Author Topic: Lending Club - Time to panic?  (Read 41157 times)

sisto

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Re: Lending Club - Time to panic?
« Reply #150 on: May 03, 2017, 12:23:08 PM »
I've been investing in lending club loans for a couple years now. The last 6 months my returns have taken a serious turn downwards. I have a high risk tolerance, so I was buying mostly C-D loans. And had been around 12% for the first 1.5 years (usually returns are high early, then trickle down as people default, first 6 months I was at 14%+). But I've had so many defaults the last 6 months I'm down to 8.5%, while still pumping in more dollars.

My filter is based on historical data and I played with the filter such that returns over the previous 3 years (prior to my investing) had been 11-13% (can't remember exact number).

It's concerning and I wonder if it might say something about the economy as a whole, or possibly a subset of the population my filter is capturing.

Either way, I've turned off automated investing and will re-asses the filter and possibly p2p lending altogether. Hopefully the trend doesn't continue, I can live with 8.5%.
I'm in exactly the same boat as you on this. I've been thinking about pulling out and may do what other are doing by turning off auto investing and then start pulling it out. I only put in $5K as an experiment and was really happy at first, but time to move on now.
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chasesfish

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Re: Lending Club - Time to panic?
« Reply #151 on: May 03, 2017, 07:00:24 PM »
Ugh, lost a net of $200 last month, now in the hole by $460 for the year
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Open Space

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Re: Lending Club - Time to panic?
« Reply #152 on: May 04, 2017, 05:24:15 PM »
here's another data point...annualized monthly returns from my LC statements since the beginning of 2016:

2016
Jan  7.9%
Feb 11.1%
Mar 13%
Apr 11.3%
May 12%
Jun 9.1%
Jul 5.4%
Aug 11.5%
Sept 12.5%
Oct 8.5%
Nov 8.3%
Dec 7.8%
2017
Jan 6%
Feb 2.8%
Mar 5.3%
Apr 4.7% 

These returns are on an account with $10k in deposits. Most of the notes were purchased in late 2015 through May 2016.  Notes are grade A-D with a heavy concentration in B&C, and I purchase them manually with a filter.  Overall I was happy with performance, and I would have expected some decrease in returns due to the portfolio aging.  I've actually added a little money to buy new notes so we will see if it pulls up the averages.  Hopefully they will find a way to sort this out - I really like the concept behind peer to peer lending.

Capyy

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Re: Lending Club - Time to panic?
« Reply #153 on: May 05, 2017, 07:23:01 AM »
It's definitely a cool concept. I'm not buying any more new notes though. Maybe I'll try again in 6 months, hoping they have things sorted out. I've been buying discounted notes on the secondary market now, seeing if that gives me a decent return.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #154 on: May 05, 2017, 10:25:13 AM »
here's another data point...annualized monthly returns from my LC statements since the beginning of 2016:

2016
Jan  7.9%
Feb 11.1%
Mar 13%
Apr 11.3%
May 12%
Jun 9.1%
Jul 5.4%
Aug 11.5%
Sept 12.5%
Oct 8.5%
Nov 8.3%
Dec 7.8%
2017
Jan 6%
Feb 2.8%
Mar 5.3%
Apr 4.7% 

These returns are on an account with $10k in deposits. Most of the notes were purchased in late 2015 through May 2016.  Notes are grade A-D with a heavy concentration in B&C, and I purchase them manually with a filter.  Overall I was happy with performance, and I would have expected some decrease in returns due to the portfolio aging.  I've actually added a little money to buy new notes so we will see if it pulls up the averages.  Hopefully they will find a way to sort this out - I really like the concept behind peer to peer lending.

Are you manually calculating this or is there somewhere from LC that publishes returns by month for your portfolio?
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uwp

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Re: Lending Club - Time to panic?
« Reply #155 on: May 09, 2017, 04:59:16 PM »
Interesting article on the language used by the borrowers and it's correlation with repayment: http://nymag.com/scienceofus/2017/05/what-the-words-you-use-in-a-loan-application-reveal.html

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chasesfish

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Re: Lending Club - Time to panic?
« Reply #156 on: May 09, 2017, 07:30:05 PM »
Interesting article on the language used by the borrowers and it's correlation with repayment: http://nymag.com/scienceofus/2017/05/what-the-words-you-use-in-a-loan-application-reveal.html

Don't lend to the person who promises to pay you back.
"The more assertive the promise, the more likely he will break it."

