Messages

Why would someone buy Veteran Bond at 5% total return when they can invest in High Yield Corporate Bond HYG, JNK with similar yield and instant liquidity and lower risk? Veteran bond is lending to very small businesses smaller than even micro-cap stocks so are potentially much more riskier than bond issuers in HYG, JNK and similar funds and should be yielding much more. The return doesn't justify the associated high risk unless I am missing something.

Has anyone looked into the possibility of selling notes in IRA and buying same notes in Taxable account as IRA liquidation strategy? I don't know the IRS/tax consequences of such strategy and not a tax expert but can't imagine anything being wrong with an exchange at fair market value. Sell your Current notes at par value from IRA and then buying same notes in taxable account might speed up the IRA liquidation. Sell delinquent notes at maximum discount listed on Folio for same loan or at LC claimed loss rates might be a fair value exchange between IRA and Taxable account.
 
https://forum.lendacademy.com/index.php?topic=3551.msg42071#msg88888888Quote"> from: lascott on October 15, 2017, 01:27:39 AM

Contact LendingClub and claim that these loans are fraudulent and you want refund. Let them investigate.

I think the change happened soon after I published that post. My guess Jul-Sep time frame. Search this forum, IIRC there was a discussion about it.

https://forum.lendacademy.com/index.php?topic=4597.msg41967#msg88888888Quote"> from: nevermore on September 27, 2017, 05:44:22 PM

Makes no sense. If the losses are lower, they shouldn't be F/G grade loans. The Credit Grades are supposed to be credit rating, on a risk-return continuum, of the loans being offered, 'A' lowest risk and 'G' highest risk. By claiming F/G/60 will have lower interest rate than F/G/36 because it has lower losses, the Credit Grade is no longer a rating for assessing risk and return of loans LC offers. Grades are turning into just a few "independent" buckets in which they distribute the loans with no relationship between them. Basically, they are undermining their own argument about selecting loans based on Credit Grade only. People using LC automated investing will be shafted.

Data-driven but knowledge-unaware, most probably performed by people who see data just as bunch of numbers and have no basic knowledge of credit modeling and aptitude for interpretation what data telling them.
 
https://forum.lendacademy.com/index.php?topic=4576.msg41924#msg88888888Quote"> from: rubicon on September 20, 2017, 10:21:46 AM

Interesting part I found in your table is discrepancy in Interest Rate between F/G Grade 36 month loans versus F/G Grade 60 month loans. For all other grades, interest rate is higher for 60 month versus 36 month except in the case of F/G grade. Why would borrowers take F/G 36 month loan @ 30.53% when they can take 60 month loan @ 29.89%. Supposedly 60 month loans will come with lower monthly payment commitment with option to pay off in 36 months without penalty?

Similar issue exist with Estimated Credit Loss for E/F/G grade. If E/F/G loans are riskier than A/B/C/D, they should have higher projected loss and higher interest rate to compensate for it.

I don't understand LC logic with the new credit model. There is something really wrong in their analysis and with new credit model as it defies the basic tenet between credit quality, risk and return. I think they are relying too much on ML and not enough on common sense. It will come back to bite them.

https://forum.lendacademy.com/index.php?topic=4576.msg41909#msg88888888Quote"> from: Rob L on September 19, 2017, 10:44:13 AM

Sorry for delay in responding. Do you still see incorrect number of active notes? We only count notes that are not Charged Off or Fully Paid as Active Notes.

Interesting number from retail lending perspective is originations $276M in Q2 vs $297 in Q1 for self-managed individuals. A decline that seems to echo what forum has been talking about liquidating their portfolios. Even managed accounts are not growing that much, little over 1%.

Time to abandon calling this segment P2P lending and Marketplace lending. A better term now for the segment might be online loan brokers. Finally segment got assimilated into doing the things old fashioned way.

Damn, 17% default rate!! That is too high. What is the interest rate profile for your loans? Most probably 20%+. It is shame the guys who claim to bring Google expertise can't figure out how to do better.

https://forum.lendacademy.com/index.php?topic=4528.msg41605#msg88888888Quote"> from: au88 on August 06, 2017, 09:44:20 PM

Be careful interpreting the 25% number provided by LC for IGP. It represents the loss estimates in next 9 months only. The number doesn't include defaults that may happen after 9 months. The actual default rate for IGP most probably is much higher than 25%.

My analysis couple of years ago and shared in my blog post "Lending Club Secondary Market: Profitability of Trade and Recovery Rate with Loan Status at Listing" https://www.peercube.com/blog/post/lending-club-secondary-market-profitability-of-trade-and-recovery-rate-with-loan-status-at-listing" class="bbc_link" target="_blank">https://www.peercube.com/blog/post/lending-club-secondary-market-profitability-of-trade-and-recovery-rate-with-loan-status-at-listing indicated ~42% default for IGP notes

http://forum.lendacademy.com/index.php/topic,4531.msg41578.html#msg88888888Quote"> from: lascott on August 05, 2017, 10:40:41 AM

She might be right. Attached screenshot is from Lending Club FOLIOfn Pricing Overview https://www.peercube.com/folionotes/index" class="bbc_link" target="_blank">https://www.peercube.com/folionotes/index. The minimum markup on Current Never Late notes available right now is -22.39%. To further check, I ran the queries in my database for Current Never Late notes that are listed at 5% or more discount.

