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Learning, Sharing, and Teaching => Investor Alley => Topic started by: TheStachery on May 09, 2016, 10:34:30 AM

Title: Lending Club - Time to panic?
Post by: TheStachery on May 09, 2016, 10:34:30 AM
http://www.profitconfidential.com/stock/lendingclub-corp-heres-why-lendingclub-stock-is-going-crazy-this-morning/

Title: Re: Lending Club - Time to panic?
Post by: rahby1us on May 09, 2016, 12:08:26 PM
I actually bought some shares of LC this morning as a result of this giant drop.
Title: Re: Lending Club - Time to panic?
Post by: AM43 on May 09, 2016, 12:13:00 PM
Thinking about buying some as well.
I think there is a potential here to make a quick buck.
Title: Re: Lending Club - Time to panic?
Post by: chesebert on May 09, 2016, 02:45:38 PM
What makes you think the stock will go up? They have been going down hill since IPO. There could be a class action and LC could be forced to declare bankruptcy and delist its stock.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on May 09, 2016, 04:08:54 PM
I'm really debating this both as an investor and as someone interested in their stock.

I hate accounting irregularities, but if its earnings are accurate, they'll make about 0.27/share this year.  Financials trade between a 12 and 20x multiple and this one might be able to grow a little more.  At a 15 PE, the stock is worth about 4.05. 

The drop is from reeling back the growth expectations.

As an investor, I think I can get more upside then a regular 7% right now

Title: Re: Lending Club - Time to panic?
Post by: chasesfish on May 10, 2016, 04:25:16 AM
One other note, my biggest fear as a shareholder is when multiple regulatory agencies jump on this news and start fining the company.  The people who did this are gone, all the government is doing at that point is stealing money from shareholders.  They're still fining other financial institutions from eight years ago.
Title: Re: Lending Club - Time to panic?
Post by: rahby1us on May 10, 2016, 09:31:23 AM
I've jumped in a few stocks in the past on major down days and made (sometimes intra day) 15-20%. JCP, BP were a couple... Carnival Cruise Lines and VOW3.DE (volkswagon) would be a couple others where this was possible.

But as i check the market today i see i'm in the red 6% already today... We'll see.
Title: Re: Lending Club - Time to panic?
Post by: adamwoods137 on May 11, 2016, 03:00:59 PM
Panicking is never a good plan but, here's a value investing podcast that touches on Lending Club:

http://seekingalpha.com/article/3973298-sweet-25-percent-gain-krispy-kreme-podcast
Title: Re: Lending Club - Time to panic?
Post by: Acg on May 12, 2016, 07:40:40 AM
What does this mean for those of us that are lending money out through their platform as an investment?  I stopped investing money a few months ago but I still have a sizable amount tied up.

I see that cash balances are FDIC insured but there's no insurance on money that I've loaned out.  Their website says that they've taken steps to protect investors in the case of bankruptcy but they give no details.  They say to look at their prospectus for more information but of course it's enormous and pretty dense.  So does anyone know if there are any protections in place for people lending money out through their platform? Thanks.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on May 12, 2016, 08:09:35 AM
I think the loans will be safe, but I only have about 1-2% of my portfolio in LC notes. But I think the stock has farther to go. Especially if they get fined. The stock can easily start dropping to the $2-3 range.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on May 12, 2016, 09:08:09 AM
I just saw this below:

http://www.cnbc.com/2016/05/10/why-you-shouldnt-panic-about-the-lending-club-scandal-commentary.html

It says not to worry but can't quite help it.  I've stopped my automatic reinvestment.  I'd love to restart but I'm just hesitant in the short term for the reasons everyone has been mentioning...
Title: Re: Lending Club - Time to panic?
Post by: Jeremy E. on May 12, 2016, 10:12:09 AM
I bought some of this stock in a stock simulation game where I use fake money.... But I would never actually buy it.
http://jlcollinsnh.com/2011/06/02/why-i-cant-pick-winning-stocks-and-you-cant-either/
You guys invest your money how you want, but I'm happy with total stock market index funds like VTSAX
Title: Re: Lending Club - Time to panic?
Post by: R5 on May 12, 2016, 12:05:57 PM
I'd suggest this could be viewed through multiple lenses.  You could be on the platform or buy the stock solely for financial ROI.  Alternatively you could be motivated by desire to encourage development of the peer to peer market. 

Here's a thoughtful read on the current situation:
http://seekingalpha.com/article/3974435-lending-club-worth-risk

For return on the platform personally I have doubts about the adequacy of their vetting mechanisms.  I suspect there is an asymmetry of information and expectation and that if one should be creating a default reserve at the same time you are booking the high yield interest.  This may be why MMM's return is trending down.

These points noted I frequently early adopt products where I want to encourage continued existence/help promote the space.  I like micro lending conceptually, particularly in developing economies and it doesn't work without capital.  I have no problem being willing to provide early stage seed capital in small amounts similar to being willing financially support research at an academic/medical institution.




 
Title: Re: Lending Club - Time to panic?
Post by: TheStachery on May 12, 2016, 01:01:20 PM
I emailed Lending Club, here is what they responded with:

Thanks for your email and continuous support of Lending Club. Regarding your concerns, here is a quick review of the facts, and how they relate to your investment with Lending Club:
 
·         None of the announcements this week relate to the quality of your investments with Lending Club. The solid returns and commitment to investors that we offer remain the same.
·         The issue has nothing to do with the quality of credit and did not relate to the performance of any loans facilitated through Lending Club. See here for data on how all loans have performed since our inception.
·         The issue that was identified and addressed related to whole loan sales to institutional investors. It did not relate to Lending Club Notes and did not affect investors in Lending Club Notes. 
·         There has been no change in servicing. We are servicing and processing borrower payments just like we always have, and the interest and principal payments they make will continue to be passed on to you just as they were before.
·         We’re in the business of trust and we cannot afford the slightest whiff of impropriety. The Board of Directors has acted to address this issue swiftly and decisively in the best interests of investors, employees, partners and borrowers.
·         The company has a strong, experienced management team at the helm that has been with the company since its earliest days (6 years apiece), and lends the company continuity in execution and vision.
 
For more detail, please see our press release. http://ir.lendingclub.com/file.aspx?IID=4213397&FID=34233669
 
Additionally, please note we remain laser focused on serving you – our investors – and we continue to pursue our mission of making credit more affordable and investing more rewarding, just like we did when you first invested. Trust is the center of our business and we are committed to earning it from you every day.
 
As always, please feel free to reach out to us directly at (888)596-3159 with any questions.
 