I'm in my 14th year as a banker, very accurate statement.
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chasesfish

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Re: Lending Club - Time to panic?
« Reply #157 on: May 10, 2017, 08:23:47 AM »
Here are my stellar returns (annualized) over the last four months.  I was on auto-invest, Portfolio option 2 for most of this portfolio.

January    -6.99%
February   -10.86%
March     0.27%
April           -11.70%
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Icecreamarsenal

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Re: Lending Club - Time to panic?
« Reply #158 on: May 10, 2017, 08:54:56 AM »
I've been doing weekly withdrawals. Anywhere from $30-90. What was I thinking? I followed MMM blindly into it without doing my own thinking. No one to blame but myself.


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Considering that most people, MMM included didn't notice a decrease until Fall 2016, I wouldn't really say anyone saw this coming.  The MMM experiment started in what 2011 and had a good track record.

True. I'm referring not to results, but entity. These are illiquid junk bonds.  Thinking or referring to them that way negates any upside appeal for me.


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ChpBstrd

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Re: Lending Club - Time to panic?
« Reply #159 on: May 10, 2017, 08:55:40 AM »
I can't help but wonder if LC and the other P2P lending sites are the canaries in the coal mine. Maybe we're about to see another wave of auto repossessions, foreclosures, and individual bankruptcies. Maybe internet loans are the easiest things to default on, and the next wave will hit other lenders. Maybe the credit cycle is further along than the official household indebtedness numbers would seem to indicate, because the averages obscure increasing inequality in debt servicing ability.

If that's the case, and if we act on it, the foresight provided by P2P lending experiences could save many times more money than it cost to receive an early economic signal. Based on what I'm hearing, I'll be paying more attention to the Dow Transports Index -  known as another canary. I will also think twice before writing any more puts.

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Re: Lending Club - Time to panic?
« Reply #160 on: May 10, 2017, 09:17:55 AM »
Here are my stellar returns (annualized) over the last four months.  I was on auto-invest, Portfolio option 2 for most of this portfolio.

January    -6.99%
February   -10.86%
March     0.27%
April           -11.70%

What level of notes do you hold?  Are these E or F rated?  I've still got a few (been selling off every month) but have always had A, B, C notes only.  Never had a charge off....one late payment in a couple years.  But I'm getting out even though I'm still at 10.65%.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #161 on: May 10, 2017, 10:17:19 AM »
I can't help but wonder if LC and the other P2P lending sites are the canaries in the coal mine. Maybe we're about to see another wave of auto repossessions, foreclosures, and individual bankruptcies. Maybe internet loans are the easiest things to default on, and the next wave will hit other lenders. Maybe the credit cycle is further along than the official household indebtedness numbers would seem to indicate, because the averages obscure increasing inequality in debt servicing ability.

If that's the case, and if we act on it, the foresight provided by P2P lending experiences could save many times more money than it cost to receive an early economic signal. Based on what I'm hearing, I'll be paying more attention to the Dow Transports Index -  known as another canary. I will also think twice before writing any more puts.

I work in the banking industry - They've loosened up over the last three years on credit card and unsecured lending.  Additionally, appreciating home values have opened up access to home equity lines/borrowings again.   

I think the Lending Club issue now vs. 2011 is the best borrowers are going back to their banks and credit unions for 5-7% rates, leaving LC adversely selecting the worse borrower.
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chasesfish

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Re: Lending Club - Time to panic?
« Reply #162 on: May 10, 2017, 10:21:00 AM »

Here are my stellar returns (annualized) over the last four months.  I was on auto-invest, Portfolio option 2 for most of this portfolio.

January    -6.99%
February   -10.86%
March     0.27%
April           -11.70%

A:  1.4%
B:  6.1%
C:  17.6%
D:  22.6%
E:  39.6%
F:  9.5%
G: 3.2%

The lesson is past returns don't indicate future results.  I've gone between Portfolio 2 and Portfolio 3 on auto-investing while the good notes from 2011-2013 paid off.  My 6 year return is now 4.6%.  Its a nice sample size, $66,000+ in principal invested over the time period.
What level of notes do you hold?  Are these E or F rated?  I've still got a few (been selling off every month) but have always had A, B, C notes only.  Never had a charge off....one late payment in a couple years.  But I'm getting out even though I'm still at 10.65%.
« Last Edit: May 10, 2017, 10:25:16 AM by chasesfish »
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FIPurpose

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Re: Lending Club - Time to panic?
« Reply #163 on: May 10, 2017, 12:31:11 PM »
I don't think people should really be selling off their loans if they're a good amount of time in.

