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Messages - rj2

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Investors - LC / Collections when the Notes platform is discontinued
« on: October 22, 2020, 11:00:00 PM »
The difference, of course, is that LC will keep all this money and not compensate us in any way once our accounts are closed. It's not a lot of money, but looking at my account it looks like it adds up to a couple hundred bucks a year.

It's a cash grab by LC verging on theft. It may be only a little bit of money for each of us, but added together I'm sure it's significant.
Investors - LC /
« on: August 26, 2020, 11:00:00 PM »

Since they announced it was closing I sold 705 notes, which was 80% of my holdings. All that's left now are notes maturing in 6 months or less, plus a handful of "hardship" loans I was unable to sell. In six months I'll transfer the remaining cash out of my account, "gift" any remaining hardship loans to LC, and be gone.
Investors - LC / Folio ending August 28th.
« on: August 08, 2020, 11:00:00 PM »
I've been liquidating as well, had sold everything with >12m left on it and was working on 9m to 11m. Lots of those are still "locked" and can't be sold so I guess I'm stuck dealing with LC for at least a year.

Is anyone doing anything other than liquidating at this point?
Investors - LC / Hardship loans an even bigger PITA than I thought?
« on: June 06, 2020, 11:00:00 PM »
I can't prove this yet, I need to watch what happens, and maybe others can watch and confirm or deny it.

I have listed my hardship loans for sale on folio and usually no-one buys them, but recently, some of them sold. Good news right?

Not so fast: It appears that the borrower made a payment, the loan reverted to current non-hardship status, AND folio did not remove my offer "payment pending", just kept it up. Of course since there is a recent payment my heavily discounted price is quite attractive! I saw 4-5 loans sell this way before I brought a halt to it.

I don't know if these are out of band payments? Like, the borrower got back on their feet and started paying off earlier than they needed to, or if they were scheduled hardship payments. But when I look at the loan history now I see "deferred, deferred, payment completed" with no indication that it was in hardship status, and the next payment is "scheduled".

I also believe that my offer of sale was not visible to anyone UNTIL that payment was processed. Originally I listed my hardship loans for sale at a steep discount. No one buys them. I believe this is because LC does not actually display them to anyone. I even tried discounting a couple of low value hardship loans by huge amounts (70%, 80%, 90%) just to see if anyone would buy them--no one does. So I think although I see them for sale in folio no one else does.

It's *possible* that I made a mistake, that the loans that sold had reverted to normal status, folio cancelled the offer, but I didn't notice, and then somehow I resubmitted my own deeply discounted offer without checking. But I don't think I did that. I will be watching more carefully going forward to see if I can prove it.

For now I am listing them at a price I am willing to sell IF the borrower makes a payment, and I am assuming they won't sell until the borrower does that.

Investors - LC / Slow exit strategy
« on: May 18, 2020, 11:00:00 PM »
About a year ago I decided to exit LC, and to take two years to do it. The idea was to end up with cash in my account that I could transfer out in one shot without having to sell at a steep discount. My LC account is an IRA so I only wanted to do the transfer once and not repeatedly.

So I stopped buying new notes, and only bought on folio, and specifically, I only bought notes with a maturity date on or before my exit date.

On the first day that meant I only bought notes with 24 months or less left. I had other filters, mainly a high enough credit score and a credit score that had gone up, and a few other things. But the main filter was 24 or fewer remaining payments.

And in the second month, that became 23. Then 22, 21, etc.

Simultaneously I went though and identified every loan with more than 24 payments left and moved them to a new portfolio called "over 24”. I put them all up for sale continuously, but not at a discount. At a small premium. With 24 months to sell I figured I didn't need to take a loss, and every month I sold a few, reinvesting the proceeds in notes maturing ahead of my exit date.

Sometimes cash would pile up in my account for a few weeks and then I guess someone would dump a bunch of notes and I'd find enough to buy to stay fully invested. The rate at which I had to reinvest also accelerated as the shorter and shorter duration meant payments became a larger share of my capital.

