Author Topic: Lending Club - Time to panic?  (Read 81044 times)

Outside the Box

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Re: Lending Club - Time to panic?
« Reply #300 on: April 25, 2018, 02:07:04 PM »
Ohh yep LC stock is hitting a new low. Looks like it will be dropping to the 2.80 range.
$2.77 right now.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #301 on: April 26, 2018, 06:34:27 AM »
Sometimes I wish I would go big on my ideas.  I only put $125 in to $2.50 puts for June....I didn't expect a federal regulator to sue, just terrible earnings in May.   Worth $250 now, before the costs of liquidating.

ChpBstrd

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Re: Lending Club - Time to panic?
« Reply #302 on: April 26, 2018, 02:29:24 PM »
Sometimes I wish I would go big on my ideas.  I only put $125 in to $2.50 puts for June....I didn't expect a federal regulator to sue, just terrible earnings in May.   Worth $250 now, before the costs of liquidating.
At least you're sitting on gains. I had the synthetic short idea but was too risk averse to carry through.

(Homer Simpson) D'oh! (/Homer Simpson)

I do find when I am certain of a speculation, that is the speculation that will fail!

ChpBstrd

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Re: Lending Club - Time to panic?
« Reply #303 on: April 26, 2018, 04:02:08 PM »
The more I think about it, the more I wonder if crowdfunding is simply an enabling technology for DIY ponzi schemes. You set up a fake company / persona, borrow some money, make payments from principal for a year or two, get the credit needed to borrow lots more, borrow a lot more, and then ghost.

If so, shorting crowdfunding companies might be a never before encountered opportunity to actually short ponzi schemes! Check out this disaster story and tell me it doesn't fit the description.

https://firechecklist.net/2018/04/21/downside-to-r-e-crowdfunding/

chasesfish

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Re: Lending Club - Time to panic?
« Reply #304 on: May 10, 2018, 05:28:10 AM »
Earnings...surprised everyone.  Company lost money, but they actually found new suckers to invest in them.

Still not reporting investment returns in a consistent manner with the industry.  I was happy to see some collection activity spike and I had my first positive net month thanks to $36 in recoveries.

Anyways, I lost the gain I had in the short position and decided I missed the train once, now it was time to bet hard against the company and I threw a few thousand into the put options and bought some going out into 2019 and 2020.  We will see...

ChpBstrd

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Re: Lending Club - Time to panic?
« Reply #305 on: May 10, 2018, 09:47:41 AM »
My own reluctance is based on the $400M of cash on their balance sheet. That's a lot to burn through, even with a cash flow of -$113M/year.

LC is riding the roller coaster with the rest of the market. I think if you set a limit order to sell your puts 20% higher than what you paid, you'd have the sale executed sometime within the next several months.

I have held a couple Sears puts over the past 3 mos and they've gone nowhere so far. But I remain confident that SHLD will eventually declare bankruptcy.

uwp

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Re: Lending Club - Time to panic?
« Reply #306 on: May 10, 2018, 11:14:07 AM »
Options are tough, you gotta be right on direction and timing.

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #307 on: May 10, 2018, 11:59:44 AM »
There is usually a bump before a stock goes kaput. People who buy up stocks to cover their short positions is likely the cause. Its hard to imagine that anyone would really value this company at 1.2 billion. Personally, it seems like the stock price should be in the sub $1 range.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #308 on: May 10, 2018, 08:35:27 PM »
I’m betting this is a dead cat bounce...but again, with that level of cash it might be worth something.

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #309 on: May 15, 2018, 06:51:34 PM »
Found out that there is a class action lawsuit building up: https://www.prnewswire.com/news-releases/rm-law-announces-class-action-lawsuit-against-lendingclub-corporation-300642988.html

They're looking for people with losses above 100k. They claim that LC had "hidden fees" despite claiming no hidden fees, and the Gramm-Leach-Bliley Act for failing to provide customers with a clear and conspicuous privacy notice so that each customer could reasonably be expected to receive actual notice.

I wonder how much that settlement could even possibly be worth or if it will go anywhere.

Dollar Slice

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Re: Lending Club - Time to panic?
« Reply #310 on: May 15, 2018, 09:28:44 PM »
Yeah, I got a notice in the mail saying I could potentially join the class action, yadda yadda. But I never lost money with LC since I got out while the getting was good and then made bank on the IPO...

