Author Topic: Selling Houston loans  (Read 4364 times)

rubicon

  • Full Member
  • ***
  • Posts: 103
    • View Profile
Selling Houston loans
« on: August 31, 2017, 12:41:29 AM »
Have started selling them aggressively since Monday and have sold more than 2/3. About 20% stuck in payment processing.

Will track them to see how fast they turn to IGP.

https://www.maptechnica.com/zip3-prefix-map/770

Zip codes =
770xx
773xx
774xx
775xx
776xx
777xx
778xx
779xx
784xx

706xx

Edited to add
772xx
783xx
« Last Edit: August 31, 2017, 11:38:02 AM by rubicon »

Rob L

  • Hero Member
  • *****
  • Posts: 2124
    • View Profile
Re: Selling Houston loans
« Reply #1 on: August 31, 2017, 09:29:00 AM »
FWIW I took a look at my active note exposure in those zip codes.
It's 3.74% of Outstanding Principal.
Don't plan to sell the notes on Folio. I'll probably take a bit of a hit but it's not a large dollar amount.
Overall my portfolio is only maybe 25% of what it once was.

rubicon

  • Full Member
  • ***
  • Posts: 103
    • View Profile
Re: Selling Houston loans
« Reply #2 on: August 31, 2017, 11:29:49 AM »
I'm just curious at how high default rates can climb to? 50%?


rawraw

  • Hero Member
  • *****
  • Posts: 2793
    • View Profile
Re: Selling Houston loans
« Reply #3 on: August 31, 2017, 12:44:47 PM »
I don't think I've ever seen a loan category with 50 percent default rate. The Alt A mortgages in the crisis only got up to like 35% based on my quick Google search

Lovinglifestyle

  • Hero Member
  • *****
  • Posts: 901
    • View Profile
    • Email
Re: Selling Houston loans
« Reply #4 on: August 31, 2017, 01:49:36 PM »
Thanks, Rubicon.  Thank you for the zip updates too.  I'm selling mine.

jheizer

  • Sr. Member
  • ****
  • Posts: 481
    • View Profile
    • LC Tools
Re: Selling Houston loans
« Reply #5 on: August 31, 2017, 06:32:46 PM »
Ugh.  Thanks.  Never even crossed my mind.  I've been trying to be more hands off late.  Sold 5 pretty fast.  A whole bunch more to go.
Replacement to P2P Quant's Percentile Tool http://lc.geekminute.com

dbailey75

  • Guest
Re: Selling Houston loans
« Reply #6 on: August 31, 2017, 08:30:55 PM »
thanks for the heads up,  you know I had 34 loans in those zips, and every single active note is current. Hate to sell them, but you don't know who got hit and how didn't

Lovinglifestyle

  • Hero Member
  • *****
  • Posts: 901
    • View Profile
    • Email
Re: Selling Houston loans
« Reply #7 on: August 31, 2017, 09:26:36 PM »
I only have 15, but two of those come up as "note not issued" (after many payments!) so I can't list them and that's annoying.  8 have sold so far.

Debt Free

  • Full Member
  • ***
  • Posts: 125
    • View Profile
    • Email
Re: Selling Houston loans
« Reply #8 on: September 01, 2017, 07:57:25 AM »
Just had my first Houston loan go IGP.

"8/23/17 (Wednesday)   Borrower contacted Payment Solutions specialist and promised to pay."
Loan Summary
Note Issuance Date   2/12/16
Note Amount   $25
Loan Amount   $11,200
Rate   F1 : 23.13%
Term   60  months
Status   In Grace Period
Recent Credit Score   655-659
Credit Score Change  Down
Received Payments
Last Payment Received (8/1/17)   $0.71
Payments to Date (18)   $12.49
Principal   $4.78
Interest   $7.71
Late Fees Received   $0.00
Upcoming Payments
Next Payment Due (8/27/17)   $1.41
Remaining Payments (42)   $29.68
Expected Final Payment   1/27/21
Outstanding Principal   $20.22
Accrued Interest   $0.45