This is for multiple reasons:

1. You'll have to sell at an even further discount
2. Most defaults happen during the earlier half of the loan. (ie people who pay for more than 50% of the loan are more likely to continue to pay)
3. Selling early means you're giving up on most of the positive return, acting as a shield for buyers on the second-hand market.

Imagine a series of notes that are E grade. You should expect E grade notes, if they will default, to default earlier rather than later.

Year one: 20% default rate = -4% return
Year two: 10% default rate = 8% return
Year three: 5% default rate = 14% return

CAGR: ~5.5%

Which is about what people see. But of course reinvestment takes the same path. You're money that's reinvested in each year is going to be hit by a big drop in the beginning. For people buying on 2nd market like myself, are aiming that people are dumping good notes left and right because they get fearful after a bad round of defaults. Meaning that other investors are acting as shields to early defaulters.
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zazpowered

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Re: Lending Club - Time to panic?
« Reply #164 on: May 10, 2017, 06:47:20 PM »
My Prosper is showing 20% annualized returns using a portfolio that is managed by LendingRobot on a risky portfolio. I assume their calculations could be off but that's pretty good

chasesfish

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Re: Lending Club - Time to panic?
« Reply #165 on: June 05, 2017, 11:57:47 AM »
Here are my stellar returns (annualized) over the last four months.  I was on auto-invest, Portfolio option 2 for most of this portfolio.

January    -6.99%
February   -10.86%
March     0.27%
April           -11.70%

Another month....and the return is...

- 8.16% annualized. 

I don't know if its worth anything to liquidate the notes, or just enjoy letting this payout and getting a hundred dollars a year in residual bad debt recovery occasionally.
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retiringearly

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Re: Lending Club - Time to panic?
« Reply #166 on: June 07, 2017, 11:37:28 PM »
Here are my stellar returns (annualized) over the last four months.  I was on auto-invest, Portfolio option 2 for most of this portfolio.

January    -6.99%
February   -10.86%
March     0.27%
April           -11.70%
The single best piece of investing advice I have ever received is, "Do less of what isn't working, and do more of what is working."

Get out while you still can and put the money to work in an investment that is working.

Another month....and the return is...

- 8.16% annualized. 

I don't know if its worth anything to liquidate the notes, or just enjoy letting this payout and getting a hundred dollars a year in residual bad debt recovery occasionally.

tyort1

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Re: Lending Club - Time to panic?
« Reply #167 on: June 08, 2017, 10:59:56 AM »

CAGR: ~5.5%

Which is about what people see.

Really?  That's it?  All this extra risk, stress and worry, and the return is only 5.5%?  And not only that, but 5.5% during a time that the economy is doing pretty well?  Wow.
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chasesfish

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Re: Lending Club - Time to panic?
« Reply #168 on: June 08, 2017, 04:11:01 PM »
Has anybody run this enough to say whether or not its worth selling the portfolio and being done with lending club?

I figure I'll keep collecting mine out, but it was good while it lasted.
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coloradojoe

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Re: Lending Club - Time to panic?
« Reply #169 on: June 13, 2017, 04:03:51 PM »
I stopped reinvesting around June 2016 (~1 year ago), then started actively selling my notes using LendingRobot in Oct. 2016 (~8 months ago). In that time, I've managed to liquidate all but $1K of my $12K portfolio and been able to sell enough notes at a slight premium to offset the 1% that LendingClub charges (conveniently, LendingRobot charges nothing to help you automate sales of notes, only for automated buying of notes).
The BAD NEWS is that for the last few weeks, I've really cranked up the discounts on my few remaining grace period, late, and very late notes (which are C, D, E class notes for ~$50 each).  NONE have sold -- and that's with discounts WAY above the loss rates the LendingClub lists. Suggests to me that things are going sour in a way that LendingClub is doing its best not to acknowledge -- and that people would be wise to crank the custom loss rates for past due notes to pretty near 100%...