Best Regards,
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal on May 12, 2016, 01:17:17 PM
I've started liquidating my balance. It's a slow process withdrawing $50 at a time on a low 5 figure balance.
This has less to do with the news that the CEO was a scumbag and more with the realization (after reading miles dividend) that lending club loans are just junkier junk bonds.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on May 12, 2016, 11:20:15 PM
I don't know about that.  But then again I can't say too much about what the loans are.  The majority of it was handled by the algorithms.  I'd like to believe that they are good loans for people who need them.  It's made me a nice bit of cash in the meantime while the market's been rough.  That's really why I don't want to pull out.  I think LendingClub was probably better when it was new.  When it was peer to peer before larger companies got involved... but then again, I just don't trust big business.
Title: Re: Lending Club - Time to panic?
Post by: pha999 on May 13, 2016, 09:33:59 AM
Not gonna panic... I own some LC shares after this drop. I also have an investing account with LC and Prosper. All and all it only accounts for about 3% of my total invest able assets between my cash, stock taxable account, IRAs and everything else... I do not plan to make p2p any bigger than 5% of my entire portfolio though. I suggest most people do the same, stay diversified and only invest what you can afford to loose in case things get worse.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on May 13, 2016, 10:16:46 PM
I invest money in LC loans, don't own any of their stock.

I've been keeping an eye on this news too, but I don't see any reason to panic just yet. The ex-CEO may have been engaging in some shady business and not disclosing when he should have, but the loans themselves (at least for me) are performing as advertised. I don't think this story implicates the overall viability of the company or LC's usefulness to FIRE types as an alternative income stream.

That said, I'm keeping most of my assets in Vanguard. I don't plan for Lending Club to ever be more than a small part of my overall retirement portfolio. That was my plan before this news and it still is.
Title: Re: Lending Club - Time to panic?
Post by: BlankCheck on May 13, 2016, 10:48:48 PM
I invest money in LC loans, don't own any of their stock.

I've been keeping an eye on this news too, but I don't see any reason to panic just yet. The ex-CEO may have been engaging in some shady business and not disclosing when he should have, but the loans themselves (at least for me) are performing as advertised. I don't think this story implicates the overall viability of the company or LC's usefulness to FIRE types as an alternative income stream.

That said, I'm keeping most of my assets in Vanguard. I don't plan for Lending Club to ever be more than a small part of my overall retirement portfolio. That was my plan before this news and it still is.

Same here.  LC is just a small portion of my portfolio, but the loans have been performing just fine.  At least for now.  I'm not currently reinvesting, but might resume so later after my current notes mature a bit more.
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal on May 17, 2016, 10:36:58 AM
I've been withdrawing, and loans are terribly illiquid.  At this rate, it'll take me 3 years to liquidate. It's an ok 12% simulated return I have, but inaccessible.
Title: Re: Lending Club - Time to panic?
Post by: chesebert on May 17, 2016, 10:44:28 AM
Fyi, DOJ is investigating LC.

http://www.latimes.com/business/la-fi-lendingclub-20160517-snap-story.html
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on May 17, 2016, 10:45:43 AM
I'm wondering how much we the investors are actually hurting LendingClub right now?  How many of us have stopped investing in the loans and have therefore dug a deeper whole for them to climb out of?  I really want to restart my reinvestments but as mentioned here, I don't know what will happen to the company or the loans I'm currently tied up in.  The investigations in to one small percentage of the company could have profound consequences just because they exist.  Part of me wants to continue, I just wish we could know what the DOJ and then will do to LC and how it will affect the loans...
Title: Re: Lending Club - Time to panic?
Post by: chesebert on May 17, 2016, 11:02:02 AM
Fyi, treasury department's whitepaper on marketplace lending (i.e., LC).

http://www.lexology.com/library/detail.aspx?g=ee3a5193-59a2-4adb-b953-bfa2dd70521f
Title: Re: Lending Club - Time to panic?
Post by: retiringearly on May 17, 2016, 11:11:04 AM
I'm wondering how much we the investors are actually hurting LendingClub right now?  How many of us have stopped investing in the loans and have therefore dug a deeper whole for them to climb out of?  I really want to restart my reinvestments but as mentioned here, I don't know what will happen to the company or the loans I'm currently tied up in.  The investigations in to one small percentage of the company could have profound consequences just because they exist.  Part of me wants to continue, I just wish we could know what the DOJ and then will do to LC and how it will affect the loans...

According to this article, significant investors have suspended making loans.  This will only compound LC's problems.

http://www.bloomberg.com/news/articles/2016-05-17/lendingclub-shares-fall-after-investors-suspend-debt-purchases
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on May 18, 2016, 05:25:02 AM
One of the challenges with all the "investigations/lawsuits" is they're only going to succeed in stealing money from shareholders that own LC today.  They won't succeed in clawing back anything from the management that left or the initial investors who cashed out in the IPO.

I really hate our legal system sometimes
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on May 18, 2016, 10:04:42 AM
So ignoring the stock side of the house and just looking at the investing/loan side of the house, the question still remains.  I called up the number in their calming e-mail today and the lady was very cool, collected, and relaxed.  Willing to answer any and all questions.  And the general gist I got was the same as the articles I've seen online.  The CEO made a bad choice with a very small section of the organization and as bad as it was, it doesn't tie into the majority of the company.  So if you cut out the one rotten portion, is the rest still good?  Is it still worthwhile to invest as a loaner?  The actual debt the company has is a small fraction of the company.  Bankruptcy isn't a foreseeable conclusion unless everyone just stops and things are left to whither, but that's true of any company.
Title: Re: Lending Club - Time to panic?
Post by: retiringearly on May 18, 2016, 01:34:34 PM
Good article from today's Wall Street Journal.  My gut is that this will not turn out well for LC.  They need liquidity (people being willing to invest in their loans) for their business model to survive.  That will be difficult to pull off at certain times (such as right now).

http://www.wsj.com/articles/lendingclubs-loans-come-home-to-roost-1463511780
Title: Re: Lending Club - Time to panic?
Post by: chesebert on May 19, 2016, 03:28:00 PM
If LC goes belly up, I query whether the SEC will look into bloggers that pushed the LC stock and/or the LC loan investments. SEC interprets "investment adviser" broadly.

See below SEC guidance:

Who Is an Investment Adviser?

Subject to certain limited exclusions discussed below, Section 202(a)(11) of the Advisers Act generally defines an "investment adviser" as any person or firm that: (1) for compensation; (2) is engaged in the business of; (3) providing advice, making recommendations, issuing reports, or furnishing analyses on securities, either directly or through publications. A person or firm must satisfy all three elements to be regulated under the Advisers Act.

