https://www.lendingclub.com/account/loanPerf.action?loan_id=2295003&order_id=13956945¬e_id=16160563The borrower negotiated a payment plan on 11/22/2013, made every payment on time as agreed, then was automatically charged-off because that agreed-upon payment amount wasn't high enough to keep it from going 120 days past due. I have several other notes like this, including these two from the recent batch of charge-offs:
https://www.lendingclub.com/account/loanPerf.action?loan_id=3034655&order_id=13270819¬e_id=17904540https://www.lendingclub.com/account/loanPerf.action?loan_id=5825282&order_id=21394555¬e_id=25699798I don't mind if Lending Club charges off a note that hasn't paid in 5 months. But when the borrower has been making recent payments, even if it's lower than the standard amount, they shouldn't be charged off. No other major lender or credit card company would charge off a borrower who is still actively trying to make good on their debt. It's utter farce.
This is pretty standard in consumer credit portfolios I see. You charge it off because of the regulatory requirements and take it as recoveries. I'm confused at how it harms the borrower? The credit report perhaps? But you don't know how LC is reporting the activity, as far as I can tell
daysUntilChargeoff would be a nice field to have in one of these downloadable files. Or in general, days until a worse status change. Of course none of that would be necessary if stuff just worked in a predictable manner. But if there's some reason it needs to be so disorganized, fine, just tell us ahead of time for each note.
Yojo's thread about the ides of March, and others... somehow along the way it became acceptable that this is some sort of game to figure out when notes are going to be marked as charged off, defaulted, and what not. I honestly do not see why this is tolerated. What if you bought a stock "around" the ex-dividend date and had to guess whether you'd receive a dividend, or whether the previous guy will get yours? Maybe the broker will just take advantage of the situation and keep it. Would you sit around with your friends and giggle like little girls at a slumber party guessing about who's going to get their dividends this quarter shaking your magic 8 balls? Unbelievable what LC gets away with.
I'm still confused how this hurts borrowers. BTW: