Author Topic: LC originations taking too long  (Read 11559 times)

Show Me The $

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Re: LC originations taking too long
« Reply #15 on: April 02, 2013, 06:41:12 AM »
IMHO, LC should consider shuffling their review process around a bit.

When it was actually taking borrowers 8 to 13 days to get their loans funded, it made a lot of sense to do some of the up-front verification in parallel with the funding process -- get the notes on the platform ASAP so lenders could start lining up funding.

Now, it is taking just a day or two to get funded, and lenders are being jerked around by having their "in funding" notes cancelled at alarming rates.

Perhaps LC should work on these notes for perhaps 3 days or so before putting them on the market.  Given the current speed at which notes are funded after listing, delaying the listing until after some cursory checks are done would not slow things down one bit.


TOTALLY AGREE. Loans funds pretty quickly and at this point in the game they should only allow approved ready to go loans on the site. STOP WASTING OUR TIME

edward

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Re: LC originations taking too long
« Reply #16 on: April 02, 2013, 03:16:56 PM »
DanB,

Thank you for pointing out that lots of loans go through without any verification. I was trying to say that of those in which verification was asked for, a large percentage fail. If I saw that type of failure percentages in any quality control process, I would be very worried about my product. In general, I would prefer that LC verify more information on a larger percentage of loans prior to their release. From reading the other comments on this site, there are both pros and cons to such an approach, but shouldn't more verification help improve loan outcomes to most investors? As a newbie my comments may not always be right on the mark, but I want to be a contributing member of this wonderful information exchange where I've learned so much and look forward to always learning more. You've helped me learn to think through my comments more carefully.

DanB

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Re: LC originations taking too long
« Reply #17 on: April 02, 2013, 03:50:13 PM »
DanB,

Thank you for pointing out that lots of loans go through without any verification. I was trying to say that of those in which verification was asked for, a large percentage fail. If I saw that type of failure percentages in any quality control process, I would be very worried about my product. In general, I would prefer that LC verify more information on a larger percentage of loans prior to their release. From reading the other comments on this site, there are both pros and cons to such an approach, but shouldn't more verification help improve loan outcomes to most investors? As a newbie my comments may not always be right on the mark, but I want to be a contributing member of this wonderful information exchange where I've learned so much and look forward to always learning more. You've helped me learn to think through my comments more carefully.

You would think that would be the case but LC have always claimed that any move towards more verification becomes counterproductive since it turns off & turns away the better credit risks who have other options in terms of getting loans & may just walk away. That seems like a debatable point, especially since the whole argument is based on whether LC itself can consistently identify who to verify or not to verify.............. but it's tough to engage in such arguments when you don't have independent figures to counter their in house figures. So................

But you're right, that 40% number really stands out & would seem way way excessive in almost any other scenario. It would be interesting though to find out what comparable numbers the banks dealt with in these loan app. scenarios.

BTW, thanks for your gracious comments.

Fred

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Re: LC originations taking too long
« Reply #18 on: April 03, 2013, 07:33:33 AM »
... LC have always claimed that any move towards more verification becomes counterproductive since it turns off & turns away the better credit risks who have other options in terms of getting loans & may just walk away.

As an investor, I focus more on rates and returns.

Perhaps it is counterproductive to verify more loans; however, if I take a step back, I am fine with the quality of loans that LC put on their platform.  LC default rates are well within the industry standards for consumer loans, and I like that very much.

If I were to ask LC to spend more resources on, it would be on speeding up the overall origination process (more automation, etc.) rather than more verification.