Author Topic: Chances of collecting when borrower has died  (Read 14168 times)

New Jersey Guy

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Re: Chances of collecting when borrower has died
« Reply #15 on: December 30, 2012, 12:37:57 PM »
"There's a link at the bottom of Foliofn My Accounts to view last year's sales. But if you change the date you can see this year's sales, e.g."

Yea, but that's pretty much worthless, too.  Not only does it list the notes you sold, but it also lists the notes you bought.  Just for November, I had a total of 126 transactions, and it's like 8 pages long.  I don't feel like scanning each transaction over and over again every time a note sells, just to find out what I paid for it.  I suppose if they listed the note title, it would help slightly in tracking a note down much faster.  However, when you're looking for a note titled "Debt Consolation"  or just "Consolation", that constitutes a large amount of the notes.

Go look at your notes and see how many have either one of those two titles.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

yojoakak

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Re: Chances of collecting when borrower has died
« Reply #16 on: December 30, 2012, 12:54:14 PM »
"There's a link at the bottom of Foliofn My Accounts to view last year's sales. But if you change the date you can see this year's sales, e.g."

Yea, but that's pretty much worthless, too.  Not only does it list the notes you sold, but it also lists the notes you bought.  Just for November, I had a total of 126 transactions, and it's like 8 pages long.  I don't feel like scanning each transaction over and over again every time a note sells, just to find out what I paid for it.  I suppose if they listed the note title, it would help slightly in tracking a note down much faster.  However, when you're looking for a note titled "Debt Consolation"  or just "Consolation", that constitutes a large amount of the notes.

Go look at your notes and see how many have either one of those two titles.

Are you sure you're not looking at the Monthly Statement?

I'm talking about the Year End Summary/Trader Statement.

(Although if this is your first year, maybe it doesn't show up yet.)

« Last Edit: December 30, 2012, 01:03:37 PM by yojoakak »

rawraw

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Re: Chances of collecting when borrower has died
« Reply #17 on: December 30, 2012, 01:04:01 PM »
I've bought a three or four deeply discounted notes at $2.50 and received in excess of $50 in payments to test it.  Sadly, both Lendstats and NSR currently compute loss rates based on initial principal and not initial investment, so it screws up my loss estimates and ROI.

Sometimes when I have free time, I just sort FolioFN by highest discount and look at why they are being sold that way.  And there are a lot of deceased borrowers listed on the platform.  Scaling it is hard, since I don't know of a way to "search" the notes on each LC note.  But I think there is def. a chance of high returns, as I've done it on a very small scale.
« Last Edit: December 30, 2012, 01:06:21 PM by rawraw »

New Jersey Guy

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Re: Chances of collecting when borrower has died
« Reply #18 on: December 30, 2012, 02:39:07 PM »
Rawraw, you almost need to separate the amount you have invested in your speculative notes away from what you have invested in your good, interest bearing notes.  Unless you have two different accounts, this is difficult to do using the LC platform.  The NAR Lending Club shows on your account page reflects Charge offs (from your speculative notes) BUT FAILS TO FIGURE IN GAINS YOU MADE SELLING OTHER SPECULATIVE NOTES.  This is why my NAR shows a -11.49%, and this is why you'll never get a true, actual NAR when mixing the two accounts together.

Since 3/4 of my notes are speculative, I spend no time chasing NAR on the 1/4 of my notes that are good.  If they pay, they pay.  And yes, most do.

I set up a spread sheet on EXCEL that will calculate my monthly return based only ON THE ENTIRE AMOUNT OF MONEY I HAVE INVESTED OUT OF POCKET!  This does NOT include interest paid to me on the good accounts.  But, it will include gains (or losses) of notes I sell.  Therefore, I look at interest strictly as a bonus, and is NOT calculated into my returns.

For example, if you invest $1,000 of which $250 is set aside for quality notes, your out of pocket investment is still $1,000.  So, let's say I sell a note for a $5.00 gain, my out of pocket will automatically increase on Excel to show $1,005.

So, at the end of the month, let's say with all your gains and losses, you end up making $90.  You'll end up at the end of the month with an out-of-pocket investment of $1,090 or pretty much a 9% gain for that month only!
Now you can look at it as "Okay, I made $90 on my $1000 investment.  Oh, and lookie here!  I also made an additional $2.99 interest on notes that actually paid!  Isn't that cute!"

Now, starting at the first of the new month (with a clean Excel worksheet) I'll enter $1090 as my starting investment, and the game begins all over again.

I did some house cleaning on Christmas Day and listed a bucket of non-selling notes pushing the 120 day limit for dirt cheap.  They were selling as fast as I could get them up.  I lost money on all of them.  Despite that, I'm still going to end up making over 9% for the month of December alone.
Return over deposits:   66.82%
IRR:   86.54%
As of April 30, 2014

rawraw

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Re: Chances of collecting when borrower has died
« Reply #19 on: December 31, 2012, 07:16:42 AM »
I don't care about LC's NAR except for its trend and stability.  I calculate my own ROI based on each portfolio within my account (I have a speculative portfolio) and then use 3rd party websites to do the same.  But the websites still suck at calculating the return on my speculative portfolio, since they do loss assumptions which aren't valid.