I realized at some point I would not find enough to buy as the duration became very low and the incoming payments high--I was ok with that, it's an exit strategy. I figured that would happen at maybe 6 to 8 months left, where I'd just lose the ability to reinvest for lack of available inventory fitting my timeline.

I was at the point of buying only notes with 13 or fewer remaining payments when COVID-19 brought a halt to my strategy. There's nothing much available for sale that meets my criteria now and way too much risk. I got burned buying a few "hardship" loans without realizing it and so I'm done with buying now.

I have a handful of notes left over my target date, that I'm now having to discount slightly to sell, and my goal is to sell them over the next year, but that's less than 20 notes out of a portfolio with ordinary hundreds of notes, so I'm almost there.

So now I'm just going to let it run out and accept that I'm not going to be able to reinvest for the final 12 months, but on the flip side, I'm getting more than 1/12th of my investment out of notes into cash every month now just by collecting payments. I'm not reinvesting it, I'll live with that--I see it as rapidly reducing my risk.

Although, I've got 10% or so of my loans in "hardship" status, so I'm expecting to take a bath on that, and likely more will sour.
Investors - LC / What is the lifecycle of a "hardship" loan?
« on: May 11, 2020, 11:00:00 PM »
So what's the lifecycle of these hardship loans?

They are listed as current now, but not making payments. Presumably at some point they're supposed to start paying--can they just keep on deferring? For how long?

And once they start finally being "late", do they go through the usual lifecycle for a late loan, starting with 15-30 days, and then 120 days? Or does the lateness "backdate" to the original deferred payment once they are late?

And so how long from today, where it's marked hardship, to when LC is going to mark one of these loans as charged off?
Investors - LC / hardship fields in spreadsheet wrong
« on: May 07, 2020, 11:00:00 PM »
What really ticked me off is that in folio when you search for "never late" notes, these hardship notes are included in the results, even though they haven't made payments in a few months. They only way to identify them is to click through to the loan and see the "hardship" notation, there's no way I can see of filtering them out.

I complained to lending club and they insist they do not think it's misleading to list them as "never late".

I only discovered this after seeing discussion here, then went back and realized I had bought a bunch of "hardship" loans in folio without realizing it--and I paid full price for them, as though they were really never late.
Investors - LC / Total investment minus total payments: -$284.01
« on: March 15, 2020, 11:00:00 PM »
I know, I know it's the wrong way to look at a portfolio. But still. Today I went to LC web interface and moved all my completed notes into one portfolio, containing all and only notes that are either charged off or fully paid. Here's what it looked like:

Notes: 1153
Investment: $26928.83
Payments to Date: $26644.82

Principal: $22547.41
Interest: $4093.81
Late Fees Received: $3.60
Charged Off: $4439.39

WAIR: 15.04%
Composition: 1% A, 11% B, 26% C, 20% D, 29% E, 11% F, 3% G

NOW... Lending Club says that the ANAR on my account is 4.69%, and maybe it is, but I'd have expected better from a portfolio that has been running since 2015. Like actually coming out ahead on the notes that actually run to completion one way or the other.

Thankfully after 2017 I stopped adding money to this account (which is an IRA).
Investors - LC / Available Cash -$1.49
« on: March 07, 2019, 12:00:00 AM »
Ok, it's only $1.49, but how is it that the available cash in my LC account can ever be negative?

I looked through the recent activity and didn't see anything unusual. I bought some notes on the secondary market, as well as some directly through LC's API, got paid some interest, etc.

Anyone else seen this? I guess the next interest payment I receive will wipe it out but I'm kind of curious how it can happen.
Investors - LC / Possible to see how many payments remaining?
« on: February 04, 2019, 12:00:00 AM »
I was looking around the LC site and also downloaded the spreadsheets on the "notes" page, trying to see if I could see how many payments remain on my notes. I found lots of data, but didn't anywhere see the number of remaining payments. I can see the term, outstanding balance, amount of payment, date of first payment, but not how many are left.

