Author Topic: "Double-Down" on late payments???  (Read 20570 times)

New Jersey Guy

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"Double-Down" on late payments???
« on: September 06, 2013, 10:16:54 AM »
Over the past week, I seemed to notice what might be a change in LC's collection practices.

Take a look at the next payment due on this account (9/26/13)

https://www.lendingclub.com/account/loanPerf.action?loan_id=2376439&order_id=9233499&note_id=17061014

It's DOUBLE the normal payment.  Yet, there has been no borrower contact to justify it.

This is not an isolated case.  Many of the late loans I've looked at are "Double-Down" with absolutely no (documented) borrower contact (besides the usual email sent when a payment is missed).  Normally in situation like this you'll see a "LC contacted borrower", "Borrower promised to pay", "Borrower promised to pay by 9/30/13", or something to indicate the borrower is aware they will be getting smacked with a double payment.  Lately, this has not been the case.

If this is a new procedure it could really increase the number of recoveries.
If the payment fails, it could indicate you're holding a real turd.

Check your late loans (especially Grace Period and 16-30 days late) and see if I'm right.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

yojoakak

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Re: "Double-Down" on late payments???
« Reply #1 on: September 06, 2013, 11:00:47 AM »
The 8/26/13 is missing from the Payment History. It's not uncommon to see that. This usually means the payment has been missed. But you're right about the next payment being an automatic double. I haven't seen that before. LC's database must be a nightmare. It will get "fixed up" in a day or two. Take a screen-shot or later you'll question your own sanity.


Quote
9/26/13   --   $1.31   --   --   --   --    Scheduled
7/26/13   8/5/13   $0.65   $0.27   $0.38   $0.00   $23.20    Completed - in grace period
...
« Last Edit: September 06, 2013, 11:02:22 AM by yojoakak »

Randawl

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Re: "Double-Down" on late payments???
« Reply #2 on: September 06, 2013, 11:22:38 AM »
I noticed this change about a week ago.  It makes sense given that would be the amount owed by that point to make the loan current.  Attempting to draw double on an account that had nothing in it the previous month may not make much of a difference, but I think it's a good change overall, assuming this is intentional.

yojoakak

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Re: "Double-Down" on late payments???
« Reply #3 on: September 06, 2013, 11:28:43 AM »
It looks like they're rolling up all the missed payments, plus some accrued interest (or a rounding error), into the "next" payment. This is something new.

Is this real? Have they notified the borrowers? It's certainly incentive to get on a payment plan.

Target: 5.34
1.81 + 1.81 + 1.81 = 5.43
1.81 + 1.81 + 1.81 - 0.12 = 5.31




Target: 6.65
1.66 + 1.66 + 1.66 + 1.66 = 6.64


New Jersey Guy

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Re: "Double-Down" on late payments???
« Reply #4 on: September 06, 2013, 11:54:56 AM »
"It looks like they're rolling up all the missed payments, plus some accrued interest (or a rounding error), into the "next" payment. This is something new. "

Normally when a borrower missed a payment, you'd see that the next payment due would only be equal to one month.  (In the case of my example, the payment due in September would have only been $.65)

"Is this real? Have they notified the borrowers? It's certainly incentive to get on a payment plan."

Nearly all the notes I've looked at that have a "Double-Down" have NO borrower contact!

I think this is a great collection practice!  I have notes showing "31-120 days late".  They missed a payment like back in March.  Yet, they paid timely April thru August, but the note continues to show "31-120 days late" because they never caught up that missed payment.

With this Double-Down, it's either pay-up or shut up!  If successful, notes will go back current the following month instead of dragging on which would dramatically increase the value of the note.  If it fails, then it's a good indicator to dump the note.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

DanB

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Re: "Double-Down" on late payments???
« Reply #5 on: September 06, 2013, 12:15:14 PM »
I don't see the importance or significance of any of this.  I mean come on.............How is this going to increase the likelihood someone pays??

New Jersey Guy.............Of course you think it's a good idea. Because you're holding a bunch of these crap notes that you paid pennies on the dollar for. If even 1 out of 10 goes back to current, you make out on that one because you can then sell it as "current". As for the other 9, it leaves you in no worse of a situation as you were in previously. They were late before & they'd still be late. Their value would be little changed.

New Jersey Guy

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Re: "Double-Down" on late payments???
« Reply #6 on: September 06, 2013, 12:47:56 PM »
"How is this going to increase the likelihood someone pays??"

IT'S NOT!
What it does do, if the payment is successful, is keeping the note from dragging month-after-month in a late status when the borrower is still making regular monthly payments.

As far as my "Crap" notes are concerned, none of this really applies to them, and I don't care.  None are "Grace Period" or "16-30 days late".  Double-Down won't help them.  But you're right about one thing.  I have enough going current on a  monthly basis to provide me with a 3900% ROI on that "Crap Note" money.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

DanB

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Re: "Double-Down" on late payments???
« Reply #7 on: September 06, 2013, 01:19:59 PM »
3900% ROI! Wow, that is mind boggling. Is that per annum? My God, in a couple of years time your account will be in the BILLIONS if you keep it up. Oh wait, you mean you took $27 & parlayed it up to $900 after expending 175 hours & doing 3000 small transactions, right?  I don't know, I guess I may be a bit off here.

