Loss assumptions

[hoggy1]

Thanks everyone. Good discussion. The loss data in LCs 10K/10Q is more than I hoped for. Its been some time since I looked at them and I forgot that data was there. My thanks to Fred.

Follow Fred's link and you'll find the same data for each grade of loan.

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=3034.msg27467#msg27467">Quote"> from: Fred on February 10, 2015, 11:55:08 PM

[Fred93]

https://forum.lendacademy.com/index.php?topic=3034.msg27585#msg88888888Quote"> from: hoggy1 on February 14, 2015, 04:38:51 PM

[AnilG]

https://forum.lendacademy.com/index.php?topic=3034.msg27585#msg88888888Quote"> from: hoggy1 on February 14, 2015, 04:38:51 PM

[TravelingPennies]

Thanks, but can I then be certain the charge-offs in month 5 made 0 (zero) payments.

[TravelingPennies]

No.  https://forum.lendacademy.com/Smileys/default/wink.gif" alt=";)" title="Wink" class="smiley" />

Official definition of charge off is when the loan comes off the books of lender, in this case Lending Club. In case of charge off due to death/bankruptcy, the loan can be charged off any time the settlement happens. In other cases, the charge off happens when lender decides that it has made sufficient effort for collection and recovery and there is no chance of recovery, typically it will be 120+ days but not guaranteed. I have seen as long as 180 days.

For practical purposes, you can review the loan history to see when typically loans are charged off after the last payment and use that as guideline to estimate. You don't need to be 100% accurate, just approximately right.

https://forum.lendacademy.com/index.php?topic=3034.msg27588#msg88888888Quote"> from: hoggy1 on February 14, 2015, 05:44:34 PM

[rawraw]

Just to clarify, the 120 days applies to consumer loans.  Business loans are a little different.  If you are interested in the standards most financial institutions adhere to, here they are: https://www.fdic.gov/regulations/laws/rules/5000-1000.html" class="bbc_link" target="_blank">https://www.fdic.gov/regulations/laws/rules/5000-1000.html

[TravelingPennies]

Yeah, I should have guessed there were reporting rules (FASB, SEC, etc) for all these forms. Temporary brain death. Just haven't spent a lot of time with 10Qs before.