The Division construes these elements broadly. For example, with respect to "compensation," the receipt of any economic benefit suffices. To be deemed compensation, a fee need not be separate from other fees charged, it need not be designated as an advisory fee, and it need not be received directly from a client. With respect to the "business" element, an investment advisory business need not be the person's or firm's sole or principal business activity. Rather, this element is satisfied under any of the following circumstances: the person or firm holds himself or itself out as an investment adviser or as providing investment advice; the person or firm receives separate or additional compensation for providing advice about securities; or the person or firm typically provides advice about specific securities or specific categories of securities. Finally, a person or firm satisfies the "advice about securities" element if the advice or reports relate to securities. The Division has stated that providing one or more of the following also could satisfy this element: advice about market trends; advice in the form of statistical or historical data (unless the data is no more than an objective report of facts on a non-selective basis); advice about the selection of an investment adviser; advice concerning the advantages of investing in securities instead of other types of investments; and a list of securities from which a client can choose, even if the adviser does not make specific recommendations from the list. An employee of an SEC-registered investment adviser does not need to register separately, so long as all of the employee's investment advisory activities are within the scope of his employment.

For additional guidance on the definition of "investment adviser" and the applicability of the Advisers Act to financial planners, pension consultants, and others, refer to Investment Advisers Act Release No. 1092 (October 8, 1987) (part of the Investment Adviser Registration Package; see below).
Title: Re: Lending Club - Time to panic?
Post by: TheStachery on May 20, 2016, 06:43:23 AM
New letter to loan investors...

I'm Scott Sanborn, President and acting CEO of Lending Club. I've been on Lending Club's leadership team for the past six years as Chief Marketing Officer and Chief Operating Officer.
 
I know you have questions about the events of the past week and what it means for your investments.
 
Here are answers to a few questions we've heard this week:
 
•   What's happening with my assets? Nothing. Your investments are still yours. The performance of loans facilitated through the platform remains robust. We are servicing and processing borrower payments like we always have, and the interest and principal payments that borrowers make will continue to be passed on to you as they were before.
•   What's the status of Lending Club's business? We reported strong financial results for Q1 2016. We had solid originations, operating revenue, and adjusted EBITDA, despite a difficult economic environment. We facilitated $2.75 billion in loans and also reported a substantial amount of cash and securities - $868 million.
•   Where is Lending Club going from here? We're intensely focused on restoring our investors' confidence. We've talked to hundreds of our investors - spanning individuals to financial advisors to banks to large institutions - including some who are new to Lending Club. While some investors have paused, others have reiterated their interest. We remain committed to both our borrowers and investors, and are working day and night to prove to you that we deserve your trust.
•   I'm worried about Lending Club's data - what are you doing to reassure me? On Monday, we took the first of many steps to restore investors' confidence in our data. We shared the observations of an independent forensic data change analysis that looked at over 10 million test conditions on approximately 673,000 whole loans sold over the last eight quarters. Excluding the loans previously identified as having an issue, 99.99% of the loans the independent firm tested display either no changes or changes explained by the normal course of business. You can read the full details here.
•   Are you confident in Lending Club's management? Yes. Our Executive Team has been working together for the past six years and has deep expertise in credit, operations, marketing, finance, human resources and technology. We're also supported by one of the strongest Board of Directors in the industry. It includes Hans Morris (the former President of Visa and now our Executive Chairman), Larry Summers (former US Treasury Secretary), John Mack (former CEO of Morgan Stanley), Mary Meeker (a Partner at Kleiner Perkins Caufield & Byers) and other experienced executives.
•   What happens if Lending Club goes bankrupt? First and foremost, we are not going out of business. Lending Club has a strong business, a large balance sheet and we are here to stay. We have $868 million in cash and securities, which could cover our costs for a long time. Second, Lending Club has no claim to the payments you receive from borrowers, since each Note is tied to a loan, and loan payments are passed on to Note holders. Third, with a $10.2 billion loan portfolio that generated over $18 million in revenue in the first quarter of 2016 alone, we could profitably service the existing Lending Club platform as a standalone business, even if we didn't facilitate a single new loan. Finally, and I am only mentioning this because some have asked, if all else failed we would transfer our loan servicing obligations to a third party backup servicer. We have a longstanding contract with a third party to service loans in the event Lending Club can't, so that you'd continue to receive borrower payments (regardless of LendingClub Corporation's status). See our prospectus for more detail.
•   Why the Department of Justice subpoena? The Department of Justice often issues subpoenas in response to public disclosures such as ours, especially in light of the department's focus on financial services. The company is fully cooperating with the department's investigation.
 
Our Investor Services team has been working tirelessly to address as many of your questions as possible and I have full confidence in their abilities. Please do not hesitate to reach out by phone at (888) 596-3159 (7am-5pm PT, Monday through Friday) or email us anytime at investing@lendingclub.com.
 
We're working hard to make things right and I will continue to keep you informed as we move ahead.
 
Thank you for investing with us. We look forward to having you as an investor for years to come.
 
Sincerely,
Title: Re: Lending Club - Time to panic?
Post by: Vagabond76 on May 20, 2016, 09:15:41 AM
This company, indeed the industry's whole business model, is fucked if the big boys don't provide money to make loans.  Peer-to-peer lending has NEVER been "peer" to "peer."  The "investors" looking to make a return have always been pension funds, hedge funds, investment banks, and endowment funds looking to increase yield.  It's never been about the little guy that writes a blog or reads this forum.

If the institutions don't provide funds for loans, then LC makes no revenue off of fees and the company shuts down.  The loans still exist are payable and enforceable according to the laws of the state specified in the loan contract.  But who is going to step in and service the loans--collecting payments and disbursing proceeds to the investors?  Is that covered in the investment contract?  Presumably another company will offer to buy the loan portfolio.  Are the investors stuck with whoever a bankruptcy trustee chooses?  That companies revenue will only come from one place--money that would have been payable to the investor.
Title: Re: Lending Club - Time to panic?
Post by: Greenpez on May 20, 2016, 10:09:33 AM
But who is going to step in and service the loans--collecting payments and disbursing proceeds to the investors?  Is that covered in the investment contract?  Presumably another company will offer to buy the loan portfolio.  Are the investors stuck with whoever a bankruptcy trustee chooses?  That companies revenue will only come from one place--money that would have been payable to the investor.

From the wall of text above your post:

"•   What happens if Lending Club goes bankrupt? First and foremost, we are not going out of business. Lending Club has a strong business, a large balance sheet and we are here to stay. We have $868 million in cash and securities, which could cover our costs for a long time. Second, Lending Club has no claim to the payments you receive from borrowers, since each Note is tied to a loan, and loan payments are passed on to Note holders. Third, with a $10.2 billion loan portfolio that generated over $18 million in revenue in the first quarter of 2016 alone, we could profitably service the existing Lending Club platform as a standalone business, even if we didn't facilitate a single new loan. Finally, and I am only mentioning this because some have asked, if all else failed we would transfer our loan servicing obligations to a third party backup servicer. We have a longstanding contract with a third party to service loans in the event Lending Club can't, so that you'd continue to receive borrower payments (regardless of LendingClub Corporation's status). See our prospectus for more detail."
Title: Re: Lending Club - Time to panic?
Post by: Paul der Krake on May 20, 2016, 10:26:20 AM
That's a nice email. They do have an extremely impressive board of directors.

