Author Topic: hardship fields in spreadsheet wrong  (Read 1154 times)

Fred93

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hardship fields in spreadsheet wrong
« on: May 08, 2020, 07:37:10 PM »
I sent this to LC today...

Quote
From:      xxxxxxxxxxxxxxx
To:      support@lendingclub.com
Subject:      hardship fields in notes spreadsheet are wrong
Date:      Fri, May 8, 2020 4:34 pm

On the "notes" web page, there is a link to download a spreadsheet containing info on all the notes in one's account.

That spreadsheet for some time now has had incorrect information in all the "hardship" columns.  Notes in hardship plans are not flagged as they are supposed to be.

The only way a customer can learn that a note is in a hardship plan now is to look at the note's DETAIL page, and this is cumbersome to the point of being unworkable for folks with 10,000 or 20,000 notes!

Please fix the spreadsheet.

Example...
Loan id: 142417793
Note id: 192978176

This loan is in a hardship plan, as shown on the loan detail web page.  However the hardship flag column contains an "N" on the spreadsheet, and all the other hardship columns are blank.

This is just one example.  There are a great many of these nowadays.

The lack of information on the notes or account summary pages and the incorrect/missing information on the spreadsheet leaves retail customers no way to track the true status of their loans.  It would appear, just looking at dates of last payment, like about 11% of loans are now on hardship plans.  This is a significant impairment, so should be mad visible to customers.



jrl

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Re: hardship fields in spreadsheet wrong
« Reply #1 on: May 08, 2020, 08:47:14 PM »
Just so you know, I noticed the issue (but not in the spreadsheet) in early April, so it's been like this for over a month now:

https://forum.lendacademy.com/index.php/topic,21636.msg61755.html#msg61755

Initially, they did show up as IGP, then they got converted to "Deferred" (I guess) as the borrowers called in and asked for it.

Since last month I can confirm that my month over month earnings from the account that I'm winding down have went from around 6-8% yearly to negative 2%. Though because the notes are listed as "current" my ANAR has gone up by around 0.2 percentage points, and my implied APR (based on LC's adjustment) has gone up 3 percentage points, from 8% APR to 11%.

My other account has shown even "better" numbers, due to purely Folio reinvestment since I lost primary market access in September. (It's still turning a profit.)

In both accounts I'm seeing notes get converted from IGP and late to current ("deferred") just about every day. Though some of these accounts have been making payments before the end of the deferral term.

My guess is that they're attempting to hide this from retail. My expectation is around 3-6 months of near break-even (for me) returns, then a higher than normal amount of late notes converting into charge-offs around year-end before a return to normal returns (for these older notes) in the new year. I would expect just like in other hard times that the new notes being issued in the next few months will have much better returns than we've seen in the past few years.
« Last Edit: May 08, 2020, 08:49:43 PM by jrl »

Fred93

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Re: hardship fields in spreadsheet wrong
« Reply #2 on: May 08, 2020, 10:31:49 PM »
My guess is that they're attempting to hide this from retail.

Sloppiness, extreme disinterest, indifference, lack of caring, lethargy, lassitude, incompetence, all much more likely that evil intent. 

I'm guessing that the new covid19 related deferrals are really a different (new) program than the old hardship program and the software changes to implement it were a quick hack job with little review, and nobody at LC pays attention to the retail program any more, so when they didn't bother to write the code to update the fields in the spreadsheet, nobody noticed, or maybe one guy did notice at about the time he was handed his pink slip last week.

rj2

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Re: hardship fields in spreadsheet wrong
« Reply #3 on: May 08, 2020, 10:49:47 PM »
What really ticked me off is that in folio when you search for "never late" notes, these hardship notes are included in the results, even though they haven't made payments in a few months. They only way to identify them is to click through to the loan and see the "hardship" notation, there's no way I can see of filtering them out.

I complained to lending club and they insist they do not think it's misleading to list them as "never late".

