Messages

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Investors - LC / What is the oldest loan you have that gave you an initial recovery payment

« on: January 30, 2020, 09:56:58 AM »

Earlier this month I received the last payment of the last 5 year loan in my account (I had 6 of them). I'm now totally out...or I thought I was. My last loan charged off was about 2 years ago. My last recovery was in October of last year. I figured all the recoveries that I was going to get have been received so I was getting ready to close my LC account. Well...I was wrong.

I just got a recovery from a loan whose last payment was in January of 2015 (5 years ago). It was charged off in June of 2015. I wonder what causes an initial recovery payment of such an old charged off loan?

Just wondering who holds the record for an initial recovery payment of an old loan? Anyone start getting recoveries of a loan that was charged off more than 4 1/2 years ago?

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Investors - LC / Re: Tue 02/12/19 payments about 3 times higher than normal

« on: February 16, 2019, 06:10:41 AM »

If I remember correctly LC stated that they were going to start crediting loan payments on the date they were due. If that was on the 12th then on the 12th you probably got credited for payments that would have been delayed about 4 days...so on the 12th you probably got payments that were scheduled for Feb 12, Feb 11, Feb 10, Feb 9.

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Investors - LC / Re: Worst Month Yet

« on: April 22, 2018, 09:37:42 AM »

At this point in time I am mostly gone (so long...farewell...auf Wiedersehen...goodbye).

Have only 6 loans left. (Because of lack of vigilance, I mistakenly purchased some 5 year notes.) I log in very infrequently nowadays. Only have $42 worth of notes left.

I happened to do some math on my whole LC investment and found that my charge off's as a percent of interest over the life of my LC account is 47.63%.

If I include all the fee's and also recoveries my total losses as a percent of gain is 42.67%.

To give you an idea of the stability of my account I purchased 1,426 notes. My ANAR (for what it's worth) is 5.16%

NOTE: I stopped purchasing notes in early 2015 so missed out on those toxic loans of 2016

I only invested in A-B-C (and a couple of D's).

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Investing - General (not P2P) / Re: Why I want to make $0 earnings on an investment; FOREVER.

« on: February 16, 2018, 09:07:21 AM »

As a developer of annuity/life/etc administration software my brain just goes FEES FEES FEES.  It is an interesting tax dilemma though.  All our clients are based overseas so I've never really sat down and thought about the tax implications of owning the different options in the US.  I be your investment advisor looked at you like WTF??

Yeah...he said in all his years he had never heard of anyone bringing up such a scenario...was one for the books...

Too bad I didn't think of this when setting it up...not that bad though. I only have taxable distributions for about 2 1/2 years. That will allow most taxable distributions to be done before my wife files for soc sec (would have been a double whammy)

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Investing - General (not P2P) / Why I want to make $0 earnings on an investment; FOREVER.

« on: February 15, 2018, 11:44:30 AM »

This is a contrast to the thread "what is your minimum acceptable return". In this case my MAXIMUM interest is 0%.

Yesterday I told my investment advisor to look for a way to ensure I made nothing or as little as possible on one of my investments, FOREVER.

A lesson in thinking outside the box...thought someone might be interested.

Just got done filing taxes for 2017 and it started me thinking of future years.

I am retired and live on social security, a work pension, ROTH withdrawals and the remnants of a "golden parachute". That remnant ends in 1 1/2 years so I will need to find some income to replace it.

There are a few reasons for purchasing an annuity (and a few more than a few to NOT purchase one). One of those reasons to purchase is to provide guaranteed income for the rest of your life. When I retired I opened an annuity for guaranteed income for the rest of my life to replace that parachute; to start when my parachute ended. This particular annuity is non-qualified (I funded it with after tax money).

Because of the way an annuity income stream works I have come to realize that I don't want that annuity earning any interest or gain, BECAUSE of taxes.

There are two values to this particular annuity. A current value and an income stream value. The current value is the initial investment plus any gain realized. The Income stream value is based upon the initial investment plus 6.5% interest each year. Once you turn on an annuity income stream that income value interest stops BUT the current value gains do not. The income stream value is basically meaningless except that it is used to determine the yearly income stream amount when starting the payments. You get that income for life even if your income payments eventually total more than that income stream value. 

Once the income stream starts the current value is essentially meaningless also; except for one condition in my case. That condition is why I don't want to earn money.

Once the income stream starts it doesn't end until you die. Also (for all practical purposes) your income payment WILL NOT increase in future years even if your current value increases. What WILL happen if there is a gain is that some (or all) of my income payment will be taxable. This is a non-qualified annuity. As such, if my annuity does not increase in value I have 15 years worth of non taxable income. (It will take 15 years of income to wipe out that inital investment.) Obviously when all the current value is wiped out my income stream payment will be fully taxable...but because of the annuuity I still HAVE an income stream. If the annuity gains 6% or more in one of those first 15 years, ALL of that year's income is taxable. There is NO benfit to me if this happens. I get the same amount of money...BUT I DO end up paying a good chunk of it to the IRS.

