Author Topic: Payment - Settled In Full  (Read 8078 times)

core

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Re: Payment - Settled In Full
« Reply #15 on: November 20, 2013, 02:44:33 AM »
Got them, Bohb.  Thanks!

If anything good happens with them I'll be sure to post a follow-up to rub it in keep you updated.

Bohb Daishi

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Re: Payment - Settled In Full
« Reply #16 on: December 09, 2013, 07:22:32 AM »
I just picked up another one of these notes. It makes me really curious what the "Payment - Settled In Full" log really means...

 https://www.lendingclub.com/account/loanPerf.action?loan_id=708969&order_id=14230741&note_id=4218269
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yojoakak

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Re: Payment - Settled In Full
« Reply #17 on: December 09, 2013, 10:06:03 AM »
I just picked up another one of these notes. It makes me really curious what the "Payment - Settled In Full" log really means...

 https://www.lendingclub.com/account/loanPerf.action?loan_id=708969&order_id=14230741&note_id=4218269


Maybe it means this:

"...cashing a check marked "payment in full" may well discharge the debtor's obligation entirely..."

http://www.callawyer.com/clstory.cfm?pubdt=NaN&eid=916594&evid=1

Keltset

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Re: Payment - Settled In Full
« Reply #18 on: December 09, 2013, 01:03:42 PM »
This is directly from the borrower agreement I received when taking out my loan here. (I'm still waiting for it to be issued but I'm a long term investor here as well and see no reason for it to not complete)

"Prepayments and Partial Payments. Borrower may make any payment early, in whole or in part, without penalty or premium at any time. Any partial prepayment is to be applied against the principal amount outstanding and does not postpone the due date of any subsequent monthly installments, unless Lender otherwise agrees in writing. If Borrower prepays this Note in part, Borrower agrees to continue to make regularly scheduled payments until all amounts due under this Note are paid. Lender may accept late payments or partial payments, even though marked "paid in full", without losing any rights under this Note."

Based on what I bolded from the borrower agreement, there is no liability to LC to cash a check marked "Paid In Full" that obligated them to treat the note as fully settled. I believe they are just notating that the check was marked as such and would continue any standard payment methods or collections methods as needed on the account. One of the note links I had clicked on and reviewed indicated that there were collection efforts after the notation on the payment. Had I seen this thread earlier, I would have offered to purchase those notes from you ;)


Edit: Actually this was from the Loan Agreement, not borrower agreement.
« Last Edit: December 09, 2013, 01:06:56 PM by Keltset »

brycemason

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Re: Payment - Settled In Full
« Reply #19 on: December 09, 2013, 03:54:04 PM »
Of course, LC's agreement with the borrower cannot fly in the face of the California statute which trumps it. It seems the law would win out. It's like a state making a law that opposes federal law, which would hold. Go go severability clause.

Keltset

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Re: Payment - Settled In Full
« Reply #20 on: December 09, 2013, 04:54:23 PM »
I'm not entirely certain what California law is under the matter but I do recall reading about a few court decisions and the primary court decision sticking out in my head is nelson v. fire insurance exchange in which the decision, if I recall correctly, was that there was no reservation of rights and thus the check cashed indicating that the claim is resolved in full does constitute an agreement to resolve the outstanding amounts and resolved any potential further action from claim.

What I had read into the failure to reserve rights was that they failed to protect themselves such as I would view LC's clause... I'm not a lawyer though and this is also from memory. Either way it has peaked my fascination.

Are all of these loans governed under CA law, or do they reside under the host (residing) state of the individual borrower where case-law and written law may differ state to state?

core

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Re: Payment - Settled In Full
« Reply #21 on: December 09, 2013, 05:16:26 PM »
Why would a loan originated by a Utah bank and sold to a Delaware company be governed by California law?

At any rate this whole deal is ridiculous.  For one, it says SETTLED in full, not paid in full.  And LC wouldn't build in a whole different status message in their system to log it in case some crackpot tries some trick that he read about once.   If they wanted to log it there are plenty of other ways to do so which would be more clear to everyone involved.  Hint: The word "Settled" would not be a part of it.  "Nut" might be.  "Refuses to pay" is even better.  Also, you will note that no payment is logged near the date of that notation for the notes in question.

Next y'all are going to suggest that the borrower offered to pay his debt in pennies, LC refused it, and that's what the notation means.  It makes just as much sense.  This thread is on-target to get as funny as that one where you guys thought LC was providing bankruptcy counseling when people called up.

Keltset

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Re: Payment - Settled In Full
« Reply #22 on: December 09, 2013, 05:34:11 PM »
Why would a loan originated by a Utah bank and sold to a Delaware company be governed by California law?

Lost in headquartered in SF-CA land... Ha! Anyway my question was more regarding the enforcement laws, I would think it would be related to the resident state of the borrow vs. the lenders state in the same way that debt collection laws are related to the individual state of the borrower or federal depending on the law you are looking at.

After a little research it looks like there are many protections against the ability to simply state you are paid in full and have that be a valid restrictive endorsement. One can look at the UCC laws and the Safe Harbor clause alone to see many exit's for a company such as LC. In fact simply having the check go to a processing center or lockbox can void a restrictive endorsement in many (if not all, depending on the most recent version of UCC the state has) states. The restrictive endorsed check would have to be mailed to a specific place or person and must be manually reviewed during the course of business and not just shoved through a payment processing unit that has no legitimate ability to negotiate an agreement as such on behalf of the organization.

Based on everything I have read out of my curiosity going sky high, it's more of a myth these days than a factual obligation- especially if the disputed party to the contract has reserved their rights against such action directly in the contract- most states allow this contractual exemption and even allow them to still take and cash the check and simply dispute the restrictive endorsement on it.

Edit>I have no idea regarding the lack of payment around the thing... Has anyone actually messaged support regarding this to just get a clear cut answer?
« Last Edit: December 09, 2013, 05:36:07 PM by Keltset »

core

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Re: Payment - Settled In Full
« Reply #23 on: December 09, 2013, 05:54:52 PM »
Has anyone actually messaged support regarding this to just get a clear cut answer?

Not that I know of.  If anyone wants to try, you'll probably need a note in-hand to ask about.  I would be glad to sell you one for -70%.

Keltset

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Re: Payment - Settled In Full
« Reply #24 on: December 09, 2013, 05:58:49 PM »
You paid 85... I'll take one for 90 :P Ha.... I'll just worry about it when / if I ever come across one...

Bohb Daishi

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Re: Payment - Settled In Full
« Reply #25 on: May 07, 2014, 03:30:56 AM »
Looks like the old "Payment - Settled In Full" log was just changed to "Borrower completed all payments for the negotiated settlement amount and will not be making additional payments".

I'm glad I offloaded those notes to Core...  ;)
There are three ways to make a living in this business: be first, be smarter, or cheat.