Updates to your Lending Club data

[jennrod12]

Thanks, Fred! 

Jenn

[Fred93]

So far the historical notes files haven't been updated with these fields, but it will be interesting to see whether LC appends the new data to old records once they update for the Q3 loan issuance.

I don't think they can append the new data to old loans, because all old loans are INDIVIDUAL, and the new fields apply to JOINT only.

[jheizer]

Nicely saying WTF mate!

My assumption is that they are giving us only these fields for the joint application and the rest is still for the primary person.  But that is just a guess.  Which means we know jack about person #2. 

When in doubt, throw it out. 

Edit: I see they at least updated the API documentation already.  I don't think it was there yesterday.  But pretty vague still.

[PhilGD]

I would put money on the assumption that all other credit fields apply to the person who filled out the loan application. Perhaps they ask joint filers who is the "head of household," and it's this person who's credit data is listed.

One interesting thing is that both parties are on the hook for the loan, and even if one party dies the other party is still obligated to pay. Ceteris paribus, joint loans will likely be safer risks than individual loans.

[jheizer]

Well there was at least one released during this feeding time, but I was too slow to dump out its info or even get the ID before it was bought up.  So they are coming through already.

[Kombinator]

Interesting, these are de facto safer as both are separately and jointly liable for the loan...interesting to see if the joint means jst family members, or in fact allow for other cosigners?

[cjpat]

Does anyone know if there is a statistically greater or lesser *general* risk when there are two applicants instead of one -assuming the rest of the borrowers' profiles are similar?  Intuitively the fact that two people are legally liable for the loan seems to be a plus, but that may not be born out in the default rates...  Anyone know where we can get that kind of data?  I looked on NSR, it ain't there 

[Fred93]

Intuitively the fact that two people are legally liable for the loan seems to be a plus, but that may not be born out in the default rates... 

Bingo.  There have been many things that seemed intuitive to me about credit data, but weren't validated by the data, so I'm data-driven.  Wonderful that so much data is available, but on this point there seems to be no data.

Anyone know where we can get that kind of data?  I looked on NSR, it ain't there 

LC hasn't issued loans like this before, so we can't get the data from LC.  We have to scratch our heads to think of whether we can get it somewhere else.  And then... its not just the question of whether adding a 2nd person helps the default rate, but also how one interprets the credit numbers.  It appears that LC is giving us the full data on one person, and very limited data on the 2nd person.  That's very strange.  How should I deal with that?  If the first person has a good FICO score (good stuff) but the 2nd person has a hidden FICO score, then maybe the 2nd person's FICO is horrible, in which case she isn't much of a help after the 1st person loses his job, defaults, moves to Florida, etc.  So how do I even try to make intuitive evaluations if I don't have the data for both people?

Perhaps there is some data set out there from the government or some banking source or something that tells us the relative performance of 2 person loans vs 1 person loans.  If that exists, perhaps we can extrapolate it and come up with a theory.

Even if we do, that's still not data-driven the way our investing in the LC INDIVIDUAL loans is data-driven.  We'd need about 3 years of data before we could do that. 

All very puzzling. 

I do hope to force an explanation out of them so that we can at least understand what the data fields mean.  That will at least allow us to guess the rest.

[AnilG]

It is just a speculation that joint means 'co-signer', that is both parties are legally responsible for the loan. It just could simply be a primary borrower who is using spouse's income and credit history as additional supporting data for the loan to lower interest rate or higher loan amount (similar to disclosure of alimony, spousal and child support).

[Fred93]

It is just a speculation that joint means 'co-signer', that is both parties are legally responsible for the loan. It just could simply be a primary borrower who is using spouse's income and credit history as additional supporting data for the loan to lower interest rate or higher loan amount (similar to disclosure of alimony, spousal and child support).

It is important that we understand the meaning.

I believe I found written words somewhere from LC that say the 2nd person is also responsible.  I will try to find those words tonite and post the source.

[jheizer]

Pretty sure I read that somewhere too.

Edit: oh yeah a link from the email I posted before.

Once a joint application is approved, each co-borrower is fully obligated with respect to the loan. For example, if one co-borrower dies or files for bankruptcy, the other co-borrower remains obligated with respect to all payments owed. Alternatively, if one co-borrower is an eligible servicemember who meets the requirements under the Servicemembers’ Civil Relief Act (SCRA), the joint application loan as a whole is eligible for certain financial benefits and protections when the servicemember co-borrower enters active duty. Learn more about financial benefits for eligible servicemembers under SCRA.

[PhilGD]

I don't think we have any basis to complain that there's no historical performance data on joint loans. To put this in perspective, the original retail investors who put their money on the line with LC had zero historical performance data to analyze for individual loans, the exact situation we find ourselves in now with joint loans. The same can also be said for when Lending Club originally introduced 60-month loan terms.

By now, I think we can give LC's underwriting the benefit of the doubt. In the meantime, I agree with Fred93 that we need additional clarification on how the rest of the credit factors are being handled for joint applicants.

[Rob L]

The way this was handled seems to me that the old fields stay the same and the new fields are additional new information for a new type of loan LC is now offering borrowers.

If individual then the there's nothing new. If joint then the three new fields provide new information and the old fields continue to provide the same old information for the applicant his/her self. This provides backwards compatibility with the existing data base for all the existing fields and adds a very limited amount of new information for the new loan type starting today. Maybe this is all the new information LC is getting from joint applicants. Who knows? If they spelled it out this way I don't think it would be a problem and we would be happy to have the backwards compatibility retained.

It would be nice not to have to COMPLETELY GUESS though!! 

[Fred93]

It would be nice not to have to COMPLETELY GUESS though!! 

Precisely.

[Fred93]

Well there was at least one released during this feeding time, but I was too slow to dump out its info or even get the ID before it was bought up.  So they are coming through already.

My software hasn't detected any yet.  Here's the breakdown of the applicationType field on new loans last few feeding times, as seen from here...

Code: [Select]

10/07/15 06:00:01.3  LC 531 individual  0 joint  0 other
10/07/15 10:00:02.5  LC 595 individual  0 joint  0 other
10/07/15 14:00:01.1  LC 614 individual  0 joint  0 other
10/07/15 18:00:02.0  LC 509 individual  0 joint  0 other