Author Topic: This one surprised me  (Read 9212 times)

faeriering

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This one surprised me
« on: December 31, 2012, 10:59:12 AM »
I know you can't predict poor outcomes in folks life (emergency situations that no emergency fund could cover).  But man a cop . . . I would have thought they would have known better. https://www.lendingclub.com/account/loanPerf.action?loan_id=1259706&order_id=2655704&note_id=10353500

One of my original starter loans was for a fire fighter in NY.  That guy went late so many times, like 1/2 of his payments.  He just paid the loan off in full. I was always rooting for him.  Come on man you can do it. https://www.lendingclub.com/account/loanPerf.action?loan_id=482902&order_id=695818&note_id=1170304

This was a good lesson for me in starting to be a little bit more objective on who I'm loaning to, and maybe not worrying so much if I'm dumping a loan at a discount while it's in pre grace period even if I think the debtor will come around.

New Jersey Guy

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Re: This one surprised me
« Reply #1 on: December 31, 2012, 01:06:38 PM »
Wow.  I looked at the original listing.  I didn't care for his revolving credit amount.  But besides that, there was no indication of him being that much of a risk.

People (like this) who default or go BK soon after receiving their LC money were most likely on the verge when they applied.  This is a last ditch effort in a desperate situation.  For all we know, he could have been months behind on his utilities or owed his bookie money.  They tell us what they are going to use the money for, but nobody knows for sure where it goes after they get it.

I've seen people making much more than him living outside their means and going BK.
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OrthoInvest

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Re: This one surprised me
« Reply #2 on: December 31, 2012, 01:25:16 PM »
Curious - The loan was graded an E4. That's pretty bad for someone who doesn't have a bad credit score and didn't have anything that jumped out at us.

What do people think of that? Is there other information that is possibly not being shared with the loaners that LC has access to?


DanB

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Re: This one surprised me
« Reply #3 on: December 31, 2012, 02:02:42 PM »
Faeriering..............Slightly off topic, but I've always thought it an interesting social comment that cops in this country, who as a whole received such a bump in their social/moral standing during & after 9/11...............never suffered even a tiny hit to that same standing a few years later after something like 1 in 5 walked off their jobs during Katrina. Goes to show how easily the populace can be manipulated.

New Jersey Guy

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Re: This one surprised me
« Reply #4 on: December 31, 2012, 02:47:19 PM »
"Curious - The loan was graded an E4"
He probably rated a "D", but was dropped to an "E" due to the fact he took out a 60 month loan.
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faeriering

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Re: This one surprised me
« Reply #5 on: December 31, 2012, 02:59:47 PM »
I gotta be honest I hold cops, firefighters, teachers, postal carriers in pretty high regard.  My parents were both letter carriers and my dad saved like 2 people's lives, and I can't tell you how many times they brought home the wandering toddler that had escaped their parent's notice.  I know there are people who are in these jobs that probably don't deserve our respect.  but 4 in 5 stayed in their jobs in Katrina living through that hell and maybe helping others too.

New Jersey Guy

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Re: This one surprised me
« Reply #6 on: December 31, 2012, 04:02:05 PM »
I just found this on Comcast.net

Top 10 causes of debt
Reduced income/same expenses.
Divorce.
Poor money management.
Underemployment.
Gambling.
Medical expenses.
Saving too little or not at all.
No money-communication skills.
Banking on a windfall.
Financial illiteracy.


Read more: http://www.bankrate.com/finance/debt/top-10-causes-of-debt-1.aspx#ixzz2GfJY2ZvZ Follow us: @Bankrate on Twitter | Bankrate on Facebook
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As of April 30, 2014

yojoakak

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Re: This one surprised me
« Reply #7 on: December 31, 2012, 08:09:52 PM »
4 in 5 stayed in their jobs in Katrina living through that hell and maybe helping others too.

And a few people would have been better off if some of those cops HAD walked off their jobs, e.g.

http://www.cnn.com/2011/CRIME/08/05/louisiana.danziger.bridge.shooting/index.html

New Jersey Guy

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Re: This one surprised me
« Reply #8 on: January 04, 2013, 10:14:04 AM »
Even though I've been investing in LC for short period, I've quickly found out nothing surprises me anymore.  However, descriptions like this make me laugh and shake my head!

"I really appreciate your help and will ensure every payment is made timely....I plan to pay 2-3 payments on this loan per month ....You can count on my repaying the loan as agreed.....If you and the other LC investors can give me this chance, I will be so grateful..... After the LC loan is paid in full, I, too, would like to become an investor to help others that are trustworthy and hard-working and the banks won't help."

1/2/13 (Wednesday) Borrower filed for Chapter 13 Bankruptcy 
(https://www.lendingclub.com/foliofn/loanPerf.action?loan_id=640372&order_id=4590796&note_id=3527632)

This loan was double the fun!  I had 2 notes!
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investforfreedom

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Re: This one surprised me
« Reply #9 on: January 04, 2013, 11:13:59 AM »
I have been with LC for about five months.  I've got two borrowers declaring bankruptcies after they made only 1 payment.  Obviously, they knew that was coming.  For my Prosper account, I haven't sold any notes just yet, but I've been selling a few notes on the LC platform.  I have found that for Prosper loans, repeat borrowers tend to catch up despite being late, so I am a bit more lenient in that regard.  However, because of the lack of such data on LC, I am slightly less tolerant of late payments, although cutting losses early could also mean cutting out good borrowers who might need a little more time. 



