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Author Topic: Drastic change in LC projected returns

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Drastic change in LC projected returns
OP: April 22, 2020, 11:00:00 PM

I've noticed many changes at LC in the last six weeks: 

1. a dramatic drop in the number of notes that fit my criteria (and probably in the number available in general)

2. LC continues to list as "Current" many notes I own although the borrowers are not actually paying ("on Hardship Plan.")
  --As far as I can tell there is no way to sort out which notes are truly current and which are on Hardship Plan and so not really current. Is there such a way?
  --Also, the fact that many notes are no longer paying off does not seem to have been factored into what LC reports as my Adjusted Net Annualized Returns, which has continued to creep up over the last two months (from 5.81% to 5.87%). I wonder how much I should now trust this estimate.

3. A drastic drop in the projected return on notes for sale.
   --Two months ago a note offered at 13.33% would have had a Projected Return after Expeteted Chargeoff Rate and Estimated Fees of something like 4.9%, as I recall.
   --Today such a note has a much higher Expected Chargeoff Rate (9.43%) and Estimated Fees of 1.53% (also higher than before, I believe) resulting in a Projected Return of 1.96%. Similarly, a note offered at 17.30% that typically would have had a Projected Return in the 6-8% range now has a Projected Return of 2.29%.

I understand that many things have changed in the current situation, but some of this seems mystifying. I would appreciate any information that would help put these changes in context.
Thanks, Jim
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