I was wondering about that. I had one due; its FICO had dropped but within normal variation (the usual 20-30 points that means nothing), so I didn’t worry too much.
Have you heard if anyone has ever contacted LC and gotten an explanation for this? I mean, I understand system glitches delaying things, but they need to have a plan in place to correct the unwarrented “grace period” flags.
What is up with that? I looked and the erroneous grace period notes are still there from it happened before. Seems like LC is tainting a lot of good notes. And making me panic sell them when I don’t need to.
And of course you’ve probably had enough in payments from the 4K-minus-three-notes that you’ve had to find new notes for reinvestment…
Of my two forever-in-review notes: I pinged LC and they came back with something along the lines of “can take up to 14 days even after 14 day funding period and sometimes we’ll give them even longer if they’re working with us”. Bullshit. The day after I notified them of the two notes, one issued and the other was returned. I think someone just forgot about them.
Bizarro on that one that’s going into default. Keep us updated on what if anything happens with that.
I remember reading a few posts from people who have contacted LC about this. I don’t think anyone’s gotten an answer for why these payments don’t post, and it’s not like the front line customer support would have an accurate technical explanation anyway. “It’s a glitch”. Big help. More likely the woman who presses the ‘process payments’ button was out on Laplanche’s yacht sipping apricot brandy and doing God knows what else that day instead of working.
What I can tell you is that LC has no intention of fixing these. The grace period payments will remain on there for the life of the note unless hell freezes over or something. They don’t understand why it even matters.
I just uncovered an interesting change they made in the past week or so:
Now if you try to sell a note with a par value of $4.89 or less on Folio, it will accept the order as usual but they will quietly hide if from view and it will never show on Folio. They do this without telling you a thing; you will sit there and wonder for weeks why it’s not selling. Effectively this means that once a loan reaches the last 4 or so months of payments, you are stuck with it until it’s completely paid or defaults. If you need to liquidate your account, tough luck.
It’s bad enough that they made this change, but to try to conceal it in such a sneaky manner is rather unforgivable. Why not just come right out and announce the policy change and deal with the complaints? It’s sad that a user had to stumble upon this – did they really think we simply wouldn’t notice?
the hell???
Has anyone asked them this? Have you tried listing something and doing a search for it to see if it doesn’t show up???
That’s beyond poor design, that’s fucking FRAUD.
And… yeah. I just did a search. Filtered for 10 or fewer payments, and the lowest P+I that showed was 4.85. OK, that’s a lot better than 4.89 ;). But seriously??? What. The. Fuck.?
Yeah it was 4.90 yesterday, but after the 4am PDT Folio update I did see some 4.83 ones. So whatever the algorithm is, it’s not a fixed price I guess.
Nope, nobody’s asked them anything yet as far as I know. I’m not exactly on good terms with them so I’m sure not making the call. On that other forum I think I’ve stirred up enough interest that we may get some answers today.
I’m almost certain they are trying to cut down on people selling overpriced notes and making out like bandits. But they could have filtered out negative YTM notes instead (if they wanted to be big brother), which would have made a helluva lot more sense than this crap.
Agreed!! I mean, if you buy a note with negative YTM, when the info is all there, you may be stoopid, and FolioFn is not exactly known for even commonsense validations: like there really NEEDS to be a two-step verification before you submit note for sale: you put in the price, you’re taken to a screen that says “here’s what you’re selling” and you have to click OK. Hell, even the original-loan purchase through LC has at least 2 such steps, maybe 3.
But selling a note with a low current value is an extremely reasonable thing to do. You may need to discount it because the expected income ain’t great, but if I’ve got a 4.50 note and wanna get out, I should bloody well be able to list it for 4 bucks.
And, there’s nothing stopping me from listing a 5.00 note for 6.50 which is a negative YTM (and is also very unlikely to sell!!).
Not only that, but I notice one loan is already fully paid! Paid off on the first payment for a 32 cent profit.
They seem to have fixed this - just did a search and saw notes with P+I as low as 16 cents (and by the way, I seriously doubt they’ll sell that for 26 cents!!).
Awesome news!! And yes it seems you are right – mine are now showing up again as well.
I have a feeling this will not be the end of this. Things don’t just break in such an obscure way without being touched, so they were obviously trying to change something and accidentally hit the wrong targets.
I think we will increasingly see them behave like nannies – telling us what we can sell, the maximum price we can ask, etc. This was but the first attempt. I hope I am wrong.
I had two notes fail to issue (both fairly old) and so I was waiting to pounce when they released the batch of notes at 6:00 PDT (9:00 east coast). The list of available went from 41 notes to maybe 150 with one screen refresh. I nabbed two as quickly as I could. One was 56% funded 2 minutes later. The other was a paltry 8% funded by then. An hour later, both have been 100% funded.
The 150ish available notes are back down to 81.
All in all, quite a little feeding frenzy!!
I wonder if this isn’t a sign that LC needs to do things to attract more borrowers. For example getting rid of the origination fee (or maybe making it reimbursable after the borrower has paid on the loan for a year), or lowering rates a titch. I know that last is a tradeoff, because if you lower them too much you drive away investors.
I logged in today and saw the new trading member agreement below. I wonder what prompted it.
Yeah they put that in place approximately 10 days ago. I have no doubt that what caused it was people buying overpriced notes and then whining to LC about it. An alternate theory advanced by some others (which I don’t necessarily subscribe to) is that LC thinks it gives them a bad image when some traders are making 40%, 100%, even 600% returns “on the backs of others”. Pre-IPO, anything is possible I guess… no matter how illogical.
Well, it has taken three months but I have finally invested all the $4k I put in in mid-July. Although my aim was to have equal amounts in B, C, D and E loans, I ended up with 75% B, 16% C, 8% D and 1% E. As previously mentioned, there seem to be very few lower-rated loans these days (or they are all snapped up immediately).
I have invested just $25 in each loan to get maximum diversification, but I have noticed that the average loan is more like $75 - $100, and I have seen a loan with an average over $200.
I cannot get anything to sell on the trading platform anymore. I list notes that seem to be going south at a discount and they just sit now. If they do get to the grace period, they won’t sell. I think the search changed so it’s easier to hide notes that are late, etc but I never had this much trouble selling them before. I’ve had 4 that I’ve been slowly pricing lower and lower and they won’t sell (2 of them went into grace but were then paid so they are back to good standing).
You’re not alone, wguy123. Nothing has really changed with the search recently, it’s just that the market for notes has gone into the toilet during the last month or so. This has been my worst trading month ever, and I’m hearing the same thing from others. Too much supply, too little demand at the moment.
They did make a substantial change to Folio yesterday though. Now you are no longer allowed to sell notes which result in a negative YTM. I sure saw that one coming, with all of the nanny stuff they are doing lately.
Thanks for the confirmation, Core. I don’t typically buy so it seemed to me the search had changed. I was just trying to figure out why I couldn’t sell. I’ve typically sold a 1-2 a month over the last year and they would always sell (even one that went into bankruptcy…I did a deep discount, but still why buy that one?) but I cannot get them to move now. I hope it picks up again.
I’ve had 3 I’ve been trying to sell and cannot do it. One is way past due, deeply discounted. Another is in good standing but has been late twice and is only slightly discounted. The third was 30-60 days late and was discounted $3 ($18 with $21 left on principal). I look this morning at the status of the 3 and the 30-60 day late finally sold. I look into it and a payment had finally come through. In the past, my for sale notes have cancelled when a payment went through. I highly doubt it is coincidence that this person finally picked it up hours before a payment went through. Grrr. I’d still try to sell the note but not with that discount.