Author Topic: Worst Month Yet  (Read 254158 times)

nonattender

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Re: Worst Month Yet
« Reply #225 on: October 28, 2016, 08:11:37 PM »
1)  Industry players must be vigilant about reporting initial loan balance the moment the account is opened/loan originates - otherwise, there's a window in there where it looks like this guy just paid off $20k in revolving debt and his score is going to go up by triple digits.

2)  The "magic bullet" for this, for you guys (and for in-house quants) would be to look for an increment in # of total accounts after the first consolidation event - especially revolvers.  If they've opened new tradelines, it's probably a decline - or a very big modelrank "look out!" discount - or, for retails, a "sell signal" or "don't buy this guy" signal...  That weeds out the "stackers" and "spending spree" guys, somewhat - but it's going to require some humans to look at a lot of CR's in order to see what's really going on and build in a model fix, and, for you guys, all you get is a FICO trend - never an update on total # of accounts or total # of revolving accounts, so..... good luck!

3)  One can approximate/back-out those events from FICO trend, but it's... approximate.  There are lots of edgecases and anomalies...

4)  FICO/etc should probably adjust their algos/models to account for consolidation by personal loan - especially their credit card model, which sees these people with low to no revolving debt and just can't wait to hand them a huge credit line and capture that customer...

5)  Not so sure that the Discovers/etc who are poaching high-fico customers with LC/P/etc tradelines are getting what they think they are getting (same story as people buying FICO UP on folio).  They need to recognize the FICO flaw and become a little more selective.

http://www.lendacademy.com/online-lending-network-combat-fraud/

You're welcome.  Let us know how much fraud you guys catch, okay?
(It's a positive signal for investors to know you're protecting them...)

Also, pretty much anybody who goes for an immediate second loan from another platform should be flagged for halting the disburse of original proceeds (if not yet sent) or subject to an immediate clawback.  Put legal on that, because you're on the hook to us for those.
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BruiserB

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Worst Month Yet
« Reply #226 on: November 01, 2016, 08:47:16 AM »
Well, October 2016 just went down as my first month with more charge offs than interest earned. And I get to pay tax on all of the interest but have more losses this year than I'll be able to write off against other investment capital gains.  I can carry it forward, but I can't keep going with this trend. I'm moving to more conservative notes in my taxable account, but if the losses continue, I'll be reducing my account significantly.  Have gone from 9-10% returns to barely holding flat this year.  LC better get its act together.


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jheizer

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Re: Worst Month Yet
« Reply #227 on: November 01, 2016, 09:43:50 AM »
Loan Status Date in October and in charged off status I assume is the same as what will be in the monthly statement?  If so I am going to get hammered this month too.
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anabio

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Re: Worst Month Yet
« Reply #228 on: November 01, 2016, 04:25:18 PM »
... LC better get its act together.
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I'm not convinced it is an LC problem. Everyone has been talking about problems with 2016 loans...but I am seeing very similar results in my loans, all of which were funded in 2014. I have not invested since Jan, 2015.

It might be partly LC's problem because of that 2016 miscalculation, but that does not explain why I am having loans that have 27-30 months worth of payments going IGP and late 16-30...a lot of them with no missed payments or only 1 grace since inception. And mind you, all my loans are in A-B-C buckets, about equal in quantity.

Two weeks ago I had 12 out of 630 active notes go IGP (none of which had less than 22 payments; most had between 25-30 payments). So far only 3 of them have paid. 8 went 16-30 late and the other one SHOULD have gone 16-30...it's 17 days late (same as another two notes who DID go 16-30) but for some reason LC hasn't popped it over to 16-30 yet.

Last week I had 9 notes go IGP. So far none of them have paid up. They are still in IGP but are getting close to 16-30 territory.

