Author Topic: Charge-offs ratio increasing this year?  (Read 2454 times)

rubicon

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Charge-offs ratio increasing this year?
« on: June 02, 2016, 11:42:18 AM »
was just looking through my monthly statements (charge off / interest)

Dec: -16.66%
Jan: -21.62%
Feb: -30.56%
Mar: -36.36%
Apr: -70.20%

Anyone else seeing anything similar?

Boatguy

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Re: Charge-offs ratio increasing this year?
« Reply #1 on: June 02, 2016, 02:16:29 PM »
My charge offs YTD are definitely higher this year than last.  But it's very hard to draw any broad assumptions about that.

We all have different note ratings in our portfolios, different average note ages, etc.  I think trying to assert that LC dropped their lending quality criteria in 2014 or 2015 and now we're paying the price needs to be evidenced with a lot more than just higher than expected defaults YTD.  We also have no way of separating what we're experiencing from what may be a leading indicator of a macro economic development.

dompazz

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Re: Charge-offs ratio increasing this year?
« Reply #2 on: June 02, 2016, 02:31:36 PM »
My charge offs YTD are definitely higher this year than last.  But it's very hard to draw any broad assumptions about that.

We all have different note ratings in our portfolios, different average note ages, etc.  I think trying to assert that LC dropped their lending quality criteria in 2014 or 2015 and now we're paying the price needs to be evidenced with a lot more than just higher than expected defaults YTD.  We also have no way of separating what we're experiencing from what may be a leading indicator of a macro economic development.
Pretty much exactly what he said.  Though I would argue charge offs are a lagging indicator given it takes 4-5 months or so for a loan to go from current to charged off.

My opinion is we went through a rough economic patch late last year that may or may not be over. 

Fred93

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Re: Charge-offs ratio increasing this year?
« Reply #3 on: June 02, 2016, 03:42:53 PM »
Short answer: Some people are seeing an increase and some are not.  I believe this is caused by different folks filters.  The increase in delinquency & chargeoff is only in certain high risk sectors.

Long answer: There's a long thread about this...
http://www.lendacademy.com/forum/index.php?topic=3551.0

Fred

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Re: Charge-offs ratio increasing this year?
« Reply #4 on: June 03, 2016, 02:10:44 AM »
Since Renaud's forced resignation last month, it has always been my worry that some borrowers might think their LC loans are no longer valid or kept track, causing them to stop making payment, thus spiking the charge-off rates.

I'd be curious to see the charge-off rates in their next 10-Q in August.