Competing with institutional lenders for notes.

[TonySaunders]

I'm almost always online while new loans are being posted. Lately, the amount of time it takes for a "good" loan to be fully funded is on the order of 30 seconds.

I don't know that institutional lenders are hogging the good notes by using automated methods to buy them up as quickly as possible... but I totally know. It's driving me crazy. I need more than 3 seconds per loan to decide if I want in, and I'm tired of having to settle for the left-overs. The 70% rule for institutional lenders has been completely useless in practice.

This race-for-the-notes is completely unacceptable. I know there isn't enough for everyone to have everything they want, but I want my share. I shouldn't have to frantically glance-click-buy my notes.

[Zach]

https://forum.lendacademy.com/index.php?topic=1321.msg9222#msg88888888Quote"> from: TonySaunders on July 15, 2013, 01:29:59 PM

[LonghornSF]

https://forum.lendacademy.com/index.php?topic=1321.msg9222#msg88888888Quote"> from: TonySaunders on July 15, 2013, 01:29:59 PM

[investforfreedom]

I talked about the practice of front-running that is increasingly brazen in this thread on Prosper:
http://www.lendacademy.com/forum/index.php?topic=1271.0" class="bbc_link" target="_blank">http://www.lendacademy.com/forum/index.php?topic=1271.0

This is true for LC as well.  I added $25 to a loan that just came out on the LC platform today.  But when I clicked "Continue" about 10 seconds later, it just vanished.  I am reposting that particular post:

https://forum.lendacademy.com/index.php?topic=1271.msg9149#msg9149">Quote"> from: investforfreedom on July 13, 2013, 01:03:18 AM

[storm]

I'm cheap, so I'm waiting ever so patiently for LC to come out with its own auto-invest tool.  I can usually find a couple or more loans that meet my criteria each day, and then I usually invest $50 each as I don't need to diversify my account much more.

I do think LC really needs to think twice how they are treating small individual investors.  If it wasn't for us risking a few hard-earned dollars from our bank account and trying things out for the past 6 years, LC would not be where it is today. 

From an IT perspective, it is less cumbersome to have just a few investors contribute to each loan.  On the other hand, this feeding frenzy they've created 4 times a day is not so good on their servers especially as demand increases and third-party robots keep looking for loans.  I think we are seeing the effects of that with slower payment processing and loan status updates.  My recommendation is to restrict the amount that can be invested per user to, say, $100 for the first 24 hours a loan is posted, and then the institutional investors can swoop in after that.

[New Jersey Guy]

"My recommendation is to restrict the amount that can be invested per user to, say, $100 for the first 24 hours a loan is posted, and then the institutional investors can swoop in after that."

I can't buy off the LC Platform, but that suggestion appears to be fair for everybody.  Like Longhorn said, it would still enable LC to "Boost their bottom line while making <all> investors happy."

But what would happen if small investors bought out all the good loans within the first 24 hours, and there was nothing left for the institutional investors?  Is that possible?

[rev]

LC and Prosper are stepping away from p2p and becoming b2c. Eventually someone will realize that and start the "first p2p lending site since LC and Prosper left". At least the hard part, proving the concept and establishing regulatory requirements, is behind. That means lower ramp up costs and less risk, which translates into lower fees, which in turn will attract more borrowers. LC and Prosper will be more like the banks, while the new site will be more like LC and Prosper were in the past.
Then the whole cycle starts over, unless they're smart enough to stick with a plan this time and implement caps or whatever else is needed to stand ground and remain p2p.

[IrishMoss]

I haven't even started yet, and I'm already feeling like I missed the boat...  https://forum.lendacademy.com/Smileys/default/cry.gif" alt=":'(" title="Cry" class="smiley" />

[TravelingPennies]

It is quite clear that you can't get p2p off the ground without institutional backing.  The question has to do with how much these platforms would allow big investors and financial institutions to dominate.  As you said, LC and Prosper are going the way of b2c.  I'm not even sure if any new site that tries to operate as LC and Prosper did in the past would be sustainable.  I'd hazard a guess: If as a retail investor you don't like the way LC is operating now, you'd hate it even more when it goes into IPO next year.

https://forum.lendacademy.com/index.php?topic=1321.msg9314#msg88888888Quote"> from: rev on July 16, 2013, 03:47:00 PM

[rawraw]

If you like the returns from selecting the "Cream of the crop", then pony up and pay for a service that lets you compete.  There are plenty of loans that don't get sucked up immediately with awful returns of what, 7%?

I understand it sucks, but really I don't understand why people think making money should be painless or complain about it.  If you have to log on at a certain time each day to get a 12% return, that surely is a #firstworldproblem.   And probably a #uppermiddleclassproblem as well.   Warren Buffet spends his entire day trying to get those kinds of returns and all I have to do is set an alarm clock?  Man. . . I'm the luckiest 24 year old in the world.

I don't mean to sound like a contrarian, but I really don't get why people complain so much about it.  I'd prefer the platform survive and I know my account alone isn't going to pay LC's bills.

It is what it is.  Learn to compete or just complain yourself into a S&P Index fund lol

[AnilG]

https://forum.lendacademy.com/index.php?topic=1321.msg9329#msg88888888Quote"> from: rawraw on July 16, 2013, 09:26:14 PM

[TravelingPennies]

LC has more than enough institutional backing to survive going forward.  Is it necessary to keep kissing up to these big guys?  Prosper will soon too.

Pony up and pay for a service?  Did you carefully read my reposted message?  You might be able to compete for now by signing up for NSR, but the big boys are the ones who will develop the fastest and the most efficient APIs, which you and I have no access to or can't afford.  All they need to do is to beat NSR by 1 second or fraction of a second to soak up the best of loans, especially when they are allowed to take 50 or 75% of the loans.  If you are talking about frontrunning, big boys will always win.  Ask Goldman Sachs if you are not sure.

https://forum.lendacademy.com/index.php?topic=1321.msg9329#msg88888888Quote"> from: rawraw on July 16, 2013, 09:26:14 PM

[Fred]

https://forum.lendacademy.com/index.php?topic=1321.msg9329#msg88888888Quote"> from: rawraw on July 16, 2013, 09:26:14 PM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=1321.msg9332#msg88888888Quote"> from: investforfreedom on July 16, 2013, 09:58:16 PM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=1321.msg9332#msg88888888Quote"> from: investforfreedom on July 16, 2013, 09:58:16 PM