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Re: Lending Club - Time to panic?
« Reply #311 on: May 15, 2018, 10:03:30 PM »
Posting to follow, because I'm not paying close enough attention to my LC.  I've turned off automatic investment and have been pulling some cash out recently to cover some other (hopefully temporary) losses on a small business loan to a company I've made loans to many times before (long story, don't ask, we understand that this is the last time I'm loaning them money), and because I'm just not sure of their business model going forward.  It seems to be getting awfully close to Harley Davidson's "Zero down, zero a month, until the repo man finds it" loans back in 2008 or so.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #312 on: May 16, 2018, 05:21:20 AM »
Found out that there is a class action lawsuit building up: https://www.prnewswire.com/news-releases/rm-law-announces-class-action-lawsuit-against-lendingclub-corporation-300642988.html

They're looking for people with losses above 100k. They claim that LC had "hidden fees" despite claiming no hidden fees, and the Gramm-Leach-Bliley Act for failing to provide customers with a clear and conspicuous privacy notice so that each customer could reasonably be expected to receive actual notice.

I wonder how much that settlement could even possibly be worth or if it will go anywhere.

Its interesting all the legal action is for either the stock investors or the borrowers.  Nothing for all of us who put money into the service and has been getting pounded by poor/negative returns

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #313 on: May 17, 2018, 09:09:22 AM »
I still have 31 notes left, 2 in Grace Period and the rest current. I'm now up to listing the current notes at 20% off . I have no idea what is different about these notes vs. the hundreds of current notes that sold at more modest discounts earlier on (started around 2-3% off and a bunch sold there), and frankly am to busy/lazy to dig in to the data at all. Just want to be done with it.

I sold the last of the 31-120 day late notes at 95% off, and the 16-30 day late at 75%. At that discount I honestly hope the buyer gets the price in recoveries after the inevitable charge off. I just don't want to deal with the trickle of money coming in (which I will still have to, with the notes that were charged off on my account).

chasesfish

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Re: Lending Club - Time to panic?
« Reply #314 on: May 17, 2018, 11:57:44 AM »
I still have 31 notes left, 2 in Grace Period and the rest current. I'm now up to listing the current notes at 20% off . I have no idea what is different about these notes vs. the hundreds of current notes that sold at more modest discounts earlier on (started around 2-3% off and a bunch sold there), and frankly am to busy/lazy to dig in to the data at all. Just want to be done with it.

I sold the last of the 31-120 day late notes at 95% off, and the 16-30 day late at 75%. At that discount I honestly hope the buyer gets the price in recoveries after the inevitable charge off. I just don't want to deal with the trickle of money coming in (which I will still have to, with the notes that were charged off on my account).

The upside of leaving it in there, you'll get a trickle of money and they finally got the tax reporting/importing easy.

The downside is who knows what happens once lending club bankrupts.

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #315 on: May 18, 2018, 12:37:16 PM »
I still have 31 notes left, 2 in Grace Period and the rest current. I'm now up to listing the current notes at 20% off . I have no idea what is different about these notes vs. the hundreds of current notes that sold at more modest discounts earlier on (started around 2-3% off and a bunch sold there), and frankly am to busy/lazy to dig in to the data at all. Just want to be done with it.

I sold the last of the 31-120 day late notes at 95% off, and the 16-30 day late at 75%. At that discount I honestly hope the buyer gets the price in recoveries after the inevitable charge off. I just don't want to deal with the trickle of money coming in (which I will still have to, with the notes that were charged off on my account).

The upside of leaving it in there, you'll get a trickle of money and they finally got the tax reporting/importing easy.

The downside is who knows what happens once lending club bankrupts.
Sadly this is an IRA account, so no taxable events, AND once I transfer the money out (with the hefty fee courtesy of STRATA), the trickle will never amount to the transfer fee which I think is $150 IIRC.

I know there are some workarounds here that someone posted about getting a fidelity brokerage account through STRATA, I just don't care enough over a few bucks.

sisto

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Re: Lending Club - Time to panic?
« Reply #316 on: May 22, 2018, 12:46:36 PM »
I still have 31 notes left, 2 in Grace Period and the rest current. I'm now up to listing the current notes at 20% off . I have no idea what is different about these notes vs. the hundreds of current notes that sold at more modest discounts earlier on (started around 2-3% off and a bunch sold there), and frankly am to busy/lazy to dig in to the data at all. Just want to be done with it.

