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Author Topic: Desperate Borrowers.

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Desperate Borrowers.
OP: May 11, 2013, 11:00:00 PM
I know we've talked about desperate borrowers before, and I normally wouldn't single one out.  But this loan had disaster written on it in every column, yet 489 investors gave him $20K.

I wouldn't have flipped him $25 back in 7/12 when he was in funding.  And he's still not worth $9.75 that a Folio seller is looking for today.

Look at the loan, but read the description!
One of the biggest turnoffs I found was he planned on using part of his money to pay "...a pay day installment loan for $4300 at 122% APR"

https://www.lendingclub.com/account/loanPerf.action?loan_id=1430726&order_id=3083078&note_id=12431182

Oh! And "God Bless"!
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b
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Desperate Borrowers.
#1: May 11, 2013, 11:00:00 PM
The negatives I see are a couple inquiries, high utilization, and a giant literacy problem. That's hardly every column, but I doubt I would have bitten if I saw those replies.

I once tested for religious inference on charge off. Yeah, let's not go there.
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L
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Desperate Borrowers.
#3: May 12, 2013, 11:00:00 PM
Oh, good grief, that's my note!  Not positive, but I think those words weren't there when I signed up for it!  I didn't have IntRad then, so I went for the 6 yr job at $5,667 verified  and the 8.33 DTI.  I'm so sorry!

If s/he pulls off the payment plan, great.  Meanwhile, do you think I should keep reducing until I get to a better fire sale price or let it ride??
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P
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Desperate Borrowers.
#4: May 12, 2013, 11:00:00 PM
The borrower's last QA talks about 3 car loans and a pay day loan that alone is costing him $800 a month.  But his revolving credit balance was only showing $8392 owed.  I imagine that most of the lenders on this loan probably had invested before they saw his numerous pleadings posted later.  But looking upfront, his LC loan payment of $768 would be more than 10% of his monthly gross income of $5667.  That would be one red flag right there.  Also he only has 5 open credit lines- another risk factor. Peter said he filters out those loans with less than 8 open credit lines.  Also Inquiries=2 and revolving line utilization = 96.5%, other risky factors.  It is really sad to read the borrower's desperation.  For those of you without access to Lending Club, here is what we are talking about below.

Borrower added on 07/18/12 > i need the money despertetly to re establish financial security for my family. With this loan i could pay off All high intrest debt and cautch up on bills please grant this loan for the love god my family needs it to sastain the future. this is my last resort. PLEASE HELP!!!!

Borrower added on 07/24/12 > any and all help is greatley aprieceiatd Im trying so hard to get on the right trak this is my very last option they say if I get at least 60% funded I automaticaly get the loan so please help all u can I've never had to ask strangers for help before bot I don't know what else to do at this point

Borrower added on 07/26/12 > things are graully geting better and I have sold a few thing I am speaking with a financial advisor so I can insure a prosperous future and build my bussiness but I first need to rebuild my personal finance so again thank you and I still 12,125 to get the loan so PLEASE HELP . AND GOD BLESS

Borrower added on 07/26/12 > Thank u so much all of u I've spent my life helping others . It is soo nice to see that people are here to help in my time of need. if i don't reach 60% it's all for not this sight has given me hope. Please help

Borrower added on 07/26/12 > almost there lees then 4000 to make 60% less then 12000 to make the requested amount. I promise this money will be put to good use THANK YOU

Borrower added on 07/28/12 > Tell your story. What is your loan for?

Borrower added on 07/28/12 > almost there thanks so much!!!!!!!!

Borrower added on 07/28/12 > I am so blessed to have found this sight thank you so much to ALL of the investers I need 4,850 to meet the requested amount. Please help .

Borrower added on 07/29/12 > Thans soo much only 2,550 to go Please help
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T
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Desperate Borrowers.
#5: May 12, 2013, 11:00:00 PM
It's clear s/he can't afford the $.96/mo. payment.  And now it's evident s/he can't even afford the reduced $.42 payment as May's payment failed. 

On a positive note, the FICO score remains high despite LC putting that loan 31-90 days late.  But that's the only thing it has going for it.

I have several Payment Plan notes, and I've had good luck with them.  However, the missed payment and desperate cry for help at issue just indicate bigger problems.  I guess it wouldn't hurt too much to hold onto it til next payment, but you'll be taking a chance.  If payment fails in June, that note could lose it's "Payment Plan" status and end up becoming just an everyday variety bad note just like about 4500 others on LC, none worth more than $1 to $3. 

Fortunately, the partial payment in April will keep the note from going into default despite it showing a last payment of 1/22/13.  (January-late notes with no further payments have already defaulted).  Hopefully, nobody else will read that darn description!

