Author Topic: "Credit for Ineligible Loan"  (Read 20550 times)

DanB

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Re: "Credit for Ineligible Loan"
« Reply #45 on: November 07, 2014, 03:25:03 AM »
Scenario 2 is far too complicated already as you presented it, and you're neglecting the possibility that it may have changed hands 10 more times after that.  They are not going to do anything like unwinding a whole chain of trades, I guarantee you.  Another company might.  LC can't/won't.  I do have some small experience in having trades unwound here.

Scenario 3 (and the most likely one IMHO):  You keep your $15.  The Folio trade stands.  Lending Club pays me the $25 full par value and takes the IGP note.

Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note? In view of your tremendously low opinion of LC in virtually all areas including in the area of "trust",  your opinion of how this would pan out seems suspiciously generous. Thank you though for sparing us the "doing the right thing" nonsense.


core

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Re: "Credit for Ineligible Loan"
« Reply #46 on: November 07, 2014, 03:47:17 AM »
Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note?

I am basing this on the fact that in every case we have seen so far, LC has paid note holders the principal plus accrued interest.  That is what the numbers say, that is what the quoted LC rep emails say.  It makes no difference what the investor paid for it.  To do what you are suggesting, unwinding a whole series of trades (even though the cash may no longer be there in some account along the way) would be an absolute nightmare.  This went on for 3+ months.  This is not something that can be undone with a wave of a wand like you are suggesting.  It's not just one trade.

Paying P+I for the note is very straightforward.  That is what they seem to have done.  All I am saying is it's not exactly proper.  You seem to be agreeing with me based on your disbelief that it actually happened that way.

Also Dan this whole IGP discussion may be academic.  I have not yet seen any evidence that LendingClub bought back any IGP/late notes at all.  Not one.  I don't see why they would.  If you're going to rob somebody you take the good stuff.
« Last Edit: November 07, 2014, 04:00:29 AM by core »

DanB

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Re: "Credit for Ineligible Loan"
« Reply #47 on: November 07, 2014, 07:28:49 PM »
Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note?

I am basing this on the fact that in every case we have seen so far, LC has paid note holders the principal plus accrued interest.  That is what the numbers say, that is what the quoted LC rep emails say.  It makes no difference what the investor paid for it.  To do what you are suggesting, unwinding a whole series of trades (even though the cash may no longer be there in some account along the way) would be an absolute nightmare.  This went on for 3+ months.  This is not something that can be undone with a wave of a wand like you are suggesting.  It's not just one trade.

Paying P+I for the note is very straightforward.  That is what they seem to have done.  All I am saying is it's not exactly proper.  You seem to be agreeing with me based on your disbelief that it actually happened that way.

Also Dan this whole IGP discussion may be academic.  I have not yet seen any evidence that LendingClub bought back any IGP/late notes at all.  Not one.  I don't see why they would.  If you're going to rob somebody you take the good stuff.

I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October. So I would ask for confirmation of the 3+ month claim as well as the 1% of notes claim that someone previously mentioned...............unless they mean 1% of October. 

rawraw

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Re: "Credit for Ineligible Loan"
« Reply #48 on: November 07, 2014, 07:30:25 PM »
Based on my redemptions, it comes out to a little less than 1% of my total notes I have invested right now.  And I'm a fairly low interest rate investor (weighted average is 14).

Randawl

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Re: "Credit for Ineligible Loan"
« Reply #49 on: November 07, 2014, 07:31:46 PM »
Excuse me but other than your effervescent personality,  what could possibly motivate LC to take an additional $10 out of their own pocket & pay you..............when you only paid $15 for this hypothetical note?

I am basing this on the fact that in every case we have seen so far, LC has paid note holders the principal plus accrued interest.  That is what the numbers say, that is what the quoted LC rep emails say.  It makes no difference what the investor paid for it.  To do what you are suggesting, unwinding a whole series of trades (even though the cash may no longer be there in some account along the way) would be an absolute nightmare.  This went on for 3+ months.  This is not something that can be undone with a wave of a wand like you are suggesting.  It's not just one trade.

Paying P+I for the note is very straightforward.  That is what they seem to have done.  All I am saying is it's not exactly proper.  You seem to be agreeing with me based on your disbelief that it actually happened that way.

Also Dan this whole IGP discussion may be academic.  I have not yet seen any evidence that LendingClub bought back any IGP/late notes at all.  Not one.  I don't see why they would.  If you're going to rob somebody you take the good stuff.