Discount rates I'm trying (and not succeeding in selling) currently set at:
Grace period: -32% to -42%
Late (16-30 days): -70% to -80%
Very Late (31-120 days): -85% to -90%

coloradojoe

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Re: Lending Club - Time to panic?
« Reply #170 on: June 13, 2017, 04:11:45 PM »
and since they are a totally different asset class they are a good hedge when stocks don't do well.

This depends on the assumption that LC performance will be uncorrelated with the stock market -- and there's lots of reason to doubt that assumption. If the stock market takes a dive, lots of people are likely to lose their jobs -- and loss rates on unsecured debt like LC and P2P lending may well jump. I'd urge people to think twice about the role of LC and other P2P in their portfolio. Especially given that we're past due for a recession based on historical patterns (to say nothing of the instability and incompetence of current US leadership).

chasesfish

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Re: Lending Club - Time to panic?
« Reply #171 on: June 14, 2017, 09:14:08 AM »
I stopped reinvesting around June 2016 (~1 year ago), then started actively selling my notes using LendingRobot in Oct. 2016 (~8 months ago). In that time, I've managed to liquidate all but $1K of my $12K portfolio and been able to sell enough notes at a slight premium to offset the 1% that LendingClub charges (conveniently, LendingRobot charges nothing to help you automate sales of notes, only for automated buying of notes).
The BAD NEWS is that for the last few weeks, I've really cranked up the discounts on my few remaining grace period, late, and very late notes (which are C, D, E class notes for ~$50 each).  NONE have sold -- and that's with discounts WAY above the loss rates the LendingClub lists. Suggests to me that things are going sour in a way that LendingClub is doing its best not to acknowledge -- and that people would be wise to crank the custom loss rates for past due notes to pretty near 100%...

Discount rates I'm trying (and not succeeding in selling) currently set at:
Grace period: -32% to -42%
Late (16-30 days): -70% to -80%
Very Late (31-120 days): -85% to -90%

I agree with everything you said above.  Once a loan goes 30 days past due, it should just be an immediate charge-off and recovery.  I'm convinced LC was playing some games early on with the loss rates and write-offs.  Banking institutions are required to called a loan a chargeoff when there's no collateral and no payments are received in 90 days.  LC was already playing in the grey area adding another 30 to those numbers.

I don't need the money, selling notes seems to be more of a pain than its worth, I'll just keep collecting what money I can out of the paydowns and move on.
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FIPurpose

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Re: Lending Club - Time to panic?
« Reply #172 on: June 14, 2017, 09:43:45 AM »
I stopped reinvesting around June 2016 (~1 year ago), then started actively selling my notes using LendingRobot in Oct. 2016 (~8 months ago). In that time, I've managed to liquidate all but $1K of my $12K portfolio and been able to sell enough notes at a slight premium to offset the 1% that LendingClub charges (conveniently, LendingRobot charges nothing to help you automate sales of notes, only for automated buying of notes).
The BAD NEWS is that for the last few weeks, I've really cranked up the discounts on my few remaining grace period, late, and very late notes (which are C, D, E class notes for ~$50 each).  NONE have sold -- and that's with discounts WAY above the loss rates the LendingClub lists. Suggests to me that things are going sour in a way that LendingClub is doing its best not to acknowledge -- and that people would be wise to crank the custom loss rates for past due notes to pretty near 100%...

Discount rates I'm trying (and not succeeding in selling) currently set at:
Grace period: -32% to -42%
Late (16-30 days): -70% to -80%
Very Late (31-120 days): -85% to -90%

My guess is that your remaining notes have very low credit scores, meaning that the recovery rate will be lower than the LC average. If the secondary market expects you to lose out, I would assume those late notes will not be making it.
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Re: Lending Club - Time to panic?
« Reply #173 on: June 14, 2017, 10:31:28 AM »
I stopped reinvesting around June 2016 (~1 year ago), then started actively selling my notes using LendingRobot in Oct. 2016 (~8 months ago). In that time, I've managed to liquidate all but $1K of my $12K portfolio and been able to sell enough notes at a slight premium to offset the 1% that LendingClub charges (conveniently, LendingRobot charges nothing to help you automate sales of notes, only for automated buying of notes).
The BAD NEWS is that for the last few weeks, I've really cranked up the discounts on my few remaining grace period, late, and very late notes (which are C, D, E class notes for ~$50 each).  NONE have sold -- and that's with discounts WAY above the loss rates the LendingClub lists. Suggests to me that things are going sour in a way that LendingClub is doing its best not to acknowledge -- and that people would be wise to crank the custom loss rates for past due notes to pretty near 100%...

