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Messages - DiligentiaLLC

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16
Today I was asked a great question - one of which I have no idea what the answer is so I thought I would put it on the boards and see if anyone knows for certain. Does anybody know if a business can get a loan from prosper or lending club?  And when I say "business" I mean getting a loan using the actual business name and FEIN (Federal Tax Identification Number) versus borrowing as an individual and using his/her social security number.

Any ideas?

17
Investors - LC / Re: Account Balance
« on: February 06, 2012, 06:13:55 PM »
Larry, while I know that your post is about LC, I thought you might be interested to know that Prosper has a similar phenomenon where your balance can be incorrect for 24 business hours.  I submitted a guest/commentary article to Peter on this very topic and it explains where & why this takes place.  I wouldn't be surprised if LC has a similar situation/problem.

As soon as Peter publishes it to the front page (of SocialLending.net) you can read more about it.

Food for thought,
Chris

18
Investors - P / Re: Debt Sales
« on: January 27, 2012, 12:03:08 AM »
Peter, I see what WES is talking about here:

http://www.prosper.com/help/topics/lender-debt_sale_history.aspx

Over 700 bad debt notes sold in the month of December 07 alone - and then everything stopped???

Any word from Prosper on this?

19
General Lending Club Discussion / Re: Folio Taxes?
« on: January 11, 2012, 09:15:30 PM »
Captain,

Per prosper's website:

Quote
Prosper does not provide tax advice. The following provides an overview of Prosper's tax reporting methodology for the benefit of investors. Each taxpayer's situation is unique; please consult your tax advisor for more information.

Income earned from loan interest is taxable income. Each tax year that you earn interest or other income, Prosper will send you a Consolidated Form 1099 summarizing your taxable interest income, and will report this 1099 information to the IRS. (In some cases, amounts less than $10 may be reported to state tax authorities based on individual state requirements.)

Regardless of whether or not the interest income or fees are greater than $10, these amounts are reportable on your annual tax return. Prosper reports interest income on a cash basis, not on an accrual basis. This is required by the Internal Revenue Service.

I know you mentioned Lending Club & Folio in your previous post so in consideration of Prosper's statement above and your post, here is my two cents:

1. Any net gain you realize (via a sell) or interest income payment you receive is taxable income.  You will receive a 1099 from Lending Club and/or Folio providing the details as Prosper and Lending Club seem to work in a similar fashion with this regard.

2.  If LC does not let you buy notes in your state, try prosper.  Each platform have their own set of privileges per state and where LC isn't ready for your state, Prosper may be.


Hope that helped.

20
General P2P Lending Discussion / Re: Feedback on Foliofn
« on: November 14, 2011, 04:37:33 PM »
In the past I did a lot of buying on Foliofn with my personal account(s).  I used it as a way to accelerate purchasing but as time has gone by I have almost completely moved away from it for at least the following reasons:

1.  Lack of available and meaningful filters, which in turn create way too much time spent finding the right type of notes.
2.  Little or no institutional investor support.
3.  Tendency for notes to be less payment reliable.  Even if you search for notes that are "Never Late", I noticed a disproportional amount of these notes to go into grace period shortly thereafter.

I feel for the reasons above (among others), the overall liquidity of member dependent notes should be questioned more acutely.   I could see some investors becoming hesitant to take large positions in member dependent note platforms if they feel they may run into issues selling notes - or only able to sell them at considerable discounts.

In the interest of fairness, I have found some absolute jewels on foliofn where the owner was wanting/needing to sell quality notes at a serious discount for whatever personal reason.  Those instances have created some fruitful ROI opportunities, but I have experienced more negative than positive.

Overall, I have been underwhelmed with Foliofn.  I really hope the technology improves.

Hope that was helpful.

21
General P2P Lending Discussion / Re: Why Folio?
« on: November 04, 2011, 07:04:40 PM »
Great question. I would like to take it a step further and ask, "Why don't each platform bring the trading of their own notes in-house instead of trying to find a Folio replacement?"

22
Investors - P / Re: New Institutional investor on Prosper?
« on: November 03, 2011, 01:22:31 PM »
Diligentia.......That's odd. .Have you tried to find out if the Folio delays you have experienced have happened to other institutional investors as well?

To my understanding (provided by the Prosper/LC platforms), what I have experienced is nothing new.  Apparently Folio has their own set of guidelines and approvals a firm has to go through in order to use the secondary market.  I will be happy to post when/if I get access so I can share what all has to be done in order for a firm to buy/sell notes.