Remaining Payments, Loan Term, Number of Notes
< 18, 36 mos, 15
< 18,  60 mos, 1
< 30, 36 mos, 1,624
< 30, 60 mos, 70

http://forum.lendacademy.com/index.php/topic,4526.msg41535.html#msg88888888Quote"> from: nonattender on August 01, 2017, 10:05:53 PM

Chargeoffs rise when interest rates rise making existing floating rate loans such as credit card unaffordable. As an investor you should expect higher interest rate to compensate for higher Chargeoffs but as an existing borrower higher interest rate may be the death knell.

https://forum.lendacademy.com/index.php?topic=4464.msg41503#msg88888888Quote"> from: nonattender on July 31, 2017, 02:36:31 PM

We have a repricing engine. We don't 'slow decline' the price of notes being sold on Folio. Our pricing strategies are based on the prevailing pricing on Folio and based on premise that a reasonable buyer will buy the lowest markup/highest discounted note from all available notes from same/similar loans. With PeerCube, you can use multiple pricing strategies at same time and system will automatically reprice and put sell orders once previous sell order expires.

If you are motivated seller, you may want consider pricing notes with Strategy 1 (Lowest Listed Price for Same Loan) and Strategy 2 (Strategy 2: Average Listed Price for Similar Loans). The system reprices the notes automatically based on prevailing pricing on Folio once previous sell order expires, typically 3 days. Also, it is a good idea to put thresholds on Markup/Discount Range field to avoid notes being listed with too low/high markup.

Following blog posts provide detailed information about automated selling:

Six Steps to Automated Selling on Lending Club Folio Secondary Market https://www.peercube.com/blog/post/six-steps-to-automated-selling-on-lending-club-folio-secondary-market" class="bbc_link" target="_blank">https://www.peercube.com/blog/post/six-steps-to-automated-selling-on-lending-club-folio-secondary-market
Enhancements to Automated Note Selling on Lending Club Folio Secondary Market https://www.peercube.com/blog/post/enhancements-to-automated-note-selling-on-lending-club-folio-secondary-market" class="bbc_link" target="_blank">https://www.peercube.com/blog/post/enhancements-to-automated-note-selling-on-lending-club-folio-secondary-market
How to automate Note Selling on Lending Club Secondary Market with PeerCube? https://www.peercube.com/blog/post/how-to-automate-note-selling-on-lending-club-secondary-market-with-peercube" class="bbc_link" target="_blank">https://www.peercube.com/blog/post/how-to-automate-note-selling-on-lending-club-secondary-market-with-peercube

https://forum.lendacademy.com/index.php?topic=4524.msg41501#msg88888888Quote"> from: kurtnyc on July 31, 2017, 11:25:29 AM

There has been encouraging changes in last couple of weeks on Folio. I quickly compared two Folio listings from today (7/22) and 14 days ago (7/08) both were captured about noon.

• The number of notes listings decline by 30.5% between 07/08 and 07/22 but decline in unique loans listed is only 4.9%. It indicates that while the amount of notes available has declined the variety of loans available hasn't declined much.
• The average markup declined from +3.90% on 07/08 to -0.34% on 07/22 indicating the newer listings are more reasonably priced to sell than previously.
  
• The markup at 75% of listings declined from +7.62% on 07/08 to +2.68% indicating majority of listings have lower markup than previously.
  
• The average Ask Price has declined from $31.29 on 07/08 to $29.27 on 07/22 while outstanding principal has almost stayed the same $29.90 on 07/08 to $29.00 on 07/22.
  
• Majority of decline has been in notes with Current (30.0%) and Issued (77.2%) status.

For a while, the Folio notes listings were getting too bloated with majority of listings had no reasonable chance of selling. Bloated listings create challenge for buyers who have to shift through lot more notes to find they want to buy. I am sure large amount of such listings were gumming up the systems at Folio and buying services.

https://forum.lendacademy.com/index.php?topic=4519.msg41465#msg88888888Quote"> from: fliphusker on July 22, 2017, 04:53:16 PM

The keyword is amortized loans. These loans are constant repayment declining balance loans. Interest / Remaining Principal ratio stays the same during the life of loan sans default.

You can take the repayments out of account and invest anywhere else you like. There is no penalty for getting off the merry go-round. Continuous reinvesting gives appearance of higher return because repayments on newish loans mostly consist of interests and little of principal repaid. Once you reach a level reinvesting rate, you portfolio returns will level off too. San defaults, return fluctuate mostly when money is added and deployed to or cashed and withdrawn from account.

You are trying to find fault where there is none.

https://forum.lendacademy.com/index.php?topic=4517.msg41444#msg88888888Quote"> from: OleBill on July 21, 2017, 05:17:59 PM