Author Topic: Unverified Borrower Profile Data  (Read 8629 times)

rlv99

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Re: Unverified Borrower Profile Data
« Reply #15 on: November 29, 2013, 06:28:43 PM »
What is this "testing of the system" you mention?  Why would an institution want to pay an origination fee just to see if LC really does issue loans?  And you guys call me paranoid.

Why wouldn't LC simply waive the origination fee for the institutional clients who want to test the process?  We know they discount their fees to them.

Inflationhawk

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Re: Unverified Borrower Profile Data
« Reply #16 on: November 29, 2013, 06:34:11 PM »
........if only LC would share a tiny fraction of their cash cow (aka origination fees) with us to particularly stymy the pang of full first month repayments.

I can heartily agree! Prepayment is a windfall for LC, but a loser for the investor.  5% of the the LC origination fee distributed to to the investor(s) would make it worthwhile without impacting LC's cash flow.  It is our money that they are using to make that origination fee.

Keep in mind that I was told that some of those 1st month payoffs could be their institutional "partners" testing the system.

I would argue that LC's cash flow would be impacted by 5%! It is our money, but its their service we are using.  A prepayment kickback from LC for taking the risk though to fund the note would seem appropriate though, I wouldn't argue that.
I would not be surprised at all by institutional partners testing the system.  There is a much greater emphasis on due diligence, compliance and risk these days in the financial industry.  However, this has to be a very very small number in comparison to the overall volume of 1st month repayments.

core

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Re: Unverified Borrower Profile Data
« Reply #17 on: November 29, 2013, 06:40:46 PM »
I don't even see why they need to be testing the process.  If an institution doesn't like how a page in the process looks, well don't invest with LC.  Let LC do their job, which (among other things) is designing the site and borrower process.  Institutions can stick with what they do best, which is sitting around throwing money here and there and scheduling needless in-person visits.  Lord knows LC has enough investors so if they lost a few institutions who want to play webmaster too that wouldn't be a bad thing.

Why wouldn't LC simply waive the origination fee for the institutional clients who want to test the process?  We know they discount their fees to them.

Yeah for all we know they might just do that.  Maybe if you rack up enough 'tests' you get free yacht rides.

Bohb Daishi

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Re: Unverified Borrower Profile Data
« Reply #18 on: December 02, 2013, 04:59:13 AM »
Do first month repayments happen often?  What drives that behavior?  Is the borrower just trying to build up their credit rating???

Another possibility is that the borrower needs a short-term bridge loan. This would be most common for businesses; especially if they need to purchase some extra inventory.
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