Starting today, Folio prevents selling notes with processing payments.

[Joleran]

This new change also means that we will no longer get cancelled orders due to payment.

Have you confirmed this?  How does a payment figure in to the sale?

For example: note listed for $10 and sale is queued.  Payment of $1 is posted and is sent to...?  Note settles next day.

[GS]

Yesterday, I had my first note miss a payment since the rule change.  I figured it would go to IGP and I could put it for sale today.  NOPE.  Now it's listed as Processing Payment Plan, with a new withdrawal date scheduled in a few days, and won't let me post it.  I assume that by time I'm allowed to post it for sale (assuming the second withdrawal attempt fails), it will be at or near 16 days overdue.  I'll have to see how this plays out. 

LC blew it with the way they are handling this.  I can understand why they wanted to close the loophole, but I can think of a few better ways to do it than this. 

[Ran]

Yesterday, I had my first note miss a payment since the rule change.  I figured it would go to IGP and I could put it for sale today.  NOPE.  Now it's listed as Processing Payment Plan, with a new withdrawal date scheduled in a few days, and won't let me post it.  I assume that by time I'm allowed to post it for sale (assuming the second withdrawal attempt fails), it will be at or near 16 days overdue.  I'll have to see how this plays out. 

LC blew it with the way they are handling this.  I can understand why they wanted to close the loophole, but I can think of a few better ways to do it than this.

A better way may be to allow notes in IGP, late or default to go for sale regardless of the payment situation. Those notes usually are not the targets of young guns who usually do not buy D-G notes, not even to mention these performance-tarnished notes. 

[Joleran]

A better way may be to allow notes in IGP, late or default to go for sale regardless of the payment situation. Those notes usually are not the targets of young guns who usually do not buy D-G notes, not even to mention these performance-tarnished notes.

Ran, you've got a thing for the phase "young guns", is that yours and what do you mean by it?

[Ran]

A better way may be to allow notes in IGP, late or default to go for sale regardless of the payment situation. Those notes usually are not the targets of young guns who usually do not buy D-G notes, not even to mention these performance-tarnished notes.

Ran, you've got a thing for the phase "young guns", is that yours and what do you mean by it?

There was a movie "Young guns", about a group of young gun men in the west who were taught by a rich men to read and civilized and then formed a gangster, but people honored  them for justice.

[New Jersey Guy]

I just logged onto my Folio account and saw that the number of notes I had for sale had decreased.  Sales?  NOPE....CANCELATIONS!  Now we're not even safe on weekends!

My notes are dropping like flies!

[core]

I just logged onto my Folio account and saw that the number of notes I had for sale had decreased.  Sales?  NOPE....CANCELATIONS!  Now we're not even safe on weekends!

My notes are dropping like flies!

I was surprised by this too.  When I first heard of this change I thought it was simply a very bad deal.  Now when I see all the details of the way it was implemented, how it affects notes nowhere near payment settlement, this is absolutely freaking ridiculous.

If what Zach said in another thread is true about LC not retaining a cent of that 1% trading fee, then they really have little motivation for allowing you to trade notes at all.  They have to write all the code, handle all the phone calls and support, buy all the servers, but collect nothing for their trouble.  This change has likely cost FOLIOfn a lot of money...  25% reduction in trading commissions overnight.  Perhaps this is exactly what LC wants.  LC may be trying to sour the relationship and get out of the deal.  Notice how the legalese is very careful to say the trading platform may not exist in the future.  I don't think LC anticipated the trading platform generating this kind of revenue and volume.  They now realize they are handing Folio a bit fat check each month for doing nothing but having Folio's name on stuff.  LC now wants in on the action, or at least to end that free money stream for Folio.  The losers here are you and me.

[GS]

FWIW, the "processing" status on my IGP note did clear up today and I was allowed to list it.

[DanB]

I just logged onto my Folio account and saw that the number of notes I had for sale had decreased.  Sales?  NOPE....CANCELATIONS!  Now we're not even safe on weekends!

My notes are dropping like flies!

I was surprised by this too.  When I first heard of this change I thought it was simply a very bad deal.  Now when I see all the details of the way it was implemented, how it affects notes nowhere near payment settlement, this is absolutely freaking ridiculous.