I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October. So I would ask for confirmation of the 3+ month claim as well as the 1% of notes claim that someone previously mentioned...............unless they mean 1% of October. 

Fred's post on the previous page of this thread shows one of his from August 13.

Has anyone had a late, defaulted, or charged off note repurchased? Mine were all current.

Mine are all Current status, with IssueDate as early as 13-Aug-2014.  So this has been going on for about 3 months!



core

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Re: "Credit for Ineligible Loan"
« Reply #50 on: November 07, 2014, 11:55:12 PM »
I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October.

Alright, then I'll ask you the same question I asked Fred:  How were you able to determine which notes were affected, in order to get the dates?  I am guessing you didn't do an outer join on your database because unless my memory is failing me, you were the one that never uses automated tools because he never found the need.  Even if you wanted to investigate after the fact, you would still have needed a csv snapshot from the previous day or something similar.  Why would someone who doesn't use automated tools take a manual snapshot the day before if they didn't know this was coming?

I thought my data was decent, but I am unable to determine if I was affected except that I do know that I didn't receive any credits.  Disappearing notes happens hundreds of times a day (Folio settlements) and I never had the foresight to look out for notes that disappeared for other reasons.  I thought I had enough crap tracked.  Now it seems I need to add a burglar alarm to my systems too.

hoggy1

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Re: "Credit for Ineligible Loan"
« Reply #51 on: November 08, 2014, 06:23:59 PM »
  I thought I had enough crap tracked.  Now it seems I need to add a burglar alarm to my systems too.

I love this board. I think I might nominate Core for the "Al Sleet Hippy Dippy Policeman Memorial Post: Tonight will be mostly burglars with a scattered few accountants, code jockeys, SEC officials, and investment banker covering up the plunder by morning.

I have only one of these loans but I have seen a few possibly related anomalies this week. I had two high interest notes for sale on folio that got canceled reportedly for payments processing. But neither of them were anywhere near payment processing time. I just re-listed them and they sold today. 
Steve

SamV

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Re: "Credit for Ineligible Loan"
« Reply #52 on: November 09, 2014, 12:32:41 AM »
I am fairly new to investing with LC and only have a small number notes so far as I test things out to see if I want to commit more money to this.  So it was easy for me to see that five of my already issued notes had disappeared when I logged in to their site on Friday.  I had five of these "Credit for ineligible loan" transactions on my account activity page and wasn't sure what that meant so I called them.

I got the same explanation as others in this thread but wanted to work through the numbers for myself because I don't have a lot of trust for this company yet and didn't just want to take their word for it with no details.  So I asked for details and the customer service person was able to give me the Loan ID's and Note ID's for the affected notes.  It was still a major chore to pull all the information together because the notes were no longer showing up in my account so I had to cross reference the ID's with orders on my account statements to find their dates and interest rates, and then payment details on the account activity page to find the payments I had received for them.

I just created an account on this forum just to let people know that you should call and ask if you want to know specifically which of your notes where affected by this.

I think I will be calling or emailing them again to let them know that I am not happy about the way they are handling this.  They should have contacted us to let us know what was happening and made it easier to find the details about which notes were involved.  I take it from the comments here that this is not a frequent occurrence?  I hope not.

core

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Re: "Credit for Ineligible Loan"
« Reply #53 on: November 09, 2014, 07:04:41 AM »
I take it from the comments here that this is not a frequent occurrence?  I hope not.

Sam this exact event has never happened before.  But Lending Club making the rules as they go along, just kind of doing whatever they damn please with your accounts, IS a frequent occurence.  So you better get used to it now.

Dennis

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Re: "Credit for Ineligible Loan"
« Reply #54 on: November 09, 2014, 03:30:58 PM »
I am fairly new to investing with LC ....   I take it from the comments here that this is not a frequent occurrence?  I hope not.

Keep in mind that LC is still a young company and P2P (if you can still call it that) is still in its infancy so mistakes will happen.  We're all still learning here.  I think LC has been very good at correcting things in the past and they get better at what they do as time goes on.  But one of the risk factors you must accept if you are going to invest in P2P is that these things will happen from time to time.  Hopefully it won't dissuade you from investing.  I've been doing this for over 3 years and I'm still confident enough in P2P that I continue to add new money.  Best of luck..... 

