[Fred93]

I sent this to LC today...

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[jrl]

Just so you know, I noticed the issue (but not in the spreadsheet) in early April, so it's been like this for over a month now:

https://forum.lendacademy.com/index.php/topic,21636.msg61755.html#msg61755

Initially, they did show up as IGP, then they got converted to "Deferred" (I guess) as the borrowers called in and asked for it.

Since last month I can confirm that my month over month earnings from the account that I'm winding down have went from around 6-8% yearly to negative 2%. Though because the notes are listed as "current" my ANAR has gone up by around 0.2 percentage points, and my implied APR (based on LC's adjustment) has gone up 3 percentage points, from 8% APR to 11%.

My other account has shown even "better" numbers, due to purely Folio reinvestment since I lost primary market access in September. (It's still turning a profit.)

In both accounts I'm seeing notes get converted from IGP and late to current ("deferred") just about every day. Though some of these accounts have been making payments before the end of the deferral term.

My guess is that they're attempting to hide this from retail. My expectation is around 3-6 months of near break-even (for me) returns, then a higher than normal amount of late notes converting into charge-offs around year-end before a return to normal returns (for these older notes) in the new year. I would expect just like in other hard times that the new notes being issued in the next few months will have much better returns than we've seen in the past few years.

[TravelingPennies]

from: jrl on May 08, 2020, 08:47:14 PM

[rj2]

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.

[TravelingPennies]

I had the same experience.  I realized only recently that my software had been buying loans indicated by LC as "never late" loans when in fact these loans had not made payments for a few months, which is completely bogus. 

The shame is on LC for this.  This is just plain misleading.

[Peter]

from: rj2 on May 08, 2020, 10:49:47 PM

[TravelingPennies]

It's an email exchange.

My first email raises the issue and requests that they reverse folio sales for "hardship" loans on the grounds that "never late" is misleading. They reply suggesting I sell them on to other unsuspecting people:

Quote"> from: LC

[JDII]

Thank you for your efforts Fred.

[TravelingPennies]

Got an answer from LC today...
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[jheizer]

It has been annoying from the selling side too.  I got all my notes sold pretty fast when this all started except 10.  You all keep buying them, but then they cancel with "Canceled: This loan cannot be sold on the secondary market."  Most appear good and were being bought at a slight markup. 

[TravelingPennies]

Did the spreadsheet error ever get corrected such that one can eyeball the data and perhaps see which geographic areas are undergoing more hardship than others / which seem to be recovering more quickly?  Thanks.

[TravelingPennies]

Oh yea.  Got fixed within a week or so of my complaint.  All good now.

[TravelingPennies]

Could I sweet talk you into perhaps sharing that data, by state?  ("Hey man, lemme see your portfolio - please?")

I remember % hardship by state + loan state transition as a good indicator of "how's the country doing?" in 2008.

[TravelingPennies]

Same fields are present in the files you can download from LC containing all loans. 

Only downside is that those files update only once a month, and new loans don't appear until we're 2 weeks into the next quarter.  But for existing loans as of June 1st, the info is all there in the LC files.

I haven't tried to do any of the sort of analysis you suggest.  Such results would be interesting.  One caveat tho, I don't quite know what it means when someone is on a hardship plan.  It could mean he's in hardship.  It could also mean he's just tricky enough and unethical enough to claim hardship to delay his payment, because the covid19 situation gives him cover.  I'm sure there is a mix, and much in between, but we have no way to evaluate what it might be. 

Another way of saying this is even if we suppose everyone is perfectly ethical, different people have a different threshold for asking for things like a hardship plan.  The threshold could be quite different in different parts of the country.

My cousin is a physician who specializes in rehab after injury.  She swears that postal workers have a lower threshold of pain than the general population.  I doubt any scientific study has been done. 

Would you interpret the distribution by state as a measure of hardship, willingness to ask for help, or ethics, or what?

[TravelingPennies]

from: Fred93 on June 14, 2020, 05:43:27 PM