If what Zach said in another thread is true about LC not retaining a cent of that 1% trading fee, then they really have little motivation for allowing you to trade notes at all.  They have to write all the code, handle all the phone calls and support, buy all the servers, but collect nothing for their trouble.  This change has likely cost FOLIOfn a lot of money...  25% reduction in trading commissions overnight.  Perhaps this is exactly what LC wants.  LC may be trying to sour the relationship and get out of the deal.  Notice how the legalese is very careful to say the trading platform may not exist in the future.  I don't think LC anticipated the trading platform generating this kind of revenue and volume.  They now realize they are handing Folio a bit fat check each month for doing nothing but having Folio's name on stuff.  LC now wants in on the action, or at least to end that free money stream for Folio.  The losers here are you and me.

Well, much more you than me actually. 

 I'm not interested in having a serious conversation regarding the secondary market on a public forum, because a number of people are bound to be bent out of shape, among other reasons...................but I don't think it takes some sophisticated crystal ball to see where this will likely end up. PM me if you'd like to converse privately.

[LC Adv]

I think Folio was established so as to give people the capability of selling out if necessary ( i.e. in case of emergency etc)., or just to be able to state that there is a way out if necessary due to extenuating circumstances. I do not believe the intent had ever been to create a robust fully transparent "Note Exchange", as should be obvious from the fact that LC makes nothing from exchange trades. As for people in Folio only states, the intent was not to enable them to participate , but as an aside the question came up of how do we who live in Folio only states participate and the off the cuff answer was -use Folio. But rather than having disgruntled investors dragging in all the Securities regulators it may be easier to totally restrict out all the "Dubious Transactions" which may ensnare all sorts of "non-Dubious Transactions" as collateral damage and just allow the original transactions Folio was created for. The Emergency exit for a portfolio.

[core]

it may be easier to totally restrict out all the "Dubious Transactions" which may ensnare all sorts of "non-Dubious Transactions" as collateral damage and just allow the original transactions Folio was created for. The Emergency exit for a portfolio.

I see.  So it is acceptable to sell notes to cover some unexpected medical bills (emergency), but it's not OK to sell notes if you want a new kitchen and are a bit short on cash (non-emergency).  I think I'm with you so far.

Now we just need a way to determine what's a bona fide emergency and what is not.  I don't know about you guys, but when a borrower's FICO drops from 720 to 560 in a single month that's an emergency to me!    I could probably think up several hundred emergencies per day if I put my mind to it.  Sick cow.  Chicken pecked my eyeball out.

I propose that when you go to sell a note, you have to answer a series of questions randomly selected from a question pool:

What is your intended use of the note sale proceeds?
If you have posted a note for sale in the past 2 years, please explain the reason.
What are your current monthly expenses (rent, transportation, utilities, phone, insurance, food, etc)?
Please explain the reason you carry such a large portfolio of notes for sale.

Unfortunately this does not prevent the note seller from lying when answering the questions.  We will need to distribute USB lie detector devices to each investor.  That seems expensive.  An alternative might be for LC to conduct 15 minute phone interviews with the investor before each note sale.  They could charge a 20% fee to cover the costs of this time.

I think we're getting somewhere now.

I do not believe the intent had ever been to create a robust fully transparent "Note Exchange"

Without a robust market, just who do you think is going to buy your notes when you do have that emergency??  Create a secondary market just so they can say there's a way out but then prevent anyone from actually using it?  That's ingenious, in a dark sort of way.  I like it.

[New Jersey Guy]

You do an online transaction and purchase 100 shares of ABC stock.  The next day, ABC declares bankruptcy.  Feeling you got screwed, you call your brokerage firm and tell them you don't want the stock and they should refund your money back.  They tell you that the proposed bankruptcy was no new news, and you should have done your due diligence. 

Congratulations.....you own the stock.

This has been the problem for Lending Club all along.  Cry babies who call them up asking for Folio reversals because they get buyer remorse.  LC is not Folio!  If Core sells a note to me at a 20% markup, shame on me for being so stupid!  If you buy a Processing note that goes IGP in two days, shame on you for not looking!  It doesn't matter what kind of cheating system you claim the seller was using.  His system is NEVER good enough to force you to hit the "Buy" button. It all comes down to common sense which apparently, many investors don't have.

Personally, I think LC should have just continued with their online warnings which continually separated them from Folio.  Eventually, most of the fools would get the hint.  Despite this, though, there are still a few brain-deads out there who really need to be taken off of life support. 