I sold the last of the 31-120 day late notes at 95% off, and the 16-30 day late at 75%. At that discount I honestly hope the buyer gets the price in recoveries after the inevitable charge off. I just don't want to deal with the trickle of money coming in (which I will still have to, with the notes that were charged off on my account).
I'm riding it out and still just hoping to still break even

140 notes issued and current
10 notes in grace period
187 notes fully paid
3 notes 16-30 days late
3 notes 31-120 days late
1 note in default
96 notes charged off

I just keep pulling the cash out as notes get paid off.

FLBiker

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Re: Lending Club - Time to panic?
« Reply #317 on: May 24, 2018, 10:32:20 AM »
I just keep pulling the cash out as notes get paid off.

Me too.  I've got 35 current, 1 in grace, 4 late and 1 default.  I've been phasing out for a while, though (also have 140 fully paid and 86 charged off).

I did pretty well with it all told, but it was WAY more hassle than index funds.

AM43

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Re: Lending Club - Time to panic?
« Reply #318 on: May 25, 2018, 06:52:55 AM »
I am just cashing out as notes get paid and not selling on secondary market for 90% discount.
900 notes
140 in default
Only around 70 notes are left to get paid from so should be done with it this year.
All and all I am making around 6.5% in interest.
On the other hand I jumped on LC IPO and absolutely got hammered.
Only invested little over $1k, but still...

Timodeus

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Re: Lending Club - Time to panic?
« Reply #319 on: July 17, 2018, 12:25:40 PM »
I came across this article and thought of this thread. It's not about Lending Club per se nor P2P lenders in the USA, but I thought it germane to the discussion about the state of Lending Club's business model and the P2P lending environment.

https://www.bloomberg.com/news/articles/2018-07-16/panic-roils-china-s-p2p-lenders-as-savers-rush-to-withdraw-cash

I also noticed MMM updated his Lending Club stats this past June, for interest received he states "No Longer Shown". I wonder what's going on.

I got out of Lending Club years ago but have a tiny amount invested in crowdfunded real estate. As we head into the late part of the credit cycle I'm still keeping tabs on this business model and how it comes out the other end. I am a chicken I know, but right now I'd rather be a chicken than a pig that gets slaughtered.

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #320 on: July 17, 2018, 01:25:55 PM »
I still have 31 notes left, 2 in Grace Period and the rest current. I'm now up to listing the current notes at 20% off . I have no idea what is different about these notes vs. the hundreds of current notes that sold at more modest discounts earlier on (started around 2-3% off and a bunch sold there), and frankly am to busy/lazy to dig in to the data at all. Just want to be done with it.

I sold the last of the 31-120 day late notes at 95% off, and the 16-30 day late at 75%. At that discount I honestly hope the buyer gets the price in recoveries after the inevitable charge off. I just don't want to deal with the trickle of money coming in (which I will still have to, with the notes that were charged off on my account).

The upside of leaving it in there, you'll get a trickle of money and they finally got the tax reporting/importing easy.

The downside is who knows what happens once lending club bankrupts.
Sadly this is an IRA account, so no taxable events, AND once I transfer the money out (with the hefty fee courtesy of STRATA), the trickle will never amount to the transfer fee which I think is $150 IIRC.

I know there are some workarounds here that someone posted about getting a fidelity brokerage account through STRATA, I just don't care enough over a few bucks.
Finally sold my last note a few weeks ago. Total invested: $9700; total balance now: $8808.

I ACH'd the funds to STRATA and initiated a rollover to Vanguard. Vanguard requires a statement from within the past 90 days, and STRATA only posts quarterly statements. And their Q2 statement doesn't post until the last week of July, WTF! So just waiting on that to finish the rollover. Upside is if any recoveries come in between now and then, I can bring them along.

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Re: Lending Club - Time to panic?
« Reply #321 on: July 17, 2018, 01:33:26 PM »
My Lending Club experiment is over.

January 2014 to June 2018

Invested $27,000, withdrew $30,200

1,313 notes, mostly B and C

154 defaults

So I made $3,200, but it was spread over four years so the annual return is about 3% per year. Less taxes.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #322 on: July 17, 2018, 06:09:18 PM »
My Lending Club experiment is over.

January 2014 to June 2018

Invested $27,000, withdrew $30,200

1,313 notes, mostly B and C

154 defaults

So I made $3,200, but it was spread over four years so the annual return is about 3% per year. Less taxes.

