Author Topic: Questioning inquiries=0 filter  (Read 1669 times)

hoggy1

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Questioning inquiries=0 filter
« on: June 28, 2014, 12:52:20 PM »
I have written to Peter about this but have not heard back...busy guy. In his 6/22 news letter last week and elsewhere he has argued for filtering loans with inquiries=0.

With NickStaem as a source looking at LC loans, if you insist that inquiries=0, that filter cuts the available loans almost precisely in half (from 288,758 to 144,572) and increases expected ROI on E rates notes (E just by example) from 11.52% to 12.17%.

Instead, I use inquiries <= 1 because the loan count is only reduced from 288,758 to 225,456 (i.e. 21.9%) and the expected ROI drops only a few tenths percent from 12.17 to 12.03. I am arguing that the added 80k loans to choose from are worth this tiny change in expected ROI.

I do believe the data supports Peters presumption that the borrowers have shopped this loan. If you add to zero inquiries, months_since_recent_inq =>1 you loose all but 11k of the loans you got back by allowing the single inquiry. But I forgive them for shopping this loan. Perhaps it was shopped on Prosper before LC.

Are there other reasons to worry about one inquiry I'm not getting?
Steve