I have declined to invest with them, but following this story closely. Interesting times.
Title: Re: Lending Club - Time to panic?
Post by: robartsd on May 20, 2016, 11:20:38 AM
This company, indeed the industry's whole business model, is fucked if the big boys don't provide money to make loans.  Peer-to-peer lending has NEVER been "peer" to "peer."  The "investors" looking to make a return have always been pension funds, hedge funds, investment banks, and endowment funds looking to increase yield.  It's never been about the little guy that writes a blog or reads this forum.

If the institutions don't provide funds for loans, then LC makes no revenue off of fees and the company shuts down.  The loans still exist are payable and enforceable according to the laws of the state specified in the loan contract.  But who is going to step in and service the loans--collecting payments and disbursing proceeds to the investors?  Is that covered in the investment contract?  Presumably another company will offer to buy the loan portfolio.  Are the investors stuck with whoever a bankruptcy trustee chooses?  That companies revenue will only come from one place--money that would have been payable to the investor.
There are many companies that specialize in servicing various types of loans. They get a small portion of the interest payments on the loans they service. I don't know the details of Lending Club's loan portfolio, but I imagine that the servicing contracts are a valuable asset. I'd honestly be more worried about LC shutting down as a borrower than as a lender. A change in servicer is a hassle and sometimes errors are made during the transfer. Also, loan servicing companies that do not originate loans have little incentive to provide good customer service to borrowers.
Title: Re: Lending Club - Time to panic?
Post by: Telecaster on May 20, 2016, 11:28:53 AM
One other note, my biggest fear as a shareholder is when multiple regulatory agencies jump on this news and start fining the company.  The people who did this are gone, all the government is doing at that point is stealing money from shareholders.  They're still fining other financial institutions from eight years ago.

Insane isn't it?  The government is acting as if owners of the company might actually have a tiny bit of responsibility for how the company is run.

Title: Re: Lending Club - Time to panic?
Post by: fa on May 20, 2016, 11:41:32 AM
Remember the old advice from Peter Lynch: NEVER invest in a company with known legal trouble.  The outcome is unpredictable and you may  lose your entire investment.  That is in regards to buying stock in LC.

As for the loans: they are likely safer but how much do you trust a company suspected of legal wrongdoing.  Maybe the CEO is the only one who has gone rogue and he is gone.  All is well now?  At the very least you can conclude that LC has inadequate internal controls.  Would you keep your money with such a company?  Maybe not.

This story remind us to carefully examine all investment advice, even coming from MMM.
Title: Re: Lending Club - Time to panic?
Post by: Another Reader on May 20, 2016, 12:00:59 PM
http://finance.yahoo.com/news/exclusive-citigroup-declined-support-lending-club-memo-171322323--sector.html

Time to get out the popcorn....
Title: Re: Lending Club - Time to panic?
Post by: Paul der Krake on May 20, 2016, 12:44:25 PM
http://finance.yahoo.com/news/exclusive-citigroup-declined-support-lending-club-memo-171322323--sector.html

Time to get out the popcorn....
What exactly is Citi's relationship with Lending Club? The compliance department at large investment banks rules on everything that gets released to the public. They would need an excellent reason to comment on an outside company, regardless of good or bad.
Title: Re: Lending Club - Time to panic?
Post by: Tyson on May 20, 2016, 12:46:26 PM
Why in the world did anyone think putting their money into Lending Club was a good way to invest?  I'm not particularly risk-averse, but good lord!  How can people not see how risky this is?  "Regular banks won't lend money to these people, so I will!"  WTF? 
Title: Re: Lending Club - Time to panic?
Post by: Another Reader on May 20, 2016, 01:37:44 PM
http://finance.yahoo.com/news/exclusive-citigroup-declined-support-lending-club-memo-171322323--sector.html

Time to get out the popcorn....
What exactly is Citi's relationship with Lending Club? The compliance department at large investment banks rules on everything that gets released to the public. They would need an excellent reason to comment on an outside company, regardless of good or bad.

http://www.ifre.com/p2p-running-out-of-steam-thank-god/21247022.article

There is a lot more to the P2P story than what you see on the surface. 

I thought it was strange the banking industry was not up in arms over the loosely regulated competition.  Looking into it, it was obvious why.  The traditional lenders have co-opted the
P2P lending business.  It's now "marketplace lending" and P2P has very little to do with these businesses.
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on May 20, 2016, 02:58:57 PM
As for the loans: they are likely safer but how much do you trust a company suspected of legal wrongdoing.  Maybe the CEO is the only one who has gone rogue and he is gone.  All is well now?  At the very least you can conclude that LC has inadequate internal controls.  Would you keep your money with such a company?  Maybe not.

Well, Vanguard had legal trouble with tax issues last year, a lawsuit or two I believe, and accusations of tax fraud.  It was discussed on these boards, and i haven't heard that the legal issues were resolved.  Granted, Vanguard is a much more established company selling a product with a much longer history than LC.

I have a very small investment in LC loans (and a much larger investment in Vanguard mutual funds!) and I'm not particularly worried yet.  According to the news, the ex-CEO misrepresented some data on loans LC sold to an institutional investor.  How about that, he was misrepresenting information to the big boys, not the tiny investors on LC.  The tiny investors probably don't control enough money to be worth lying to.  Sure, maybe there will be an avalanche of lies that will now start to unravel.  We will see.
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on May 20, 2016, 03:18:19 PM
Why in the world did anyone think putting their money into Lending Club was a good way to invest?  I'm not particularly risk-averse, but good lord!  How can people not see how risky this is?  "Regular banks won't lend money to these people, so I will!"  WTF?

I chose LC for 3% of my taxable portfolio.  At the time i was considering that same % for a junk bond fund.  I ended up choosing LC instead.  Most of the people who get loans on LC have been lent to by banks through credit cards, and the point of the LC loan is to pay off credit card debt at a lower interest rate.  Sure, some may not actually do that once they get the loan.  I acknowledge LC loans are risky.  I was looking for high risk, and hopefully high return, for a small % of my portfolio.

I've been in LC for almost 3 years.  So far my annualized return, calculated in excel, is roughly 12.5%.  That's after expenses and loan write-offs, but before taxes.  I'm satisfied.  I can only wait and see what the recent circumstances develop into.