You rocked past my 1.52% return

Villanelle

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Re: Lending Club - Time to panic?
« Reply #323 on: July 18, 2018, 01:38:18 AM »
$3000 invested
$3616 withdrawn

So roughly 20% return total, not annualized. [edited because I forgot a zero and that makes a big difference!]

124 notes paid
46 charged off 
So ~27% of my loans defaulted before completion and didn't pay off in full, and $730 was written off.

Loan categories
A (0.0%) B (1.1%) C (7.3%) D (36.4%) E (29.5%) F (24.3%) G  (1.4%)  (According to a note on my balance sheet, as of 11/2017, LC stopped doing F &G loans.)

Late Fees Received:   $0.70 
Recoveries:   $102.79 
Recovery Fees:   ( $10.34 )
Service Fees:   ( $49.39 )
Collection Fees:   ( $7.19 )

So I paid about $68 for them to collect $103 (of about $730 that didn't get paid). 

Since I only dabbled in this, it really doesn't matter, but if I had it to do over again, I'd certainly skip it.   
« Last Edit: July 18, 2018, 06:13:19 AM by Villanelle »

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #324 on: July 18, 2018, 06:06:29 AM »
$3000 invested
$3616 withdrawn

So roughly 2% return total, not annualized.

124 notes paid
46 charged off 
So ~27% of my loans defaulted before completion and didn't pay off in full, and $730 was written off.

Loan categories
A (0.0%) B (1.1%) C (7.3%) D (36.4%) E (29.5%) F (24.3%) G  (1.4%)  (According to a note on my balance sheet, as of 11/2017, LC stopped doing F &G loans.)

Late Fees Received:   $0.70 
Recoveries:   $102.79 
Recovery Fees:   ( $10.34 )
Service Fees:   ( $49.39 )
Collection Fees:   ( $7.19 )

So I paid about $68 for them to collect $103 (of about $730 that didn't get paid). 

Since I only dabbled in this, it really doesn't matter, but if I had it to do over again, I'd certainly skip it.   

I think you mean 20% total, not 2%

Villanelle

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Re: Lending Club - Time to panic?
« Reply #325 on: July 18, 2018, 06:13:46 AM »
$3000 invested
$3616 withdrawn

So roughly 2% return total, not annualized.

124 notes paid
46 charged off 
So ~27% of my loans defaulted before completion and didn't pay off in full, and $730 was written off.

Loan categories
A (0.0%) B (1.1%) C (7.3%) D (36.4%) E (29.5%) F (24.3%) G  (1.4%)  (According to a note on my balance sheet, as of 11/2017, LC stopped doing F &G loans.)

Late Fees Received:   $0.70 
Recoveries:   $102.79 
Recovery Fees:   ( $10.34 )
Service Fees:   ( $49.39 )
Collection Fees:   ( $7.19 )

So I paid about $68 for them to collect $103 (of about $730 that didn't get paid). 

Since I only dabbled in this, it really doesn't matter, but if I had it to do over again, I'd certainly skip it.   

I think you mean 20% total, not 2%

Yes, thank you!

sisto

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Re: Lending Club - Time to panic?
« Reply #326 on: July 18, 2018, 08:41:54 AM »
$3000 invested
$3616 withdrawn

So roughly 20% return total, not annualized. [edited because I forgot a zero and that makes a big difference!]

124 notes paid
46 charged off 
So ~27% of my loans defaulted before completion and didn't pay off in full, and $730 was written off.

Loan categories
A (0.0%) B (1.1%) C (7.3%) D (36.4%) E (29.5%) F (24.3%) G  (1.4%)  (According to a note on my balance sheet, as of 11/2017, LC stopped doing F &G loans.)

Late Fees Received:   $0.70 
Recoveries:   $102.79 
Recovery Fees:   ( $10.34 )
Service Fees:   ( $49.39 )
Collection Fees:   ( $7.19 )

So I paid about $68 for them to collect $103 (of about $730 that didn't get paid). 

Since I only dabbled in this, it really doesn't matter, but if I had it to do over again, I'd certainly skip it.   
I too only invested $5K and would not have done it knowing what I know today. I'm still fighting to get the rest of my money out.

Villanelle

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Re: Lending Club - Time to panic?
« Reply #327 on: July 19, 2018, 03:04:03 AM »
$3000 invested
$3616 withdrawn

So roughly 20% return total, not annualized. [edited because I forgot a zero and that makes a big difference!]

