Author Topic: Tool to find the default rate on a single note?  (Read 4535 times)

adamdreaming

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Tool to find the default rate on a single note?
« on: November 18, 2012, 08:31:22 AM »
I am looking for a tool where I can find the default rate on a single note easily by entering a loan ID. The closest I have come is adjusting the parameters of a loan search on something like lendstats or interest radar so that the loan I am looking for info on falls squarely in it, but it takes a long time and I know there has to be a better way.

thank you so much for helping a newbie!

yojoakak

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Re: Tool to find the default rate on a single note?
« Reply #1 on: November 18, 2012, 12:21:04 PM »
"default rate on a single note"

What do you mean by "default rate"?


http://www.investopedia.com/terms/d/defaultrate.asp

adamdreaming

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Re: Tool to find the default rate on a single note?
« Reply #2 on: November 18, 2012, 01:23:08 PM »
Allow me to clarify, and I apologize if I misuse words as I am new at this. Thank you for helping.

I am considering selling notes on the secondary market. I would like to be able to predict the likelihood that any particular loan may default. The information that I am looking for is the historical performance of loans that are similar to the one I am considering selling, and what percentage of those similar loans defaulted. This is a common method used for finding loans to invest in that are less likely to default on websites like lendstats and interest radar, but the tools I have been able to find on these sites only help me pick out new loans, not analyze single ones. 

Thank you for responding to my post.
Does this clear up any ambiguities?

yojoakak

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Re: Tool to find the default rate on a single note?
« Reply #3 on: November 18, 2012, 06:25:35 PM »

Peter

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Re: Tool to find the default rate on a single note?
« Reply #4 on: November 19, 2012, 03:52:01 PM »
Both Lendstats and NickelSteamroller will allow you to do just that. Simply enter in the characteristics of the loan and see what the historical default rate has been. Keep in mind, for some fields like income or revolving credit balance you should stick with broad ranges otherwise there will be not be enough matching loans in the historical data file.
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adamdreaming

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Re: Tool to find the default rate on a single note?
« Reply #5 on: November 20, 2012, 07:48:39 AM »
I fear that once again I left some sort of ambiguity, so please understand that in the following explanation I am not trying to offend anyone if I sound like I am talking to a five year old. It is simply when there is confusion this is the quickest way to clarify, and know that I respect the intelligence of those that have replied as well as the general intelligence of those in this forum.

I want to be able to enter a Loan ID and receive historical data on similar loans.
I am not looking to purchase a new loan, but I am trying to re-asses the value of a note already in my possession.
I understand that on Lendstats ect. you are invited to adjust parameters on your own, and that those parameters can be adjusted to receive data similar to a particular loan. This is currently what I am doing, but adjusting the thirty-plus data points by hand is time consuming. I wish to find a more efficient method.
Idealy I wish to be able to enter a Loan ID and have a data set derived from the historical performance of similar loans. A close second would be entering a Loan ID and having the parameters automatically adjust to fit it, so that I might adjust them if the data set gathered is so small as to be insignificant.

I have my doubts that this tool exists, especially since Peter has responded to this and I believe that if a tool like this exists he would know about it. If the tool does not exist, are there any faster ways to achieve my goal without entering in all the data points manually?

thank you again,
~a

brycemason

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Re: Tool to find the default rate on a single note?
« Reply #6 on: November 20, 2012, 10:59:03 AM »
Write a script in your favorite statistics package that loads all the data and allows you to enter a parameter of a loan id, reads the characteristics of that loan, and finds all loans that are within certain tolerances of that loan on as many characteristics as you like. Then output whatever performance metrics you want.


Peter

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Re: Tool to find the default rate on a single note?
« Reply #7 on: November 20, 2012, 05:00:39 PM »
I am pretty sure that no tool like this exists...yet. One day in the near future I expect something like this will be available. In the meantime you will have to stick with your DIY solution.
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adamdreaming

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Re: Tool to find the default rate on a single note?
« Reply #8 on: November 22, 2012, 05:36:16 AM »
Thank you Brycemason! Thank you Peter! I don't know anything about writing or implementing scripts unfortunately so I'm going to have to wait till a publicly available tool comes out. I'll ask if any of my friends can do this but I think it will be a long-shot. If anyone out there has written something like this and wouldn't mind sharing I would love to get my hands on it.

Thanks again!
~a

adamdreaming

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Re: Tool to find the default rate on a single note?
« Reply #9 on: December 02, 2012, 12:41:41 PM »
Interest radar just put out this tool today!

here's the link;
http://www.interestradar.com/loan

viking

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Re: Tool to find the default rate on a single note?
« Reply #10 on: December 02, 2012, 09:57:57 PM »
Interest radar just put out this tool today!

here's the link;
http://www.interestradar.com/loan
No, that tool only lets you look up information on a single loan. It is similar to the loan look-up on Nickel Steamroller's (NSR) website.

However, here is what could quite easily be done:
1. Install the iMacros add-on for Firefox.
2. Write a simple macro that extract the loan data from the webpage after looking up a loan (e.g. on NSR).
3. Put the data into a URL string for NSR (similar to the one created when clicking on "Permanent Link")
4. This will give you a forecast for "identical" type loans.

In step 3, you will need to decide if you want to widen the range of the loan attributes* to get similar loans or using only exactly the same attributes to get identical loans. With identical loans there may be very few loans.

*) e.g.
Interest Rate   19.040%
Open Credit Lines   5
Total Credit Lines   21
Revolving Credit Balance   13363
Revolving Line Utilization   99.00
Inquiries In Last 6 Months   1
etc.

How exact do you want to be...??