Note gone delinquent

[thezfunk]

This note seemed like a sure thing to my filter.  Even looking it over, I don't see anything that might stick out.  One payment, then gone.

https://www.prosper.com/invest/listing.aspx?listingID=1648579" class="bbc_link" target="_blank">https://www.prosper.com/invest/listing.aspx?listingID=1648579

[neals384]

Gosh, that listing looks good.  Somehow I missed out on it.

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=2862.msg25745#msg88888888Quote"> from: neals384 on December 10, 2014, 01:34:11 PM

[Kombinator]

Yep, does look good, although perhaps some secondary screens using more data might have kicked it out.  Sometimes shit just happens:)

[Galli]

One thing i've been looking at lately is note size versus current revolving debt versus stated income.  Even though the borrower states they are consolidating debt, there's no way to gauge whether or not this borrower will actually use the new debt to pay off the higher interest rated debt.

If he/she uses the new debt for something else, suddenly they have a significant payment to handle and their default risk increases.  This in itself is a risk that can't be quantified with the data given.

I wish there was a clause that forced the borrower to pay off existing debt with their new debt.  Otherwise, in this case, the borrower now has 22k in debt to service everything month, on a 50-75k salary, which is difficult

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=2862.msg26095#msg88888888Quote"> from: Galli on December 12, 2014, 09:04:42 AM

[Fred93]

https://forum.lendacademy.com/index.php?topic=2862.msg26095#msg88888888Quote"> from: Galli on December 12, 2014, 09:04:42 AM

[bobeubanks]

https://forum.lendacademy.com/index.php?topic=2862.msg26148#msg88888888Quote"> from: Fred93 on December 12, 2014, 05:15:35 PM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=2862.msg26151#msg88888888Quote"> from: bobeubanks on December 12, 2014, 07:08:46 PM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=2862.msg26159#msg88888888Quote"> from: Fred93 on December 13, 2014, 01:55:38 AM

[hoggy1]

I (almost) always buy only debt_consol/CC_refi notes. Then I watch FICO trends carefully. The FICO trend should rise after the loan issues if the borrower used the funds as stated because they have just traded revolving credit for installment credit. If it doesn't rise I place it up for sale on Folio. After the bump one of two things happen - 1) it stays high and/or goes higher still (borrower really helped by loan consol) or 2) more typically they drift back down (running their cards up again). I sell notes where FICOs have fallen 50+ points from the HIGH POINT.

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=2862.msg26595#msg88888888Quote"> from: hoggy1 on December 31, 2014, 11:34:06 AM

[TravelingPennies]

I'll give you an anecdotal guess of 50%ish.1) I haven't kept track of it as I trade 2) looking back is hard and 3) of course a very high percentage of the loans I still hold have the bump. I don't panic sell any of these (ie I don't price them at a steep discount) unless there are other indicators of problems (drop below 650 or very steep drops that concern me, or late payments). I also don't buy anything under 16% so I am getting about 1.5%/month so I am not usually in a hurry. I pay closest attention to the most recent change. I'll keep some records over the next few months and see if I can give you a better answer.