Worst Loan of the Day Thread, Grades A - C

[Rob L]

Can't exactly remember, but near if not the absolute worst of the worst (so far):

C2,  13,59%,  $33.45,  https://www.lendingclub.com/browse/loanDetail.action?loan_id=126385908

[Edward Reid]

Can't exactly remember, but near if not the absolute worst of the worst (so far):
C2,  13,59%,  $33.45,  https://www.lendingclub.com/browse/loanDetail.action?loan_id=126385908

Interesting. I would reject it for the major derogatory. (Obviously my approach is to try to pick C grade loans which are least likely to default.) Don't care for the rounded-off $30K amount. And perhaps I should be paying more attention to recent inquiries. If those aren't the reasons for the low model rating, then it's an example of why you can't pull the individual factors.

Edward

[Rob L]

Can't exactly remember, but near if not the absolute worst of the worst (so far):
C2,  13,59%,  $33.45,  https://www.lendingclub.com/browse/loanDetail.action?loan_id=126385908

Interesting. I would reject it for the major derogatory. (Obviously my approach is to try to pick C grade loans which are least likely to default.) Don't care for the rounded-off $30K amount. And perhaps I should be paying more attention to recent inquiries. If those aren't the reasons for the low model rating, then it's an example of why you can't pull the individual factors.

Edward

The 3 inquires are a big part of the story. It is well known that inquires is one of the most significant predictor of default variables. The discussion has always been that LC knows this too so it's model should factor it in into the loan grade assignment. Sure they do, but is is enough or too much? We don't know. Many folks that use the filter approach have posted here they only buy notes with zero inquires.

There's a lot more going on than inquires. The loan payments represent about 20% of the borrowers monthly gross income. That strikes me as a lot.

[Rob L]

Okay, this unequivocally the worst yet. Not sure the score can go lower, but we will see.

B2,  10 42%,  $27.17  https://www.lendingclub.com/browse/loanDetail.action?loan_id=126923844&previous=browse

[Fred93]

One of the unexpected things about the LC grading system is how much of a spread of FICO score you find in each grade, especially A and B.

I made this chart a few months back...

[Rob L]

Very very nice work! I've had something like this on my todo list but I was thinking a scatter diagram. This is much better.
My take away is that the predictive power of FICO regarding LC grades shown on the chart is the slope of the curve's at each point. Pretty obvious. Where the curves are flat there is little correlation. Steep and FICO is correlated. That said, FICO between 660-705 is least predictive for B grade. The curve is pretty flat there. If you throw out F & G since they don't matter anymore and plot the first derivative of each curve, the correlation between FICO and LC grade should jump off the chart (I think). Easier said than done! 

[Fred93]

My main takeaway was surprise at how WIDE these curves are.  The correlation between FICO and grade is far less than I had imagined.  There are "A" loans across the entire range of FICO scores.  Who would have imagined that?

Both FICO and grade (independently) are good predictors of default rate, and yet they are not the same thing in different clothing. 

[Rob L]

An absolute new low by far! The new super duper LC G5 model wants lenders to fund this??

C1,  12.62%  $29.76  https://www.lendingclub.com/browse/loanDetail.action?loan_id=127342041

I don't know what's going on with G5 but this is an amazingly bad loan as I see it.
There seems to be plenty of time to jump board. Only $625 of the $10,000 loan is funded at this time (21 hardy investor souls).

The crowd seems to like this one even less:
C3,  14.08%  $0.00  https://www.lendingclub.com/browse/loanDetail.action?loan_id=127366829
There are zero investors at this time.

The Latin phrase "caveat emptor" seems to be most appropriate.

[Lovinglifestyle]

"The crowd seems to like this one even less:
C3,  14.08%  $0.00  https://www.lendingclub.com/browse/loanDetail.action?loan_id=127366829
There are zero investors at this time."

No kidding!  Now, at 9:00 p.m., it's listed as "invalid loan".  Wonder what that's code for?

[Edward Reid]

An absolute new low by far! The new super duper LC G5 model wants lenders to fund this??

C1,  12.62%  $29.76  https://www.lendingclub.com/browse/loanDetail.action?loan_id=127342041

I don't know what's going on with G5 but this is an amazingly bad loan as I see it.
There seems to be plenty of time to jump board. Only $625 of the $10,000 loan is funded at this time (21 hardy investor souls).

And 12 more as of this morning ...

A (self-described) accountant with black marks on their credit record. Of course, we don't know what was happening in someone's life six years ago, but they (claim to) have had the job for nine years. And it's a "business" loan.

Oh, two more people jumped on while I was writing ...

Edward

[Rob L]

"The crowd seems to like this one even less:
C3,  14.08%  $0.00  https://www.lendingclub.com/browse/loanDetail.action?loan_id=127366829
There are zero investors at this time."

No kidding!  Now, at 9:00 p.m., it's listed as "invalid loan".  Wonder what that's code for?

My mistake. It's listed as a whole loan, not fractional. I was looking up loan_id=127342041 and just stumbled onto this one. Since there were zero investors I mistakenly thought it was unpopular. 

[Data Junkie]

My code also flushed out 127342041, but not enough data to predict a default probability.

Here's my worst of this morning:  127296020, C2 (13.59%).  My code predicts a 34.6% probability of defaulting.  Would be curious to see other folks' numbers on this as I am not using linear reg.

[Rob L]

My code also flushed out 127342041, but not enough data to predict a default probability.

Here's my worst of this morning:  127296020, C2 (13.59%).  My code predicts a 34.6% probability of defaulting.  Would be curious to see other folks' numbers on this as I am not using linear reg.

127296020 was in the 1pm EDT drop way back on 1/19/2018. My program says 11.05% Pd and would not have touched it.
Currently its 43% funded ($4,125 of $9,600), 132 investors, for $31.25 average amount per investor. Not a popular loan for sure.
The worst of that drop IMO was 127095856, C3, 14.08% with a Pd of 30.3%. It's fully funded now and issuing so much better liked than 127296020.

[Rob L]

Okay, I believe this is the worst yet.
Going to start posting the raw loan score just to be able to verify new lows when I find them.

B5,  11.99%,  $33.80  https://www.lendingclub.com/browse/loanDetail.action?loan_id=127697324

This one is now 100% funded, $12,000 loan and 355 investors. Pd = 53.5%, Score 38.24.
There are so many problems with this one. It punches all the bad buttons. Not even close.
Maybe it's me. Does this one look attractive to anyone out there?

[RomanLegend]

My site ranked 127296020 a 30 out of 82.  82 is the least likely to default, haha.   Very awful loan. 

Although, I have seen some zeros and an occasional negative sore as well.  Yikes.