Nine total Houston loans.  Two of which were processing payments over last couple days.  One paid and this one IGP.  All have been Never Late and now are currently listed on Folio.
« Last Edit: September 01, 2017, 08:00:34 AM by Debt Free »

rubicon

  • Full Member
  • ***
  • Posts: 103
    • View Profile
Re: Selling Houston loans
« Reply #9 on: September 01, 2017, 09:41:54 AM »
I don't think I've ever seen a loan category with 50 percent default rate. The Alt A mortgages in the crisis only got up to like 35% based on my quick Google search

well, many of these borrowers were in debt to begin with, and now many have lost their homes and cars and have an expensive rebuilding ahead. I'm going to say that paying off their Lending Club loan is literally the last thing on their mind. The only question is whether they remember to call the LC office to stop the automatic deductions from their bank account. If I were them, I would even use the hurricane as an excuse to declare bankruptcy...who would ever question that?
« Last Edit: September 01, 2017, 10:12:46 AM by rubicon »

rubicon

  • Full Member
  • ***
  • Posts: 103
    • View Profile
Re: Selling Houston loans
« Reply #10 on: September 01, 2017, 09:42:42 AM »
Just had my first Houston loan go IGP.

"8/23/17 (Wednesday)   Borrower contacted Payment Solutions specialist and promised to pay."
Loan Summary
Note Issuance Date   2/12/16
Note Amount   $25
Loan Amount   $11,200
Rate   F1 : 23.13%
Term   60  months
Status   In Grace Period
Recent Credit Score   655-659
Credit Score Change  Down
Received Payments
Last Payment Received (8/1/17)   $0.71
Payments to Date (18)   $12.49
Principal   $4.78
Interest   $7.71
Late Fees Received   $0.00
Upcoming Payments
Next Payment Due (8/27/17)   $1.41
Remaining Payments (42)   $29.68
Expected Final Payment   1/27/21
Outstanding Principal   $20.22
Accrued Interest   $0.45

Nine total Houston loans.  Two of which were processing payments over last couple days.  One paid and this one IGP.  All have been Never Late and now are currently listed on Folio.


interesting...that was when the first forecasts came out about Houston and 50 inches of water somewhere

rawraw

  • Hero Member
  • *****
  • Posts: 2793
    • View Profile
Re: Selling Houston loans
« Reply #11 on: September 01, 2017, 09:47:13 AM »
I don't think I've ever seen a loan category with 50 percent default rate. The Alt A mortgages in the crisis only got up to like 35% based on my quick Google search

well, many of these people were in debt to begin with, and now many have lost their homes and cars and have an expensive rebuilding ahead. I'm going to say that paying off their Lending Club loan is literally the last thing on their mind. The only question is whether they remember to call the LC office to stop the automatic deductions from their bank account. If I were them, I would even use the hurricane as an excuse to declare bankruptcy...who would ever question that?
Right... So you think Lending Club prime borrowers will underperform liar and no doc subprime loans because of a hurricane? Well it's certainly an empirical claim...

rubicon

  • Full Member
  • ***
  • Posts: 103
    • View Profile
Re: Selling Houston loans
« Reply #12 on: September 01, 2017, 10:20:31 AM »
No I'm just wondering. Not making a claim one way or the other.

I would point out that the Alt-A and subprime mortgages at the very least owned some equity in their homes or at the very least a call option on that home equity with HPA, if they didn't put a deposit down. If your home and car gets flooded whatever equity you had gets destroyed (assuming no flood insurance) and you're still liable to repay the principal on your (mortgage/car) loans. So you're in deep negative equity territory, which is the definition of insolvent (or bankrupt).
« Last Edit: September 01, 2017, 10:22:45 AM by rubicon »

sensij

  • Newbie
  • *
  • Posts: 31
    • View Profile
    • Email
Re: Selling Houston loans
« Reply #13 on: September 02, 2017, 12:09:38 AM »
LendingClub is not ignoring the potential impact, just got the email below.

