Author Topic: Low dollar notes do not show up on Folio  (Read 8414 times)

core

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Low dollar notes do not show up on Folio
« on: September 15, 2013, 08:30:40 AM »
If you try to sell a note where the P+I is less than or equal to about $4.89, they'll let you post it but it will not show up on Folio.  It doesn't even matter if you're trying to give it away at a serious discount.  No error message or warning appears.  It would appear they are hoping you won't notice.  It's not just my listings because no others appear on Folio either.

What is this Mickey Mouse stuff?  The great LC gods have decided that you shouldn't be able to liquidate notes after so many payments have been made??  That wasn't part of the deal when I invested in these notes.


rlv99

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Re: Low dollar notes do not show up on Folio
« Reply #1 on: September 15, 2013, 08:40:58 AM »
Seems they need 5 cents, minimum, per transaction.  It would be a better idea to charge a minimum for their "service" rather than deny a listing.

core

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Re: Low dollar notes do not show up on Folio
« Reply #2 on: September 15, 2013, 08:55:46 AM »
Seems they need 5 cents, minimum, per transaction.  It would be a better idea to charge a minimum for their "service" rather than deny a listing.

Naw it's not about the commissions because it's not sale price that determines whether they show, but rather P+I.  You can sell a $100 note at $0.01 if you really want to, no problem, and they're fine with making next to no commissions on that.

Plus they've never had a problem with $4.89 notes for all the years I've been with them... until now.  This change just happened recently.  Possibly the same day they put that nanny notice up on Folio.

New Jersey Guy

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Re: Low dollar notes do not show up on Folio
« Reply #3 on: September 15, 2013, 10:36:35 AM »
Core....there must be something in your eggs this morning.

I just listed two BK's on Folio for 98-cents.  Both have Principles around $20 and they are both showing up in Folio.

Interest Radar is picking up dozens of notes well under $4.00 with no problems, all listed within the past 24 hours.

Folio has a ton of notes currently listed, too.
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core

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Re: Low dollar notes do not show up on Folio
« Reply #4 on: September 15, 2013, 10:53:01 AM »
Core....there must be something in your eggs this morning.

I just listed two BK's on Folio for 98-cents.  Both have Principles around $20 and they are both showing up in Folio.

I know I already said this twice above, but I'm going to try a third time:  This is based on the P+I value, principal+interest, not the asking price.  The reason your $0.98 BK notes showed up is because the principal was over $4.89 -- $20 in your case, so well over the limit.  I am assuming all of the other cheap notes you're seeing on IR also have P+I>=4.90.

As for my eggs, nope I didn't have Scotch for breakfast this morning but this issue is gonna drive me in that direction.



« Last Edit: September 15, 2013, 11:11:24 AM by core »

core

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Re: Low dollar notes do not show up on Folio
« Reply #5 on: September 15, 2013, 11:06:58 AM »
Screenshot for clarity:


New Jersey Guy

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Re: Low dollar notes do not show up on Folio
« Reply #6 on: September 15, 2013, 11:55:38 AM »
Core....I gottcha!  And you're right!

I ran searches for "1 payment remaining", then 2, then 3, then 4.

All the loans that appeared were $50 notes which makes sense, because their principles and interest are double.  There were no $25 notes for sale which of course would be impossible.  I think the cheapest note I saw was like $4.89

At "3 payments remaining", the lowest price note had a markup of 67%.  As a matter of fact, all the notes were marked up between 67% and 145%.  Pretty stupid. 

Perhaps this is Folio's first step in cleaning up a pretty sloppy house.

The odds of this adversely affecting your returns are pretty slim.  With a mere 4 or less payments left, a borrower would have to suddenly default or go BK.  At that point, you wouldn't be able to dump the note at any price, and would surely get stuck with a Default.  However, the default amount would be so minimal, it wouldn't make any difference.   
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core

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Re: Low dollar notes do not show up on Folio
« Reply #7 on: September 15, 2013, 12:24:00 PM »
It doesn't bother you at all that when you invested in the note you did it under the understanding that you'd be able to liquidate it if you had to or wanted to?   Now you can't, for nearly half a year.

I couldn't care less about the default rate being low.  If I want out I should be able to get out, and not have to be locked into my notes for 5 months.  I might need that money for a family emergency.  Interest rates could skyrocket and I might find a better place to get some decent returns.  LC's financial status might come into question some day.  You are stuck!

This is moving the freaking goalposts.

The sneaky way they pulled this off makes it all the worse.  If you want to lock people in to a note for the last 4 months, fine, just tell them that.  When you go to sell it they can instead show a big red error message:  "Sorry, you can't sell this note for 4 months.  Here's why..."  And then they can deal with the backlash right out in the open.  But to happily accept the order, and then quietly just hide it behind the scenes hoping nobody will notice is downright slimy.

New Jersey Guy, for someone who deals in "penny notes" I'm surprised you're accepting this so cheerfully.

The next step is locking you in for the full 3/5 years.
« Last Edit: September 15, 2013, 12:28:44 PM by core »

Randawl

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Re: Low dollar notes do not show up on Folio
« Reply #8 on: September 15, 2013, 01:44:00 PM »
This must have been a recent change.  I sold a note on August 26 for $2.14 with a par value of $1.42.


