Lending Club certainly thinks so because if you use their Automated Investing tools, they have drastically reduced the expected returns. For the allocation that I use (10% B, 20% C, 30% D, and 40% E) they previously projected a 9% return based on historical charge off rates. Now they project 7.37% return for the same allocation because they project an increase in the number of charge-offs.
I posted about this on another thread where I noted I had seen a dramatic spike in late payments in the past few months, and a lot of members here chimed in to say that I must not be looking at statistically valid data, blah blah blah.
Well, while it's true that I didn't have a sample size large enough to be statistically valid (none of us do) it's evident now that something is happening.
Theories? I think that crooks have learned you can get a loan from LC and just not pay. I see an increasing number of "straight rollers" who make no or only a few payments and then just stop paying. My guess is that the only reason for the few payments they do make is that they are waiting for additional loans to go through with Prosper, perhaps other lenders, before walking off with the cash.
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