Author Topic: WT*????????????????????  (Read 12995 times)

DLIFVOIP

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WT*????????????????????
« on: June 14, 2016, 01:23:16 PM »
So Lending Club makes this big push to try and reassure the retail investor after the recent debacle.  Asks for our feedback, offers a deposit bonus, etc, etc.

Looks like they took all of our responses to heart and their reply speaks volumes.  Or should I say lack of volume.  It has been over a week since there has been a meaningful amount of new loans available that are not absolute junk.  I know I know what I call junk you may call gold, but I currently hold 25k+ loans, so I doubt seriously that my filters are so tight I am missing out on loans I would be interested in.

Ok, seriously your reward to the retail investor is making almost 0 loans available? 

I hope the recent dry up in loans is due to the change in rates and new loans are about to flood the market with the new rates, if not, what next?

Unfortunately this position will take years to unwind as I am not willing to fire sale my inventory, but unless volume picks up, I am seriously looking elsewhere.

I believe the Direct Lending Fund is a good option and still doing my due diligence on the fund, but it looks very promising for those who meet the investor criteria.  I would be interested to hear what others are exploring as an alternative the LC and the stock market.




Fred93

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Re: WT*????????????????????
« Reply #1 on: June 14, 2016, 01:42:32 PM »
Ok, seriously your reward to the retail investor is making almost 0 loans available? 

The way this business works, they adjust the quantity of loans they source (or in your words "make available") to the demand.  Demand is way down, so they are sourcing fewer loans.  Therefore you see fewer loans.

With fewer loans available, there are of course fewer that meet your criteria.

I remind you that you have the ability to invest more $ per loan.

DLIFVOIP

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Re: WT*????????????????????
« Reply #2 on: June 14, 2016, 02:07:31 PM »
Trust me I am way past the $25 per loan strategy.

So what exactly are those of us who are loyal investors and what to continue investing supposed to do?  I understand what you are saying about demand, but right now I am not encouraged to deposit more $ onto the site given the quantity of available loans. 

Again my solution to the problem is to put 100% of loans on the retail side first (we do not need 14 days, give us 2 days).  All unfunded amounts are offered to whole loan market as a whole loan and LC simply needs to internally track the retail and whole loan separately.

Example:

Borrower loan #1 - $10,000
Retail investors fund $2k in 2 days.  Remaining $8k is offered to whole loan market.  If whole loan market does not fund the loan, 100% of loan is cancelled.  If funded, loan #1 becomes loan #1retail and loan #1whole.  Borrower makes same one payment, Lending Club has to do a bit more work distributing the monthly payment.

This solution is a win win for everyone, retail investor gets more options, whole loan market gets more options.  Lending Club keeps everyone happy.

I am not arguing with you Fred, just saying those of us who want to continue to invest are getting hosed.  I really feel like the above solves a lot of problems and really does not require much more work.

Just venting my frustration.  LC has been a great investment for me for the last 6.5 years and I am starting to get the feeling that the ride is about to end.
« Last Edit: June 14, 2016, 02:09:26 PM by CircleT009 »

kiltym

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Re: WT*????????????????????
« Reply #3 on: June 14, 2016, 02:13:09 PM »
Second.

Same boat, and very disappointed in what is going on this past week.

LC shouldn't try to entice us to invest more, when there is basically nothing to invest in.  And, they can't push us to invest in much larger amounts, as that defeats their entire marketing strategy to the "small" people like us.  Diversify, diversify, diversify....

Fred93

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Re: WT*????????????????????
« Reply #4 on: June 14, 2016, 02:31:05 PM »
Just venting my frustration.  LC has been a great investment for me for the last 6.5 years and I am starting to the feeling the ride is about to end.

I'm quite frustrated too.  This is very painful to watch.  We're have to have patience to make it thru this tough period.  LC has been great for note investors, and it would be a shame really stupid if current events put and end to it.

I sent LC a note a few days ago with my views on some things he must do to regain investor confidence.  Told them to  COMMUNICATE a lot, frequently, instead of not at all, and announce layoffs immediately ie assure us that they aren't stuck in a fantasy that the high-growth past will magically return.  My basic pitch was that with a lack of communication, investor's fantasies about scary things get the best of them.  Told them that the decision to delay the shareholder's meeting was at last as bad for investor confidence as the May 9th events.  Suggested that while there may be good reasons for not having the official meeting, I believe they could have monthly investor conference calls where they tell us what is happening during this unusual period.  My contact tells me he forwarded my message to Sanborn, tho I'm sure he's been getting lots of advice he didn't ask for, and mine is no doubt one among hundreds.  I have no reason to suspect he has even read my note.

Fred93

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Re: WT*????????????????????
« Reply #5 on: June 14, 2016, 02:37:17 PM »
LC shouldn't try to entice us to invest more, when there is basically nothing to invest in. 

It works the other way around.  Supply is adjusted to be lower because investor demand is low at the present time.  It was great when the flow of loans was large, and some of us could be picky and yet invest quickly.  That was nice.  It is more difficult now.  Just complaining that "they should post more loans" doesn't help.

Quote
And, they can't push us to invest in much larger amounts, as that defeats their entire marketing strategy to the "small" people like us.  Diversify, diversify, diversify....

Diversification is a good thing, but after you have a reasonable amount of diversification, more doesn't buy you much.