But since you're so good at figuring ROI, maybe you can help me. Last week I bought a $150 note for $4.50.
 It went current a few days later & I sold it right away for $135. 2 transactions, 4 minutes spent. How impressive is my ROI??  :)  Does it mean that it's only a matter of time before I become a billionaire? Should I start displaying my ROI numbers too................ under every post I write?  :)

core

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Re: "Double-Down" on late payments???
« Reply #8 on: September 06, 2013, 01:42:26 PM »
Heheh I always enjoy these types of posts from you Dan and this is certainly no exception.  (Who let you out of your cage recently?)

I believe it is accepted by anyone who does such trading that your ROI has to go down over time.  If you have a small subaccount of 'fun money' I don't see anything wrong with having fun tracking return on that subset as you move the profits to other sustainable approaches.

If IRR and return over deposits is irrelevant, then what would you suggest as a metric?

Quote
Should I start displaying my ROI numbers too................ under every post I write?  :)

Yeah, show us your naughty details Dan.  As they say, "Put up or..." ;)

New Jersey Guy

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Re: "Double-Down" on late payments???
« Reply #9 on: September 06, 2013, 02:12:47 PM »
"after expending 175 hours & doing 3000 small transactions, right?"

Actually Dan, I spend more time on this Forum than I do on my LC account.  I'm always logged in both at home and at work.

Secondly, I like working my "Crap" notes.  I make the equivilent of a months worth of interest that an $18,000 account would make.  And I do it with a lot less money.

Thirdly, yea!  I like displaying my results under my signature.  Mainly, because I'm proud of the fact I did it without a single stitch of any type of financial background.  Also, because it can work if you have the balls to take a few risks. 

"Should I start displaying my ROI numbers too................ under every post I write?"
Why don't you?
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

SBryantMS

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Re: "Double-Down" on late payments???
« Reply #10 on: September 06, 2013, 05:39:25 PM »
Here is one of my lates -- Looks like I get more interest than before.



[attachment deleted by admin]

Fred

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Re: "Double-Down" on late payments???
« Reply #11 on: September 06, 2013, 06:31:42 PM »
3900% ROI! Wow, that is mind boggling.

If you buy a late note at $10, and it becomes current and you sell it at $20, you can get about 5200% ROI (annualized) if this buy-and-sell happen within 1 week.

Traders boast about their star trades incessantly; however, no traders ever share their "ooops" stories.

The challenge is how to realize this kind of gain portfolio-wide.
« Last Edit: September 06, 2013, 06:40:35 PM by Fred »

core

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Re: "Double-Down" on late payments???
« Reply #12 on: September 06, 2013, 08:30:52 PM »
The challenge is how to realize this kind of gain portfolio-wide.

Even if you could, it would be impossible to do it for long at all.  If you double your money in a month, now next month you need double the supply and double the "customers".  Where are you going to find those, especially in this environment the way things are?  You run out of both extremely quickly no matter how many new ideas you come up with.  Down go your returns. 

If Folio activity was exponentially increasing then maybe I could see some hope.  Too bad the big guys don't seem to want to sell off notes when they start to go bad.

New Jersey Guy

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Re: "Double-Down" on late payments???
« Reply #13 on: September 06, 2013, 09:11:50 PM »
"however, no traders ever share their "ooops" stories."

* In May, I lucked out and paid $14 for a $100 (30-day late) note I was confident would go back to current.  It had a principle balance of $83.  I mean, I was really confident.  Come July, no payments were ever made and I sold the note for the same $14 I paid.  I was really disappointed.  A week later, I noticed on my sold list the status was changed to "Fully Paid".  (Note:  I've actually had this happen 2 other times this year, but those notes were were smaller, $25 notes).

* Using Interest Radar, I found a very undervalued note quite cheap.  I bought it in haste before somebody else scooped it up.  When it settled the next day, not only did I realize I bought the wrong note, but the note I bought was in "Chapter 7".  Needless to say, I lost money on that. 

*  Last month, some investor dumped like 12 notes (16-30 days late) for like 75% to 85% off.  Using IR, I purchased all of them.  Deals like this just don't come around that often, and I was quite pleased with myself.  3 hours later, I realized they were still in my cart, as I forgot to submit the purchase.  When I tried to purchase them again, they were all sold.

*  Just a couple of weeks ago I purchased a note.  The same day it settled a new log entry appeared- "Chapter 7".

*  Early June I purchased a late $50 note (with a $44 principle) for $15.  It took until last month before it went current.  I went to resell it for $39.60, but accidentally entered $9.60.  By the time I jumped through all the slow-moving hoops to correct it, the note sold just that fast. 

Most of the mistakes I've made, I've made by being careless using Interest Radar.  Several times this year I've purchased the wrong notes, usually because I would have several notes opened in my browser at the same time.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

DanB

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Re: "Double-Down" on late payments???
« Reply #14 on: September 06, 2013, 09:41:51 PM »
I remembered that I promised Peter  I would not engage in back & forth discussions of this type on big soccer days...........when I tend to become more agitated than usual. I will keep my promise.

LC Return over deposit (on that note).......obscene.    I made the equivalent of a months worth of interest that a $12,000 account would make.  And I did it with $4.50 in 4 minutes. So what!  And, unlike others, this will be the last time I brag about it or refer to it................