« Last Edit: January 04, 2013, 11:15:58 AM by investforfreedom »

flyp52

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Re: This one surprised me
« Reply #10 on: January 04, 2013, 11:36:36 AM »
Even though I've been investing in LC for short period, I've quickly found out nothing surprises me anymore.  However, descriptions like this make me laugh and shake my head!

"I really appreciate your help and will ensure every payment is made timely....I plan to pay 2-3 payments on this loan per month ....You can count on my repaying the loan as agreed.....If you and the other LC investors can give me this chance, I will be so grateful..... After the LC loan is paid in full, I, too, would like to become an investor to help others that are trustworthy and hard-working and the banks won't help."

1/2/13 (Wednesday) Borrower filed for Chapter 13 Bankruptcy 
(https://www.lendingclub.com/foliofn/loanPerf.action?loan_id=640372&order_id=4590796&note_id=3527632)

This loan was double the fun!  I had 2 notes!

Good to maintain a sense of humor about it!  I eventually figured out to not invest in these kinds of loans, despite how the numbers looked.  The narrative suggests their plans are based on hope, and I don't want my road to losses paved with the borrower's good intentions.  But that said, a year and a half of perfect payments isn't too bad - maybe the borrower lost their job.

daniel2023

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Re: This one surprised me
« Reply #11 on: January 04, 2013, 01:10:53 PM »
I remember seeing someone's analysis of word counts/word associations, and I have also become more skeptical of of people who are overly descriptive about their desired habits.

Dennis

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Re: This one surprised me
« Reply #12 on: January 04, 2013, 11:09:39 PM »
Here's a laugh at some of my lates at Prosper and why you can't believe a word of what a lot of these people write.  Because of the non existent collections agency at Prosper I fully expect all these notes to be charged off.  I've yet to have even 1 note 31+ days late become current again, not one (12 charge offs so far, 24 currently 31+ days late, ouch).  Prosper should look into getting a real collections agency.  Some of you may recognize these notes in your own portfolio:

I am a good candidate for this loan because...

- "I pay my bills on time." (C Grade Note, 31+ days late)
- "I have a good full time job and I pay all my bills on time." (C Grade Note, 31+ days late)
- "I have a good credit and I all was pay my bills." (HR Grade Note, 31+ days late)
- "I'm a responsible person." (B Grade Note, 91+ days late)
- "I strongly believe that I am an excellent candidate for this loan because I earn a good salary for a person of my age, pay my bills in it's entirety; on time, every month and most importantly I live at home with my Parents, therefore helping me save on monthly costs. (E Grade Note, 31+ days late)
- "I pay all bills on time." (HR Grade Note, 61+ days late)
- "This will be my 3rd loan through Prosper and I have never missed a payment and paid both loans off early. ... Long story short you are guaranteed repayment. (E Grade Note, 31+ days late)
- "I am a good candidate for this loan because I am responsible and have great income to pay." (HR Grade Note, 61+ days late)
- "I have a steady job and I have been able to rebuild and pay off most of my debt after a divorce." (E Grade Note, BK Filed)
- "We always pay our bills!" (E Grade Note, BK Filed)
- "When able, I will pay an additional amount in order to pay off sooner." (HR Grade Note, 61+ days late)
- "I will make payments on time and pay off this loan. I have determined a monthly budget,..." (D Grade Note, BK Filed)

6 of these people made 3 payments or less.

Surprisingly I'm still making decent money at Prosper after 17 months of investing (17.39% annualized return on all notes, 17.87% on seasoned).  None of my notes are greater than $25 and I listened to Peter in the very begining and diversified heavily, spreading the risk among all classes (A - HR but heavy in C - E ), and that has worked very well.  As I'm still learning as I go, I no longer invest in HR grade notes, not surprisingly, they are by far the worst performers.
 

Dennis

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Re: This one surprised me
« Reply #13 on: January 04, 2013, 11:35:28 PM »
From my charged-off notes.......

I am a good candidate for this loan because:

- "I have 11 years of good credit history with no late payment and full time job." (D Grade Note, Charged-off)
- "cosmetic sergery bill", "I Have a good job!" (HR Grade Note, Charged-off)
- "I work very hard and am responsible." (HR Grade Note, Charged-off)
- "You can see I have a good credit score and I am ALWAYS on time paying bills." (C Grade Note, Charged-off)
- "I work a full time job and a part time and both are very solid positions." (D Grade Note, Charged-off)
- "I am stable."  (E Grade Note, Charged off)
- "I have a good income and excellent payment history." (D Grade Note, Charged-off)


DanB

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Re: This one surprised me
« Reply #14 on: January 05, 2013, 01:18:22 AM »
Dennis........Thx. for those, brought back memories.  I've personally used some of those lines when I was younger  & hanging around with the wrong crowd. Please understand that it wasn't really my fault. My environment made me irresponsible & a deadbeat borrower.  :)