Author Topic: liquidation strategy on folio  (Read 10225 times)

nmay2k

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Re: liquidation strategy on folio
« Reply #30 on: June 01, 2016, 08:34:52 AM »
Not familiar with prosper, but B loans are usually not high in demand, so I say not so easy to sell. The rates does not fall, it is the pennies of interest each month that goes down. Smaller principal means a smaller interest but the rate did not change.

When you get near the end of the loan (less than 12 payments)...let's say there are 6 payments left. The yield looks like it halved because there are no longer on an annual basis. APR is an annual rate, what you get in the next 12 months. If there are only 6 months of returns in the next 12 months, it looks like half the yield of the same loan with 12 months or more. So a 12% rate looks like a 6% yield when there are 6 payment left (but the rate really did not change). If you try to sell this with a 7% mark-up, LC won't let you.  If you have a loan with 3 payments left, and it has a 2% yield and you attempt to sell with a 3% mark-up, it won't let you. So there are loans that I put in the "mature" bucket that you cannot apply your blanket mark-up.

Rob L

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Re: liquidation strategy on folio
« Reply #31 on: June 01, 2016, 09:47:40 AM »
When you get near the end of the loan (less than 12 payments)...let's say there are 6 payments left. The yield looks like it halved because there are no longer on an annual basis. APR is an annual rate, what you get in the next 12 months. If there are only 6 months of returns in the next 12 months, it looks like half the yield of the same loan with 12 months or more. So a 12% rate looks like a 6% yield when there are 6 payment left (but the rate really did not change). If you try to sell this with a 7% mark-up, LC won't let you.  If you have a loan with 3 payments left, and it has a 2% yield and you attempt to sell with a 3% mark-up, it won't let you. So there are loans that I put in the "mature" bucket that you cannot apply your blanket mark-up.

Thanks! this is a big help. I was aware strange things happened regarding loans with small amounts remaining. It was on my todo list to figure this out. Your post gives me a nice basis to get a firm understanding. It appears to be a flaw in the system and everything could be done on an annualized that worked properly. Wonder if this has roots in the flawed YTM calculation? Anyway it's a lot to take in and it will be a while before I completely understand what you are saying.

« Last Edit: June 01, 2016, 09:50:08 AM by Rob L »

SeattleSun

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Re: liquidation strategy on folio
« Reply #32 on: June 01, 2016, 12:11:17 PM »
.
OK stand by for a dumb question.

I was looking at selling out my Prosper notes as I now have an opportunity that just beta tested at 1/2% per week.

I have 1291 notes and started in 2012 most are $100 notes.

Dec-13-2012   B   740-759      Current   60   19   $42.72   18.82%
Feb-04-2013   B   800-819      Current   60   21   $45.60   17.47%

1) haven't LC/prosper lending rates been falling since these notes were issued,
2) maybe these FICO have gone up since being issues, but 700 was my floor to lend to.

Q.  Should stuff like this be easy to sell?

Clueless in Seattle.

Let me add to that post.

B is the third from the top in Prosper.  It goes AA, A, B, C, etc  I am not sure what the comparable is in L/C but whatever is third from the top.

Those are both 60 month loans and one has 19 more payments due and the other 21 months, both well over one year.

FICO scores 740-750 and 800-819 and the loans are "current".

The lender yield is 17% and 18%.  I can't get on Prosper right now but the average of  B loans offered must be around 10% as I remember.

So "why" wouldn't these loans sell easily, because they a "B's" ?  Yea Bs with 800 FICOs yielding 17% .

FILTER

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Re: liquidation strategy on folio
« Reply #33 on: June 02, 2016, 02:22:54 AM »
.
OK stand by for a dumb question.

I was looking at selling out my Prosper notes as I now have an opportunity that just beta tested at 1/2% per week.

I have 1291 notes and started in 2012 most are $100 notes.

Dec-13-2012   B   740-759      Current   60   19   $42.72   18.82%
Feb-04-2013   B   800-819      Current   60   21   $45.60   17.47%

1) haven't LC/prosper lending rates been falling since these notes were issued,
2) maybe these FICO have gone up since being issues, but 700 was my floor to lend to.

Q.  Should stuff like this be easy to sell?

TIA

Clueless in Seattle.

SeattleSun,  No question is a dumb question. I think given your notes that are seasoned, current, good FICO with zero late payments should sell somewhat easily. As others have stated, some price these subject notes from 0% - 3% markup.  The better the quality/reliability, the faster those notes will be scooped up.  I think the average sweet spot to price/sale may be in the 1% range,  Also, $25 notes do tend to sell faster than larger notes. Other contributors may agree or offer something a little different.  I don't claim to be professional Folio trader, just my common 2 cents.

AnilG

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Re: liquidation strategy on folio
« Reply #34 on: June 02, 2016, 02:32:12 AM »
The attached Screenshot from https://www.peercube.com/folionotes/detailed_pricing might help you. It shows markups for 2013 Vintage B Grade Current Loans listed on Lending Club Folio platform. I expect premiums might be much lower on Prosper Folio platform as it is not that active.

.
OK stand by for a dumb question.

I was looking at selling out my Prosper notes as I now have an opportunity that just beta tested at 1/2% per week.

I have 1291 notes and started in 2012 most are $100 notes.

Dec-13-2012   B   740-759      Current   60   19   $42.72   18.82%
Feb-04-2013   B   800-819      Current   60   21   $45.60   17.47%

1) haven't LC/prosper lending rates been falling since these notes were issued,
2) maybe these FICO have gone up since being issues, but 700 was my floor to lend to.

Q.  Should stuff like this be easy to sell?

Clueless in Seattle.

Let me add to that post.

B is the third from the top in Prosper.  It goes AA, A, B, C, etc  I am not sure what the comparable is in L/C but whatever is third from the top.

Those are both 60 month loans and one has 19 more payments due and the other 21 months, both well over one year.

FICO scores 740-750 and 800-819 and the loans are "current".

The lender yield is 17% and 18%.  I can't get on Prosper right now but the average of  B loans offered must be around 10% as I remember.

So "why" wouldn't these loans sell easily, because they a "B's" ?  Yea Bs with 800 FICOs yielding 17% .
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Rob L

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Re: liquidation strategy on folio
« Reply #35 on: June 02, 2016, 08:54:07 AM »
The attached Screenshot from https://www.peercube.com/folionotes/detailed_pricing might help you. It shows markups for 2013 Vintage B Grade Current Loans listed on Lending Club Folio platform. I expect premiums might be much lower on Prosper Folio platform as it is not that active.

Something I don't understand in the screen shot. There's a column "Days Since Last Payment" yet information about multiple notes and loans is aggregated in the rows. Is this actually the an average number of days for all the loans aggregated on each row (the number shown is integer; thus my confusion)?