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Messages - New Jersey Guy

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Investors - LC / Re: This one surprised me
« on: December 31, 2012, 04:02:05 PM »
I just found this on

Top 10 causes of debt
Reduced income/same expenses.
Poor money management.
Medical expenses.
Saving too little or not at all.
No money-communication skills.
Banking on a windfall.
Financial illiteracy.

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Investors - LC / Re: This one surprised me
« on: December 31, 2012, 02:47:19 PM »
"Curious - The loan was graded an E4"
He probably rated a "D", but was dropped to an "E" due to the fact he took out a 60 month loan.

Investors - LC / Re: This one surprised me
« on: December 31, 2012, 01:06:38 PM »
Wow.  I looked at the original listing.  I didn't care for his revolving credit amount.  But besides that, there was no indication of him being that much of a risk.

People (like this) who default or go BK soon after receiving their LC money were most likely on the verge when they applied.  This is a last ditch effort in a desperate situation.  For all we know, he could have been months behind on his utilities or owed his bookie money.  They tell us what they are going to use the money for, but nobody knows for sure where it goes after they get it.

I've seen people making much more than him living outside their means and going BK.

Investors - LC / Re: Chances of collecting when borrower has died
« on: December 30, 2012, 02:39:07 PM »
Rawraw, you almost need to separate the amount you have invested in your speculative notes away from what you have invested in your good, interest bearing notes.  Unless you have two different accounts, this is difficult to do using the LC platform.  The NAR Lending Club shows on your account page reflects Charge offs (from your speculative notes) BUT FAILS TO FIGURE IN GAINS YOU MADE SELLING OTHER SPECULATIVE NOTES.  This is why my NAR shows a -11.49%, and this is why you'll never get a true, actual NAR when mixing the two accounts together.

Since 3/4 of my notes are speculative, I spend no time chasing NAR on the 1/4 of my notes that are good.  If they pay, they pay.  And yes, most do.

I set up a spread sheet on EXCEL that will calculate my monthly return based only ON THE ENTIRE AMOUNT OF MONEY I HAVE INVESTED OUT OF POCKET!  This does NOT include interest paid to me on the good accounts.  But, it will include gains (or losses) of notes I sell.  Therefore, I look at interest strictly as a bonus, and is NOT calculated into my returns.

For example, if you invest $1,000 of which $250 is set aside for quality notes, your out of pocket investment is still $1,000.  So, let's say I sell a note for a $5.00 gain, my out of pocket will automatically increase on Excel to show $1,005.

So, at the end of the month, let's say with all your gains and losses, you end up making $90.  You'll end up at the end of the month with an out-of-pocket investment of $1,090 or pretty much a 9% gain for that month only!
Now you can look at it as "Okay, I made $90 on my $1000 investment.  Oh, and lookie here!  I also made an additional $2.99 interest on notes that actually paid!  Isn't that cute!"

Now, starting at the first of the new month (with a clean Excel worksheet) I'll enter $1090 as my starting investment, and the game begins all over again.

I did some house cleaning on Christmas Day and listed a bucket of non-selling notes pushing the 120 day limit for dirt cheap.  They were selling as fast as I could get them up.  I lost money on all of them.  Despite that, I'm still going to end up making over 9% for the month of December alone.

Investors - LC / Re: Chances of collecting when borrower has died
« on: December 30, 2012, 12:37:57 PM »
"There's a link at the bottom of Foliofn My Accounts to view last year's sales. But if you change the date you can see this year's sales, e.g."

Yea, but that's pretty much worthless, too.  Not only does it list the notes you sold, but it also lists the notes you bought.  Just for November, I had a total of 126 transactions, and it's like 8 pages long.  I don't feel like scanning each transaction over and over again every time a note sells, just to find out what I paid for it.  I suppose if they listed the note title, it would help slightly in tracking a note down much faster.  However, when you're looking for a note titled "Debt Consolation"  or just "Consolation", that constitutes a large amount of the notes.

Go look at your notes and see how many have either one of those two titles.

Investors - LC / Re: Chances of collecting when borrower has died
« on: December 30, 2012, 10:41:36 AM »
Some notes to Rev's reply!

1.)  For aggressive traders, Folio is a total nightmare! It was not set up for this kind of trading.  I'm buying and selling everyday.  I have sold notes cancelling.  I have buy notes cancelling.  Come this part of the month, my folio site is many, many pages long.  What sucks is that when I sell a note, it won't tell me what I paid for it.  Therefore, I have to manually track it down with all those silly ID numbers.  And forget about the loan titles!  I don't know how may I have that are titled "Debt Consolidation".