I only discovered this after seeing discussion here, then went back and realized I had bought a bunch of "hardship" loans in folio without realizing it--and I paid full price for them, as though they were really never late.
« Last Edit: May 08, 2020, 10:52:52 PM by rj2 »

Fred93

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Re: hardship fields in spreadsheet wrong
« Reply #4 on: May 08, 2020, 11:13:28 PM »
I had the same experience.  I realized only recently that my software had been buying loans indicated by LC as "never late" loans when in fact these loans had not made payments for a few months, which is completely bogus. 

The shame is on LC for this.  This is just plain misleading.



nonattender

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Re: hardship fields in spreadsheet wrong
« Reply #5 on: May 09, 2020, 07:44:52 AM »
I complained to lending club and they insist they do not think it's misleading to list them as "never late".

Get that in writing.  Apparently they're a bit slow on learning those "tone at the top" lessons.
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rj2

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Re: hardship fields in spreadsheet wrong
« Reply #6 on: May 09, 2020, 01:00:49 PM »
It's an email exchange.

My first email raises the issue and requests that they reverse folio sales for "hardship" loans on the grounds that "never late" is misleading. They reply suggesting I sell them on to other unsuspecting people:

Quote from: LC
Thanks for reaching out to us.

Since borrowers now have the option the enroll in a hardship plan or
deferred payment plan due to the current economic crisis, this allows their
loans to remain in "Current" status for the time being. I understand how
this can affect your strategy for buying Notes on Folio however, and I'm
happy to forward your feedback along to the appropriate team to see if they
can adjust these recent changes for the Folio platform.

While all sales on Folio are final and we're unable to reverse these
transactions, you're always welcome to relist those Notes for sale. We
apologize for the inconvenience and appreciate your patience during this
time.

Best,
Gabe

LendingClub Investor Services

I reply with a very short email:

Quote from: me
Do you really think it is accurate, and not misleading, to call these loans "never late"?

and they reply with

Quote from: lc
The reason why they are showing as "never late" is because enrolling in these payment deferment plans prevent the loan status from going into an official "late" status, which would impact the borrowers' credit.

LendingClub feels strongly about providing options to help support borrowers during this financial crisis. Please know that we have never intended to present misleading information to our investors, however the options we are providing to borrowers are quickly changing due to the current conditions that we're in and because of that, Folio may not be able to stay up to date with all of the changes that we are making. I understand your concern, however, and will surely pass your feedback along to our management team.

Best,
Gabe

LendingClub Investor Services
« Last Edit: May 09, 2020, 01:03:40 PM by rj2 »

JDII

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Re: hardship fields in spreadsheet wrong
« Reply #7 on: May 09, 2020, 02:08:27 PM »
Thank you for your efforts Fred.

Fred93

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Re: hardship fields in spreadsheet wrong
« Reply #8 on: May 12, 2020, 04:51:21 PM »
Got an answer from LC today...
Quote
Please know that we are aware of this issue with the hardship plan columns and we are working to resolve it. We hope to have a resolution as soon as possible and we appreciate your patience during this time.

jheizer

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Re: hardship fields in spreadsheet wrong
« Reply #9 on: May 13, 2020, 10:35:28 AM »
It has been annoying from the selling side too.  I got all my notes sold pretty fast when this all started except 10.  You all keep buying them, but then they cancel with "Canceled: This loan cannot be sold on the secondary market."  Most appear good and were being bought at a slight markup. 
Replacement to P2P Quant's Percentile Tool http://lc.geekminute.com

nonattender

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Re: hardship fields in spreadsheet wrong
« Reply #10 on: June 13, 2020, 06:12:26 PM »
Did the spreadsheet error ever get corrected such that one can eyeball the data and perhaps see which geographic areas are undergoing more hardship than others / which seem to be recovering more quickly?  Thanks.
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Fred93

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Re: hardship fields in spreadsheet wrong
« Reply #11 on: June 13, 2020, 08:17:05 PM »
Oh yea.  Got fixed within a week or so of my complaint.  All good now.

nonattender

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Re: hardship fields in spreadsheet wrong
« Reply #12 on: June 14, 2020, 03:05:43 PM »
Could I sweet talk you into perhaps sharing that data, by state?  ("Hey man, lemme see your portfolio - please?")