There are many investors who have >1000 loans, are still investing $25 each, and are complaining about supply of loans.   These people could invest more per loan.  Nobody needs 1000 loans worth of diversification.

If you have 100 loans, on the other hand, then I would not push you to increase $/loan.
« Last Edit: June 14, 2016, 02:38:59 PM by Fred93 »

dompazz

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Re: WT*????????????????????
« Reply #6 on: June 14, 2016, 02:53:39 PM »
Just venting my frustration.  LC has been a great investment for me for the last 6.5 years and I am starting to the feeling the ride is about to end.

I'm quite frustrated too.  This is very painful to watch.  We're have to have patience to make it thru this tough period.  LC has been great for note investors, and it would be a shame really stupid if current events put and end to it.

I sent LC a note a few days ago with my views on some things he must do to regain investor confidence.  Told them to  COMMUNICATE a lot, frequently, instead of not at all, and announce layoffs immediately ie assure us that they aren't stuck in a fantasy that the high-growth past will magically return.  My basic pitch was that with a lack of communication, investor's fantasies about scary things get the best of them.  Told them that the decision to delay the shareholder's meeting was at last as bad for investor confidence as the May 9th events.  Suggested that while there may be good reasons for not having the official meeting, I believe they could have monthly investor conference calls where they tell us what is happening during this unusual period.  My contact tells me he forwarded my message to Sanborn, tho I'm sure he's been getting lots of advice he didn't ask for, and mine is no doubt one among hundreds.  I have no reason to suspect he has even read my note.
I sent them a note Monday morning (after the no note weekend) along the same lines.  Your response shows the size of your account.  I got a canned response.  You big fish, me small minnow.  Hopefully the message gets through and they can start to restore confidence.

rawraw

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WT*????????????????????
« Reply #7 on: June 14, 2016, 03:10:52 PM »
I don't think LC will ever sell fractional whole loans. Retail loans and whole loans are completely different legal structures. I don't even think this is an option.

This reminds me of when I started on LC. It used to take 2 weeks just to have my loans finish funding. Talk about cash drag!

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« Last Edit: June 14, 2016, 03:12:43 PM by rawraw »

AnilG

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Re: WT*????????????????????
« Reply #8 on: June 14, 2016, 03:19:02 PM »
Agree with you. Only for last 2 years, lenders were spoiled with large inventory, quick funding, and loan issuance.

Lending Club Loan Listings, Issuance, and Impact on Yield from Non-performing Period
https://www.peercube.com/blog/post/lending-club-loan-listings-issuance-and-impact-on-yield-from-non-performing-period

I don't think LC will ever sell fractional whole loans. Retail loans and whole loans are completely different legal structures. I don't even think this is an option.

This reminds me of when I started on LC. It used to take 2 weeks just to have my loans finish funding. Talk about cash drag!

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Fred93

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Re: WT*????????????????????
« Reply #9 on: June 14, 2016, 03:22:45 PM »
I believe the Direct Lending Fund is a good option and still doing my due diligence on the fund, but it looks very promising for those who meet the investor criteria.  I would be interested to hear what others are exploring as an alternative the LC and the stock market.

Direct Lending's fund invests via small company originators, who don't publish data.  You have no idea what is going on under the covers. 

With these individualized "facilities", ie special deals with each originator with secret terms... what confidence do you have that he accounts for loan impairments?

I don't see any way to see into this thing.  No data from originators.  No data showing the risk profile of his investments.  No data on his deals with originators.  No data on how he records impairments. 

It is possible that everything is fine.  On the other hand, there could be significant problems in the portfolio, and you wouldn't know it until he was forced to take a writedown.
« Last Edit: June 14, 2016, 03:29:32 PM by Fred93 »

Larry321

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Re: WT*????????????????????
« Reply #10 on: June 14, 2016, 03:35:19 PM »
I agree with you guys. For the last few days, there have been really crappy loans put out there.  I am letting cash sit there, uninvested because the loans I want, that used to be available daily, are not there at the moment.
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rubicon

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Re: WT*????????????????????
« Reply #11 on: June 14, 2016, 05:27:43 PM »
I'm also looking at Direct Lending Income fund and am close to an investment there.

jheizer

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Re: WT*????????????????????
« Reply #12 on: June 14, 2016, 05:43:04 PM »
And here I was excited I bought 3 notes in the last 2 days.  Pretty darn good ones too IMO.  Two are renters, but with great everything else and they are 100% funded already.
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dompazz

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Re: WT*????????????????????
« Reply #13 on: June 14, 2016, 07:31:14 PM »
And here I was excited I bought 3 notes in the last 2 days.  Pretty darn good ones too IMO.  Two are renters, but with great everything else and they are 100% funded already.
New rates or old rates?

nmay2k

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Re: WT*????????????????????
« Reply #14 on: June 14, 2016, 07:33:15 PM »
I think the tide is slowing turning. The secondary market (folio) was hard to compete with. Since June 2nd (~ the low) the folio average sales price mark-up has been steadily rising from 1.62% to 3.1% (so fewer people are liquidating their accounts). So until June 2nd the cash was probably mostly flowing into folio. Now the cash should probably flow to LC if only the loans were there to invest into. I had moved some cash to get some deals on folio but looks like that has dried-up. Not sure how much cash needs to sitting on the sidelines for LC to crank up the volume. But I think they will probably want to dump the loans no one wants first with those desperate to invest their cash quickly and save the good loans for later.