If I understand things in that other thread, it seems to be some combination of your accidentally listing ALL your loans at once (which shouldn’t be an issue anyway, dammit), and multiple IPs, and an automated listing tool?
I hadn’t even known about that forum, by the way - thanks for the link.
Amarone: it’s interesting to see your “failed issue” stats. I don’t keep a close eye on them myself, but I know it’s a lot higher than it used to be. Your funding (or trying!) a bunch at a time points out to a roughly 25% failure rate.
It seems like the rapid-funding trend lately is because of big investors / automated tools. I wonder what effect that will have on loan rates. As in: it can be hard to find enough borrowers to invest your money in, so maybe rates might need to be lowered, or something.
It’s higher than that. Of my orders that have been completely processed, the failure rate is 35% Most of my orders still have loans in funding, so I do not yet know how many will fail.
Certainly all of those things happened and were used as excuses by LC, but as it turns out the trigger was a bit more than that, which had to do with me updating the notes frequently in an attempt to keep them listed on the platform. That info’s buried somewhere on page 3 of that thread.
The point is, your money and certainly your profits are not safe when a company can decide to seize all your notes just because they don’t like the way you trade. Who here has sold negative YTM notes to some fools? Probably quite a few of us. What if LC decides that wasn’t very nice of you and on that basis declares all of your interest earnings null and void 5 years down the road? That’s a slippery slope.
Tough. Just because some people are stupid enough to buy others’ notes at a loss and probably deserve what they get doesn’t make it ethical for sellers to out-and-out screw people over.
Welcome to the SDMB…just a note, however, this board is more moderated than most message boards. Our primary rule is “Don’t be a jerk”, and posts like your two in here seem to approach the line to this rule already. I suggest dialing back the style of your posting just a little if you wish to remain a long-time member here.
I noticed in my recent attempts to invest more money that almost all the loans were rated B. To some extent this is because I hide A, F and G with my filter. However, I just looked without using my filter and out of 42 loans, 13 were A, 21 B, one C, zero D and E, two F and five G.
I wonder if loans are now dominantly rated A and B, or if C - F get snapped up very quickly.
I assume you’re talking about The Lending Club, but I’ve noticed the same thing at Prosper.
I can’t say as I blame the borrowers - I wouldn’t borrow money at those rates - but Adam Smith’s invisible hand doesn’t seem to be fixing the situation. There’s just more lending dollars chasing fewer loan opportunities in general at Prosper.
Anyone know what the “policy code” is? It’s the last field on the download file if you request an extract. I got curious about Amarone’s note that certain classes are hard to find, and wanted to do some crunching on the extract (as well as playing with loading stuff into a local Oracle database)…
On the “rejected” loans it seems to be always 0 (zero). On funded loans it seems to be 1, 2, or blank.
Also: has anyone figured out how to do a download of all your loans? You can do the extract of the ones you currently hold, but there’s no way to get an easy extract of all the ones you’ve ever held (i.e. ones you sold on FolioFn). I could go order-by-order and download the loan/note/order numbers but that’s, well, a little tedious :).
I had to ask on another forum and eventually got the answer (thanks Fred).
values are:
1 = public offering
2 = private offering
Please note: ‘Public Offering’ refers to the performance of loans which were originated utilizing the Lending Club website and met all characteristics necessary for the loan to become a “member loan” assigned to correspond to a “Member Payment Dependent Note” publicly offered to Investors on the Lending Club platform. *
That doesn’t clear it up much. It sounds like 1 is a regular old note that we buy via the browse notes tool. What’s 2 then? Are there notes that aren’t offered up for all the investors or something?
Thanks for the link to the glossary. Most of it I was able to figure out before, but it’s nice to have the definitions.
Ah - I hadn’t realized there was a whole loan program.
On another topic, every now and then I think about moving some IRA funds over there. I’m stopped by the minimum balance (5,000) and account fees (100/year), and today I noticed that you can’t actively TRADE within an IRA. Notes must be buy-and-hold only. What’s with that??? I don’t know if a trading-platform-only state resident would be able to do it at all.
What? Are you sure about not being able to sell notes in an IRA??? That’s ridiculous, if true. Got a link handy?
I know one source of confusion in the past has been that they have said on their web site that Folio-only states can open IRAs. But if you attempt it (I did, and same story from one other person) eventually in the account opening process someone will tell you “Errr… sorry, it seems we can’t open IRAs for Folio states”. I mean for a while there it seemed like nobody there knew what was going on.
So now recently I occasionally hear rumblings about not being able to trade in an IRA but I had just assumed that they were talking about not being able to open a trading-only IRA.
Regarding the fees, several months ago when I went through this they were waiving the fees as long as you met that $5k minimum. They were still going to open my account with just a few hundred bucks but I would have no doubt been charged the annual fee.
What I read about the fee the other day is LC will pay it it for the first year if you transfer in 5,000. For the second year, you have to maintain a balance of 10,000 for them to pay it for you.
Now, my total interest income from LC was something like 120.00 last year (remember, I’m small potatoes). Assuming that scales up (and that my average balance was 1,500), we’d be looking at about 400 dollars in interest on a 5,000 balance. The fee would wipe out 25% of that.
Other IRA vehicles (that use, say, stock) allow for trading. Why not LC?
Thanks for the link. Un-freaking-believable. That pretty much kills my plans for opening a Roth with them this year.
Since that section was at the top of the page and highlighted, I’m guessing it’s a relatively new policy. There’s certainly no legal restriction about trading stuff in an IRA, hell I trade risky options on margin in one of mine. It has always been clear that LC doesn’t want people to trade notes for whatever reason, so I shouldn’t be surprised. In this case it may be a knee-jerk reaction to people possibly employing that scheme we discussed a few pages back.
You might be able to get around both the trading restriction and the fees by using a self directed IRA. I’ve heard that LC requires hefty minimum balances for LLCs but I don’t know if this applies to all the entities. I haven’t thought it through well enough yet. There’s always a way.
A new low in “taking forever to process loans”: I have one that’s been “in review” for ages. Submitted on August 12th. As of tomorrow that will be a full 4 weeks. Another submitted on the 13th. :mad:
Well, I am still trying to complete my $4k investment from July 17. I was down to just three loans still “in funding”, but all failed so I have had to select another three.
Elsewhere in my portfolio I have the strange loan 1202982. The borrower made eight regular payments, then paid over 20 times that amount in the next payment, then two more regular ones, then went into default with just 6.9% of the original loan amount outstanding. After four missed payments they have just made a partial payment. However, the loan still shows as being in default - it is well ahead of the original payment schedule, but behind on recent payments.
I am in profit as I have received $25.67 for my original $25, but it will be interesting to see what happens next.
Payments did not process yet again today, so everyone’s going to get undeserved in-grace-period payments on notes with payment dates of the 6th through 8th. These occurrences really kill the resale value of your notes and it drives me nuts that LC doesn’t even think it’s an issue.
