P2P Lending / NFT Lending Forum

Unfortunately I am an investor in the DLIF fund.  I am not posting this for sympathy/empathy, etc.  I am simply posting this on the hopes that either Brendan Ross himself or someone on or at the DLIF team will see this and do the right thing.

I could care less about jail time, fines, etc.  As an investor who is facing a significant loss as a result of fraudulent activity, someone please do the right thing and provide the needed information to the receiver to help unwind this mess.  Investors are taking significant losses and those losses are only being increased as the receiver is being forced hire lawyers and specialist to unravel the web.  Any information that can be provided to the receiver to help point him the right direction, that could lead to information about when collectability issues arose or when information was available regarding issues at VOIP would be a great help.  Investors that invested in Dec 2018 are particularly getting screwed as all of the loss is being applied in Dec 2018 and no impairments/write-downs are being applied to prior periods.  As a former auditor at a big four CPA firm, it is very hard to believe no evidence or information is available that shows collectability issues did not exist prior to Dec 2018 (which would mean impairments should be applied prior to Dec 2018).  I understand that is how fraud works, it is covered up and hard to find.

Yes, I am affected as I invested in Dec 2018 (however I was invested prior to Dec 2018 as well), so I am taking a loss no matter what. 

I understand Brendan Ross is being investigated and it would be hard to submit evidence against yourself, but your investors are getting screwed, do the right thing.

I know I probably live in a dream world, but maybe just maybe someone will be compelled to do the right thing should the truth be out there somewhere.

Thought some of you might find this interesting. 

So I have been withdrawing excess cash from my account since its peak value in Jan 2017.  I still invest in loans that meet my criteria, but I have always thought it would interesting to see how much money would be in the account once I withdrew all of my principal.  I know I know, it is the gain in the account, but never knew what that gain would be when the time came.  Based on my current rate of withdrawal, I am about 1.5 months from withdrawing all of my principal.  Currently I still have $33,154.71 to withdraw, then I will have no "skin" left in the game and it is all profit.  Today that profit would equal $180,165.99.  I will continue to invest in loans that meet my criteria, but I doubt I will ever add funds to my account again as LC shows no signs of returning to "hay days" / 10% returns I used to make.  I currently make 5% and for the risk involved with these loans that is not sufficient and will continue to move to other investments.  Saying that, my guess is (based on other accounts I oversee), my account will settle in around $125k and at that point the monthly payments generated will be sufficient to fund purchases of loans that meet my criteria.

Overall, I have been happy with my investment at LC, but now it is more work that it is worth.  I don't have proof of this as I have not done the analysis, but my guess is simply buying the S&P ETF with the funds I deposited into my LC account over the last 9 years would have been a lot more lucrative.

Notes on the account -
 - Account was opened in Dec 2009
 - Last deposit into account was in June 2016
 - Best month ever based on $ return.  $4,517 Oct 2016 (account worth $571k)
 - I have always been conservative, meaning more than 50% in A and B loans.  During most profitable time, over 80% was A and B.  Moved away from A's as interest rates fell.
 - Actively sell non performing loans.  A year or two ago, I did an in depth analysis on all the loans I had sold trying to figure out if I did the right thing.  At that point, I had saved myself right at $5k.  Meaning that if I never sold a single loan, I would have had an additional $5k in losses compared to what I did lose selling non performing loans.
 - Never bought more than $100 per loan

Enjoy.  Interested to hear other comments/thoughts.

Re: Today's happenings.

So wait a second, you are telling me that your revenues/forecasts are decreasing at the same time a majority of your investors are have seen their returns decrease.  Man, I wonder if the two are related.  Who knows, anytime you are ready to get back to where you were just let me know Mr. Sanborn.

I spent a few hours today and put together a summary of some of my LC data to shed some light on what I have been seeing.

I completely understand this is not a perfect analysis and does not answer all questions.