124 notes paid
46 charged off 
So ~27% of my loans defaulted before completion and didn't pay off in full, and $730 was written off.

Loan categories
A (0.0%) B (1.1%) C (7.3%) D (36.4%) E (29.5%) F (24.3%) G  (1.4%)  (According to a note on my balance sheet, as of 11/2017, LC stopped doing F &G loans.)

Late Fees Received:   $0.70 
Recoveries:   $102.79 
Recovery Fees:   ( $10.34 )
Service Fees:   ( $49.39 )
Collection Fees:   ( $7.19 )

So I paid about $68 for them to collect $103 (of about $730 that didn't get paid). 

Since I only dabbled in this, it really doesn't matter, but if I had it to do over again, I'd certainly skip it.   
I too only invested $5K and would not have done it knowing what I know today. I'm still fighting to get the rest of my money out.

What do you mean when you say you are fighting to get your money out?  I couldn't be bothered to sell off my notes, especially at the horrible discount required, so I just waited until they all paid off (or were charged off).  Every few months, I'd go and transfer out the few dollars in my account, and this last time, I realized it was the last of it.  To me, this makes so much more sense than putting any work in to it, especially if you have so little invested.  Just let it reach it's natural conclusion.

~~

Overall, my ROI was actually decent, but it was a fair amount of work and I could have done about as well in average stock market returns, with much less time spent finding notes, especially after the first few months when LC took off and I had to log on at exactly the moment new loans posted and try to scan as many notes as possible as quickly as possible, watching as they disappeared on my as I tried to find loans I liked.  I mean, it wasn't exactly arduous, but it was  PITA and far more time and brain intensive than clicking "Buy" on some more Vanguard.  Because my returns were okay, I'm not sure I'd call it a failure, but I definitely don't categorize it as a success. 

sisto

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Re: Lending Club - Time to panic?
« Reply #328 on: July 19, 2018, 09:48:10 AM »
$3000 invested
$3616 withdrawn

So roughly 20% return total, not annualized. [edited because I forgot a zero and that makes a big difference!]

124 notes paid
46 charged off 
So ~27% of my loans defaulted before completion and didn't pay off in full, and $730 was written off.

Loan categories
A (0.0%) B (1.1%) C (7.3%) D (36.4%) E (29.5%) F (24.3%) G  (1.4%)  (According to a note on my balance sheet, as of 11/2017, LC stopped doing F &G loans.)

Late Fees Received:   $0.70 
Recoveries:   $102.79 
Recovery Fees:   ( $10.34 )
Service Fees:   ( $49.39 )
Collection Fees:   ( $7.19 )

So I paid about $68 for them to collect $103 (of about $730 that didn't get paid). 

Since I only dabbled in this, it really doesn't matter, but if I had it to do over again, I'd certainly skip it.   
I too only invested $5K and would not have done it knowing what I know today. I'm still fighting to get the rest of my money out.

What do you mean when you say you are fighting to get your money out?  I couldn't be bothered to sell off my notes, especially at the horrible discount required, so I just waited until they all paid off (or were charged off).  Every few months, I'd go and transfer out the few dollars in my account, and this last time, I realized it was the last of it.  To me, this makes so much more sense than putting any work in to it, especially if you have so little invested.  Just let it reach it's natural conclusion.

~~

Overall, my ROI was actually decent, but it was a fair amount of work and I could have done about as well in average stock market returns, with much less time spent finding notes, especially after the first few months when LC took off and I had to log on at exactly the moment new loans posted and try to scan as many notes as possible as quickly as possible, watching as they disappeared on my as I tried to find loans I liked.  I mean, it wasn't exactly arduous, but it was  PITA and far more time and brain intensive than clicking "Buy" on some more Vanguard.  Because my returns were okay, I'm not sure I'd call it a failure, but I definitely don't categorize it as a success.
@Villanelle I mean exactly what you are saying. Fighting = waiting for them to be paid back or charged off. I wait until I have around $500 and then cash it out.

teltic

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Re: Lending Club - Time to panic?
« Reply #329 on: July 19, 2018, 02:43:06 PM »
I've been loaning through Prosper, LC's competitor... Here's my returns

Using XIRR, I get 10.8%

4/18/2016   $5,500.00
1/1/2017   $5,500.00
1/2/2018   $2,750.00
1/24/2018   $2,750.00
7/19/2018   ($19,176.10)  << Current Value
   
