Author Topic: The thread for unashamed griping  (Read 81107 times)

SarahV

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Re: The thread for unashamed griping
« Reply #30 on: July 02, 2013, 05:55:06 PM »
I paid a 2.4% markup for a really perfect D3 note on Folio. Newly issued, no payments yet. So far, so good! Except... maybe it's TOO perfect of a note. I happened to click on it (I don't even remember why, maybe by accident) and see that it's gone on a payment plan! What the heck, they're having problems already? And then I see that the payment plan is for the person to pay off the loan in full on their first payment, July 1st. Quick calculation... yes, my ROI on this note will end up being -1.8%.  ::) 
So this note was updated today, the payment plan to pay it off early was removed and it immediately sold as a regular ol' note. (I'd priced it at a 26-cent loss instead of the 47-cent loss I would have had if he paid it off early.) I'm not sure whether to be pleased that I didn't lose the full 46 cents, annoyed that they changed the status of the note and I lost an unnecessary 26 cents, or if I should just stop caring because it's pocket change either way.  :P   It's the principle of the thing, y'know?

What will really make me feel good is if this is one of those things where they process a payment-in-full separately so the normal payment goes through on schedule and you don't get the rest of the money for a week or two, and it ends up showing two separate payments even though you know it was really one big payment.

rlv99

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Re: The thread for unashamed griping
« Reply #31 on: July 04, 2013, 10:01:56 AM »
Good thread Sarah- my gripes, not in any particular order, are as follows:

1. Most Borrowers, whose credit scores reflect irresponsible spending habits, do not have the courtesy to explain how they will use the money.  Just saying ""CC consolidation" isn't enough especially when they are asking for way more, or way less, than their  credit balance.

2. LC's Collection Log sucks!  My bet is institutional investors will force a change here.

3. Posting of payments takes 5-6 business days.  No good reason, LC!!

4. Lack of marital status of Borrower, as well as number of dependents.  This is not an invasion of privacy; simply good business. 

5. Too many California Borrowers!!!





 

rawraw

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Re: The thread for unashamed griping
« Reply #32 on: July 04, 2013, 10:05:52 AM »
I know we small investors like our logs -- but really, the question is whether the extra cost of having a log team will really improve the performance of the platform.  I'm not so sure if it will.  For example, I have over 700 notes at this point.  Interest Radar allows me to take action on log updates, but I'm not sure how much an improvement my strategies could benefit from the logs being updated to the degree we'd like.

I personally think the money spent on better logs is better spent on collections.

New Jersey Guy

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Re: The thread for unashamed griping
« Reply #33 on: July 04, 2013, 11:49:03 AM »
"I personally think the money spent on better logs is better spent on collections."

This is a good point, but I think there should be a more responsible action needed in keeping the logs correctly updated.

Granted.  There are people here who may not have to pay that much attention to log entries.  We all know of a certain female here who's "Pristine" portfolio probably dwarfs your 700+ notes.  For the sake of privacy, I'm not going to mention her name, but let's give her a fictitious name and call her "SarV".  "We've all heard the expression about "Being as clean as a nun's sheets".  SarV probably doesn't have a single log entry on any of her massive number of notes, and has the audacity to tell you how she smelled your stinky notes the moment she logged on.  That's one side of the investment fence.

I, on the other hand, depend on the log entries when making a buying/selling decision.  So what's going on here?  I look at a "31-90 days Late" note today, and the last log entry is dated April 29th?
(Example: https://www.lendingclub.com/foliofn/loanPerf.action?loan_id=1131875&order_id=7561612&note_id=8551819)

Okay, so what is it?
A.)  There has been NO contact or collection efforts with the borrower in 2 months.
B.)  There's been contact and effort, but nobody bothered to make a log entry.

If it's "A", then that proves your point of better collection efforts needed.
However, I think most of the time it's "B", and that's unacceptable.

RLV99 made a great point by saying "The collection Log sucks".  Yea, it does need improvement beyond the Old, canned "Attempted to contact borrower (left message)" type entries.  But I think improvement can start by actually spending the 3 0r 4 seconds needed to ACTUALLY make some sort of entry instead of nothing at all.  And that effort wouldn't cost a penny to do.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

SBryantMS

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Re: The thread for unashamed griping
« Reply #34 on: July 04, 2013, 12:01:42 PM »
IMHO: Once I see "Engaged external collections agency" -- LC has given up internal collection efforts.  Any future log entries are on the monthly IT feed from the agency.  If I had this note, I would price it at $9 and hope I got a fish to bite on it and I would mark it down everyday. 

Otherwise, you can hold it till it goes to Charged Off status. 

New Jersey Guy

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Re: The thread for unashamed griping
« Reply #35 on: July 04, 2013, 12:25:06 PM »
"If I had this note, I would price it at $9 and hope I got a fish to bite on it"

Actually, that note is moments from going into Default.  As a matter of fact, I'm surprised it hasn't already.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

SarahV

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Re: The thread for unashamed griping
« Reply #36 on: July 04, 2013, 01:42:25 PM »
Granted.  There are people here who may not have to pay that much attention to log entries.  We all know of a certain female here who's "Pristine" portfolio probably dwarfs your 700+ notes.
Tsk tsk. I have a small, boutique portfolio of just ~250 notes or so. I think that is plenty of diversification for a buy-and-hold strategy.

I find the collection log very helpful (i.e., when one appears, I know I have to sell it  ;) ). I have to say though, I kind of like when there is no "payment failed" on the note right away because that makes it much easier to sell during the processing delay. I keep a very close eye on payment due dates and can usually offload those notes at a profit before they go into grace period. But when there is a "payment failed" that popped up on the due date, those are harder to get rid of and I am more likely to take a small loss on those.