Discount rates I'm trying (and not succeeding in selling) currently set at:
Grace period: -32% to -42%
Late (16-30 days): -70% to -80%
Very Late (31-120 days): -85% to -90%

I agree with everything you said above.  Once a loan goes 30 days past due, it should just be an immediate charge-off and recovery.  I'm convinced LC was playing some games early on with the loss rates and write-offs.  Banking institutions are required to called a loan a chargeoff when there's no collateral and no payments are received in 90 days.  LC was already playing in the grey area adding another 30 to those numbers.

I don't need the money, selling notes seems to be more of a pain than its worth, I'll just keep collecting what money I can out of the paydowns and move on.

^^This

This is exactly what I am doing.
Not selling on secondary market to loose even more returns.
I prob have 2 years to go before my very last note will be paid off.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #174 on: June 20, 2017, 04:07:27 PM »
Question:  Has anyone else tried to process a withdraw this week?  I've submitted two, get a confirmation, then they don't go through.   

I haven't called yet, just wondered.
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Kwill

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Re: Lending Club - Time to panic?
« Reply #175 on: June 20, 2017, 04:27:37 PM »
Question:  Has anyone else tried to process a withdraw this week?  I've submitted two, get a confirmation, then they don't go through.   

I haven't called yet, just wondered.

I did a withdrawal on 12 June, which went through fine, and I did another earlier today, which should be another couple days.

This thread got me a little worried about Lending Club. I'm selling off and now down to 2 notes. I've been consistently above 12% for returns and have never had a default over the 3 years I've been there. I never had more than about 20 notes at most, so it was a fair amount of bother for the small dollar amount involved. I figured I should either put enough in to make it worthwhile or else sell and close the account.

Any super-positive stories here to counter the negative ones? Is there any reason to invest more rather than leaving?

WonderfulLife43

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Re: Lending Club - Time to panic?
« Reply #176 on: June 22, 2017, 12:45:54 PM »
I have 2 Lending Club accounts - 1 IRA and the other taxable.  I opened these accounts over 4 years ago, with the hope of diversifying my portfolio, and eventually generating monthly income for retirement.

A couple of years ago, I decided to liquidate the taxable LC account.  This was mainly because of the headaches it caused at tax time - writing off bad loans, accounting for partially recovered bad loans, etc.   I've been passively liquidating this account for about 2 years now, withdrawing any available funds each month, and have a grand total of 6 loans left for a total of less than $50.  If things continue normally, the last loan will be paid off next year.

I was willing to let the LC IRA ride a little longer, since it didn't have the tax reporting headaches,  investing was pretty much on auto-pilot, and the returns were good, even with a conservative mostly A and B loan portfolio.     Returns were something like this:
First year:  12%
Second year: Total average of 10%, or about 8% for that year alone
Third year: Total average of 9%, or about 7% for that year alone
This year: Total average of 7%,  or about 3% for the first 6 months of the year.
Since all of this happened in 'good' economic times, I can only imagine what will happen with the next recession!

Given the poor results so far this year, the liquidity issues, the desire to simplify my life,  and the desire to simplify my wife's life in case something happens to me .... I decided to liquidate the LC IRA, and transfer it to Vanguard, to join my other Vanguard accounts.

So, for the past 6 weeks, I've been actively selling my 900+ LC loans on the secondary market (Foliofn), starting with a 2-3% premium, and ending with some steep discounts, especially for late loans. Selling hundreds of loans this way isn't that hard, since you can Select them all at once and assign a consistent markup/discount.   I started with a 3% markup, and repriced them once or twice a day: 3% -> 2.8% -> 2.6%, ..... until they were all sold.
As of this week, I have 0 LC loans left, and in the process of transferring the IRA to Vanguard.  Yes, I will wince a little at the extra costs for closing the account with SDIRA.   :-/

chasesfish

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Re: Lending Club - Time to panic?
« Reply #177 on: June 22, 2017, 06:00:33 PM »
Finally got my latest withdrawal out, debating doing note liquidations but may just keep withdrawing slowly
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Padonak

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Re: Lending Club - Time to panic?
« Reply #178 on: June 22, 2017, 09:51:19 PM »
My Prosper is showing 20% annualized returns using a portfolio that is managed by LendingRobot on a risky portfolio. I assume their calculations could be off but that's pretty good

I also use lending robot, but only for lending club.