PLUS a larger part of my social security is taxed. Currently only 46% of my social security is taxable. (I purposefully set up my income for this...I know...I know...when RMD kicks in that will go up to 85%...but that's the way it goes...). If my income stream becomes taxable 85% of my social security is taxable.

Now you know why I don't want to earn anything on this particular investment.

By the way...for those of you who don't know...ROTH distributions are NOT taxable and also DO NOT count in the formula for determining how much of social security is taxable.

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Off Topic / Re: Cash Parking

« on: January 29, 2018, 02:04:34 PM »

Got one year to go....but I really can start using it now as a kind of 1 year CD...just haven't got the urge yet.

11 years ago I "hid" 200,000 cash in a fixed annuity....not for investment purposes but to get it off my assets so I even had a chance of getting financial aid for my children, one of whom was going to college a few years later.

Side note: Lot of good that did me...among other colleges, she got accepted into a couple of UC systems...even with their high costs we were only able to get about $3,000 in LOANS...no free money...I made too much money...didn't think that one through the whole way....

Anyway. That fixed annuity pays 3% and in one year there will no longer be any withdrawal penalty, so I can start using it as a bank savings account...

Not sure what they will do if they see multiple deposits coming in and withdrawals going out... anyone have any experience in this situation...will they stop me from making deposits/withdrawals???

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Investors - LC / Winner of the "they really,really, REALLY tried" trophy

« on: December 14, 2017, 07:26:29 AM »

Had a loan just pay off that I had been sure for the past year that they would have defaulted. Loan id 28754440 was a loan for around $6000. This person has been late over 20 times since loan inception. FICO has been as low as 530. Currently  it is 555.  Loan was ostensibly meant for debt consolidation. I first said "uhohh" a few months after the loan originated when I noticed Fico did not jump up which signifies to me that the person really didn't use the loan to pay off credit cards. Loan never officially got into 30-120 days late although by my calendar there were times when it was 34-35 days late.

This person made their 36th payment on Nov 22 (24 days late) which should have paid off the  loan but since they had so many late payments additional interest must have been charged because after paying 36 payments they still owed 9 cents.

They paid 9 cents on Dec 13 (25 days late). This loan actually paid off! In and of itself I consider that a minor miracle...BUT...

As a radio host named Paul Harvey (anybody remember him?) many times said:

"The Rest of the Story?"

This person paid off the loan AFTER they declared bankruptcy.

The notes section says they declared bankruptcy on Dec 11. The final payment was on Dec 13. Two days after the bankruptcy...

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Investors - LC / Re: Worst Month Yet

« on: November 05, 2017, 06:55:42 AM »

It looks like I finally turned the corner with notes going IGP...its about time . Only have 1 note in grace right now (out of 533 current). In January I had around 6-7 in grace at any given time. Previous months I mostly had double digit graces at any given time.

Well...if that don't beat all... I mentioned I only  had one note in IGP and what happens??? 5 trade days later...whomp!...I now have 12. Would have been 13 but the one I had IGP on the 16th went 16-30 days late.

"If it weren't for bad luck I'd have no luck at all ..."

Talk about no luck at all...well...I keep waiting and that corner just keeps sitting there in the far distant mist.

I now have only 44 loans left. 7 of those 44 are IGP and 3 of those IGP have only ONE payment left. I guess the saving grace is that most of those IGP don't have much left in principal for me to lose if they are charged off.

I doubt I'll see 0 IGP even in February when I will only have  6 loans left (all 60 months)...right now 1 of those 60 month loans is IGP and another one took a huge FICO hit and I figure it will go IGP on its next payment.

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Investors - LC / Re: What happens if Lending Club goes bankrupt?

« on: October 17, 2017, 09:23:11 AM »

Finally, think about how a company goes bankrupt.  There has to be debt, and not enough cash to pay the payments on the debt.  It is failure to make such payments that causes bankruptcy.  Now how could that happen with LC?  LC has NO NET DEBT.  ...

Therefore, LC can't go bankrupt unless or until some big changes occur.

If I may interject something here...

LC might have debt in the future if all those stockholders get that class action lawsuit for the LC debacle in May of 2016. How many years into the future that might be is anyone's guess.

Also, wasn't there a court case in a certain US district court about usury laws being applied to such companies as LC??? That could cause another lawsuit which will affect LC's assets.

AND YES I agree with Fred93 about the judge deciding...just look what happened with GM.

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Investors - LC / Re: Worst Month Yet

« on: October 17, 2017, 09:09:31 AM »

I'm sure this has been addressed, but is anyone else flaming mad over LC going public, basically creating a legal mandate for increasing their own profit that trumps profit or even any protection for the people actually taking the risk (us)?  In a nutshell, now they Have to prioritize their own profit by law, and whether they get it from the lenders or the borrowers is irrelevant.  As we can see. 

