P2P Lending / NFT Lending Forum

Interesting. It was a glitch I think. My site looks for new loans between 10:01 and 10:06. 99% of the time it's in those bounds.

Interested in your valuation, Fred. In fact, it might be fun to have a LendAcademy Forum LC IPO Valuation / Offering Price Thread.

Experimenting with various methods of auto buying for my own site has proven quite the learning experience. I totally get this chart.

As things stand today, this is more or less correct. I am less sure about a few points:

* I have no evidence that the large loan fractions which get tossed back are immediately carted by another large investor, but it could be possible that their software is scouring well past the load time.

* There is little evidence that the institutional investors are being intelligent in their selectivity. It would take an analysis comparing the fill time vs. an independent credit model score (such as Rev's IR04 or my PMax) to see if there is any correlation. Fill time is difficult to measure, although some on this board have made some attempts. If LC set their rates absolutely perfectly such that the expected returns across any loan grade were precisely equal, then the speed game would be pointless. You could invest in As and get the same return as investing in Fs. Unfortunately, I think there are legal / structural reasons why they can't use certain factors in their approval process and rate setting.

My analysis was extremely simple (for the mass audience on Peter's blog), but it did look at a number of borrower traits. If there are other traits you think are key, I can add them in. Given your work above, I may also play with the defaults a bit. But, I think from a disclosure standpoint, all that we need worry about is whether the characteristics that are known at the time of loan listing are balanced across whole vs. fractional.

I'll have a guest post on the whole loan program on the blog tomorrow.

1000 left! Pass the rum, core.

It's just huge. I should have rescaled it.

6 loans left, including whole loans!

Peak load by design.

The purpose of this thread is to accumulate and to discuss the merits of potential solutions to the problem defined below. Solution proposals shall be in bold for easy reading, and no other use of bold shall be made. Discussion not on topic will be deleted. I want LC to have a clean thread for the sum of our ideas.

Only a handful of weeks have passed since I had hypothesized in this thread (1) that institutions were buying free time options and sitting on large chunks of notes to the time when we have two other threads (2) and (3) where the concept is blowing up into retail investor fury.

If LC cares about the retail, individual investor, then they need to address this issue because using the website as it is now is untenable. At a technological disadvantage, individual retail investors are left with the cream of the crap a few moments after loan release.

Solution: Stricter Whole & Fractional Pools by Investor Type
LendingClub could code every account as either institutional (LP, LLC, etc.) or retail individuals. X% and (100-X%) of new applications would randomly go into market spaces designated for each type of account for 24 hours. Account types cannot cross into the other space, but after 24 hours, a loan moves into a general pool available for everyone. $Y max fraction on the retail space.

Funds would be less likely to abuse this system because (a) at least one account associated with the fund would need to be an individual, giving a liability opening in their corporate structures, and (b) the trading fees moving individual purchases to a fund account via the secondary market would eat up much of the alpha they generate (especially after their fees). Downsides to LC seem minimal, as any funding delay is at maximum 24 hours above what it is now (which is instantaneous for the loans in question).

Eager to hear more ideas!

(1) http://www.lendacademy.com/forum/index.php?topic=1348.0" class="bbc_link" target="_blank">http://www.lendacademy.com/forum/index.php?topic=1348.0
(2) http://www.lendacademy.com/forum/index.php?topic=1453.0" class="bbc_link" target="_blank">http://www.lendacademy.com/forum/index.php?topic=1453.0
(3) http://www.lendacademy.com/forum/index.php?topic=1455.0" class="bbc_link" target="_blank">http://www.lendacademy.com/forum/index.php?topic=1455.0

https://forum.lendacademy.com/index.php?topic=1455.msg10799#msg88888888Quote"> from: core on August 18, 2013, 07:48:15 AM

I haven't done such a tally, Rawraw. I suppose I could do such a thing, but it might be difficult because very early on in 2012 I was not keeping the scores around. My feeling is that I am heavily weighted in 10% notes, but that will shift to 5% over the next year.

I know, right, Peter? I never even told the reporter that I worked for I university, yet that's the affiliation. Sheesh. How about tying P2P-Picks to the importance of independent credit modeling to help protect against the incentive to grow too fast. Oh well, better than nothing, but I would have liked the traffic to the site.

Just remember that without the payment history, you only have a proxy for month of default. The total payments may add up to Month 9, but that doesn't mean they made exactly 9 payments and stopped. Partial payments can trickle in for months, and default in Month 22, but still add up to 9 payments.