I have an Excel spreadsheet that I use to track my sales.  But, I'm working on another one that will allow me to better track my purchases in some sort of order.

2.)  I agree that the bulk of investors (including ones on this forum) are ultra conservative.  They chase high NAR.  Here's some news for you!  My NAR (on the LC account page) is UP from last week!!!!!  I just looked, it's now at -11.95%.  (Yea, that's a negative!).  Last week, I hit a record low of -14.49%

How many of you guys just went to the bathroom to throw-up?

Don't get me wrong.  I LOVE ULTRA CONSERVATIVE INVESTORS who will dump a note only because the borrowers FICO dropped 10 points this month.  I LOVE ULTRA CONSERVATIVE INVESTORS who will dump a note because it just went into the grace period.  I LOVE ULTRA CONSERVATIVE INVESTORS who will dump a "Deceased" note for 40% of the principle.  GUYS!  KEEP 'EM COMING!

Conservative investors are to the far left.  I'm to the extreme right.  There are thousands of investors in the middle that I cater to.  So without conservative investors chasing ROI and NAR, I wouldn't be here!  So thanks guys!

One last side note:  Again, I do this for the fun and challenge.  Yea, picking notes is a total pain, but I know what I'm looking for and how to utilize those terrible Folio filters to quickly track things down.  I'm an early riser, so I love sitting on Folio in the morning with my cup of coffee.  It's very relaxing.  I'll check my account a few times during the day while at work, then document my sales late in the evening before bed.  Heck, I even find time to visit this forum everyday to read up on everybody's posts and maybe even contribute something useful myself.


Investors - LC / Re: Chances of collecting when borrower has died
« on: December 30, 2012, 09:36:26 AM »
"Can you please let me know the progress of that?"

RawRaw- Here I thought I had two different "Deceased" notes, but what I had was 2 notes from the SAME dead guy!

Hey, maybe we both have the same guy, LOL!

Anyhow, the first note I purchased settled on 12/17  for $8.  I put it up for sale and sold it the same day for $13.88.
I can't recall when I purchased the other note, but I paid $10.76 for it and it's currently up for sale for $16.26.

Since it has a long way to go til it reaches the 120-day late status, here are my thoughts on this:
1.)  The note sells for $16.26 and I gross a $5.50 gain.
2.)  I'm betting the estate pays the loan off before it gets charged off, and I gross a $11.79 gain on the principle.
3.)  The note gets charged off.  This tells me the guy didn't have enough cash & insurance to off his debts, and I'm out $10.76.  However, I won't let it get that far.  Once it starts pushing the 100 to 110 day mark, I'll reprice the note for $1 or $2 just to dump it and reduce my loss.  Even if I sell it for $1, I'm out less than $10.  Not the end of the world. 

Personally, I feel the odds are in my favor, and this note is worth holding onto.

Investors - LC / Re: Graph of Status by Payment Cycle
« on: December 29, 2012, 08:19:55 PM »
I thought this was a very interesting graph, indeed?  But I have one question (strictly open for opinion).

What is your theory on what causes people with good FICO scores, a steady, clean credit history and high incomes, to all of a sudden go bad by the 9th payment????

My theory?  A lot of these people are taking out a LC loan as a last ditch effort to save themselves.  Do they "Consolidate" their CC balances like they say?  Possibly, and I believe most do.  But to many, a 0-balance credit card is like an open bowl of candy just waiting to be used again.  They follow their plan for a little while, but I think the temptation to charge-up again eventually gets the best of them.

When I see people asking for loans and their already carrying a $15K, $25K, $35K and even more balances on cards, it makes me wonder how responsible they really are.  This holds especially true when I read descriptions that state "I've been making minimum payments, but can't seem to get ahead."  Or better yet, "I want to consolidate my credit cards and use the balance to catch up on my past due bills."


Investors - LC / Re: Pre IDing bad notes
« on: December 29, 2012, 06:46:45 PM »
"Your statement is true and false at the same time, because a "BK" is not just a BK: if you say Chapter 7 I probably won't buy your note, but let me know next time you wanna sell a Chapter 11 for a deep discount."

