Author Topic: Anyone Have a Sudden, Sharp Drop at Lending Club?  (Read 3081 times)

Betty Chug

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Anyone Have a Sudden, Sharp Drop at Lending Club?
« on: November 02, 2016, 08:08:40 AM »
Hi guys,

My first post, but this is very curious to me.  My Lending Club page tells me my Adjusted Net Annualized Return is just .87% today, after hovering around 8% since the company had it's difficulties in June.  This is not a huge investment for me, but I wonder if anyone else is experiencing this today?  I haven't been able to get through to customer service, either.

Thoughts?

FIPurpose

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #1 on: November 02, 2016, 08:18:27 AM »
It depends when did you start with lending club? If it was less than 5 months ago, then you probably just suffered from the initial rounds of late notes/defaults. You'll see that number bounce back and forth depending on how many notes are current. Websites like LendingRobot I think do a better job at smoothing that number over a bit better.

Betty Chug

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #2 on: November 02, 2016, 08:20:57 AM »
No, I've been at it for about 20 months and never had such a sharp turn...I'll check out LendingRobot.  Thanks for the tip!

arebelspy

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #3 on: November 05, 2016, 10:22:26 PM »
Interesting.  Curious to hear if anyone else experienced this besides the OP.

Perhaps they adjusted how they calculate or estimate returns?
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Metric Mouse

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #4 on: November 06, 2016, 01:17:28 AM »
Hi guys,

My first post, but this is very curious to me.  My Lending Club page tells me my Adjusted Net Annualized Return is just .87% today, after hovering around 8% since the company had it's difficulties in June.  This is not a huge investment for me, but I wonder if anyone else is experiencing this today?  I haven't been able to get through to customer service, either.

Thoughts?

Could you dig deeper into the numbers to search for defaults?  Could be a simple computational error on their end.

SnackDog

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #5 on: November 06, 2016, 02:25:10 AM »
I have 37 months and a bit over 10% return.  No sudden drop. How many notes do you have?  Less than 100 implies higher volatility.  Review your notes and see if a big one just got charged off.

Car Jack

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #6 on: November 06, 2016, 08:28:58 AM »
Nope.  What's your risk profile?  Are you carrying a bunch of high risk notes? (I consider MMM's portfolio of notes to be way above my tolerance for risk).  I've also followed MMM's returns and have personally matched his.  My notes are mostly "A" grade with some "B" and "C" mixed in.  Zero charge offs.  While the interest rate is lower, the risk is as well.  If you buy a bunch of junk notes, you can expect to see borrowers skip off without paying.

MustacheAndaHalf

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #7 on: November 06, 2016, 08:30:04 AM »
I've hit this before.  A long time ago I went from ~6-8% to a negative return in a matter of weeks.  In actual fact, my return wasn't negative but LendingClub had flawed accounting that make it look so.  I'll mention what I discovered in case it matches what OP did.

I bought distressed notes.. notes selling for $3 that were likely to default.  It was an experiment with a limited pool of money.  The default rates for standard notes did not apply here.  Notes for sale tend to be near default, so they are much riskier than they appear.  So my experiment buying notes on FolioFn showed high default rates, and miscalculations on Lending Club.

I later figured out what happened.  When I spent $3 and had a default, I lost $3.  But Lending Club used the original value of the note, and thought I lost the full $25.  So every time I lost a heavily discounted note, Lending Club subtracted the full $25 from my performance.  I lose a fraction of the note's value, but Lending Club subtracts the $25 someone else originally paid for it.  I also found some setting that could avoid including these notes in the performance value - you might play with the performance settings to see how it changes.

OP - Did you buy notes on FolioFn?  If those notes were sold at a discount, and then defaulted, it could heavily impact performance if Lending Club hasn't fixed the flaw I observed years ago.
« Last Edit: November 06, 2016, 08:34:24 AM by MustacheAndaHalf »

powskier

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #8 on: November 13, 2016, 11:10:52 PM »
There's a tweet from MrMoneyMustache on Oct 16th 2016:
"Uh-oh: my Lending Club experiment lost money for the first time. Temporary blip or the start of a fiery crash?"

I think he proceeded by going a little more strict on employment verification.

HAPPYINAZ

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #9 on: November 15, 2016, 07:36:59 AM »
I noticed a dramatic drop in my too, but now it's back up.  Mine went from like 8% return to 4.6% return for seemingly no reason.  Today it's back up.  I noticed the drop on Nov 7.  There are no defaults or late payments on my loans, so makes no sense to me what changed. 

arebelspy

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #10 on: November 15, 2016, 04:43:07 PM »
I noticed a dramatic drop in my too, but now it's back up.  Mine went from like 8% return to 4.6% return for seemingly no reason.  Today it's back up.  I noticed the drop on Nov 7.  There are no defaults or late payments on my loans, so makes no sense to me what changed.

Contact support.

Let us know what they say (or don't say).
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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Metric Mouse

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Re: Anyone Have a Sudden, Sharp Drop at Lending Club?
« Reply #11 on: November 16, 2016, 07:56:24 PM »
There's a tweet from MrMoneyMustache on Oct 16th 2016:
"Uh-oh: my Lending Club experiment lost money for the first time. Temporary blip or the start of a fiery crash?"

I think he proceeded by going a little more strict on employment verification.

Have to wait for an update to see if that worked.