Author Topic: Borrower deceased  (Read 4112 times)

WES

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Borrower deceased
« on: May 20, 2012, 02:44:32 PM »
My account has a late note with the annotation "Borrower Deceased."

Here's the LC FAQ on the subject: "If a borrower dies with a loan in repayment, the executor or administrator of the estate must send a death certificate to Lending Club, after which Lending Club will file a claim on the borrower's estate to recover the outstanding loan balance. The amount to be recovered for each lender will be determined by a) the size of the estate and b) each lender's proportional share of the loan. Depending on the size of the estate, lenders may only receive a partial repayment. In the case where the estate does not include sufficient assets to cover the outstanding loan balance, the loan will be written off as defaulted with zero value."

Any idea how long this process will take? Obviously it's a function of state probate law. This particular state has a deadline of 8 months to file an accounting. And I wonder how many borrowers have died before payoff? Are those stats available?

Peter

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Re: Borrower deceased
« Reply #1 on: May 22, 2012, 12:41:37 AM »
WES, Well I can tell you this, it doesn't happen very often. I haven't had that happen to any of my notes so your guess is as good as mine. But I can tell you there no stats out there that deal with deceased borrowers for p2p mainly because LC and Prosper provide no details other than a status (charged off or default). But please keep us informed as to what happens here.
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Erin K

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Re: Borrower deceased
« Reply #2 on: June 08, 2012, 01:23:31 PM »
I keep track of my defaults/charge offs to help me determine a better investment strategy. I can tell you that of the 1000-some notes I have held, only one has been charged off because the member has deceased.