Author Topic: Has anyone sold a single Lending Club note on Folio in the last 3 months?  (Read 6334 times)

kurtnyc

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Hey, new to the boards. Just wondering if anyone has actually be able to sell a lending club note on Folio recently? Any kind of sale, bad notes, good notes with markup, good notes below book to liquidate, anything. I can't seem to sell a note at any price and am curious if other are able.

Right now I've got a few (grace period to late) with 40-85% markdowns, I can seem to get anything to move, so if anyone had advice I'd love it. My markdowns are based on default rate percentages http://www.lendingmemo.com/sell-late-notes-lending-club/, and even when I go below them I can't get a single sale. I'm also interested in people who are selling new notes at a quick markup, or other strategies. Their are currently around 250,000 notes for sale. If it's so skewed to a buyers market then maybe the opportunity is in a different place, just trying to get a handle on it.

thanks!

Tjat

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Strange. I'm trying to liquidate my lending club position (~$5000) and have been putting lots of 60 notes for sale at a time (at cost). I'll take the 1% hit

Been selling fairly easily, maybe 85% are sold by expiration

kurtnyc

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Tjat, thanks for your response, good info. Are you selling all grades and all status? (i.e. current, never late, grace period, 16-30 late, etc)
Your experience is similar to what I've read about on LC blogs, but those posts were 2014 or older so I wan't sure if it's changed again.

At the moment I'm only trying to sell grace period & 16-30 late, but if that's impossible, I might be interested on the other end in being a buyer for notes in good standing that are over 12 months old.

thanks for your input, I know grace period & 16-30 late sell for steep discounts (55% & 89%), but even with that I can't get a single one to move so I got to wondering..


Stache-O-Lantern

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I typically will try to sell a note if it enters grace period, usually at a markdown of around 20-30%.  Usually the note either sells, or the status goes "pending" because it's about to pay, and then it gets yanked from the secondary market automatically.  Most of my notes are in the B-C-D range.  I've made several sales in the last 3 months.  I will often check in every day or two, and drop the price a little bit, 1-2% at a time until it goes.

I'm surprised to hear your grace period notes aren't selling at a markdown of 40% or more.  Perhaps the notes you have listed have a spotty history of payments, or a big recent drop in credit score?

JZinCO

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I don't want to derail but I have a question from the buying perspective. I can occasionally grab loans with this rule: any grade, always on time, currently not late, 1+% discount, 5-80% paid off, any movement in credit score. I know I'm probably only catching loans for someone who is dumping their notes for liquidity.

If I were to pick up a riskier note (e.g. someone who is or has been late), what % discount would one want for it?

Stache-O-Lantern

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If I were to pick up a riskier note (e.g. someone who is or has been late), what % discount would one want for it?

The % discount could be small or large based on the available data for a note.  For example a note with a good credit score, high interest rate, long history of payment with only one late payment 2 yrs ago might sell at a discount of only a few %.  Another note that is also current, but with a history of late/missed payments, recent big drop in credit score, and a log that suggests lending club can't get in touch with the borrower might not sell at 10-20% discount. 

The discount % you would want would depend on your strategy.  I try to get good notes at a relatively small discount, and if they go into grace period i try to sell them fast.  There may be others active on the secondary market whose strategy is to buy late notes at pennies on the dollar, and have enough of them start paying again to cover the majority that don't.

Tjat

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Tjat, thanks for your response, good info. Are you selling all grades and all status? (i.e. current, never late, grace period, 16-30 late, etc)
Your experience is similar to what I've read about on LC blogs, but those posts were 2014 or older so I wan't sure if it's changed again.

At the moment I'm only trying to sell grace period & 16-30 late, but if that's impossible, I might be interested on the other end in being a buyer for notes in good standing that are over 12 months old.

thanks for your input, I know grace period & 16-30 late sell for steep discounts (55% & 89%), but even with that I can't get a single one to move so I got to wondering..