Lending Robot ANR calculations are suspicious. Mine shows around 12% for LC, but LC itself shows 5.25% ANR (taking into account past due notes). My guess is that LR does not take past due notes into account (the fact that a certain percentage of them is likely to default). Another curious thing is that I invested a bit of money in LC before I started using LR, and LR shows a higher ANR for that manual portfolio of basically random notes with a few rules applied vs the loans picked by LR which are supposed to be "better" (otherwise what's the point of using LR even for free?).

Also, I stopped my lending club auto investments using LR. I don't think I'll buy any lending club notes anymore. The rate of return does not justify the risk in my opinion. ANR is declining even now when unemployment is <5%, what's going to happen when the next recession hits? Surely all those great people who borrow money at 20%+ interest rates will pay back their loans (my portfolio is also mostly high risk hence over 20%). Surely, none of them lied about their income, property ownership and other unverified information I used in my filters to limit risk.

If you go to the Lending Club web site and click on your ANR estimate, it'll show you the range of ANRs for all accounts by average age of portfolio highlighting those with similar range of interest rates to yours. My avg age is less than a year right now and it's already 5.25% ANR. The average declines for more mature portfolios, then it goes up slightly for those with average age closer to 3 years, but that increase is likely because those loans were purchased earlier, before LC lost its luster so to speak. Based on this chart, I expect my ANR to decline even more over time, but hope that it will still be above 0. If recession starts withing the next year or two, I'll most likely lose money (<0 ANR). Even if there is no recession in the next 3 years, I might still lose money because average returns deteriorate for those who, based on average age, started buying loans a few months before I did and will likely deteriorate even more over time given that the quality of borrowers seems to have deteriorated as well.

The good news for me is that i only invested a little over 2% of my investment portfolio in LC. This is my play money and tuition for learning how lending works. 
« Last Edit: June 22, 2017, 09:54:00 PM by Padonak »

chasesfish

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Re: Lending Club - Time to panic?
« Reply #179 on: June 23, 2017, 08:09:53 AM »
Lets see how this goes, I just dropped 77 of my "best" notes into the trading platform at a 2.5% premium, we'll see if there's any demand.  They were all at least 3 payments in with improving credit scores.   I figure they'll bring the most money for now and keep playing with this.
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Re: Lending Club - Time to panic?
« Reply #180 on: June 26, 2017, 06:17:42 AM »
I just posted about $5,000 worth of notes for sale, all of my notes with over $20 left at a 1% premium.  We'll see how this goes, only eight were bought from a small batch this weekend, but don't know if the institutions start scraping notes off during the week. 

It'll be a nice trial run.
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Re: Lending Club - Time to panic?
« Reply #181 on: June 27, 2017, 07:04:27 AM »
Any super-positive stories here to counter the negative ones? Is there any reason to invest more rather than leaving?

Super positive......hmm.  I'm still well over 10% with only A-C notes.  I'm selling everything as I no longer trust the platform.  I have never had a charge off and only 1 late payment ever.

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Re: Lending Club - Time to panic?
« Reply #182 on: June 28, 2017, 04:33:46 PM »
Interesting experience so far with trying to sell notes.

Listed 573 performing loans, all ones over $10 in principal.  61 have sold so far.  I only listed issued/current notes and asked for at least a 1% premium since I've eaten all the deadbeats and first payment defaults.

Anyone else sold notes and have comments on the premiums?  I don't really need the money so I'm not interested in taking much of a loss.
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chasesfish

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Re: Lending Club - Time to panic?
« Reply #183 on: July 03, 2017, 01:20:23 PM »
June Portfolio Update:

Interest Earned:  $258.65
Charged Off Notes:  $308.76
Total Return:  ($49.55)
Average Balance for the Period:  $16,649
Annualized Return for the Month (-3.57%)

Hey hey, didn't loose quite as much.  Will have note sales to update next month.
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Re: Lending Club - Time to panic?
« Reply #184 on: July 03, 2017, 02:03:53 PM »
Any super-positive stories here to counter the negative ones? Is there any reason to invest more rather than leaving?

Super positive......hmm.  I'm still well over 10% with only A-C notes.  I'm selling everything as I no longer trust the platform.  I have never had a charge off and only 1 late payment ever.