Few things I want to point out.  In the Sales + Charge Off Data section, the sales + charge offs by year are based on the year the loan was purchased.  So a loan purchased in 2013 and sold in 2014 is listed in the 2013 row.  In the Purchases Data section, the purchases are for that year and the interest amount represents the interest in that year.  The Gain section is not that great, because it is not comparing the vintages correctly.  Meaning it is comparing sales + charge offs data by vintage to interest in the calendar year, not interest by vintage.  I do that analysis at year end and did not feel like doing it, sorry.  But this does allow you/me to look at sales + charge offs of a specific vintage compared to purchases in that year.  Purchases represents all purchases (includes reinvestment of payments).  No, I do not have $1.8M invested. 

Looks like 2016 is going to be way worse than 2015.

So I will say this again, I still do not understand how people are losing money.  I currently have an average interest rate of 11.57%, so a loss % of 4.5% still represents a good return.  The reason I complain at all, is because I used to have an average interest rate of 12.5%-13% and a loss % of 2%.  I understand that as my portfolio grew I would divert to the mean, but I could live with my current loss % if the average interest rate would increase.

I will try to answer questions, but this analysis may not allow for answers to all questions.

Been a while since I last posted, but have been following the forum and reading.

It seems like this is the only thing I post (when I do), but maybe just maybe one time LC will hear me.

So your investors have seen significant decreases in returns and for quite a few of those investors they are experiencing a loss.  HELLO.

Your new credit model is great, but it is not going to change anything until you raise interest rates to the levels they used to be.  And I am referring to 09/10 level interest rates.  I would have a hard time believing your volume of originations would decrease in any meaningful manner if you raised rates.  Most of these borrowers need to refi from a higher rate.  A savings on the interest they pay is a savings, I doubt they have an alternative.

Just my .02.

I am not disagreeing with anyone and think most who have posted have valid points.

However, to me it is very clear why returns have declined.  I have said it before and will say it again.

The lowering of the interest rates has done the most damage.  We as investors were forced to either accept lower returns and maintain our risk appetite (meaning we use filters to choose which loans to invest in and the return was the return) or in order to try and maintain returns we increased our risk appetite and invested in loans that would not have met our previous filters in order to chase the interest rate higher.

https://forum.lendacademy.com/index.php?topic=3551.msg38395#msg88888888Quote"> from: lascott on November 03, 2016, 05:58:50 PM

Guys, I will admit that I have not read every post in this thread, but I am shocked to be reading that people are losing money on monthly basis.

What kind of loans are you buying that you are experiencing default/charge off rates that are greater than 10% (hard to believe anyone has average interest rate lower than 10%). 

Seems to me that you are being greedy and focusing most of your investment into riskier loans.  I am also thinking that those that are losing money are not investing an appropriate amount of $ to achieve the correct diversification.

The most important thing about investing in LC is diversification.  But not just diversification in the number of loans you hold, but also diversification over time. 

If you have $5,000, to invest you can not invest that in a 1-2 week period (even at $25 per loan) and expect solid returns.  You have to spread your investment over a longer period of time and be really picky about the loans you purchase.  Especially if you can not hold/buy a significant amount of loans.  LC and several other sites will talk about a magic number of loans to hold to achieve diversification, to me that number is a min. of 1,000 $25 loans. 

Last month was my best month ever regarding $ return.  Yes, my net return has decreased from 10.xx% to 8.28% over the last 2-3 years, but it has been a very slow decline and cannot imagine losing money.  I have an average interest rate of  11.49% and per LC have a Combined Return NAR of 8.28%.  I know of 21 LC accounts with positive returns, lowest Combined Return NAR is 7.95%.

Maybe I am missing the bigger picture of this thread, as I have not read every post, but seems like those who are losing money are making big mistakes in how they are deploying their funds.  I am not saying LC has not done things to hurt their investors, but I do not think anything they have done would cause investors to be losing money.

I do not say any of this to say I am better than anyone else or anything like that, I am just shocked people are losing money.  Attached is the breakdown by grade of my portfolio.

All,

I am wanting to back test my traded notes.  Meaning, I want to see if I made a good decision selling the notes I have sold on FolioFN.  I have downloaded the traded notes csv file and trimmed it down to a more manageable file size.  I have sold approx 3,700 notes (some are duplicates, for a while I would buy 4 or 8 $25 loans as opposed to 1 $100 or $200 loan).  I have tried downloading the info I need to do a vlookup from LC's website, but my Macbook can not handle it and excel crashes.  I also do not want to click on 3,700 url addresses to look them up individually. 