23
Investors - P / Re: New Institutional investor on Prosper?
« on: October 26, 2011, 05:12:43 PM »
Ok. let's be clear about this. Specifically what can institutional investors not do on foliofn?

There is a much more stringent and bureaucratic process to getting access to Foliofn if you are not a private/individual investor. Prosper and LC both tell me it has nothing to do with them and they pass the buck to Foliofn.  This actually compounds the problem because (as individual investors may have already noticed) you apply to access the Foliofn exchange indirectly (via the Prosper or LC platform) so trying to understand the actual cause of the delay is often mysterious and elusive.  When I initially applied (as a firm) Prosper/LC both told me (depending upon who I talk to) either "you can't get access to Foliofn as an institutional investor" or "it takes a while". It's been months and I still don't have the green light from Foliofn to buy or sell notes as a firm.


24
Investors - P / Re: New Institutional investor on Prosper?
« on: October 24, 2011, 06:04:29 PM »
I am guessing they are in it for the long haul and have no intention of selling. As you say, they would be very difficult, if not impossible, for an institutional investor to sell at the amounts they invest.

Speaking from experience, this is because Foliofn is VERY unfriendly to Institutional Investors.  We don't want to hold bad notes; the problem is that in most cases they will not permit institutional investors to trade and unfortunately this is true for both Prosper and LC (as they both tell me the problem is with Foliofn).

This is arguably the biggest problem I have come accross as an institutional investor on both platforms...

25
General Prosper Discussion / Re: Do you invest in cashback listings?
« on: October 06, 2011, 09:54:12 PM »
I have used it and enjoyed the nice bonus it provides, however I only recommend buying a position in the loan if the rest of the information meets your existing criteria/filters.  Don't reduce your standards in order to get the 3 - 4% bump because it is only a one time payout whereas you are "marrying" that borrower for 1 - 5 years.  Overall, if the loan does meet your criteria, the cash back bonus can be a nice hedge against future defaults reducing a little bit of portfolio risk.  I wish LC would do the same.

26
Investors - LC / Re: Lessons Learned
« on: October 04, 2011, 12:41:27 PM »
Wish I knew then what I know now.

Pebbles,  I feel your pain.  My biggest newbie mistake was with Foliofn.  When I first started on the secondary market I thought that the checkbox "Now Current"  basically meant the borrower was a current payer.  I couldn't have been more wrong.  I bought up a bunch of "Now Current" notes only to have some of them default a few pay periods later and others go on a monthly roller coaster ride of "Will they pay on time this month?"

After studying Foliofn a little more I realized what I was looking for was not "Now Current" but "Never Late".

Oh well, we live and we learn!

27
Thanks Peter.  I am curious to hear the response they give you. 

28
Investors - LC / Re: When will LC offer borrower pay performance history???
« on: September 30, 2011, 01:35:00 PM »
I have mentioned it to Lending Club's management some months ago and they didn't seem to think it was a high priority. So in answer to your question: probably not any time soon.

That seems so bizarre to me.   I raised the feature request to LC as well and they seemed only slightly interested.  I really don't understand why there is a lack of enthusiasm on adding the feature.  This simple difference has caused our firm to start shifting more/new investment money from LC over to Prosper.  Backed by our own theory/research (and additional proof from Lendstats), I am increasingly convinced this simple metric permits an investor to reduce systemic risk.  I believe in this metric so much it has now become one of the most popular filters we use for new loan positions.

Oh well, maybe sooner than later.

29
Investors - LC / When will LC offer borrower pay performance history???
« on: September 29, 2011, 05:32:49 PM »
Does anyone happen to know when Lending Club will add the ability to view if an existing borrower has (or had) a previous loan with LC?  With Prosper, I love the ability to see if this is a repeat borrower and if he/she has been timely on previous Prosper loan payments.  When will LC add such a vitally important feature?

30
Introductions / Re: Welcome everyone to the Social Lending Network Forum
« on: September 29, 2011, 05:27:06 PM »
Hello Everyone,

My name is Chris and I am an institutional investor at Lending Club (and now) Prosper.  My previous screen name at prosper was "diligent-peace9" but has been changed now that I figured out how to do it.    8)   I oversee a fund that invests in a variety of things, and "member dependent notes" are gaining an increased position in our fund.


Peter,  I really appreciate the work you have done both with your blog and with this forum.  I am getting to where I check your blog daily.  Keep up the good work!   :)


Looking forward to some good discussions,
Chris

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