We can certainly wish for different/better but when faced with an inefficient sort of market, I think the best approach is to learn about the inefficiencies and figure out how you can profit from them.

rawraw

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Re: Re: The thread for unashamed griping
« Reply #37 on: July 04, 2013, 03:27:38 PM »
Granted.  There are people here who may not have to pay that much attention to log entries.  We all know of a certain female here who's "Pristine" portfolio probably dwarfs your 700+ notes.
Tsk tsk. I have a small, boutique portfolio of just ~250 notes or so. I think that is plenty of diversification for a buy-and-hold strategy.

I find the collection log very helpful (i.e., when one appears, I know I have to sell it  ;) ). I have to say though, I kind of like when there is no "payment failed" on the note right away because that makes it much easier to sell during the processing delay. I keep a very close eye on payment due dates and can usually offload those notes at a profit before they go into grace period. But when there is a "payment failed" that popped up on the due date, those are harder to get rid of and I am more likely to take a small loss on those.

We can certainly wish for different/better but when faced with an inefficient sort of market, I think the best approach is to learn about the inefficiencies and figure out how you can profit from them.
I'm not sure if 250 is enough. Maybe it is for those with crystal balls and pristine notes , but I'm looking for around 800. And I think the log sucks too just not sure how much value add it provides.

That sarv girl sounds high maintenance! Did I hear she likes bad logs so she can take advantage of people?

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« Last Edit: July 04, 2013, 03:29:15 PM by rawraw »

slypete

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Re: The thread for unashamed griping
« Reply #38 on: July 04, 2013, 05:12:12 PM »
Got to hand it to SarahV. If she is able to dump a note for a profit the moment a payment is missed,  isn't it essentially a risk free strategy regardless of the size of her portfolio?

SarahV

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Re: Re: The thread for unashamed griping
« Reply #39 on: July 04, 2013, 06:07:03 PM »
I'm not sure if 250 is enough. Maybe it is for those with crystal balls and pristine notes , but I'm looking for around 800.
I always felt like if you diversified to that extent you will struggle to beat averages. Whereas with a smaller portfolio you can put more effort into note picking and note culling and specific strategies and stuff like that.

Plus, I really don't want to plug $20,000 of my cash into Lending Club because I feel that would leave me overexposed. That is the other kind of diversification to consider...

rawraw

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Re: Re: The thread for unashamed griping
« Reply #40 on: July 05, 2013, 07:24:32 AM »
I'm not sure if 250 is enough. Maybe it is for those with crystal balls and pristine notes , but I'm looking for around 800.
I always felt like if you diversified to that extent you will struggle to beat averages. Whereas with a smaller portfolio you can put more effort into note picking and note culling and specific strategies and stuff like that.

Plus, I really don't want to plug $20,000 of my cash into Lending Club because I feel that would leave me overexposed. That is the other kind of diversification to consider...
You don't need 20,000 exactly due to reinvestment.  But I feel that:

Oh I agree with you.  But 250 notes is $6250.  $25 represents only 0.4% of the principal but if you are earning 10%, it represents 4% of the interest income for the year.  800 notes is $20,000.  $25 represents only 0.125% but if you are earning 10%, it represents 1.25% of the income.  I'm earning roughly 13% so $25 represents 0.96% of my projected interest income at $20,000.  I like that number.

In terms of scaling, I'm not sure if its much harder to originate.  It's only a couple of notes every day.  The harder part would be monitor FICO/logs and InterestRadar is making great improvements in that.

SarahV

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Re: The thread for unashamed griping
« Reply #41 on: July 05, 2013, 12:12:40 PM »
Yes, but... as you know... I sell any note that misses a payment, at a slight profit or loss, so losing $25 on any given loan is very unlikely to happen.

And, as for your math, "I like that number" isn't saying much of anything except that you are more comfortable that way. I am more comfortable having less exposure to Lending Club in my taxable portfolio, and to me that's a much more important consideration.

I do have a hard time finding enough notes that meet my criteria (yes yes, Sarah's overly picky, done that joke to death) on Folio. If I had to quadruple it that would be very difficult for me.

rawraw

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Re: The thread for unashamed griping
« Reply #42 on: July 05, 2013, 01:45:02 PM »
Yes, but... as you know... I sell any note that misses a payment, at a slight profit or loss, so losing $25 on any given loan is very unlikely to happen.

And, as for your math, "I like that number" isn't saying much of anything except that you are more comfortable that way. I am more comfortable having less exposure to Lending Club in my taxable portfolio, and to me that's a much more important consideration.

I do have a hard time finding enough notes that meet my criteria (yes yes, Sarah's overly picky, done that joke to death) on Folio. If I had to quadruple it that would be very difficult for me.
I sell just as quickly (and for better mark ups than you, I might add :P).  But there may be a point in the future where that strategy doesn't work and I don't want to be left without a contingency strategy.

pplinvestor

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Re: The thread for unashamed griping
« Reply #43 on: July 05, 2013, 01:53:25 PM »
What percentage notes do you sell due to some hints of problems?  I'd think huge percentage of notes will be late or in grace period at least once over the life of the loan.   I'm guessing over 50%.   Anyone has data?

rawraw

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Re: The thread for unashamed griping
« Reply #44 on: July 05, 2013, 04:23:04 PM »
I have a portfolio of roughly 700 notes which.  Since I've started using Interest Radar (around 11/29/2012) with a portfolio of 310, I've sold 63 notes.  37 were from my original 310 (which were very old on average) and 26 are for the new 390 notes added since the first of the year.  So I'd guess 37/310 would give some estimate, although those were SarahV kind of notes.  I realized I wasn't taking enough risk and so the new population will probably have a higher rate of selling.

Of the 63 sold:

53 are current
2 are fully paid
4 are in grace period
1 is 16-30 days late
1 is 31 - 120 days late