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Lending Club Discussion => Investors - LC => Topic started by: SeattleSun on June 25, 2016, 11:00:00 PM

Title: My Decaying Star .......
Post by: SeattleSun on June 25, 2016, 11:00:00 PM
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For totally personal reasons I have to unwind my 1200 active loan portfolio of mostly 3 year $100 dollar loans.

So far I have chosen to just let them run off.

At the end of this month (June 16) I will have about $10,000 to withdrawal.  More than I would have guessed.

I am trying to get an idea of what this decay will look like going forward.

Anyone done this before or can see the future. 

Is there a better way to do this?   Suggestions welcome   :)

I have a filo account but don't want to sell a significant portfolio at a discount, just stubborn.

TIA

Its a Prosper account but that shouldn't really matter in regards to this question.
Title: My Decaying Star .......
Post by: AnilG on June 25, 2016, 11:00:00 PM
You receiving about $4,000 in monthly payments alone (~ 1,200 x $100 / 36 months +). Rest most probably is the prepayments if loans are relatively new. IMO, your monthlies might settle at about $3-6K with time.
Title: My Decaying Star .......
Post by: TravelingPennies on July 06, 2016, 11:00:00 PM
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Thanks AnilG, 

I pulled $9,000 out at the end of June. 

But the rate of cash build up has slowed down and is only $1,300 for the first 6 days of July.
Title: My Decaying Star .......
Post by: Half Right on July 06, 2016, 11:00:00 PM
im all in 36 month notes and i think based upon the prior month it will take about 13 months to liquidate. Also waiting it out patiently
Title: My Decaying Star .......
Post by: anabio on July 06, 2016, 11:00:00 PM
I originally purchased 1,426 notes at mostly $25 per note in A B C. Started buying in March 2014. Whole $30,000 fully invested within 3 months (by end of may 2014). Re-invested earnings from June 2014 to Jan 2015. In Jan of 2015 I started to see the writing on the wall. I can't say I did much number crunching (not that kind of guy anymore) but intuition seemed to indicate something was  not right with charge off rates. I also started worrying more about a recession coming (co-incidentally???) right after this Nov. election. (They can't use chewing gum and  baling wire forever). At that time my account was worth $31,900. Letting things pay off "normally" I now have $7,193 of my original $31,900 left. The majority of those remaining notes will pay off fully by May 2017.

I stopped buying notes and started taking money out in Jan 2015. Of the 1426 notes, I have:
737 left (current)
541 paid off early
7 in grace
6 late 16-30
8 late 31-120
2 default
115 charged off.

NOTE 1: You may not get as many paid off early as me because LC is in a rising interest rate period. I got quite a bit paid off early because four or so months after I purchased most of these notes LC went into a decreasing interest rate period so people refinanced. I'm still getting between 20-25 notes paying off early each month.

NOTE 2: As I said in a note on another topic I don't think you can count on defaults tapering off after the 1 year point. My (conservative) estimates show I will have just as many notes if not more default/charged off after the 12 month point as under the 12 month point.
Title: My Decaying Star .......
Post by: lascott on July 06, 2016, 11:00:00 PM
from: SeattleSun on June 26, 2016, 11:43:45 AM
Title: My Decaying Star .......
Post by: TravelingPennies on August 11, 2016, 11:00:00 PM
from: AnilG on June 26, 2016, 04:12:39 PM
Title: My Decaying Star .......
Post by: Rob L on August 11, 2016, 11:00:00 PM
from: SeattleSun on August 12, 2016, 02:53:08 PM
Title: My Decaying Star .......
Post by: Larry321 on August 11, 2016, 11:00:00 PM
I have changed my expectations for my LC investments from 9% to 7% to anything between 6-7%

At least we are still making money.

Title: My Decaying Star .......
Post by: TravelingPennies on August 11, 2016, 11:00:00 PM
from: Larry321 on August 12, 2016, 04:43:38 PM
Title: My Decaying Star .......
Post by: RT45 on August 11, 2016, 11:00:00 PM
@SeattleSun - were you able to get access then to Folio as an LLC structure?
Title: My Decaying Star .......
Post by: TravelingPennies on August 14, 2016, 11:00:00 PM
from: RT45 on August 12, 2016, 07:56:58 PM
Title: My Decaying Star .......
Post by: andy3109 on August 25, 2016, 11:00:00 PM
from: Larry321 on August 12, 2016, 04:43:38 PM
Title: My Decaying Star .......
Post by: TravelingPennies on August 28, 2016, 11:00:00 PM
And3109,

Perhaps my portofolio has reached maturity.  My adjusted net annual return has fallen from close to 9% to about 6.15%.
My adjusted account value has not increased in a month.

Perhaps it is time to allow my notes to mature and not reinvest.

from: andy3109 on August 26, 2016, 10:21:11 PM
Title: My Decaying Star .......
Post by: TravelingPennies on March 09, 2017, 12:00:00 AM
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Just an update that probably no one really cares about but ....

but then again I think you can no longer sell Prosper loans thru Folio if I remember correctly? 

So decay maybe your only exit strategy??


My Decaying Star (Prosper account) spun off $38k in cash the last 6 1/2 months of 2016.  I pulled the cash balance at the end of December 2016

So far in the first 10 weeks of 2017 it has built up $13k of cash in the account.   It has decayed from $98k to $48k in about 9 months

This at the higher end, about $6k/mo, of what AnilG anticipated (See  AnilG's post on June 26, 2016)  I suspect I was the beneficiary of  a surge in prepayments.

The youngest loan in the account is from early June 2016 and there are 834 active loans.  Unfortunately I have a half dozen 5 year loans that will be the long tent pole in closing this account.

Title: My Decaying Star .......
Post by: Debt Free on March 09, 2017, 12:00:00 AM
We all keep commenting on winding down for 3 / 5 years based on note terms.  However, as you're experiencing, I doubt they'll last that long overall.  Even with steady paying borrowers, I suspect that as their notes wind down that there will be the inclination to pay them off when it gets down to 3-6 months left.
Title: My Decaying Star .......
Post by: Larry321 on March 15, 2017, 11:00:00 PM
Andy,
Yes, you reoplied to me months ago, but I finally decided to wind down my LC investments and not reinvest. Instead I am slowly moving my money out of LC and into Fidelity funds.

Quote"> from: andy3109 on August 26, 2016, 10:21:11 PM
Title: My Decaying Star .......
Post by: SeattleSun on March 25, 2018, 11:00:00 PM
Quote"> from: SeattleSun on June 26, 2016, 11:43:45 AM
Title: My Decaying Star .......
Post by: Rob L on March 26, 2018, 11:00:00 PM
Good to hear from you again.
Here's a chart of my unwind after completion of all folio selling and discontinuation of all note purchases.
Looks similar to your experience and decaying each month as you said.
All the returned cash has been transferred out of LC and has found a new home.

My biggest problem is that I resumed purchases of D&E notes 9/16 thru 1/17. That added 7 months to my unwind.
I think I have 18-24 months to go, with some folio cleanup selling at the end. Time will tell.