In the past I stated that I felt LC going public turned out to be a bad idea for precisely this reason. That was a BIG turnaround for me because I watched LC for a long time, waiting for it to go public before investing. I figured when it went public it would be more stable. Well....phooey on me...

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Investors - LC / Re: What amount does investors obtain after chagre-off?

« on: October 14, 2017, 11:48:24 AM »

What is the difference between recovery fee and collection fee?  Both show up as deductions against my account in monthly statements.

The collection fee comes FROM the investor's funds (ie...you pay it...not the borrower) and goes to LC's coffers. It only comes into effect if the borrower makes a late payment...and supposedly is to reimburse LC for the cost of collecting late payments (ie. phone calls, etc). NOTE: sometimes LC charges a LATE fee in conjuction with the recovery fee. If they do then that fee comes from the borrower and goes to the investor (you).

The recovery fee concerns accounts that have defaulted/charged off. Any recovered amount goes to the investor MINUS this recovery fee (which goes to comes LC's coffers.

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Investors - LC / Re: Throwing in the Towel

« on: September 20, 2017, 10:12:01 AM »

A lot of the guys on the forum have graphs to try to explain what went wrong, what is happening, etc.. The answer is not to be found in a graph. It is much simpler. Paying a debt to your debtor is a moral obligation as well has a financial obligation. How does one quantify morality on a graph? It's impossible. You are making a bet that the debtor will honor his/her obligation. Many will not. When a person who takes out a loan doesn't make one penny of payment, no one can tell me that this debtor's intention was clear-take the money and run. No moral obligation to pay back, to honor or even to acknowledge that someone put his/her money on the line to help this person. This person boldly took the money and never paid a penny. This is stealing and fraud.

Ya know...that's exactly how I felt at first with my LC involvement. I am luckier than most on this board. Because of an interpretation error I stopped buying notes in Jan, 2016 and missed the 2016 loan debacle, but I still have plenty of charge offs, 1 of which was that "0 payment fraud" you mentioned. At first I was upset at "those conniving sobs" but that attitude eventually changed. It's true that someone making none or only a few payments probably  gamed the system; those making less than 12 payments probably never "mended their ways" after getting an LC loan to payoff credit card excesses. But what do you say about those who made more than 12 payments?

Of the 1,426 loans I have bought 190 have charged off so far. The majority of those charge offs (130) paid more than 12 payments. I guess some of those could have been credit card excesses who just held on longer than others but, how can you explain someone who made 24 (or even 34) payments and then stopped?

LC opened my eyes to that fact that there are many hurting people out there who through little or no fault of their own are having problems. Maybe sickness, maybe job loss, maybe hurricanes, maybe earthquakes, maybe fires, etc. They held on as long as possible but eventually reality sets in and they just can't do it anymore.

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General P2P Lending Discussion / Re: HELP! LC portfolio got slammed to -2.57!!!

« on: September 19, 2017, 09:30:21 AM »

... One wonders if such a default as described could even be due to a death or serious illness. I know that I have taken a serious hit with my income since my diagnosis, but so far, have made all my bills and debts. But it can be a struggle.

As far as died: LC puts entry in note history stating borrower died...at least I have seen that entry in a couple of my loans.

As far as disability, etc. I would think if things had been that bad they would have declared bankruptcy (the best reason to use bankruptcy).

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General P2P Lending Discussion / Re: HELP! LC portfolio got slammed to -2.57!!!

« on: September 18, 2017, 09:22:25 AM »

but use money to reinvest only in seasoned loans on folio with less than 15 payments left. I even bought a couple with less than 5 payments.

I did a project earlier in the year buying only loans with less than 15 payments and it was just as big a grace period rate as the regular loans. So far all recovered. I purchased on the theory that these people would pay off the loan if they had already paid into it but it seems like that doesn't work and they just get lazy about paying at all.

FYI. So far I have had 4 loans with 2 payments remaining go charged off. One of them was a bankruptcy so that is understandable. I wonder about the other 3. If things were that bad shouldn't there have been a bankruptcy involved? If things were not that bad...did they just choose to forgo the LC loan because they thought it would be the easiest to default on with less repercussions than say a credit card default?

I guess in the grand scheme of things you would rather have one pay for 34 payments than one with only a few payments...after all I did make money on those 34 month payment loans...I just wonder sometimes...

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Investors - LC / Re: LC Email: "The Next Generation Credit Model"

« on: September 11, 2017, 10:14:38 PM »

•   We expect loan volume to shift toward higher quality grades (grades A and B) because some borrowers will qualify for lower interest rates under the new model, and other higher-risk borrowers, who may have received an offer previously, will be screened out.

...Let me translate that for you...

Now that everybody and their brother is into this online lending bandwagon we can't compete anymore. We either lower our interest rates (which will turn off investors) or bump everybody into a higher grade credit risk...whether they deserve it or not...