I've noted the number of LC notes for sale on the secondary market has almost doubled in the last couple weeks.  It's usually around 300,000.  Last night it was about 571,000.  Clearly i think some people are trying to get out.  So people were marking notes down more than usual.  I bought a couple with good payment histories at a greater discount than i can usually get.
Title: Re: Lending Club - Time to panic?
Post by: chesebert on May 20, 2016, 03:20:33 PM
For the folks doing LC loans, can someone tell me why you decided to investment in LC loans and not junk bonds. Presumably junk bonds have good yield, greater transparency and offer the protection of the securities laws and there is a bond trustee to enforce the terms of the bond. What makes LC loans superior to well diversified and diligenced portfolio of junk bonds?
Title: Re: Lending Club - Time to panic?
Post by: Seppia on May 20, 2016, 03:43:52 PM
For the folks doing LC loans, can someone tell me why you decided to investment in LC loans and not junk bonds. Presumably junk bonds have good yield, greater transparency and offer the protection of the securities laws and there is a bond trustee to enforce the terms of the bond. What makes LC loans superior to well diversified and diligenced portfolio of junk bonds?


Mostly because it was recommended by MMM.
It was / is play money amounts for me so willing to throw it on a hi risk hi reward.
MMM has made a huge net positive  difference in my life.
Probably LC was / is a bad idea but I guess the damage (if any) is going to be pretty minor.
Certainly, trying to get out when everybody else is sounds like a bad idea, unless all loans go to s**t

I'll stay put.

Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on May 20, 2016, 03:44:42 PM
For the folks doing LC loans, can someone tell me why you decided to investment in LC loans and not junk bonds. Presumably junk bonds have good yield, greater transparency and offer the protection of the securities laws and there is a bond trustee to enforce the terms of the bond. What makes LC loans superior to well diversified and diligenced portfolio of junk bonds?

I have no great reason other than I enjoy LC.  I pick notes by hand after running a screen i came up with with all the historical data available on the nickel steamroller website.  My account is small enough that in a few minutes a week i can do that.  I also look for bargains on the secondary market for notes.  The great majority of my portfolio is in Vanguard index funds.  LC fulfills some inner need i have to trade, without screwing up the advantages of buy-and-hold index investing.

So far my return at LC has beaten Vanguard's hi-yield corporate mutual fund over the last roughly 3 years.  Only time will tell if that continues.  I don't have more $ in LC than i could afford to lose.
Title: Re: Lending Club - Time to panic?
Post by: pha999 on May 22, 2016, 07:23:46 AM
Honestly my portfolio with LC is on autopilot, I do not plan to change any thing. Maybe stop contributing new money into the account, but will keep reinvestment's turned on. If any one here is panicking or loosing sleep over it you probably have way too much into Lendingclub in that case. Currently this doesn't amount to more than 2-3% of my net worth. Its such a small investment to me, thats it not even worth my time to read about whats going on with the company. For now its all up in the air, they may survive this and our money will be okay and heck they might not. But either way the small amount i do have in this I can recover in essentially a month and half of regular income.
Title: Re: Lending Club - Time to panic?
Post by: pl28 on May 22, 2016, 07:59:57 AM
Same here, I think their business model will survive but probably will scale back a bit. I still have money with them which I will keep reinvesting. I have pause adding new money but plan to restart soon pending no major finding come up from DOJ. So far my yield has been what I expected (8-9%) and less volatile than the stock market.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on May 22, 2016, 05:23:02 PM
I just restarted my automated investing as well.  I figure, that even with all I have in there, it would take too long to get anything back that's worth it so might as well keep the small bits moving.  It sounds like there is enough of a backup plan that I wouldn't really be screwed anyhow.  Gotta spend money to make money.  Might as well see what kind of rates I can eek out.
Title: Re: Lending Club - Time to panic?
Post by: Dollar Slice on May 22, 2016, 05:50:33 PM
Why in the world did anyone think putting their money into Lending Club was a good way to invest?  I'm not particularly risk-averse, but good lord!  How can people not see how risky this is?  "Regular banks won't lend money to these people, so I will!"  WTF?

There are plenty of companies making money hand over fist off of imperfect borrowers (credit card companies, payday loans, etc.). You just have to make sure that the interest rate is sufficient to compensate for the expected defaults. The risk is mitigated by diversifying your investment over many many loans - they come in $25 increments. So you buy a few hundred of them instead of putting all your money into one risky loan - just like buying an S&P 500 index instead of buying a bunch of shares of one company. When I invested I was making about 12%. It was too high-maintenance for me at the time so I cashed out, but I can't complain about the returns or the risk.

Also, they weren't necessarily all people who banks wouldn't lend to. I bet a lot of them went to Lending Club because it's all done online and automatically - I think that's very appealing for younger people who don't have experience with getting loans and mortgages in B&M banks. I never loaned to anyone with a FICO under 700.
Title: Re: Lending Club - Time to panic?
Post by: joleran on May 23, 2016, 08:58:02 AM
For the folks doing LC loans, can someone tell me why you decided to investment in LC loans and not junk bonds. Presumably junk bonds have good yield, greater transparency and offer the protection of the securities laws and there is a bond trustee to enforce the terms of the bond. What makes LC loans superior to well diversified and diligenced portfolio of junk bonds?

On the surface, these asset classes may seem similar because they're both high risk, high yield fixed income instruments.  However, there's one huge difference - LC note interest rates aren't tied to any underlying rate curve.  In the middle of the credit crisis when everything was going to shit in the bond markets, LC rates barely quivered.

Also, LC notes are higher risk as you note, but have higher return as well, and the markets are not efficient so there is plenty of opportunity.  I've been getting ~12% returns net of defaults every year since 2008 in LC by creating my own credit risk model that appears to be working.
Title: Re: Lending Club - Time to panic?
Post by: chesebert on May 23, 2016, 10:22:12 AM
For the folks doing LC loans, can someone tell me why you decided to investment in LC loans and not junk bonds. Presumably junk bonds have good yield, greater transparency and offer the protection of the securities laws and there is a bond trustee to enforce the terms of the bond. What makes LC loans superior to well diversified and diligenced portfolio of junk bonds?

On the surface, these asset classes may seem similar because they're both high risk, high yield fixed income instruments.  However, there's one huge difference - LC note interest rates aren't tied to any underlying rate curve.  In the middle of the credit crisis when everything was going to shit in the bond markets, LC rates barely quivered.

Also, LC notes are higher risk as you note, but have higher return as well, and the markets are not efficient so there is plenty of opportunity.  I've been getting ~12% returns net of defaults every year since 2008 in LC by creating my own credit risk model that appears to be working.

the LC notes are not marked to market, should be subject to liquidity discount and are not pegged to underlying interest rate. Given that we are in a low interest environment, any upward movement on market base interest rate should in theory decrease the market value of your LC notes - but you won't see that because you are only shown the historical book value of the notes.

