P2P Lending / NFT Lending Forum

Lending Club Discussion => Investors - LC => Topic started by: mo on December 28, 2012, 11:00:00 PM

Title: Increase In Applicants With Public Records?
Post by: mo on December 28, 2012, 11:00:00 PM
Over the past week, Dec 22 - 29 I've noticed that there has been a large increase in the number of loan listings where the applicant has a public record on file.  Anecdotally prior to this week I rarely saw listings with public records but now it seems like the majority of them have one.  Has something changed with the way information is being reported or what gives?
Title: Increase In Applicants With Public Records?
Post by: DanB on December 31, 1969, 06:00:00 PM
I normally screen out public records anyway, but I just looked at total loans available a few minutes ago & it stood at 1093. If you screen out only those with public records you're left with 591. I don't have anything to compare this with the average historically, but yes, 46% of all loans available having a public record seems dramatically elevated right now. Though I wouldn't want to suggest any reasons or draw any conclusions just yet.
Title: Increase In Applicants With Public Records?
Post by: brycemason on December 31, 1969, 06:00:00 PM
Here's a table by vintage quarter with the percentage of loans with a public record. Now, these are issued loans, so perhaps a TON of the ones on the platform won't issue, but 46% is so far out of line with the past, it makes me think something's wrong. That said, a public record isn't the end of the world.


. table iq, c(mean publicrecord)

--------------------------
       iq | mean(public~d)
----------+---------------
   2007-2 |              0
   2007-3 |       .0740741
   2007-4 |       .0653951
   2008-1 |       .0856553
   2008-2 |       .0979167
   2008-3 |       .0734266
   2008-4 |       .0698925
   2009-1 |       .0552359
   2009-2 |       .0541825
   2009-3 |       .0361538
   2009-4 |       .0465632
   2010-1 |       .0584795
   2010-2 |       .0680249
   2010-3 |       .0613372
   2010-4 |       .0560286
   2011-1 |       .0562956
   2011-2 |       .0614628
   2011-3 |       .0634016
   2011-4 |       .0386435
   2012-1 |       .0314555
   2012-2 |       .0304205
   2012-3 |       .0296941
   2012-4 |       .0096432
--------------------------
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
Can someone re-check that my 46% is ballpark correct ................because that doesn't even sound right to me. The more I think about it, the more ridiculously high it sounds.
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
My script says 48% of 3-year loans in the BrowseNotes file have a public record. Something's got to be wrong on their end.
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
Yeah, that can't be accurate.
Title: Increase In Applicants With Public Records?
Post by: rawraw on December 31, 1969, 06:00:00 PM
from: brycemason on December 30, 2012, 01:18:56 AM
Title: Increase In Applicants With Public Records?
Post by: faeriering on December 31, 1969, 06:00:00 PM
One point of view might be that there are 46% of the currently available notes with public records because the notes with public records stay available longer, and the notes without public records get funded faster.

So to your point Dan the only way to really compare this is to look at how the browsenotes.csv file changes over time.

Here's data I have from some older downloads:
Date/Time                Total Notes      Notes with PR  % with PR
12/25/12 09:14 AM     764                  109                 14.3% browseNotes(4)
11/25/12 08:52 AM     721                    19                   2.6% browseNotes(3)
11/18/12 10:06 AM     863                    18                   2.0% browseNotes(2)
09/25/12 12:00 PM    1352                    19                   1.4% browseNotes(1)  (okay that's just spooky)
 
Wow substantial change.  the other interesting thing was the notes from Nov & Sept didn't have any public records greater than 2.  The stuff from December has notes with public records as high as 5.

Still doesn't really answer the question of if people are changing what notes they are buying up.  Did the change happen because of who LC is approving or because of which loans are leaving the platform faster? Is it because of the discussion on this forum about public records being bad for ROI?

I couldn't attach the files (file size too big).  Is there a good way to post them somewhere for folks?