I can't remember ever having this many IGP notes not paying up; usually a big majority (supposedly around 66%) of IGP notes pay up. What has changed? Could it be too many people in oil have lost their jobs? or could it be the big R rearing its ugly head...or something else???
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jz451

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Re: Worst Month Yet
« Reply #229 on: November 01, 2016, 05:45:45 PM »
I'm having a similar situation myself where I've had 4 loans go bad out of 89 active notes. One I sold in the beginning of the month which went bad in September for 90% off when it went Late 16-30 days. Another is also Late 16-30 days but went on a paymen plan, which is frustrating me since it doesn't pay until 11/30, 55 days past due. The other two are IGP but were notes I just bought off Folio, one which is hasn't paid but shows no contact log, and is in payment processing for the past eight days, so I can't sell it, the other is also on a payment plan, for three months. Luckily for me none of my notes in my seven months of investing have gone bad, luckily by selling them once they go IGP.


I'm not convinced it is an LC problem. Everyone has been talking about problems with 2016 loans...but I am seeing very similar results in my loans, all of which were funded in 2014. I have not invested since Jan, 2015.

It might be partly LC's problem because of that 2016 miscalculation, but that does not explain why I am having loans that have 27-30 months worth of payments going IGP and late 16-30...a lot of them with no missed payments or only 1 grace since inception. And mind you, all my loans are in A-B-C buckets, about equal in quantity.

Two weeks ago I had 12 out of 630 active notes go IGP (none of which had less than 22 payments; most had between 25-30 payments). So far only 3 of them have paid. 8 went 16-30 late and the other one SHOULD have gone 16-30...it's 17 days late (same as another two notes who DID go 16-30) but for some reason LC hasn't popped it over to 16-30 yet.

Last week I had 9 notes go IGP. So far none of them have paid up. They are still in IGP but are getting close to 16-30 territory.

I can't remember ever having this many IGP notes not paying up; usually a big majority (supposedly around 66%) of IGP notes pay up. What has changed? Could it be too many people in oil have lost their jobs? or could it be the big R rearing its ugly head...or something else???

dmcnic

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Re: Worst Month Yet
« Reply #230 on: November 01, 2016, 09:59:54 PM »
I have a new D2 loan that is now IGP. I'm surprised there wasn't even one payment. I don't have a good feeling the loan will ever make a payment, y'know?

Rob L

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Re: Worst Month Yet
« Reply #231 on: November 02, 2016, 10:47:07 AM »
I have a new D2 loan that is now IGP. I'm surprised there wasn't even one payment. I don't have a good feeling the loan will ever make a payment, y'know?

Rollers:
There are 366 notes of 36 month term loans that did not make the first payment (in full) listed on Folio at the present.
There are 326 similar notes of 60 month term loans.
These are note counts, not loan counts. A single loan may and probably does have multiple notes listed.
On the other hand, there are no doubt  many such loans have no notes listed on Folio at all.

investor88

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Re: Worst Month Yet
« Reply #232 on: November 03, 2016, 05:11:54 AM »
Hey Rob, How is your account performing now?
When you started this thread 11 months ago, I recommended that you stop investing in LC... - that they were over-inflating returns for investors and that the charge-offs were starting to snowball.  Take a look at the current 'Understanding Your Return Chart'.  A year ago, it didn't show anyone with a negative return and now a lot of people have negative returns.  (in the 6 month to 15 month range) and it will get worse for them as their portfolio ages.   
For some reason Fred93 would not let me speak about my experience with LC and must have ulterior motives to silence any detractors.  LC is failing and anyone who invested in 2014, 2015 and 2016 will soon see the staggering losses coming their way.  A year from now the 'Understanding Your Returns' chart will look like a blood bath and I have a feeling LC will soon stop producing that chart or I recommend they rename it "Understanding Our Downturn"
« Last Edit: November 03, 2016, 07:24:36 AM by investor88 »

Fred93

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Re: Worst Month Yet
« Reply #233 on: November 03, 2016, 05:53:07 AM »
Fred93 would not let me speak about my experience with LC

For the record, I don't have that power.  I hope you speak your mind. 

Quote
LC is failing and anyone who investing in 2014, 2015 and 2016 will soon see the staggering losses coming their way.