Your 12% return does not take into account any liquidity discount when you sell the notes and your notes are not marked to market, which if they were could very well reduce your 12% return.
Title: Re: Lending Club - Time to panic?
Post by: TheStachery on May 23, 2016, 11:51:20 AM
Why in the world did anyone think putting their money into Lending Club was a good way to invest?  I'm not particularly risk-averse, but good lord!  How can people not see how risky this is?  "Regular banks won't lend money to these people, so I will!"  WTF?

Who says regular banks won't lend money to them?  There are people on LC with great credit.  Are you saying this because the loans are unsecured loans?   Most good intentioned people will pay back these loans, because if they do not, it will hit there credit score.  There is risk, but there is risk with many investments, the more risk, the great the return.
Title: Re: Lending Club - Time to panic?
Post by: TheStachery on May 23, 2016, 03:40:22 PM
I just saw that the LC referral bonus is now $75.  I think it was only $25.

Title: Re: Lending Club - Time to panic?
Post by: chasesfish on June 04, 2016, 07:01:37 AM
I just got an offer that's $100 for a new $10,000 deposited.
Title: Re: Lending Club - Time to panic?
Post by: Vagabond76 on June 04, 2016, 07:29:36 AM
I just got an offer that's $100 for a new $10,000 deposited.

Where is that bonus money coming from, ponzi scheme?  This ship is going down like a torpedoed submarine.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on June 04, 2016, 06:06:40 PM
I just got an offer that's $100 for a new $10,000 deposited.

Where is that bonus money coming from, ponzi scheme?  This ship is going down like a torpedoed submarine.

That's a horrible statement.  How many banks do the same thing every time you open a card, an account, or refer a friend?  They are trying to incentivize people to start reinvesting.  Their product is based off of people investing.  Many have held or sold.  It's about getting money back in.
Title: Re: Lending Club - Time to panic?
Post by: Paul der Krake on June 04, 2016, 06:40:17 PM
I just got an offer that's $100 for a new $10,000 deposited.

Where is that bonus money coming from, ponzi scheme?  This ship is going down like a torpedoed submarine.

That's a horrible statement.  How many banks do the same thing every time you open a card, an account, or refer a friend?  They are trying to incentivize people to start reinvesting.  Their product is based off of people investing.  Many have held or sold.  It's about getting money back in.
Banks that offer card bonuses have hugely profitable consumer lending operations. LC is operating at a moderate loss.
Title: Re: Lending Club - Time to panic?
Post by: Vagabond76 on June 04, 2016, 10:06:40 PM
With several big boys no longer fronting money, LC is desperate for cash to lend out. If no cash comes in than there are no new loans or revenue, and LC goes under.
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on June 05, 2016, 09:38:25 AM
For the folks doing LC loans, can someone tell me why you decided to investment in LC loans and not junk bonds. Presumably junk bonds have good yield, greater transparency and offer the protection of the securities laws and there is a bond trustee to enforce the terms of the bond. What makes LC loans superior to well diversified and diligenced portfolio of junk bonds?

On the surface, these asset classes may seem similar because they're both high risk, high yield fixed income instruments.  However, there's one huge difference - LC note interest rates aren't tied to any underlying rate curve.  In the middle of the credit crisis when everything was going to shit in the bond markets, LC rates barely quivered.

Also, LC notes are higher risk as you note, but have higher return as well, and the markets are not efficient so there is plenty of opportunity.  I've been getting ~12% returns net of defaults every year since 2008 in LC by creating my own credit risk model that appears to be working.

the LC notes are not marked to market, should be subject to liquidity discount and are not pegged to underlying interest rate. Given that we are in a low interest environment, any upward movement on market base interest rate should in theory decrease the market value of your LC notes - but you won't see that because you are only shown the historical book value of the notes.

Your 12% return does not take into account any liquidity discount when you sell the notes and your notes are not marked to market, which if they were could very well reduce your 12% return.

My LC loan portfolio has an aggregate interest rate of roughly 15%.  The fed increasing interest rates by a percent or two over the next couple years, if they even did that, just doesn't affect it much.  LC notes are of either 3 or 5 yr durations, so they are not as sensitive to interest rates as longer term loans.  True, the secondary loan market for performing loans is particularly thin.  Who wants to sell a performing loan earning 15% interest!  The mark to market price doesn't matter that much for a performing loan that the holder intends to hold to maturity, as presumably most LC investors do.  If the loan performs, they earn the interest rate, regardless of what they could have sold it for on the secondary market.

My 12.5% return so far takes into account all loans that are non-performing because i have sold all of those except 1 on the secondary market.  That 1 loan declared bankruptcy, which prevents its sale on the secondary market under the platform rules.  That 1 loan is counted as a total loss in the calculation of that return.
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on June 05, 2016, 09:50:06 AM
With several big boys no longer fronting money, LC is desperate for cash to lend out. If no cash comes in than there are no new loans or revenue, and LC goes under.

Yeah, maybe.  But things usually don't work out that poorly.  I look at the current bad news for LC as practice for the emotional discipline  of staying in the market when there is a big drop.  You can't panic at every bump in the road.  I added a small amount to my LC account last week.  There's still performing loans listed on the secondary market with good payment histories, at better than usual discounts.

The secondary market is still reverting to normal, the week after the bad news there were 571,000 listed.  A couple days ago there were 466,000 listed.  Normal before all the bad news was about 300,000.
Title: Re: Lending Club - Time to panic?
Post by: chesebert on June 05, 2016, 10:21:20 AM
With several big boys no longer fronting money, LC is desperate for cash to lend out. If no cash comes in than there are no new loans or revenue, and LC goes under.

Yeah, maybe.  But things usually don't work out that poorly.  I look at the current bad news for LC as practice for the emotional discipline  of staying in the market when there is a big drop.  You can't panic at every bump in the road.  I added a small amount to my LC account last week.  There's still performing loans listed on the secondary market with good payment histories, at better than usual discounts.

The secondary market is still reverting to normal, the week after the bad news there were 571,000 listed.  A couple days ago there were 466,000 listed.  Normal before all the bad news was about 300,000.
Notes might be okay assuming no bankruptcy risk but the stock is pure rubish for buy and hold. You might make some decent money trading volatility but that's for professionals.
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on June 05, 2016, 11:26:44 AM
With several big boys no longer fronting money, LC is desperate for cash to lend out. If no cash comes in than there are no new loans or revenue, and LC goes under.

Yeah, maybe.  But things usually don't work out that poorly.  I look at the current bad news for LC as practice for the emotional discipline  of staying in the market when there is a big drop.  You can't panic at every bump in the road.  I added a small amount to my LC account last week.  There's still performing loans listed on the secondary market with good payment histories, at better than usual discounts.

The secondary market is still reverting to normal, the week after the bad news there were 571,000 listed.  A couple days ago there were 466,000 listed.  Normal before all the bad news was about 300,000.
Notes might be okay assuming no bankruptcy risk but the stock is pure rubish for buy and hold. You might make some decent money trading volatility but that's for professionals.