What I'd like to do: Calculate the duration of my portfolio. If I can't do that, I'd settle for calculating the average time to maturity of my notes. But if I can calculate the weighted average, I could probably do it properly and calculate the Macaulay duration.

For example, if I had only two loans with the same payment and one had 10 payments left and the other 20 then the average remaining is 15.

Why: I am trying to reduce the risk in my portfolio in anticipation of a potential economic downturn. I am increasingly buying lower interest loans, and I have stopped buying 60 month loans. I'm even considering selling off the higher interest, longer duration loans. Anyway, I was hoping to track this number to measure the difference I'm making as I do this. Also, if I do decide to exit LC at some point it strikes me that it's easier to get out of a short-duration porftolio than a longer duration one, as in, fewer notes need to be sold and more can simply be waited-out.

As an aside: duration is such a fundamental, common concept in fixed income that I'm surprised LC isn't just showing it to me everywhere. Weird the numbers they decide to give me.
Investors - LC / Seven month review of my Lending Club account
« on: April 07, 2018, 11:00:00 PM »
I sort of do that, but didn't in the beginning.

I have two active portfolios, one called "auto" and one called "folio". New notes purchased by the auto invest filter I have go into the "auto" portfolio while stuff I buy on folio goes in that one.

Periodically I remembered these something like "Auto Dec17" and start new ones.

It's not sorting them by some exact quarter because basically I forget to do it like clockwork. Also my folio notes can be of any vintage and they go in the current folio portfolio regardless.

I do change my filters for auto invest over time and there is some eyeballing when I buy from folio. So nothing is scientific.

But it helps me understand whether the effort of buying from folio is worth it by seeing how much better or worse I am over time than the auto invest rule.

Though in practice In willing to buy seasoned notes with significantly lower credit scores than I ever allow the auto rule to buy. WAIR of my folio notes if at least 5% higher than the auto portfolio.
Investors - LC / Are things improving?
« on: March 23, 2018, 11:00:00 PM »
I signed up for LC in June 2015 which I think was really not a great time to sign up. As you all know, LC had some serious issues with loan quality in 2015 and 2016. While LC initially presented my account as having a 10% return, what I actually experienced over the following two years was less than a 4% return. Mostly due to excessive charge-offs. For context I was mostly invested in C/D/E with a few F/G loans and a WAIR of around 18% or so.

Recently though I've seen my returns ticking up. My overall return has risen from a low of 4% to 5.5% and seems to be climbing. I'd guess if current trends continue it's going to get to 6.5% or so, maybe even 7%, which while not the 10% I originally expected, is also not the 4% I saw over the last couple of years.

On my side, two things have changed. I've become more conservative in my automated investing, investing only in B/C/D. I've also started making use of Folio, where I target seasoned loans that have a rising credit score and never late. My folio buying has a WAIR of 19% but my automated buying of new loans has a WAIR of 12%. Overall that's giving me a WAIR on newly invested loans of around 17% vs a historically higher WAIR in 2015/2016, so I've become slightly more conservative.

However, my gut says that my increased return is not because I've become slightly more conservative, or that I'm suddenly better at picking notes. My guess is that the underlying return on the platform has just generally improved by a couple of percentages and that rising tide is floating my boat.

I am curious to see what other's have experienced.
Investors - LC / Loan status migration / adjustment numbers - weird
« on: December 09, 2017, 12:00:00 AM »

Lending club has an "adjustment for past due notes" based on what it claims are "loan status migration over 9 months". You can flip it on and off, or customize it. I have always customized it to be more aggressive than what LC sets for 31-120 day lates and defaults.

Well I was looking today to see if I should adjust those settings again and I noticed that sometime since I last looked (over a year at least) Lending Club has updated it in a weird way.

Here are their current adjustments:

0% - Current
31% - In Grace
62% - 16-30 late
88% - 31-120 late
72% - default

Yes that's right, they are listing DEFAULT as having a lower 9 month loss estimate than 31-120 days late.

How is that even possible?

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