No 11's.  All 7's and 13's.  I don't know what LC does, but I do know they end up charging them off.  (Charged off. Bankruptcy: economically infeasible to recover)

So, you can't trade a charged-off note.  LC deems it infeasible to pursue.  So what are buyers of these notes hoping to accomplish?

Investors - LC / Re: Pre IDing bad notes
« on: December 29, 2012, 12:01:13 PM »
"What I'm wondering is who is buying them? Do they realize that they might enter grace period?"

Forget about a mere grace period!  Try figuring this one!  I think this month alone I had either 6 or 7 notes go BK!  Even being as aggressive as I am, I know BK's have like a slim/none chance of ever getting paid.  So, I dump them on Folio, cheap.  Usually between $.99 and 2.99.  I take my lumps and move on.  Every BK I have ever listed has sold within hours, some within minutes. 

I know the selling price is cheap, but even still?  Who is buying those dead notes and why???

It's like somebody else stated earlier, there's a buyer for every note!

Investors - LC / Re: Chances of collecting when borrower has died
« on: December 29, 2012, 11:53:51 AM »
Do I have data to back it up?  Heck no.  Unfortunately, I had the expiernce of being an executor twice.  Both times I had to create an escrow checking account to funnel estate cash and life insurance proceeds through.  As the credit cards and loans came due, I would pay them off and supply the creditor with both a letter stating I was the executor and a copy of the death certificate.  This would close the account or cancel the credit card.  This is part of what the executor is supposed to do.

I just recently purchased a couple of "Deceased" notes on Folio for big discounts betting the loans would get paid off.  There is no interest to be made, but hopefully a large return on principle.  I'm still waiting, as this could take up to 90 days.  If they get charged off, I'm prepared for that, and the amounts are small.  (I'd spend more for a value meal at Burger King)

Remember, though, aggressive and speculative trading is what I do.  My theories may not be suitable or in line for the more conservative investors on this forum.

Investors - LC / Re: When and how did you discover Lending Club?
« on: December 19, 2012, 11:43:28 AM »
Watching my mutual funds is like watching grass grow.  "Oh boy!  Up a penny!".

I'm aggressive, and wanted something more hands-on, something that would challenge me and produce daily results.  But, I didn't want to be studying charts and graphs.

I have a LC loan in progress that I took out nearly 2 years ago.  While checking my loan status a few months ago, I clicked on the investment tab.  Since NJ only runs off the Folio platform, I opened my account with a small amount of money (like $50!) then purchased and resold speculative notes for a profit.  I liked it!  It was simple and it was fun.

Since then, I've constantly been building my account and am currently up to 93 notes of which 47 are up for sale.  I buy and sell everyday.  Despite the fact that BK's and Defaults are part of my game plan, my overall net gains have been phenomenal, tons better than any other investment vehicle I got going.

My goal for first quarter 2013 is to increase the number of notes I own to 150 with an average of 75 up for sale each day.   

Introductions / Re: Welcome everyone to the Social Lending Network Forum
« on: December 02, 2012, 12:00:18 AM »
Hi Everybody!  My name is Roy.  I'm a 53-year old guy living here in New Jersey.  Not only am I an investor, but I also have a 36 month loan out with LC since Feb. 2011.  That's how I got interested in the investing aspect. 

Living in New Jersey I have to use the Folio platform.  That's Okay because I'm not interested in funding new notes.  My investment style is highly aggressive and speculative.  My portfolio currently consists of about 25% quality A and B notes and 75% speculation.  I'm not in this for a 10% to 12% return, but curious to see if I can't push the 30% and even 40% mark.  With that in mind, the money I have invested is strictly "Fun" money.  I enjoy the higher returns, but the pursuit of those returns is what I enjoy the most.  Unlike my mutual funds (which is like watching grass grow), I work and monitor my LC account daily. 

Investors - LC / Re: Chances of collecting when borrower has died
« on: December 01, 2012, 11:19:51 PM »
There is a pretty good chance notes will get paid after a person dies.  Typically, the executor of the estate would be in charge of distributing proceeds to cover expenses, debt and taxes.  The executor would work with the families attorney to make sure everything is locked up.

Normally, there are life insurance proceeds.  Debt money is usually paid from that.  If there is a surviving spouse, it's possible that the burden of debt would fall on that person (could vary from state to state).  However, again, that is what life insurance is for.  All you can do is hope that the deceased had enough insurance to cover everything.

Typically, it could take about 60 to 90 days to cover all the details in order to close an estate.

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