XIRR   10.8%


Allocation:
AA = 0
A = 0
B = 0
C = 3%
D = 23%
E = 44%
HR = 30%

It's been a fun experiment for sure... I'm not yet sure whether I plan to put 2019's IRA money in this or not.

sisto

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Re: Lending Club - Time to panic?
« Reply #330 on: July 20, 2018, 03:33:26 PM »
This is just pathetic, I can't wait to get the rest of my money out!
Adjusted Net Annualized Return 1.84%

chasesfish

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Re: Lending Club - Time to panic?
« Reply #331 on: July 20, 2018, 08:07:37 PM »
Just curious, are you continuing to build your number of notes or is your portfolio steady?  My returns started declining when I stopped adding money.  I've found their borrowers have to be further past due than what a Bank considers past due before they charge off the note.

sisto

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Re: Lending Club - Time to panic?
« Reply #332 on: July 23, 2018, 02:17:17 PM »
Just curious, are you continuing to build your number of notes or is your portfolio steady?  My returns started declining when I stopped adding money.  I've found their borrowers have to be further past due than what a Bank considers past due before they charge off the note.
I haven't added new money ever and quit reinvesting paid off notes several months ago maybe even a year now.

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #333 on: August 15, 2018, 12:40:07 PM »
Finally sold my last note a few weeks ago. Total invested: $9700; total balance now: $8808.

I ACH'd the funds to STRATA and initiated a rollover to Vanguard. Vanguard requires a statement from within the past 90 days, and STRATA only posts quarterly statements. And their Q2 statement doesn't post until the last week of July, WTF! So just waiting on that to finish the rollover. Upside is if any recoveries come in between now and then, I can bring them along.
Sent off the rollover paperwork on 2018-07-30. Was a little hiccup since the STRATA statement showed "debt instruments" still, since it is slow to update. Told the Vanguard rep that it was all in cash and just proceed.

Yesterday the transfer status changed from "awaiting client paperwork" to "transfer submitted/requested" to "transfer in progress." Today, I sit staring at the transfer status. Transfer, god damn it, transfer!

FWIW I got $10 of recoveries while I've been waiting. Pissed off that LC will get the future recoveries, but it's not worth the $100/year to keep the account open to just to get them. Cut my losses, out.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #334 on: August 15, 2018, 07:56:46 PM »
I'm debating how much I need to leave in there to keep seeing the recoveries.  Maybe $250.

217 active notes remaining for just over $2,500 left.  Slowly winding out, the remaining notes can't seem to be sold for their face value.

Padonak

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Re: Lending Club - Time to panic?
« Reply #335 on: August 15, 2018, 09:04:57 PM »
I have about 4K left, about 180 risky notes, bought for $50-100 each. I bought them using Lending Robot, luckily stayed under the free limit (as it turned out, their "algorithm" wasn't worth paying for). Slowly winding down over the next couple of years. Current ANR 2.8%. I can't be bothered trying to sell my notes. Definitely not buying new ones either.

MrUpwardlyMobile

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Re: Lending Club - Time to panic?
« Reply #336 on: August 15, 2018, 09:13:48 PM »
https://debanked.com/2017/08/lending-club-charge-offs-will-happen/

“Lending Club has gradually drawn more attention to the effect of prepayments on loans and this guide is no different.

“Prepayments impact returns because they reduce the amount of principal earning interest from Notes. A Note is considered prepaid when the dollar amount received is greater than the amount due for any given month,” they say. “It is inevitable that certain loans will charge-off or prepay and result in a loss of investment capital.”

Not mentioned however is that investors are charged a 1% fee on all outstanding principal if a borrower pays off their entire loan early despite it being no fault of the investor. And investors are less likely to monitor the impact of these fees if they keep reinvesting their cash which of course Lending Club advises investors to do.”

 Between that and allegations that the early payoffs were from lending club refinancing all the good borrowers thereby causing the early payoffs, I concluded lending club wasn’t something I could personally trust or invest through.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #337 on: August 16, 2018, 04:48:59 AM »
I haven't found one of the class action suits for lenders yet, they've all been for borrowers or shareholders.  Their disclosure has been less than ideal

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #338 on: August 16, 2018, 07:27:46 AM »
I'm debating how much I need to leave in there to keep seeing the recoveries.  Maybe $250.
Not sure I understand, I don't think there's an account minimum? For reference, I transferred out my entire balance in early July, and I still received a trickle of recoveries in late July (they always seem to post at the end of the month).