Note Id,Purchase Date,Purchase Price,Par Value at Purchase,Sale Date,Sale Price,Par Value at Sale,Fee
27115676 07/17/2013 $25.00 $25.00 08/26/2013 $2.14 $1.42 $0.02
« Last Edit: September 15, 2013, 01:45:53 PM by Randawl »

New Jersey Guy

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Re: Low dollar notes do not show up on Folio
« Reply #9 on: September 15, 2013, 01:47:01 PM »
Core....I didn't accept it so cheerfully.  What I tired to do (quickly, I might add) was think of the possible implications and situations that could adversely affect my account.  The point that you brought about not being able to liquidate is quite plausible.  This would quite likely tick me off if for some reason I decided to leave P2P and wanted to put up all my notes up for sale.  The fact that I would have to leave my account lingering for 4 or 5 months waiting for the rest of the notes to go fully paid would be an inconvenience, but only a small one, at that.

I also agree that this should have been disclosed prior to taking effect.  This would have given investors an opportunity to exit those small notes before the new rule kicked in.  And I also agree it needs to be disclosed when posting a note for sale.

This whole situation reminds me of the sneaky trick Craigslist pulls when you try to put an ad up.  It's called "Ghosting" and was mainly aimed at spammers.  You write an ad, you post it, Craigslist confirms the posting with a listing number, but guess what?  Your ad is nowhere to be found in the listings.  Even though your account says it's posted and active, the ad itself just doesn't exist.  Nobody ever sees it.

That is totally wrong!

As far as the Penny Notes are concerned, that's a "Buy/Hold" Strategy in which you keep the note to the very end.  With 1, 2 or even 3 payments left, it's senseless to even try and sell them as the remaining principle doesn't make it worthwhile.  It's no different than trying to buy them with 1,2 or 3 payments left. The 4 to 6 cents interest left on a $25 notes just isn't worth it.

This Penny Note that I own (with 3 payments left)  is a perfect example of why it's not worth the time to put it up for sale, and why it's not worth buying even if I did.  I mean, would you pay me $1.74 to make 4-cents in 3 months?

https://www.lendingclub.com/account/loanPerf.action?loan_id=861996&order_id=9995069&note_id=6143600

Even though I don't agree with their sneaky little tricks, I'm glad they are taking small steps to clean the platform up.  It needs it!

Return over deposits:   66.82%
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core

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Re: Low dollar notes do not show up on Folio
« Reply #10 on: September 15, 2013, 02:04:39 PM »
This must have been a recent change.

It most definitely was.  The last time I sold one was 9/04 so that rules out the 8/28 site updates.  I'm guessing it was sometime between then and around the Folio nanny notice day, 9/11.  The fact that it took me (or anyone else) this long to discover it says something.  Sneaky folks with wicked minds, they are.

rlv99, during your next weekly chat with your account rep, maybe you should ask him if you can sell your notes anytime you want to.  See what he says.  I'll bet you $4.90 that he says that you can.  Then you can turn around and embarrass him with your knowledge of their dastardly plot!

Even though I don't agree with their sneaky little tricks, I'm glad they are taking small steps to clean the platform up.  It needs it!

And by "cleaning up the platform" you mean removing everything that you personally aren't interested in buying. ;)  What needs to be cleaned up??  If you're talking about the 68% markups well guess what... they are still there just like always.  On $5 notes, $10, $25 notes, you name it.  There are overpriced notes all over and locking people down for 4 months does nothing overall to remove them.  How is my par $4.50 note offered for $3.50 "junk"?  That's a decent return for someone that wants to wait it out.

New Jersey Guy

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Re: Low dollar notes do not show up on Folio
« Reply #11 on: September 15, 2013, 04:35:17 PM »
"What needs to be cleaned up??"

I have a feeling notes with a certain NEGATIVE YTM or higher are next.

It's not that your little note selling for a discount broke the law.
It's the fact that nearly every little note like that for sale has a very bad, negative YTM.

This is just my guess.
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core

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Re: Low dollar notes do not show up on Folio
« Reply #12 on: September 15, 2013, 04:54:40 PM »
Then they should have filtered out negative YTM instead of hiding all small notes.  It makes no sense whatsoever.

Randawl

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Re: Low dollar notes do not show up on Folio
« Reply #13 on: September 15, 2013, 04:58:26 PM »
There's still a chance that this "change" is unintentional, no?  It doesn't make much sense to exclude sub $5 P&I notes unless they did it because they wanted greater than 5 cents for every transaction.

New Jersey Guy

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Re: Low dollar notes do not show up on Folio
« Reply #14 on: September 15, 2013, 05:03:04 PM »
"Then they should have filtered out negative YTM instead of hiding all small notes.  It makes no sense whatsoever."

I totally agree.  That's the smart and fair way.
Somebody should find out what their plans for Folio are.
Core.....They all seem to know you pretty well.  Pour yourself a double scotch and give 'em a warm-and-fuzzy call!  (Just don't put the bottle away).
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014