to purchase notes, I just can't narrow it down at all from the approximately 310,000 notes that are listed  :-\.  Is this happening for everyone else too?

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Investors - LC / Santander exiting Personal Lending Business
« on: October 29, 2015, 01:23:50 PM »
Santander, which currently has an agreement with LC to purchase up to 25% of LC's total loan originations, announced today in their quarterly earnings report that they will be completely exiting the personal lending business and putting all their existing personal loan assets up for sale.

The 25% was a cap, not a target, and I'm not sure if LC had disclosed the % that Santander actually purchased.  Presumably, all of the loans purchased by Santander had been purchased in the whole-loan market. 

What this means for us it seems, is that up to 25% of LC's total loan originations, which had previously not been offered on the regular platform, will now be offered on the platform and will
be available to individual investors.

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Investors - LC / Re: "Credit for Ineligible Loan"
« on: February 25, 2015, 05:46:56 PM »
Hi,

Noticed on my 1099-B that all of these "ineligible" notes are on there.  Date of Acquisition is the date the note was funded,, while date of sale is listed as 11/06/2014 for all of them. 

Cost is $25 for all (my original investment amount in each note) and then Principal/Income received is just what I received in payments.  And the sale price works out so that I have zero gain or loss on all the notes, I.e., if I bought a $25 note, and then received an $0.80 monthly payment before the note got yanked back by LC, then the sale price is listed as $24.20 so that the total is $25.00 and I have no gain.  So for tax purposes LC is treating this as if you sold on the secondary market for no gain or loss.

Slightly annoying for me because I don't do the secondary market very much and haven't sold any notes on the secondary market, but now I have to enter this 1099-B info for a bunch of notes that LC screwed up on and where the total p&l is zero.  And I do not know how to import it into turbotax in an automated fashion.  Oh well...

Edit:

Actually, if total p&l is zero AND p&l on each individual line item is zero, do I really need to file the info from the 1099-b?  I guess the answer is yes, just because the IRS will receive this and the automated system will probably flag that the IRS received a 1099-B but I did not report a 1099-B in my filing.  And then my filing might get an additional review or something because of that.  Better safe than sorry when it comes to the IRS!

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Investors - LC / Re: "Credit for Ineligible Loan"
« on: November 06, 2014, 03:18:47 PM »
I had 8 "Credit for Ineligible Loan" when I posed this morning, but now I am up to 22 in total.  It's about 2.2% of my total Notes that have been returned/refunded.

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Investors - LC / "Credit for Ineligible Loan"
« on: November 06, 2014, 09:32:27 AM »
I had several transactions show up today, "Credit for Ineligible Loan."  Does anyone know what is going on when this happens?  The Account Activity page does not show the loan number or any other data, just this:


11/06/14   Transfer   Credit for ineligible loan   $24.44

I had 8 of these show up today, I've never seen it before.

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Investors - LC / Re: Overqualified borrower problem
« on: October 13, 2014, 05:43:58 PM »
As a possibly irrelevant analogy, before the financial crisis, mortgage securitizations were generally structured so that the senior securities were protected mainly against prepayment--the biggest risk was seen as being paid back too soon, and the holders of the most senior securities in the securitization would accept a lower return in order to be protected against the risk of prepayment (the more junior securities would be paid back before the more senior securties).

But since the financial crisis, mortgage securitizations are no longer structured that way.  The senior securities are now protected against default--once again, the primary risk is viewed as not getting paid back at all; getting paid back too soon is not viewed as quite so bad anymore after seeing the types of losses that can be incurred when defaults spike.

So you might not like to see a high prepayment rate, but it could be worse.  I personally believe that the loan performance data that everyone here is working off of is skewed by limited sample size, i.e., the vast majority of performance data comes from a time period where the economy was generally improving and does not include a recessionary time period.  Loan performance during a recession is sure to be significantly different (worse), and attitudes about risk among P2P investors may change in similar ways as it did for mortgage securitization investors.

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