My account is an IRA but I doubt it would be any different in a taxable account. Maybe they would shut you down after a certain amount of time with a $0 balance? I haven't read the rules in detail on this point.

uwp

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Re: Lending Club - Time to panic?
« Reply #339 on: August 16, 2018, 09:36:28 AM »

Not mentioned however is that investors are charged a 1% fee on all outstanding principal if a borrower pays off their entire loan early despite it being no fault of the investor. And investors are less likely to monitor the impact of these fees if they keep reinvesting their cash which of course Lending Club advises investors to do.”

Wait... LendingClub charges the investors 1% of the loan balance if the borrower pays it off early?

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #340 on: August 16, 2018, 10:00:32 AM »

Not mentioned however is that investors are charged a 1% fee on all outstanding principal if a borrower pays off their entire loan early despite it being no fault of the investor. And investors are less likely to monitor the impact of these fees if they keep reinvesting their cash which of course Lending Club advises investors to do.”

Wait... LendingClub charges the investors 1% of the loan balance if the borrower pays it off early?

No:

Quote
Lending Club provides servicing for the loans facilitated through our platform. This includes maintaining investor accounts, collecting and processing principal and interest payments from borrowers, and distributing these payments net of fees to investors. Investors pay Lending Club a service fee equal to one percent (1%) of the amount of any borrower payments received within 15 days of the payment due date. If borrowers miss a payment, investors do not pay a service fee.

When borrowers prepay their loans (pay off all or part of a loan earlier than the contractual due date) during the first 12 months after a Note is issued, we limit the size of the service fee charged to investors in Notes corresponding to the applicable loan in order to protect their returns. For those first 12 months, an investor will never pay a monthly service fee greater than 1% of the contractual monthly payment amount due to such investor. For example, if the contractual monthly payment amount due to an investor is $300 and a prepayment of $4,000 is distributed to the investor's account, he or she would only be charged a service fee of $3 (1% of $300) that month.

MrUpwardlyMobile

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Re: Lending Club - Time to panic?
« Reply #341 on: August 16, 2018, 11:08:21 AM »

Not mentioned however is that investors are charged a 1% fee on all outstanding principal if a borrower pays off their entire loan early despite it being no fault of the investor. And investors are less likely to monitor the impact of these fees if they keep reinvesting their cash which of course Lending Club advises investors to do.”

Wait... LendingClub charges the investors 1% of the loan balance if the borrower pays it off early?

No:

Quote
Lending Club provides servicing for the loans facilitated through our platform. This includes maintaining investor accounts, collecting and processing principal and interest payments from borrowers, and distributing these payments net of fees to investors. Investors pay Lending Club a service fee equal to one percent (1%) of the amount of any borrower payments received within 15 days of the payment due date. If borrowers miss a payment, investors do not pay a service fee.

When borrowers prepay their loans (pay off all or part of a loan earlier than the contractual due date) during the first 12 months after a Note is issued, we limit the size of the service fee charged to investors in Notes corresponding to the applicable loan in order to protect their returns. For those first 12 months, an investor will never pay a monthly service fee greater than 1% of the contractual monthly payment amount due to such investor. For example, if the contractual monthly payment amount due to an investor is $300 and a prepayment of $4,000 is distributed to the investor's account, he or she would only be charged a service fee of $3 (1% of $300) that month.

I think you’re referring to a recent change, as opposed to how it was for years.  This was a pretty big scandal.

laserlady

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Re: Lending Club - Time to panic?
« Reply #342 on: August 16, 2018, 01:07:42 PM »
Yep, that's a recent change, and it's still only for notes that are less than one year old.  I'm guessing the one-year mark is about the breaking point for where interest and investor fees balance out in early pay-offs, so now at least you probably won't lose money when someone pays off a loan early, even though you may not get any net interest payment with the early pay off.

I have lost money when someone paid off their loans early before -- e.g., in 2014 someone paid off a $19.67 loan on a B note, which gave me $0.18 in interest and cost me $0.20 in investor fees, so I didn't even get back all of the principal on the note.  All of my loans now are old enough that they're more in the range of $0.07 in interest and $0.05 in investor fees when they're paid off early.  I don't mind the earlier pay offs, though, since that's one less loan that's going to default on me.   I feel relieved whenever I can get any money safely out of Lending Club.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #343 on: August 16, 2018, 06:03:24 PM »

Not mentioned however is that investors are charged a 1% fee on all outstanding principal if a borrower pays off their entire loan early despite it being no fault of the investor. And investors are less likely to monitor the impact of these fees if they keep reinvesting their cash which of course Lending Club advises investors to do.”

