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Messages - wcwei5800

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Yep, only count notes with SUCCESS status. I have emailed LC, but don't expect to get any fruitful answer from them.

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Not sure if anyone have been experience this problem lately, but my cancellation rate has gone up in last few month to be around 50% consistently now. This really hurts since there are that many notes to invest on to begin with.

Sorry the first answer I posted an hour or so ago was wrong.  I researched my past writings and...

You should expect around 20% failure, based on how the secondary market works.

Here's the text I posted on Jan 14, 2018, somewhere on this forum, tho I can't find it here now, and also emailed to LC on same day...


I think I have figured out the order processing timeline, and why so many buy orders are cancelled.

In the past I'd been looking at historical data for months gone by, and LC gives us no way at all to track down what happened for notes we bought in prior months but did not settle, so I couldn't look at note by note details.  Generally, you can't look up the payment history on the note unless you own it, or it is offered for sale on Folio.  One exception is notes that you've tried to buy during the CURRENT month.  The "my account" page on Folio has links to the note detail for all these notes.  However, if you let time slip into the next month, all these links disappear.  This page provides an opportunity to look at the payment details of notes for which a buy order has been cancelled!  You've just got to do it before the links disappear!  That's what I did tonite.

Tonite I looked at notes I bought this month, looking up the status of the purchase transaction, and the note payment dates on the note detail pages for a considerable number of notes.  Lots of notes.  My fingers are very tired.

I now believe I know how the purchase timeline works.  Its pretty wonky.  We all know that lots of sell orders are cancelled for note payment, and I always figured this was done to protect the buyer.  Not so.   The sell orders are cancelled way too late to help buyers.  Sale offers are NOT cancelled while payments are processing.  As a result of this, the buyer has quite a hazard.   

Loan payment processing timeline...

Lets reference dates to the note "due date".  I'll call this 'D'.  This is when the payment processing window begins.  No payment has been made yet.  This is simply the day when a process starts.  On that day, or the closest business day, LC sends a request to the bank, via the ACH system, to grab some money from borrower's account.  A few days later, if the money has arrived, LC considers the payment "settled".  This is the "settlement date".  Lets call it 'S'.  (Due date and settlement date are shown on the note detail page.)

Settlement date S can be = D+3, D+4, D+5 or D+6.  This occurs because LC only works on weekdays.  So if no weekend or holiday intervenes, settlement is D+3.  If a holiday is in there, then it's D+4.  If a weekend intervenes, it's D+5.  If you have both a weekend and a holiday, then settlement is D+6.

So payment processing takes 3,4,5, or 6 days.  ...but there's more!

Now, the LC/folio note order processing timeline...

When I place a successful buy order on day 'B', LC does not process that the same day.  They process it the next day.  You can see this on your "my account" page.  The "order date" is always 1 day later than the day you placed the order.  Recent email from LC claimed the settlement process runs every day at 3PM, but this is misleading.  That may be the time that the software runs, but the time cutoff it uses is midnight.  Buy orders up to but not including midnight on 1/1/18 are logged by LC as ordered on 1/2/18.  In other words "order date" shown by LC is always B+1.

Now, when is a buy order cancelled?

A buy order is cancelled if B is in the range [D-1 thru S] inclusive.  In other words, the hazard window is one day more than settlement.

As an example, suppose a note had a due date on the 1st of a month.  Suppose there's a weekend and a holiday in there, so settlement is the 7th of the month.  Now you come along on the 7th and see this note listed for sale, and you buy it, and get a SUCCESS_PENDING_SETTLEMENT response.  Cool.  You think you've bought a note.  You haven't.  That order is gonna get cancelled for sure.

This is astonishing.  Its goofy that they know that they're gonna cancel the order if you buy, and they have known this for SEVERAL DAYS before you buy, but they let you buy, and then cancel.  Extra processing for them.  Extra processing for you.  Things are harder to track.  The right thing to do would have been to remove the sell order from folio once the window began, so that buyers didn't waste their time.  That's not what LC does.

