So what's the lifecycle of these hardship loans?
Good question.
I also want to know what the chances are that such a loan will pay vs charging off. We have no data on which to estimate. LC says everything is fine, but it doesn't look fine to me.
LC's various computations (ANAR for example) presume that these loans will behave just like loans that are paying, but I don't believe that.
The delinquency spreadsheet that LC publishes shows that delinquency GOT BETTER after covid19, but this is fake news because they don't show that they are including a bunch of nonpaying loans as current in that calculation.
They are listed as current now, but not making payments. Presumably at some point they're supposed to start paying--can they just keep on deferring? For how long?
Surely its a one-time thing,eh? Otherwise that would be so stupid I just can't imagine.
And once they start finally being "late", do they go through the usual lifecycle for a late loan, starting with 15-30 days, and then 120 days? Or does the lateness "backdate" to the original deferred payment once they are late?
I've not seen any explanation on this. The hardship "feature" has been around for a long time, so we could look back at some pre-covid19 hardship loans and track their lifecycle. Unfortunately, LC makes them very difficult to find. I have not put forth the effort. Perhaps after they fix the spreadsheet bug it will be easier.
I suggest you pose your question to LC directly. I believe the lifecycle of a hardship loan would be a worthy subject for a nice explanation for the FAQ at the very least.