Wait... LendingClub charges the investors 1% of the loan balance if the borrower pays it off early?

I would love to find the class action suit related to that one

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #344 on: September 05, 2018, 02:25:51 PM »
Is anyone having problems selling theirs notes?

My account is down to $1500 and if I can close out my account before 2019 I'd really prefer that rather than the maybe $100 I'd accrue in interest over the next 3 years. However, when I went to the Folio'n site to sell the notes, I kept hitting errors that I couldn't sell certain notes. It'd tell me that even if I only selected one note. Anyone else experience this?

FIPurpose

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Re: Lending Club - Time to panic?
« Reply #345 on: September 05, 2018, 02:27:01 PM »
I think I have it figured out. Probably a bug I ran into on the site.

chasesfish

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Re: Lending Club - Time to panic?
« Reply #346 on: September 06, 2018, 05:07:04 AM »
I'm down to 171 performing notes, they won't sell unless I go into steep discounts.  I haven't tried in a few weeks, I might as well list another chunk

DaveSch

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Re: Lending Club - Time to panic?
« Reply #347 on: September 06, 2018, 12:59:02 PM »
I've found this thread interesting so I'll throw in my $1.56 worth. My last note ran off about a year ago and I emptied the account, but $1.56 is back from recoveries. I first invested in early 2013 and had, at the peak $7k invested (on my way to $20k). But then I began to feel that LC's goals and interests weren't aligned with mine. They make the loan and get most of their fees up front. Then down the road they offer a refi, which triggers another fee for them and no more for me.

Anyway, a few weeks ago, I got an e-mail from LC telling me that if I wanted to keep my account open, I have to put in at least $25. They said that if it doesn't happen soon, they will transfer my $1.56 and close the account. That is where I stand now.

I did ok with my involvement, but I didn't like the idea of their customers getting loans and then ducking out. I realized it was a risk, but it happened more often than I thought it would. I wanted to help others out, but not quite to that extent!

Syonyk

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Re: Lending Club - Time to panic?
« Reply #348 on: September 06, 2018, 01:31:28 PM »
I did ok with my involvement, but I didn't like the idea of their customers getting loans and then ducking out. I realized it was a risk, but it happened more often than I thought it would. I wanted to help others out, but not quite to that extent!

Yeah, the charged off notes are pretty bad.  I'm still just letting mine "naturally drain out" and transferring money out every month or two from the cash balance.  It'll take a few years, but I've got property projects I'd rather put the money into, and... next economic "correction," I expect the number of current notes to drop a lot.  Not enough to bother selling stuff out, but it's been an interesting experiment, just one I'm done with.

Not Yet Issued: 0
Issued & Current: 746
In Grace Period: 14
Fully Paid: 932
Late 16 - 30 Days: 10
Late 31 - 120 Days: 37
Default: 2
Charged Off: 301

appleshampooid

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Re: Lending Club - Time to panic?
« Reply #349 on: September 06, 2018, 02:01:05 PM »
My IRA account finally rolled over, and is now closed.

In the time between ACH'ing the funds to STRATA and initiating the rollover, and Vanguard actually receiving the funds, I had accumulated $40 in recoveries, which was both surprising and annoying. At that point STRATA had officially closed my account, but I could still log in to my LC account and see the recoveries in cash.

What's clear to me is that STRATA and LC don't really communicate that well. After I finished the rollover, I contacted LC support to close my account, so I didn't get hit with the $100 yearly fee to STRATA. They send me a distribution form that was clearly going to be sent to STRATA. I contacted them again, pointing out that the account with STRATA was already closed, and if there was some other form or process. They said fill out the form anyway, and send it, which I did. So I should be getting a check for that $40 or so, which will be a distribution, but since it's a Roth there won't be tax consequences - just withdrawal of principal (which I will note on my Roth basis tracker spreadsheet).

I am now a little bit frustrated that so many recoveries were coming in (it was more like $10/month before this, so I figured not worth it to pay the $100 fee to get maybe $100 back over the next 10 months). But if it was $40/month...would have been worth it to pay the fee and collect some. Oh well, it's over now.