DanB

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Re: "Credit for Ineligible Loan"
« Reply #55 on: November 10, 2014, 05:19:40 AM »
I was not aware  that this was going on for 3+months. I have over 3000 notes & have only had 11 of these  All of them are from October.

Alright, then I'll ask you the same question I asked Fred:  How were you able to determine which notes were affected, in order to get the dates? I am guessing you didn't do an outer join on your database because unless my memory is failing me, you were the one that never uses automated tools because he never found the need.  Even if you wanted to investigate after the fact, you would still have needed a csv snapshot from the previous day or something similar.  Why would someone who doesn't use automated tools take a manual snapshot the day before if they didn't know this was coming?

I thought my data was decent, but I am unable to determine if I was affected except that I do know that I didn't receive any credits.  Disappearing notes happens hundreds of times a day (Folio settlements) and I never had the foresight to look out for notes that disappeared for other reasons.  I thought I had enough crap tracked.  Now it seems I need to add a burglar alarm to my systems too.

No, you're absolutely correct. I have no way of knowing if it has been going on for a month or many months. That 1% of loans comment for some reason temporarily shorted my thought process out & made me forget that I was only looking back 1 month. My mistake.

SamV

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Re: "Credit for Ineligible Loan"
« Reply #56 on: November 11, 2014, 12:42:08 AM »
Thanks Core and Dennis.  It is good to know that this specific thing hasn't happened before but that this type of thing is not unusual at this point.  I remain interested but cautious and will continue to monitor my account relatively closely.  And hope that LC is learning from its mistakes and gets more reliable and consistent as it goes forward.

Fred93

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Re: "Credit for Ineligible Loan"
« Reply #57 on: November 11, 2014, 01:03:03 AM »
Keep in mind that LC is still a young company and

Bzzt.  Been in business 7 years.  I don't accept the "young company" excuse, nor should you.

They made a mistake, and they fixed it, but they forgot to explain what the hell they were doing to their customers, which is another mistake.  They're worse and worse about this 2nd type of mistake as time goes on. 

Prescott

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Re: "Credit for Ineligible Loan"
« Reply #58 on: November 11, 2014, 09:38:57 PM »
I vote system error in their underwriting criteria - it could be something like a rounding error in their calculations that changed the interest rate on the note or allowed it to get past underwriting criteria when it shouldn't have.

Consider the calculation for how many months ago their last default was - how do you calculated months. If their model builders calculated it based on days / 30, vs the engineers calculating it as something slightly different, you have the situation where loans are just off by a bit. Now suppose your criteria is default < 6 months ago = no loan. You'll get people on the fringes depending on how you calculate months which might be off.

It could be fraud, but in my (somewhat limited experience) fraud is usually limited to joe stealing his neighbor or family members identity - which means finding a bunch of notes all at once wouldn't be common - it would trickle.

If a fraudulent note was late, and you sold it on the second market at a loss, I could see LC liability to the original seller.
« Last Edit: November 11, 2014, 09:40:55 PM by Prescott »

muflafler

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Re: "Credit for Ineligible Loan"
« Reply #59 on: February 25, 2015, 05:46:56 PM »
Hi,

Noticed on my 1099-B that all of these "ineligible" notes are on there.  Date of Acquisition is the date the note was funded,, while date of sale is listed as 11/06/2014 for all of them. 

Cost is $25 for all (my original investment amount in each note) and then Principal/Income received is just what I received in payments.  And the sale price works out so that I have zero gain or loss on all the notes, I.e., if I bought a $25 note, and then received an $0.80 monthly payment before the note got yanked back by LC, then the sale price is listed as $24.20 so that the total is $25.00 and I have no gain.  So for tax purposes LC is treating this as if you sold on the secondary market for no gain or loss.

Slightly annoying for me because I don't do the secondary market very much and haven't sold any notes on the secondary market, but now I have to enter this 1099-B info for a bunch of notes that LC screwed up on and where the total p&l is zero.  And I do not know how to import it into turbotax in an automated fashion.  Oh well...

Edit:

Actually, if total p&l is zero AND p&l on each individual line item is zero, do I really need to file the info from the 1099-b?  I guess the answer is yes, just because the IRS will receive this and the automated system will probably flag that the IRS received a 1099-B but I did not report a 1099-B in my filing.  And then my filing might get an additional review or something because of that.  Better safe than sorry when it comes to the IRS!
« Last Edit: February 25, 2015, 05:49:59 PM by muflafler »