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Author Topic: How does Default status work?

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How does Default status work?
OP: February 16, 2016, 12:00:00 AM
I'm trying to figure out Lending Club basics, so I downloaded the LoanStats3c data (2013-2014 originations) from https://www.lendingclub.com/info/download-data.action

According to http://kb.lendingclub.com/investor/articles/Investor/What-do-the-different-Note-statuses-mean, defaulted loans haven't paid in 121 days. But I'm seeing 7 loans in Default with last payment in December 2015.

What gives? Are these notes truly in Default?

Apologies if this was answered somewhere else - I'm new.
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How does Default status work?
#1: February 16, 2016, 12:00:00 AM
I am also interested to learn how LC handles these loans. I currently have two notes that are in default one has one payment received and the other has no payments received, both loans were for significant sums of money. Has anyone else experienced a default where there were little or no payments received? How does LC deal with these seemingly fraudulent borrowers?
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How does Default status work?
#4: February 16, 2016, 12:00:00 AM
Thank you - makes perfect sense now.
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How does Default status work?
#11: February 18, 2016, 12:00:00 AM
"As a lender, the following is enough: Lending Club reports delinquent borrowers to credit bureaus every month."

Why is that enough? It takes what, seven years for bad debt to roll off a credit report? So if a fraudulent borrower hits up both LC and Prosper for, say, $70k, then just doesn't pay, they have effectively added $10k/yr to their income. Tax free.

Then they can do it again in seven years.

Doesn't seem like reporting is enough unless there is additional legal action being taken people will eventually come to see LC as a giant online ATM.
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