Basically I want to know if a note that I sold charged off or went into default and when. 

If someone has the ability/wants to do this for me, I can email you my traded notes csv file.  I am sure we can come up with a way for me to say thank you for your time.

Or if anyone knows of an easier way of doing this I would appreciate the help.

Thanks

I know there are others posting in this topic that have been investing for years, so I am not the only one who has noticed the below.  I started investing on LC in Dec 2009. 

Everyone is correct and LC is finally starting to admit that defaults/charge offs are increasing across all grades.  While this is not a good thing, back in the "good ole days" say 2010-2011 (maybe even thru 2012), it was not as big a deal as it is today, because the interest rates were so much higher than they are today. 

2010 - A1 - 6.03%
2016 - A1 - 5.32% (and that is the new updated rate)  That is a 12% decrease and again that is the updated 5.32%.

2011 - B1 - 9.91%
2016 - B1 - 8.24% (again this is the new updated rate) 17% decrease

I am not saying those were the rates for the entire year, but just examples.  I used to make my bread and butter returns in the A and B grade loans because defaults were so low and interest rates were decent.  I am also not saying other grades have not seen increases, but as someone who preferred high quality loans, I have seen my net return decrease from low 10% to low 8%.

I have also noticed the "quality" of borrower who received these lower interest rates over the years has deteriorated.  So overall LC has decreased interest rates and lowered the quality of borrower who gets the lower rate loans.  As investors we have been forced to take more risk for less return. 



 

https://forum.lendacademy.com/index.php?topic=3894.msg35548#msg88888888Quote"> from: Boatguy on June 02, 2016, 02:09:20 PM

I think that most people have experienced lower returns over the last quarter, but I do not think it is an issue just with the last quarter.

I think the biggest reason for the decreasing returns is a result of LC lowering interest rates at least 3-4 times in the last 18 months.  It is really hard to maintain our current risk appetite, not modify our filters and expect to maintain our old returns.  We take the same risk for a lower average interest rate, it is simple math.

I also think supply has severely decreased over the last 12-18 months (at least for my filters).  2-3 years ago I was able to reinvest payments + $20k of new cash a month at $25 per loan without an issue.  I have been forced to expand my filter criteria as well as my per loan investment.  I now take more risk at a lower interest rate than I would have received had I taken that level of risk in the past.  What I am finding is I am investing an increasing % of funds at a lower interest rate to simply get funds invested. 

I am not saying cash drag is a result of decreased returns, I am simply not adding the level of new funds to the account that I would have in the past.  As we all know, the returns are higher on "younger" funds, so the less "younger" funds and the increase in "aged" funds results in lower returns as well.

I am sure some will disagree, but I have a different strategy/objective than most.  I am not worried about investing $10-20k and making 15%.  My strategy needs to be able to invest $30k+ a month and maintain a consistent return.  My personal IRA account has under $30k in it and makes 11.3%, but this account only gets $5.5k a year of new funds and I do not care if it takes 2 months to invest that $5.5k.  So waiting for the right higher interest rate loans is easy. Dealing with accounts that have over $25k of monthly payments is a different beast.

I could go on forever, but will leave it at that.  I think P2P provides great returns compared to all other fixed income style investments.  Yes returns are going down, but I do believe just in the last 2 weeks or so, LC actually increased rates on some loans. 

https://forum.lendacademy.com/index.php?topic=3460.msg30761#msg88888888Quote"> from: 99greenballoons on October 15, 2015, 10:10:49 AM

https://forum.lendacademy.com/index.php?topic=3026.msg27386#msg88888888Quote"> from: lascott on February 06, 2015, 11:13:32 AM

I just noticed at the 4pm cst drop that rates have been lowered again.  I believe that makes 3 times in a 12 month period (maybe 18 months).

Making hard to maintain returns when reinvestment is at an average lower rate.

Just a general thought.