Personally, if that note was in my batch of distressed notes, I'd want it gone.  I'd dump it for whatever I could, take the loss, and move on.  But that's just me, and I'm used to it!
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Desperate Borrowers.
#6: May 12, 2013, 11:00:00 PM
Those are all good points.  Thank you for the time and effort of writing the above.  I was thinking about the advantage of a future "current" status, not the disadvantage of losing the "payment plan" status.  Thanks for the re-focus on the goal of keeping my lates gone.  The loss or profit goal is secondary to that, which probably makes me sound like an idiot, but so be it. 

This note and two very similar (except for the horrific language!) that are also on payment plans are the last of my current batch of 31+ late notes.  $1-$3 makes sense to me as opposed to the wait-and-hope method because I just don't want any more defaults that go to charge offs staring me in the face.  I also don't want to keep getting bothered by looking up collection log alerts for the same notes over and over.  Think I'll wait a day and then start the march down from $9.75!

Once these and three others that are 16+ days late are gone, I plan to move up to trying to keep tabs on the graces.  I pretty much have too many notes, but when the money keeps coming back to me I have to stay on the treadmill!  Not to mention getting added cash invested too.  So far I've managed to keep the Charged Off list to 19 notes for about a year, and the Default box empty. 

Not being able to wait for borrowers to add convincing, well written words to a loan request before it closes is a disadvantage.  However, even when that was not the case, I sometimes would buy a note too early.  So now, as with this troubled note, I only see the comments and answers to questions later, when it is in trouble.

It's really nice to have help thinking things through on this forum.  Thanks again!


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Desperate Borrowers.
#7: May 12, 2013, 11:00:00 PM
"Think I'll wait a day and then start the march down from $9.75!"

What's the value of a distressed note?
It's only worth what somebody is willing to pay for it!

What I've done in this situation is the Nickle/Dime-Down.  Each day, I would reprice the really bad notes a nickle or dime until somebody would eventually buy them. 

One positive aspect on your note is that the partial payments bought you more time.  You pretty much still have 60-70 days before LC will put it into default. 
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L
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Desperate Borrowers.
#9: May 15, 2013, 11:00:00 PM
I'm pretty lenient about spelling mistakes but holy cow, the borrower's egregious spelling errors would turn me off. I mean can someone like that really hold a job, especially at a police department? The borrower also mentions "building his business," which seems inconsistent with the rest of his story. Admittedly the borrower's numbers don't look too bad, although I almost never lend to people that have overdrawn their credit cards.

Also, I had a good laugh when I saw that his FICO trend was UP. The more time I spend with LC, the less I trust FICO scores.
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Desperate Borrowers.
#11: May 15, 2013, 11:00:00 PM
The magic price was $2.95.  I'm down about $15.84, so the joke will be on me if collections isn't the next step.  At least I won't have to see that original application again! 

I wish each loan application required at least one sentence to go with it!  If I hadn't invested so fast (before the words arrived), I never, never, never ever would have.  Literacy is a big deal to me.  Also, the 2:18 AM submission time is a possible red flag in my opinion.  Didn't see that at the time.

I pay more attention to responsibility indicators than FICO.  However, a sharp drop in a troubled note seems important.

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Desperate Borrowers.
#12: July 28, 2013, 11:00:00 PM
"it's been over seven months since he made a payment both in full and on time, and his FICO just kept going up and up "

https://www.lendingclub.com/account/loanPerf.action?loan_id=1430726&order_id=7561135&note_id=12501936#


"The magic price was $2.95.  I'm down about $15.84, so the joke will be on me if collections isn't the next step. "


Lovinglifestyle......2-1/2 months later.

Check this note out now!  I'm going to be curious whether or not the Aug. 1 payment actually goes through.

Hope this makes you feel better about taking the loss!
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Desperate Borrowers.
#13: July 28, 2013, 11:00:00 PM
Thanks for pointing out the follow-up!  Kudos to the person for limping along with partial payments and not declaring BK (yet).  I notice the credit score is on an upward creep now!

I'm glad this is one less problem child note about which I have to keep making daily decisions! Overall, I'm happy that it has a new home and I still wish it well.

Yes, the Aug. 1st pay or no-pay will be interesting.  Thanks again for the post and link!
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Desperate Borrowers.
#14: August 03, 2013, 11:00:00 PM
I very much remember seeing this note and passing on it very quickly.  The reason I remember it so well is because I lived up in that area of Lake Superior for 3 years, 55 miles from Silver Bay.  It is a very hard, harsh area to live in.  I always want to help those who I can identify with, but the moment I saw desperate in his verbiage, not to mention the follow up comments that were even more desperate than the use of the word desperate itself (hope that makes sense) turned me away in seconds flat.  I am Christian, and I do want to help those in need, but Christians are no better at managing their money than non Christians.  Sorry if you're Christian and disagree with me, but that is the truth.  I suppose I could have funded this person by gifting him money (no expectation of receiving it back), but that's not why we come here.  There are places to go to for charitable activity, many of which are tax deductible.  So the only play religion has here then, in my opinion, is that when this person defaults he/she will probably have a little more guilt than a non Christian would - a lot of good that does a lender.         
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