I've had orders where I bought on D-1 and the order was cancelled after I bought.  (For the record note# 126688481.  I bought 1/1/18.  LC order date 1/2/18.  Due 1/2/18.  Settle 1/5/18.)

I've had orders where I bought on D+6 and the order was cancelled after I bought.  (For the record note# 119577848.  I bought on 1/2/18.  LC order date 1/3/18.  Due 12/27/17.  Settle 1/2/18.)

So the bottom line is that for each payment, ie every month, each note has a window of 4,5,6, or 7 days in which if you order in that window, the order will be cancelled.  Most of the time its 4 or 6 days.  The other two possibilities require holidays, and there aren't very many of those.  There are 4 days of each non-holiday week which have 4 day windows, and three days that have 6 day windows.  From this we can calculate that the average window is 4.857 days.  (Not considering holidays, which would make it a little bit bigger.)

Payments come 12 times per year.  Each payment has a 4.857 day hazard window.  That's 12x4.857 hazard days per year.  (The occasional extra payment will bump this up a little, as will holidays.  Missed payments will bump it down a little.)

D can occur on any day of the year.  Yea, I know LC only processes on weekdays, but we've already handled that with all that stuff about settlement sometimes being D+3 and sometimes D+5.  So there are 365 days to consider, and ...

Probability that a note order is cancelled = 12x4.857 / 365 = 18.46%

Now you may recall that I've had some periods when I calculated much higher failure rates for my own account.  Keep in mind that this calculation is an average.   Different months have different numbers of holidays and different alignment to weekends.  Also the luck of the draw will cause some variation.  Finally some of the much higher numbers I calculated a few days ago were from manual calculations which because of the difficulty of calculating by hand were for single days, which of course will vary much more than months.  There is probably also some day-of-week bias when loans originate.  This number above is just an average calculation all other things being equal.

Here (again) are the calcs I did for the last 6 months on all buy orders in my account.


November and December have a couple of holidays each, so they're expected to be a little higher.  These numbers look like they sorta agree with the theory.

The marketplace is simply designed so that about 1 out of 5 buy transactions will fail.

your answer make sense. However, I been seem consistent high cancellation rates with my order which is really odd. My cancelled percentages are 45%, 37%, 40%, and 32% from March to June respectively. For July, this number is currently at 54%... The "day since last payment" is always around 14 days, so I don't this is the reason. The sample size is fairly large as well, so I don't believe they are due to random chances.

3
Not sure if anyone have been experience this problem lately, but my cancellation rate has gone up in last few month to be around 50% consistently now. This really hurts since there are that many notes to invest on to begin with.

4
Foliofn - LC / Re: Folio Selling API
« on: September 30, 2017, 01:56:46 PM »
I reported this issue a year ago.  The test in their software is off by one day.  They also expire at a different time of day than the documentation specifies.

This is crazy that the issue still exist!

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Foliofn - LC / Folio Selling API
« on: September 30, 2017, 04:12:41 AM »
According to Folio API documentation, we should be able to sell notes and have notes expire at the same date. However, whenever I set the expiration date to today's date, I always get the error message of "ORDER_EXPIRE_DATE_TOO_SHORT".

Are you able to submit the form with today's date? If not, how do you deal with the problem? Do you only reprice your notes every 2 days?

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Foliofn - LC / Re: Account's Available Cash Missing
« on: April 13, 2017, 10:01:08 PM »
This is common.  The way LC's accounting works, thing happen at different times of day. 

For example, in the early evening, they pull the "fees" out of your account, and then later in the evening, they deposit that day's payments.  Your cash balance drops, and can go negative, in between these two events.  I see this all the time.

The cash transactions between LC and folio also happen at some odd time, not even on the day you would expect.  I haven't ever tried to track them down exactly, so for example I don't know whether folio fees come out at the same time as cash comes in from sales, or if there's a time skew on that too.  I wouldn't be surprised to see another skew.