Oh, by the way.  I had a sold note get cancelled today.  Sunday.  No day is safe.

[DanB]

Core.............In the longer term I believe that individuals who have exhibited the tendency to have multiple "emergencies" in rapid succession, (ex. more than 1 emergency per day) be put on a temporary "no selling" list until an independent investigative commission can hear their case thoroughly & determine the nature of these alleged legitimate emergencies.

In order to insure that each case is exhaustively & impartially investigated I believe that investigations need to be conducted by a non-LC employee. I realize that I am way too controversial for this post (plus I'd die of boredom) so I recommend none other than the former unrestricted Q&A Grand Inquisitor known to veteran LC investors as RetiredUSMC, to head this investigative commission. He will have the authority to ask an unlimited number of questions (all in CAPS)  & for as long as he deems it necessary in order to determine the nature & pattern of these "emergencies".

Upon completion of this investigation (which may involve 20 or 60 emails & take anywhere from 10 to X amount of days), the probationary offender (ex. Core) will either be allowed to continue his activities without restriction for 3 months pending further review, have already expired through natural causes or be told that a permanent restriction be placed on his account barring no more than a total of 60 buys & sells per month. (this number may be further restricted without notice) 

Other investors need not be concerned regarding any of the above because the salary of the Grand Inquisitor & his staff will come out of a special excise tax on only the investors who exhibit the 2 following characteristics:
1. Extraordinary return numbers within the top 1% of all investors.
&
2.Who also seem to experience a lot of daily "emergencies" in their life.

[core]

Amen about the cry babies bothering LC due to their own lack of common sense.  No matter how many protections you add, there will never be a way to compensate for sheer stupidity.  If someone wants to lose money badly enough they will find a way.  What wil happen once you add so many protections that penalize the seller is eventually you reopen loopholes on the buying end.  Prosper, for example, is wide open to such things. 

Personally, I think LC should have just continued with their online warnings which continually separated them from Folio.

Yeah but the thing is there is no separate Folio deal.  Those warnings are blantant lies!

You are about to leave the LendingClub website and enter the note trading platform website operated by Foliofn Investments, Inc. (Foliofn)

False.  Lending Club runs the whole thing.  Folio doesn't "operate" anything on that site.  Folio has nothing to do with it except for the "settlement".  The site is littered with similar lies.  Why do we allow them to continue this deceit?

For those of you who mentioned regulators getting involved (LC Adv), maybe those regulators should start with this low hanging fruit before they go talk to the guy who lost a quarter.  LC posting falsehoods on its site to shift the blame to a straw man.  Then said regulators can go after the IRA coverup while they're there.  They might also want to look into the dissemination of insider information to a select few individuals weeks/months ahead of planned major changes which will have a dramatic affect on the market price of securities (certain notes).  Just a thought.

Oh, by the way.  I had a sold note get cancelled today.  Sunday.  No day is safe.

I had a _bunch_ get canceled today too.  Cancelling sales on the Lord's day!  What will these heathens do next?

[core]

I realize that I am way too controversial for this post (plus I'd die of boredom) so I recommend none other than the former unrestricted Q&A Grand Inquisitor known to veteran LC investors as RetiredUSMC, to head this investigative commission.

Haha yeah I remember that guy.  You know what, it would almost be worth it losing all my trading privs for a while if I got the chance to get grilled by that character.  Which reminds me, happy Veteran's Day everyone.  So no settlements or payments today, but you can bet that LC will still be cancelling sales.  If the Lord's day isn't sacred to them then they likely won't have any respect for our fallen heroes, either.

In the longer term I believe that individuals who have exhibited the tendency to have multiple "emergencies" in rapid succession, (ex. more than 1 emergency per day) be put on a temporary "no selling" list until an independent investigative commission can hear their case thoroughly & determine the nature of these alleged legitimate emergencies.

Dan you may not yet have seen Peter's post in the other thread where he says there are plans in the works for a new, competing trading platform.  Does that sound to you like things were winding down trading-wise?   Sure doesn't to me!  I for one am excited about the idea.  I could post details about how I'd get around your trading death panel but I don't think it'll be necessary now.  There may be even more profits to be made in the future.  Have some optimism Dan.  More sharks in the water for you to chase.  Clever sharks with lots of new sharkie ideas.