I'm selling my entire position without consideration to loan quality. In setting up the portfolio I targeted returns on the higher end, so I imagine some are in a grace period, but most are current. My projected return is still high (~12%), I just made the mistake of setting this up in a taxable account and I prefer the simplicity of consolidating everything at Vanguard.

kurtnyc

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I'm surprised to hear your grace period notes aren't selling at a markdown of 40% or more.  Perhaps the notes you have listed have a spotty history of payments, or a big recent drop in credit score?

thanks for the feedback, it's possible they are just turds. I'm trying to sell everything less that current, but honestly not looking at them too deeply.

Is it even possible to sell at 16-30 day late, or 31-120? I'm curious about that. I just looked it up and even a 31-120 has a 26% of coming back (74% charge off), so why you can't sell that at 85% off I don't get. 
Grace Period notes currently have a 28% charge off rate, so when I'm trying to sell them at 35-40% discounts it's actually a loosing proposition, I just wanted to see how low I had to go with a handful, but at these discounts I'm probably holding them and not wasting the time!




kurtnyc

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I don't want to derail but I have a question from the buying perspective. I can occasionally grab loans with this rule: any grade, always on time, currently not late, 1+% discount, 5-80% paid off, any movement in credit score. I know I'm probably only catching loans for someone who is dumping their notes for liquidity.

If I were to pick up a riskier note (e.g. someone who is or has been late), what % discount would one want for it?

JZinCO, this is the other side of it. I'm now thinking about if it's this tilted for buyers. Do you have trouble finding those notes to buy? are you hand picking them on folio or using some kind of automation?  whatever your willing to share would be cool.

as for your question this jpeg is a more updated version of the charge off %, if your buying from someone like me selling at a discounted rate substantially below the average charge off % I would think your doing well, but others might have experience with this. and there are blogs out about this process of buying 'grace period' notes, but when I've looked into it the time factor it takes to sort these made it not an option for me.

« Last Edit: October 30, 2015, 05:50:51 PM by kurtnyc »

Stache-O-Lantern

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thanks for the feedback, it's possible they are just turds. I'm trying to sell everything less that current, but honestly not looking at them too deeply.

Is it even possible to sell at 16-30 day late, or 31-120? I'm curious about that.

Yeah, i look at the deeper situation with a note closely before i buy or sell on the secondary market.  To me it's interesting and exciting, but i know for others its tedious.

I've sold a couple notes that were 31-120 late, ones that i couldn't get rid of in grace period.  I think the most i ever marked something down was 91%.  And it seems like almost anything will sell for $1.50.  The default rates that Lending Club posts for notes of different status is a rough guide, but it lumps notes with very different payment histories.   So the actual % markdown that a particular note in a broad status category might sell for may still be all over the map.

JZinCO

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Re: Has anyone sold a single Lending Club note on Folio in the last 3 months?
« Reply #10 on: November 01, 2015, 09:43:25 AM »
I don't want to derail but I have a question from the buying perspective. I can occasionally grab loans with this rule: any grade, always on time, currently not late, 1+% discount, 5-80% paid off, any movement in credit score. I know I'm probably only catching loans for someone who is dumping their notes for liquidity.

If I were to pick up a riskier note (e.g. someone who is or has been late), what % discount would one want for it?

JZinCO, this is the other side of it. I'm now thinking about if it's this tilted for buyers. Do you have trouble finding those notes to buy? are you hand picking them on folio or using some kind of automation?  whatever your willing to share would be cool.

as for your question this jpeg is a more updated version of the charge off %, if your buying from someone like me selling at a discounted rate substantially below the average charge off % I would think your doing well, but others might have experience with this. and there are blogs out about this process of buying 'grace period' notes, but when I've looked into it the time factor it takes to sort these made it not an option for me.
In the interim days between recurring deposits to my LC account, I will have cash amounts of less than $25. I am buying secondary notes with an automated service to put those $ to use instead of cash drag occurring. As I said, I'm looking for notes of near-perfect borrowers. So, I usually have to buy just one secondary note a week. Generally, this is not difficult.

Thanks for your attachment. I might use this to set up a rule to buy late notes at a substantial discount. It could be a strategy of finding returns by taking advantage of lenders who have no patience for late borrowers....
« Last Edit: November 01, 2015, 10:18:07 AM by JZinCO »