Once there are folio transactions "in flight" it is very difficult to reconcile the cash accounting.  You can't just subtract out the last few folio transactions, because they don't complete in the order you placed them.  I complained to LC about this once, and they suggested I stop trading on folio for a few days so there'd be no transactions in flight. :o

As I said, this makes reconciliation difficult.  They history page shows dates but not times on transactions, so it isn't easy to figure out.  If there are only LC  transactions, I think I understand it all, but once there are folio transactions, its really messy.

Aside: Not the way I would have designed it.  I think one of the basic requirements of accounting and reporting systems is that they should be reconcilable.  You have to be able to do the equivalent of "balancing your check book" using what they provide.

...but its the way it is.

For example, in the early evening, they pull the "fees" out of your account, and then later in the evening, they deposit that day's payments.  Your cash balance drops, and can go negative, in between these two events.  I see this all the time.

This would make sense for my case. I only purchase through Folio so the transaction fee does not really effects me. Do you have any idea what time range do they pull the fees? I generally see my cash balance drop in the afternoon, between 12PM to 6PM. Is this the time they generally pull the fee?

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Foliofn - LC / Re: Account's Available Cash Missing
« on: April 13, 2017, 09:24:41 PM »
I contacted LC previously, they said they did not noticing anything, and ask me to provide time stamp and screen shots. Obviously, I do not have screen shot since I do not know when this will happen. I contact LC again today, and provide exact time stamp. If anyone is interested, I will provide more follow up once they get back to me.

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Foliofn - LC / Account's Available Cash Missing
« on: April 13, 2017, 09:24:11 PM »
i only being using my lending club to invest through Folio notes. Recently, I been noticing my account available cash balance decreased without me taking any action. (Did not purchase notes, no auto investing, and did not withdraw). It generally decrease by amount less than 2 dollars.

For example, today at noon, after I purchased notes, my available cash is $842.94. Thie evening, before I purchase any notes, my available cash is only $840.85. i did not take any actions in between. I use program to purchase notes and document available  cash, so I don't think thist is one of those cases where I remember it wrong.


Is there a reason that my account available will decrease? Fees should not be the reason because LC takes fees from payments.

Did anyone else experience the same thing?




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Foliofn - LC / Re: Download Folio Secondary Note Data
« on: March 18, 2017, 11:37:32 AM »
Anybody have any ideas?

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Foliofn - LC / Re: Folio API
« on: March 17, 2017, 01:57:26 AM »
How would somebody get data on the loans trading in the folio secondary?

You can download available notes on LC FOLIOfn from their Browse Notes page: https://www.lendingclub.com/foliofn/notesRawData.action

This link seems to work for web browser. Is there a way to make this link work for a program?

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Foliofn - LC / Download Folio Secondary Note Data
« on: March 17, 2017, 01:54:06 AM »
removed

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Investors - LC / Re: Roth IRA with P2P Lending
« on: February 12, 2017, 09:46:11 PM »
That is helpful. Thanks guys for the info!

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Investors - LC / Roth IRA with P2P Lending
« on: February 12, 2017, 07:46:00 PM »
I am thinking about opening a Roth IRA account with Lending Club. However, I do have a concern I want to address before doing so.

If I want to rollover my normal Roth IRA account with a broker to a new Roth Ira, I could just sell all the assets and move the money to the new account. Or I can take all the money from the old account and deposit it into a new account within 60 days.

However, if I want to close Roth IRA account with Lending Club and transfer to a new Roth IRA, it would be hard to liquidate all the assets at once since we need to wait until all the notes mature. (I know Folio is a way, but I don't think it is a great way.)

If I do want to rollover my lending club Roth IRA and to a new Roth IRA, do I have to let my money park in lending club until all the notes matured, and then transfer it all to a new account? Or can transfer my money each month to a new account for next 36 month?

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