I am getting 6% return on 18 notes (mostly A grade notes, but a few B-D).....5 fully paid off, 1 late and likely will default (has $200 left to pay on it), and 12 are paying on time.  I don't intend to sell, but likely won't add more money into it.  I like Peer Streets shorter loan time frames.

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Re: Lending Club - Time to panic?
« Reply #185 on: July 10, 2017, 06:24:38 AM »
I had 162 notes before I stopped reinvesting. Opened account around March 2016

$3000 funded.

Since March 2017 I've traded 112 notes.
13 Fully paid
14 Charged Off

Of the 23 remaining:
6 are 31-120 days behind payment
5 are 16-30 days late
2 are in grace period

Current combined return of -2.5%

Hopefully this will all be done before year's end, I don't want to mess with Lending club in 2018.  Time to follow the simple path I think.

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Re: Lending Club - Time to panic?
« Reply #186 on: July 12, 2017, 02:30:51 PM »
Wife and I have lending club notes spread out between two accounts, her account is fairly new, mine is a bit older..
Her account returns (LC calculations) are 3.8% on notes with an average weighted interest rate of 19.3%
My account returns (LC calculations) are 5.5% on notes with an average weighted interest rate of 22.5%

Both are autoinvesting, roughly 400 notes at $25 each. I think my account had some filters applied, her's didn't. Both are obviuosly biased towards higher interest rates & riskier notes. Interesting that her returns are lower, even with less risky notes on average, she also has much newer notes. So seems consistent with recent degradation in performance.

I don't personally care how many default, nor am I that interested in hand selecting notes. I want as wide exposure as possible and only care about overall return. As part of my fixed income allocation (I carve this out of my smaller high yield allocation) I can live with 5%, but the constant declining returns are weird. The real worry for me is platform or systematic risk, if they are taking on riskier borrowers without pricing it in. (It's a small enough part of our portolio that I am fine with it is as is)

My initial and current thoughts line up with someone else said before:
I don't think that Lending Club is in any way a solid investment when done through a regular, taxable account.  The risk is high, the returns are capped at fixed rates without the chance to out-perform as in equities, and the taxes are terrible at regular income tax rates. 

I had experimented with liquidating notes on the trading platform a few years ago in my account and had good success (I would say it was moderate to bad liquidity at that time, but not horrible). Recently liquidating notes on the trading platform has been difficult, I would characterize as very bad liquidity.

This makes me curious about picking up notes at a steep discount on the secondary market. Is there a good automated tool to do that? Given that I don't want to hand select notes, but rather want funds distributed across as many notes as possible in an automated fashion.
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Re: Lending Club - Time to panic?
« Reply #187 on: July 14, 2017, 06:22:21 AM »
An update here on my portfolio with thousands of notes: I reported a ANAR of 4.6% in January, it now stands at around 3.3% with a Weighted Average Age slightly above 2 years.

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Re: Lending Club - Time to panic?
« Reply #188 on: July 14, 2017, 02:39:32 PM »
For those of you who were reporting and plotting monthly returns over time, is there a way to get that data automatically, or are you manually downloading the statements and pulling the info out?
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Re: Lending Club - Time to panic?
« Reply #189 on: July 14, 2017, 07:45:20 PM »
My initial investment was $5K, I just pulled out $690 about a week ago, that accumulated from not investing in new notes. Here is what it looks like today:

Available Cash$132.39
Committed Cash ? $0.00
Outstanding Principal$4,875.04
Account Value$5,007.43
Adjustment for Past-Due Notes ?  ( $257.72 )
Adjusted Account Value$4,749.71
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Re: Lending Club - Time to panic?
« Reply #190 on: August 04, 2017, 05:41:02 AM »
July Update:

$13,580 Average Balance for the Period (been selling some notes finally)
Net Loss:  ($110.22)
Return:  (9.47%) Annualized for the period

Seven consecutive months of losses for the year.


Lending Club doesn't report return by year, only annualized return since inception.  Now down to 2.81% since inception.

S&P 500 Index Fund invested for the same period is running 10%+ annualized returns
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Re: Lending Club - Time to panic?
« Reply #191 on: August 04, 2017, 11:28:19 AM »
Wow, higher risk and lower return than index funds.  Sounds like a dog.
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Re: Lending Club - Time to panic?
« Reply #192 on: August 04, 2017, 03:26:04 PM »
Why not just buy the stock of a subprime lender like Capital One? Their lending standards and recovery protocols are better too.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #193 on: August 04, 2017, 07:09:45 PM »
Why not just buy the stock of a subprime lender like Capital One? Their lending standards and recovery protocols are better too.