edit: okay got some drop box links:
these are all my browseNotes files that I have.
(1)  https://www.dropbox.com/s/e4tva3b7fqxy15p/browseNotes%20%281%29.csv  9/25/12 11:00 AM
(2)  https://www.dropbox.com/s/c5qd83q3ssplaum/browseNotes%20%282%29.csv  11/18/12 10:06 AM
(3)  https://www.dropbox.com/s/r5tawrqyvrwfp0v/browseNotes%20%283%29.csv  11/24/12 8:52 AM
(4)  https://www.dropbox.com/s/26qllni2ojfnwza/browseNotes%20%284%29.csv  12/25/12 9:14 AM
(5)  https://www.dropbox.com/s/1tlfs5yrln0i754/browseNotes%20%285%29.csv  12/28/12 7:14 AM
(6)  https://www.dropbox.com/s/652v307v89lemsl/browseNotes%20%286%29.csv  12/29/12 8:53 AM
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
from: faeriering on December 30, 2012, 11:56:36 AM
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
I believe it.  I typically invest in B-4 or worse rated loans.  Up until this past week I didn't even bother to have public records in my filter since there were so few I would just skip the few that had them as I went though.  There are so many now in the C and D grades esp. I started to filter them out to avoid mistakes. 
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
Here is a break down of loans with public records by credit grade from today's browse Notes.  I'm getting an over all Public Record percentage of 46.7%


Grade, Pub Records (Total Loans), % w/ Record
A | 26  (241) | 10.8%
B | 233 (398) | 58.5%
C | 173 (307) | 56.4%
D | 58  (100) | 58.0%
E | 31  (69)  | 44.9%
F | 21  (39)  | 53.8%
G | 2   (11)  | 18.2%
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
I think it has to be a mistake somehow in the data. Things don't change that fast without some explanation. Perhaps the explanation is they bought the National Association of People with Public Records mailing list! Or maybe the database is pulling the wrong records somehow.
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
Does anyone know what percentage of the general adult population have a public record? It's under 5%, correct?
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
I would estimate that 4% of credit files would have a bankruptcy on record which is looks like most of the records in the current listings are.  Here is how I made my estimate...

There are some bankruptcy statistics on the US Courts website; http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx

I can't find any number about people with it on their record but if you look at those stats 1.3 million people declared bankruptcy during the year and 72% of those where first time filers so 1300000 * 72% = 936000 first time filers. A bankruptcy will be on your record at most 10 years in some cases less per experian's FAQ

http://www.experian.com/ask-experian/20110413-public-records-that-can-appear-in-your-credit-report.html

so 936000 * 10 = 9.36 million people with a bankruptcy record at any given time

According to Census data 76.3% of the population is over the age of 18 and there are 311 million people so 237 million adults who could have a credit record
http://quickfacts.census.gov/qfd/states/00000.html

9.36 / 237 = 3.9%
So a high estimate might be about 4% of credit files would have a public record from a bankruptcy.

looking at the browse notes there is actually a public record, and a public record from bankruptcy field and most of the records are in fact bankruptcy related.  Even is 4% is a total WAG clearly 46+% is way out of line with what you would expect.
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
Okay my files are on drop box.  Please tell me if you see something that I didn't in the files.  I also added the ones that I have from the last week.  Does anyone else keep these that they are willing to share?  It looks like there's an obvious change with my data set, but maybe someone else's data would show something else?
Title: Increase In Applicants With Public Records?
Post by: brycemason on December 30, 2012, 11:00:00 PM
I don't think we need to do any more research. We've established a major change in the data from week to week. It's time to call LC.
Title: Increase In Applicants With Public Records?
Post by: rawraw on December 31, 1969, 06:00:00 PM
from: brycemason on December 31, 2012, 11:54:09 AM
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
I figured they'd be on skeleton crew.  ::)
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
from: brycemason on December 31, 2012, 03:50:53 PM
Title: Increase In Applicants With Public Records?
Post by: writing2reality on December 31, 1969, 06:00:00 PM
from: rawraw on December 31, 2012, 12:32:23 PM
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
A gentleman named Tim promised to give me a return call once he verifies the status.
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
from: brycemason on January 02, 2013, 02:22:34 PM
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
My hypothesis was fundamentally correct, if hyperbolic! Quote
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
from: brycemason on January 02, 2013, 05:53:48 PM
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
LC adjusts the interest rate according to their risk model, which probably incorporates the presence of public records either directly or through the credit score. I'm glad to have confirmed the data is correct.
Title: Increase In Applicants With Public Records?
Post by: Peter on December 31, 1969, 06:00:00 PM
from: rawraw on January 02, 2013, 05:57:14 PM
Title: Increase In Applicants With Public Records?
Post by: faeriering on December 31, 1969, 06:00:00 PM
So has this changed how people are selecting notes?

I haven't modified my filters at all, but I'm mostly just reinvesting at this point so having fewer notes to invest in isn't that bad of a thing.
Title: Increase In Applicants With Public Records?
Post by: TravelingPennies on December 31, 1969, 06:00:00 PM
Nope, as long as the data is correct, I have no reason to believe the underlying relationship between a public record and a loss is any different. Same script.