Sure.  I guess I've derailed talking about the notes themselves.  I don't own any of the stock, and have no intent or desire to buy any.
Title: Re: Lending Club - Time to panic?
Post by: FarmerPete on June 06, 2016, 06:58:14 AM
I just got an offer that's $100 for a new $10,000 deposited.

Where is that bonus money coming from, ponzi scheme?  This ship is going down like a torpedoed submarine.

Chase regularly gives me $150 to put $1350 into a checking account for 6 months.  Is Chase a Ponzi Scheme?  Should we stay away from their stock/accounts?  Now I'm worried...If Chase is going to collapse in a ball of flame, who is safe?  Maybe I should take all my money out of my accounts and stuff it in my fireproof safe, conveniently hidden in my mattress that no one knows about...CRAP!!!!!
Title: Re: Lending Club - Time to panic?
Post by: Vagabond76 on June 06, 2016, 04:48:02 PM
If Chase had this deal in the midst of the financial crisis when it was losing money and in freefall, then yes, Chase was a Ponzi scheme. The stock dropped over 95% and the company needed a bailout to keep from going under.

LC suffers from the same issues. If there aren't new borrowers AND investors, then the going concern collapses. Only this time, LC is too small for the government to care.  If people willingly walked away from their houses to avoid paying the mortgage, what do you expect them to do when LC is no longer around to service their loans? A number of them will tell the backup servicer to go fuck itself.
Title: Re: Lending Club - Time to panic?
Post by: tonysemail on June 06, 2016, 06:00:07 PM
ironically, the note from LC CEO made me feel more anxious, not less.

my main thought is that my FIRE plan is safe enough with stock market returns.
There's no need for me to go chasing yield and take on extra risk.
Title: Re: Lending Club - Time to panic?
Post by: retiringearly on June 28, 2016, 07:16:46 AM
Interesting article:
 https://techcrunch.com/2016/06/28/troubled-p2p-lender-lendingclub-names-scott-sanborn-ceo-cuts-179-jobs-amid-lower-loan-volume/

Yet more changes afoot for LendingClub — a peer-to-peer loans marketplace whose stock tanked May after its founder, CEO and chairman Renauld Laplanche resigned amid an accounting scandal. Ahead of an annual meeting being held later today, the company announced Scott Sanborn as its permanent CEO and Hans Morris as independent chairman of the board as it seeks to repair its image and business. But it also said that it would cut 179 jobs “in light of lower loan volumes in the second quarter and recognizing that fully restoring investor confidence may take time.”

Sanborn had been in the CEO role on an interim basis before today.

Currently, LendingClub’s stock is up nearly 6% in pre-market trading. But at $4.55, it is still hovering very close to its 52-week low.

The company also gave an update today about its Q2 business, and it’s not pretty. It expects loan originations in Q2 to be one-third lower compared to Q1 amid the fall in business after the scandal first came to light, or “since pausing in early May” in the company’s more euphemistic terms.

Among other charges, LendingClub said it also expects to report “investor incentives of roughly $9 million”; along with $15 million – $20 million of additional expenses “related to employee retention, employee severance, advisory relationships, board review, remediation and due diligence activities.”

Biggest of all will be a goodwill write-down of between $20 million and $40 million related to “slower growth expectations for Springstone,” the credit marketplace it acquired in 2014 for $140 million. All in all, these charges will total between $44 million and $69 million.

LendingClub was once the darling of the very crowded P2P lending space competing against the likes of Prosper, FundingCircle, Kabbage and many more with a model that disrupted the traditional banking world by connecting people looking to borrow money with those willing to lend it. Operating only in the U.S., LendingClub’s sweeteners were rates lower than institutional incumbents, and a process that appeared to work far more seamlessly and quickly. The company raised nearly $400 million when still in startup mode and then nearly $1 billion in its IPO at the end of 2014.

But it appears that what LendingClub was presenting to the world was indeed too good to be true: behind the scenes there were loan applications that were being altered, and the CEO had not disclosed his role in a fund that LendingClub was investing in essentially to provide loans on the platform. These problems led to both the Justice Department and the SEC investigating the company. But putting to one side LendingClub’s own internal mess, there is the fact that the Consumer Financial Protection Bureau is now accepting complaints about sites like Lending Club, which could lead to further fines and lawsuits.

All of this has led to a big decline in LendingClub confidence the amount of loans being made through the platform, and that is what LendingClub is now trying to tackle head-on to stave off the freefall.

Sanborn has been with the company since 2010, most recently as president and COO before stepping up to the CEO role. “We have demonstrated the power of the Lending Club marketplace model to generate attractive, risk adjusted returns to investors,” he said in a statement. “We are working closely with investors to rebuild confidence and are encouraged to see them returning to the platform.”

As part of today’s news, LendingClub also said that it had concluded its own internal review of some of the problems. It has adjusted the valuation of six private funds managed by LC Advisors (the fund that did not disclose Laplanche’s involvement originally), and it has “made several changes to improve governance of the funds, including establishing a majority independent Governing Board.” It also was investigating loans made in December 2009 to Laplance and three members of his family.

The company will be reconvenig a shareholder meeting later today and we’ll update this post as and when we learn more.

 
Title: Re: Lending Club - Time to panic?
Post by: Malaysia41 on July 06, 2016, 02:59:26 AM
For what it's worth, here's a recap of my 2 year experience with LC as an investor in the lending platform. (http://www.lauramariereese.com/lending-club-mega-post/)

This write up is independent of the shenanigans of the back end business. Long story short - while returns were reported as 12% annualized, between fees, write offs, recovery fees, collection fees, etc, I'm looking at an annualized return of 2-3%. I began divesting in earnest when I realized that LC had every incentive to write off loans and then recover them for an 18% fee.

Luckily, I sold most of my notes prior to the revelations about how the business was being managed. Now it's tough to sell more than one or two notes a day, even at steep discounts. But I've recovered more than I put in, and there's only about $1500 worth of notes left to sell.

It's back to Vanguard ETFs for this kid.
Title: Re: Lending Club - Time to panic?
Post by: retiringearly on July 06, 2016, 07:23:56 AM
For what it's worth, here's a recap of my 2 year experience with LC as an investor in the lending platform. (http://www.lauramariereese.com/lending-club-mega-post/)

This write up is independent of the shenanigans of the back end business. Long story short - while returns were reported as 12% annualized, between fees, write offs, recovery fees, collection fees, etc, I'm looking at an annualized return of 2-3%. I began divesting in earnest when I realized that LC had every incentive to write off loans and then recover them for an 18% fee.

Luckily, I sold most of my notes prior to the revelations about how the business was being managed. Now it's tough to sell more than one or two notes a day, even at steep discounts. But I've recovered more than I put in, and there's only about $1500 worth of notes left to sell.