I agree with part of that statement.  2015 & 2016 vintage loan performance has been significantly worse than recent prior years.  I am anxious to learn whether 2016Q3 vintage will perform yet again worse, or show some turnaround and do better.

LC is scheduled to release earnings on Monday 11/7.  At that time we should also get the updated statistics files which will give us our first look at 2016Q3 vintage performance.
« Last Edit: November 03, 2016, 05:54:38 AM by Fred93 »

mindbowels

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Re: Worst Month Yet
« Reply #234 on: November 03, 2016, 09:05:10 AM »
Quote
will soon see the staggering losses coming their way.

Yep, just saw my November statement.  The last 3 months have been a slightly net negative returned but I got slaughtered in November. 

I've been an investor since 2009 but I'm done.  I stopped investing in new notes at the beginning of the year and I've been trying to sell out on Folio for the last 6 months.  Hoping by the end of 2016 to have shut the books on Lending Club.  Sad.

apc3161

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Re: Worst Month Yet
« Reply #235 on: November 03, 2016, 09:32:10 AM »
This was also my worst month, I lost money at a rate of 5%.

LC clearly lowered lending standards after going public in an attempt to keep their loan volume growth in exponential territory, at the expense of the investors. Until they fix this, I'm done buying notes and will be withdrawing my cash as it comes in.

jheizer

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Re: Worst Month Yet
« Reply #236 on: November 03, 2016, 09:35:55 AM »
WOW, twice the losses of a normal month for me.  And the notes.csv Charged off with a LoansStatueDate in Oct is definitely not equal to the statement's losses amount.  Statement has another $150.  No wonder they changed the search screens to show the principal lost to 0.  It'd be nice if I could easily see which notes were charged off for a given statement.

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jheizer

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Re: Worst Month Yet
« Reply #237 on: November 03, 2016, 09:57:10 AM »
Well, I have joined the stop buying party.  Maybe I'll fire back up my folio buyer only looking for super good deals, but for now I'm done. 

Just sold my stock too.  I have a feeling their reports monday are going to have to include talk on increasing defaults and its noing to drop.  It was only meant to be a short play anyway.  Probably made more there since May than I'll make in the notes total with a whole lot less money on the line.
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SeanMCA

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Re: Worst Month Yet
« Reply #238 on: November 03, 2016, 10:57:52 AM »
When did the "Understanding your returns" chart update to show so many investors below 0%?
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DLIFVOIP

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Re: Worst Month Yet
« Reply #239 on: November 03, 2016, 11:59:47 AM »
Guys, I will admit that I have not read every post in this thread, but I am shocked to be reading that people are losing money on monthly basis.

What kind of loans are you buying that you are experiencing default/charge off rates that are greater than 10% (hard to believe anyone has average interest rate lower than 10%). 

Seems to me that you are being greedy and focusing most of your investment into riskier loans.  I am also thinking that those that are losing money are not investing an appropriate amount of $ to achieve the correct diversification.

The most important thing about investing in LC is diversification.  But not just diversification in the number of loans you hold, but also diversification over time. 

If you have $5,000, to invest you can not invest that in a 1-2 week period (even at $25 per loan) and expect solid returns.  You have to spread your investment over a longer period of time and be really picky about the loans you purchase.  Especially if you can not hold/buy a significant amount of loans.  LC and several other sites will talk about a magic number of loans to hold to achieve diversification, to me that number is a min. of 1,000 $25 loans. 

Last month was my best month ever regarding $ return.  Yes, my net return has decreased from 10.xx% to 8.28% over the last 2-3 years, but it has been a very slow decline and cannot imagine losing money.  I have an average interest rate of  11.49% and per LC have a Combined Return NAR of 8.28%.  I know of 21 LC accounts with positive returns, lowest Combined Return NAR is 7.95%.

Maybe I am missing the bigger picture of this thread, as I have not read every post, but seems like those who are losing money are making big mistakes in how they are deploying their funds.  I am not saying LC has not done things to hurt their investors, but I do not think anything they have done would cause investors to be losing money.

I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.
« Last Edit: November 03, 2016, 12:20:12 PM by CircleT009 »