They get to fund their subprime loans through FDIC insured bank deposits!  Very odd competitor of mine professionally
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Re: Lending Club - Time to panic?
« Reply #194 on: August 04, 2017, 08:20:54 PM »
My return continues to tank. I'm not investing any new money, just withdrawing interest.

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Re: Lending Club - Time to panic?
« Reply #195 on: August 07, 2017, 10:00:28 PM »
Hi guys, side-tracking a little.

FundingSocieties is a Singapore based P2P lending startup. There are lots of others in the region, but since I've started using them, I'll just take a stab at comparing LC with FC.



What's your take.

Note: this is not an endorsement of FundingSocieties
« Last Edit: August 07, 2017, 10:03:29 PM by neonlight »

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Re: Lending Club - Time to panic?
« Reply #196 on: August 08, 2017, 06:33:39 PM »
Hi guys, side-tracking a little.

FundingSocieties is a Singapore based P2P lending startup. There are lots of others in the region, but since I've started using them, I'll just take a stab at comparing LC with FC.



What's your take.

Note: this is not an endorsement of FundingSocieties
Dicey's take is I'm kind of surprised that after seeing what's happened with LC, you think another company's going to be different. It sounds like the lending climate has changed more than anything LC did or didn't do.

As to your last sentence, "If it looks like a duck, etc."
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Re: Lending Club - Time to panic?
« Reply #197 on: August 08, 2017, 08:44:03 PM »
Hi guys, side-tracking a little.

FundingSocieties is a Singapore based P2P lending startup. There are lots of others in the region, but since I've started using them, I'll just take a stab at comparing LC with FC.



What's your take.

Note: this is not an endorsement of FundingSocieties
Dicey's take is I'm kind of surprised that after seeing what's happened with LC, you think another company's going to be different. It sounds like the lending climate has changed more than anything LC did or didn't do.

As to your last sentence, "If it looks like a duck, etc."

You have a point, actually P2P lending has been cropping up like mushrooms since LC. There's a company call Lufax from China, they are now valued >1 billion USD. Maybe the only P2P unicorn.

Anyway back to facts, how do you guys think about the return, and on the mean time will try to dig out the default rate.

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Re: Lending Club - Time to panic?
« Reply #198 on: August 09, 2017, 11:00:14 PM »
Wow, higher risk and lower return than index funds.  Sounds like a dog.

That may turn out to be true, and we'll only know in hindsight. But does it have to be?

You are funding unsecured loans to individuals, with interest rates in the ~7% - 30% range. You can diversify across a lot individuals easily. So accounting for defaults, and early repayments, what might you expect your return to be? Historically it's been in the 5% - 10% range it seems, which to me sounds reasonable for that level of risk, and also passes the smell test for what I would expect after accounting for defaults.

Now something seems to have tanked for many people's returns. Were the expectations too high, did something change?
*shrugs*


Are there other tools to calculate return easily? I've got some of my notes divided across different portfolios. The notes that had been selected based on some heavy filtering seems to have done better, but I would like to confirm that. Lending club does not break down the return by portfolio.
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Re: Lending Club - Time to panic?
« Reply #199 on: August 10, 2017, 09:13:32 PM »
Wow, higher risk and lower return than index funds.  Sounds like a dog.

That may turn out to be true, and we'll only know in hindsight. But does it have to be?

You are funding unsecured loans to individuals, with interest rates in the ~7% - 30% range. You can diversify across a lot individuals easily. So accounting for defaults, and early repayments, what might you expect your return to be? Historically it's been in the 5% - 10% range it seems, which to me sounds reasonable for that level of risk, and also passes the smell test for what I would expect after accounting for defaults.

Now something seems to have tanked for many people's returns. Were the expectations too high, did something change?
*shrugs*


Are there other tools to calculate return easily? I've got some of my notes divided across different portfolios. The notes that had been selected based on some heavy filtering seems to have done better, but I would like to confirm that. Lending club does not break down the return by portfolio.

Yes, one mistake I've made was due to wanting to safe time, I invested all the money to one individual (it's not alot of money to start with) but a better strategy was to spread it to many more people.