My exposure to the zip codes in the first post:
Grades A-C: $4138 of $89,160 (108 notes, 4 of those IGP)
Grades C-G: $1600 of $37,353 (55 notes, 3 of those late + 1 charged off)



Quote
Hurricane Harvey is an unprecedented tragedy and our hearts go out to those whose lives have been turned upside down. We wanted to provide you with an estimate on how many LendingClub borrowers could be impacted and let you know what we're doing to provide relief for them.
 
Estimated Scope of Impact
We estimate approximately 30,000 LendingClub borrowers are potentially affected by Harvey (based on zip codes identified by FEMA and on the counties declared as in a state of emergency by respective state governors as of August 31, 2017), which amounts to about 2% of LendingClub's total borrower population. Of potentially affected borrowers, about 2,000 are currently delinquent as of August 31, 2017.
 
For the vast majority of investors who have diversified portfolios, we expect little to no impact to returns. The affected population is a small portion of our total borrower base of 1.5 million, and we're committed to keeping borrowers on track.
 
What We're Doing for Borrowers
LendingClub believes in doing the right thing for both borrowers and investors. Given the scope of the disaster, we've taken several steps in line with guidance from the FDIC to treat borrowers with respect, provide resources, and help them stay on track:
 
1.    Collections call adjustments. Starting on August 26 and through September 5, internal and agency collections teams stopped making calls to delinquent borrowers in Texas and Louisiana (approximately 6,000 borrowers) as the storm made its way through the area. We will resume calling delinquent borrowers who live outside of affected zip codes in Texas and Louisiana on September 5. We will not resume calling borrowers who live in affected zip codes until September 15. Likewise, we are suppressing direct mail and email collections communications to those same borrowers until September 30.
 
2.    Late fees. We are not charging late fees for borrowers in affected zip codes starting on August 23 through September 30.
 
3.    Credit bureau reporting. For borrowers who live in affected zip codes and who become delinquent, we will append a note to our report to credit bureaus that they have been affected by a natural disaster.
 
4.    Hardship plans. We typically offer hardship plans (where borrowers are allowed to temporarily make interest-only payments to accommodate an unexpected life event) to borrowers when they meet certain eligibility criteria. In response to Harvey, we are relaxing our eligibility criteria for borrowers in affected zip codes. Hardship plans work to protect investor returns as borrowers whose loans may otherwise progress to charge-off status have the opportunity to make interim payments and some portion may revert to current status. Importantly, our teams will follow our standard process, where we offer progressively more relief to borrowers who ask for help, with hardship plans made available only after other options are exhausted.
 
This is a difficult time for many Americans, and we're committed to doing what's necessary to help our customers stay on track while protecting investor returns.
 
If you have any questions or concerns, feel free to reach out to us at 888-596-3159, Monday through Friday 7 a.m. through 5 p.m. PT, or investing@lendingclub.com.
 
Best regards,
 
The LendingClub Team
« Last Edit: September 02, 2017, 12:26:28 AM by sensij »

rawraw

  • Hero Member
  • *****
  • Posts: 2793
    • View Profile
Re: Selling Houston loans
« Reply #14 on: September 02, 2017, 03:28:38 AM »
No I'm just wondering. Not making a claim one way or the other.

I would point out that the Alt-A and subprime mortgages at the very least owned some equity in their homes or at the very least a call option on that home equity with HPA, if they didn't put a deposit down. If your home and car gets flooded whatever equity you had gets destroyed (assuming no flood insurance) and you're still liable to repay the principal on your (mortgage/car) loans. So you're in deep negative equity territory, which is the definition of insolvent (or bankrupt).
I understand.  My point is that 50% is really high, especially if you are lending to prime borrowers with the average incomes that they tend to report.  Just because they had a loan doesn't mean they can't have another loan. And typically there are government programs helping those impacted out. Your potential LC losses are subsidized by other tax payers :) As with almost everything, this impact will be worse the lower down the credit spectrum one goes. 

If I remember to do it, Tuesday I'll pull the consumer loan performance data for New Orleans lenders during Katrina to see if we can quantify it somewhat.  I'll report back with the results
« Last Edit: September 02, 2017, 03:31:01 AM by rawraw »