Zach

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Re: Chances of collecting when borrower has died
« Reply #20 on: December 31, 2012, 09:22:45 AM »
I don't care about LC's NAR except for its trend and stability.  I calculate my own ROI based on each portfolio within my account (I have a speculative portfolio) and then use 3rd party websites to do the same.  But the websites still suck at calculating the return on my speculative portfolio, since they do loss assumptions which aren't valid.

For the 3rd party websites its very difficult to account for specific situations with lates/defaults as LC doesn't provide collection log details. For example, a chapter 7 bankruptcy is significantly more likely to charge off with no further payments then one that has a payment plan. Until LC provides more data for export, general statistics are the only way to go on assumed recovery rates.

rawraw

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Re: Chances of collecting when borrower has died
« Reply #21 on: December 31, 2012, 12:19:57 PM »
I don't care about LC's NAR except for its trend and stability.  I calculate my own ROI based on each portfolio within my account (I have a speculative portfolio) and then use 3rd party websites to do the same.  But the websites still suck at calculating the return on my speculative portfolio, since they do loss assumptions which aren't valid.

For the 3rd party websites its very difficult to account for specific situations with lates/defaults as LC doesn't provide collection log details. For example, a chapter 7 bankruptcy is significantly more likely to charge off with no further payments then one that has a payment plan. Until LC provides more data for export, general statistics are the only way to go on assumed recovery rates.
Oh yea, I completely agree.   Ideally, what I wish was that instead of hard coded loss rates, you could change loss rates for each portfolio within a LC account. 

Zach

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Re: Chances of collecting when borrower has died
« Reply #22 on: December 31, 2012, 02:47:48 PM »
I don't care about LC's NAR except for its trend and stability.  I calculate my own ROI based on each portfolio within my account (I have a speculative portfolio) and then use 3rd party websites to do the same.  But the websites still suck at calculating the return on my speculative portfolio, since they do loss assumptions which aren't valid.

For the 3rd party websites its very difficult to account for specific situations with lates/defaults as LC doesn't provide collection log details. For example, a chapter 7 bankruptcy is significantly more likely to charge off with no further payments then one that has a payment plan. Until LC provides more data for export, general statistics are the only way to go on assumed recovery rates.
Oh yea, I completely agree.   Ideally, what I wish was that instead of hard coded loss rates, you could change loss rates for each portfolio within a LC account.

I'm not sure I follow your ideal situation....Could you elaborate?

rawraw

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Re: Chances of collecting when borrower has died
« Reply #23 on: December 31, 2012, 04:13:48 PM »
I don't care about LC's NAR except for its trend and stability.  I calculate my own ROI based on each portfolio within my account (I have a speculative portfolio) and then use 3rd party websites to do the same.  But the websites still suck at calculating the return on my speculative portfolio, since they do loss assumptions which aren't valid.

For the 3rd party websites its very difficult to account for specific situations with lates/defaults as LC doesn't provide collection log details. For example, a chapter 7 bankruptcy is significantly more likely to charge off with no further payments then one that has a payment plan. Until LC provides more data for export, general statistics are the only way to go on assumed recovery rates.
Oh yea, I completely agree.   Ideally, what I wish was that instead of hard coded loss rates, you could change loss rates for each portfolio within a LC account.

I'm not sure I follow your ideal situation....Could you elaborate?
Currently the systems assume a loss rate for LC.  Lendstats lets you change these assumptions (I think he is the only one), but you can only change it for all loans.  For example, for my ROI return I'd leave defaults for my normal portfolio.  On my high risk one, I may increase the loss rates based on my experience.  Then on the speculative one, I'd set the loss factors to things much more liberal.  So I'd have different loss rates applied to different portfolios.   

Zach

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Re: Chances of collecting when borrower has died
« Reply #24 on: December 31, 2012, 10:40:12 PM »
I don't care about LC's NAR except for its trend and stability.  I calculate my own ROI based on each portfolio within my account (I have a speculative portfolio) and then use 3rd party websites to do the same.  But the websites still suck at calculating the return on my speculative portfolio, since they do loss assumptions which aren't valid.

For the 3rd party websites its very difficult to account for specific situations with lates/defaults as LC doesn't provide collection log details. For example, a chapter 7 bankruptcy is significantly more likely to charge off with no further payments then one that has a payment plan. Until LC provides more data for export, general statistics are the only way to go on assumed recovery rates.
Oh yea, I completely agree.   Ideally, what I wish was that instead of hard coded loss rates, you could change loss rates for each portfolio within a LC account.

I'm not sure I follow your ideal situation....Could you elaborate?
Currently the systems assume a loss rate for LC.  Lendstats lets you change these assumptions (I think he is the only one), but you can only change it for all loans.  For example, for my ROI return I'd leave defaults for my normal portfolio.  On my high risk one, I may increase the loss rates based on my experience.  Then on the speculative one, I'd set the loss factors to things much more liberal.  So I'd have different loss rates applied to different portfolios.

Got it...