I remember % hardship by state + loan state transition as a good indicator of "how's the country doing?" in 2008.
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Fred93

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Re: hardship fields in spreadsheet wrong
« Reply #13 on: June 14, 2020, 05:43:27 PM »
Same fields are present in the files you can download from LC containing all loans. 

Only downside is that those files update only once a month, and new loans don't appear until we're 2 weeks into the next quarter.  But for existing loans as of June 1st, the info is all there in the LC files.

I haven't tried to do any of the sort of analysis you suggest.  Such results would be interesting.  One caveat tho, I don't quite know what it means when someone is on a hardship plan.  It could mean he's in hardship.  It could also mean he's just tricky enough and unethical enough to claim hardship to delay his payment, because the covid19 situation gives him cover.  I'm sure there is a mix, and much in between, but we have no way to evaluate what it might be. 

Another way of saying this is even if we suppose everyone is perfectly ethical, different people have a different threshold for asking for things like a hardship plan.  The threshold could be quite different in different parts of the country.

My cousin is a physician who specializes in rehab after injury.  She swears that postal workers have a lower threshold of pain than the general population.  I doubt any scientific study has been done. 

Would you interpret the distribution by state as a measure of hardship, willingness to ask for help, or ethics, or what?

nonattender

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Re: hardship fields in spreadsheet wrong
« Reply #14 on: June 14, 2020, 10:44:05 PM »
Would you interpret the distribution by state as a measure of hardship, willingness to ask for help, or ethics, or what?

Net uncertainty.

Though, I don't think that it's structured in a way where ethics play into it, too awful much;  the payments are merely delayed and tacked onto the end of the notes, and interest continues to acrrue the whole time, no?  So the only real allowance being made is effectively equivalent to the extension of the term (time) of the note.  If they BK, they BK - if they don't, then one gets paid back at rates which were acceptable when one bought the note and terms which one knew could be extended/modified by one's agent (LC).

Quote
My cousin is a physician who specializes in rehab after injury.  She swears that postal workers have a lower threshold of pain than the general population.  I doubt any scientific study has been done.

The literalist "if we can't measure it, it doesn't exist" mafia has invaded that field;  the "all science, no art" crowd is a poor physician.

That said, does disability/insurance fraud exist?  Yup - but, you know how they set about to sort it out?  They destabilized everyone - blanket bans on pain relief.  First, the VA (captive audience), in 2015.  A few vets showed up to kill themselves in the parking lots or retreated to the woods to take their own lives.  A cost-savings, think the bureacrats who were busying/ramping up Healthcare for All.  They expanded that in 2016, before the election, and destabilized (forced pain relief discontinuation) most pain patients on Medicare.  More suicides, a shit-load of "cardiac declines" (to mask the killing) - and bunch of people who used to be functional, then bedbound.

Dunno what disability pays, per month - think it's like ~$800 - but I'm not a big fan of "central office medicine" (or hurting people) - even postal workers! :) - so that's probably not an apt analogy to use to exemplify that some things are "complex"/"subjective" (nor does particular focus upon a profession where government workers unionized / negotiated higher disability compensations clarify it).

If you want a more direct/economic example, take PPP loans.  "Economic uncertainty" is certainly subjective and so is however govt eventually decides upon whatever the forgiveness criteria may be, for small enterprise.  "Could you have tapped your kid's 529 or a retirement account or your HSA, Mr. Small Biz Owner?  If so, then we've decided that loan is unforgivable."  That may happen, too.  Whether the payoff of driving more small biz into bankruptcy is a desirable end (or putting more people on the unemployment roll), however long, is both an economic and a political risk that they're going to have to weigh.  (Measuring without interfering is tough.)

Sometimes, the risks of looking into the abyss (for too long or too deeply) outweigh the benefit - and the abyss stares back at you.

A little nonsense now and then is relished by the wisest men.