Oh yeah you're right. I see the same thing. Around 300 loans are 20-27 days left. How many usually do you normally see in that range?
I think there are too many variables that could influence things. In addition to the previous reasons I mentioned, other reasons could include:
- Tweaks in underwriting approve more people for loans (they have done that before.)
- The timing of their securatization and how many loans are available based on that...
- As you mentioned, some investors might have paused because of this FTC issue but I would think that's not as likely. ...
Yea, all those variables are sorta valid, and just scratch the surface.
I don't know of anyone who has kept track of # loans in the retail inventory with X days left to run. However, we all observe # of loans in retail inventory, because we login and look at loans available. I've been doing this for 10 years now and I've seen that inventory fluctuate wildly. Sometimes as low as 100. Sometimes >1000. I would suggest not trying to read too much into it.
There is a fellow somewhere in LC who sets some parameters (turns some knobs) every day. He tells the computers what fraction of loans to allocate to the retail market, and within the retail market, what fraction of loans to allocate to the fractional market vs whole-loan market. He makes this judgement based on information about the relative demand here and there, specifically, the securitization program, the whole-loan market, and the fractional market. He is no better at predicting the future than anybody else, but he has this job, so he has to turn the knobs. He guesses.
Sometimes for several weeks he gets sloppy and lets the retail inventory get really low. After all one implication of a healthy-sized retail inventory is that some of it doesn't get fully subscribed, and you occasionally lose the opportunity to lend to some borrower. When that happens repeatedly, there's a natural tendency to turn the knob to allocate fewer loans to retail. When you do that, retail inventory gets low, which pisses off retail investors. When that happens many investors (I've been one of them) complain explaining that the retail market cannot function without inventory. Investors expect to be able to login and see loans to pick from. When he gets some complaints from this side or that, it influences his knob-turning for the next few months, until he forgets about them.
Over time I've seen the personality of these decisions change too. I suspect different people have held this job at different times. For example, in the past, it was common to see similar numbers of loans posted every day, including weekends, in the retail market, and also similar numbers of loans at the four postings per day. In the past few months there have been almost zero (often 1 or 2 or 3 or 4, but not quite zero) postings on weekends, and almost zero (but not quite zero) at the 6AM posting. In other words, instead of 4x7 = 28 significant postings per week, we have reduced to 3x5 = 15. What has changed is the "style" of operating the market, as if a different person were setting these policies.
So just expect a lot of fluctuation. I would suggest not reading too much into it.