It's back to Vanguard ETFs for this kid.
Thanks!  That was a great write up.  One question, those written off loans seem really high, were you investing in the riskiest batch of loans?
Title: Re: Lending Club - Time to panic?
Post by: Malaysia41 on July 06, 2016, 07:32:02 AM
The majority were A,B and C grade. Here it is:

15% A, 30%B, 28%C, 14%D, 8%E, 4%F, 1%G. 

It seems heavier on C, D and E than I remembered - close to what they put as the 'platform mix'.  So, I didn't have the most conservative allocation going. But, it also wasn't terribly risky either - kind of mid to low-risk if I compare to their canned portfolios.
Title: Re: Lending Club - Time to panic?
Post by: retiringearly on July 06, 2016, 09:20:53 AM
Thanks again for the write up.  I never invested through Lending Tree, but it is a fascinating concept.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on July 06, 2016, 12:20:34 PM
For what it's worth, here's a recap of my 2 year experience with LC as an investor in the lending platform. (http://www.lauramariereese.com/lending-club-mega-post/)

This write up is independent of the shenanigans of the back end business. Long story short - while returns were reported as 12% annualized, between fees, write offs, recovery fees, collection fees, etc, I'm looking at an annualized return of 2-3%. I began divesting in earnest when I realized that LC had every incentive to write off loans and then recover them for an 18% fee.

Luckily, I sold most of my notes prior to the revelations about how the business was being managed. Now it's tough to sell more than one or two notes a day, even at steep discounts. But I've recovered more than I put in, and there's only about $1500 worth of notes left to sell.

It's back to Vanguard ETFs for this kid.

Lending Club has absolutely no motivation to send more loans into charge-off status. They charge an upfront 5% origination fee to the borrowers and a 1% fee to investors. If this does not make up 100% of their profits, it is at least 95%. I doubt the 18% fee they charge for collections even breaks even for them. Collections is a very expensive process and there is no conspiracy. A run of bad notes is not something done because Lending Club wants to screw investors and collect their fee.
Title: Re: Lending Club - Time to panic?
Post by: tonysemail on July 06, 2016, 12:46:39 PM
Lending Club has absolutely no motivation to send more loans into charge-off status. They charge an upfront 5% origination fee to the borrowers and a 1% fee to investors. If this does not make up 100% of their profits, it is at least 95%. I doubt the 18% fee they charge for collections even breaks even for them. Collections is a very expensive process and there is no conspiracy. A run of bad notes is not something done because Lending Club wants to screw investors and collect their fee.

agreed.  My first thought is the 18% fee comes from the 3rd party they contract with.
I read they outsource collections after a loan is 30 days past due.
Title: Re: Lending Club - Time to panic?
Post by: zombiehunter on July 06, 2016, 02:31:38 PM
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. 

The only way that it could be worthwhile is in a tax-advantaged account, where it can grow tax-free.  As a result, I'm also in the process of liquidating a taxable account, and set up an IRA earlier this spring ear marked as 2015.  I think it's also critical to lean towards the riskier notes and avoid the A-B-C grades.  Per Nickle Steam Roller, the most profitable class is E.  You have to seek out higher returns with riskier loans to offset the risk (which, ok, is supposed to be reflected in the class and interest rate, but it's not yet a 100% efficient system) as well as the fees (which are not adjusted based on risk/interest rate/Note class).  You pay a 1% service fee on every note, whether it's a 7% A-grade or a 25% G-grade note. 

In regards to the "sneaky" practices of Lending Club regarding their fees, I've noticed something apart from the above discussion on recovery fees:  Lending Club is supposed to charge a 1% servicing fee.  In fact, they charge more than this.  Consider the following example, picked randomly out of my pool of notes:



Title: Re: Lending Club - Time to panic?
Post by: MustacheAndaHalf on July 06, 2016, 02:52:58 PM
In looking back at past lending club notes, I calculated default rates for different risk of notes:
A1-A5: 5% defaulted
B1-B5: 6% defaulted
C1-C5: 27% defaulted

Roughly speaking, in the average default I lost half my principal (and 100% of interest).  Overall it cost me roughly 1/3rd of my total return.  I haven't completely wound down my Lending Club notes, but it's almost there.

To calculate the total return, I grouped all my notes which were paid off into one group and viewed the cost and payments.  I did the same with another group of notes where each note had defaulted.  That let me see the performance of non-defaulting notes, defaulting notes, and how they added up together.

Note I stopped buying new lending club notes several years back when they started allowing large investors to buy every note in sight (I think they allowed one or more hedge funds to invest).  Hopefully they've cleared up the supply problem by now... I highly recommend studying historical data on notes to try and lower risk.
Title: Re: Lending Club - Time to panic?
Post by: tonysemail on July 06, 2016, 03:00:37 PM
In regards to the "sneaky" practices of Lending Club regarding their fees, I've noticed something apart from the above discussion on recovery fees:  Lending Club is supposed to charge a 1% servicing fee.  In fact, they charge more than this. 

This does not seem to be true.
http://kb.lendingclub.com/investor/articles/Investor/What-fees-does-Lending-Club-charge-investors/

"All fees are calculated to the tenth decimal place and will appear rounded to the nearest whole cent in your account.  To see the full amount of the fees calculated to the tenth decimal place, you can hover your cursor over the dotted line below the rounded number."
Title: Re: Lending Club - Time to panic?
Post by: Malaysia41 on July 06, 2016, 06:43:02 PM

Lending Club has absolutely no motivation to send more loans into charge-off status. They charge an upfront 5% origination fee to the borrowers and a 1% fee to investors. If this does not make up 100% of their profits, it is at least 95%. I doubt the 18% fee they charge for collections even breaks even for them. Collections is a very expensive process and there is no conspiracy. A run of bad notes is not something done because Lending Club wants to screw investors and collect their fee.

Maybe so. On the statement, there are two different fees called out. There are collection fees, which typically ran around a few dollars a month, and, my impression was that they were the fees for the initial pestering that might be done when a note gets to be more than 30 days late.

Later, the loans would get charged off.

Then, for all charged off notes, if they somehow managed to collect, there was a recovery fee, which, was 18%. Which of course, is still a part of the collections process. I'm sure it is a lot of work. Have you seen Highston on Amazon prime? Good example there. Okay, not really a good example, but that show made me laugh. 

That said, it is, as you say, entirely possible that there was a string of bad notes. At first, 1% of my account balance was being charged off per month. But then it went as high as 10% since I first turned off automatic reinvestment and began taking income from notes off the table. The charge offs just seemed extraordinarily large, and it made me suspicious. I'm not saying they were charging notes off early for profit. I'm just saying they were charging off an awful lot of notes and then recovering an awful lot of notes.

Here's some data:

MonthInterestCharged OffRecovered
5/2015$709$334$1
6/2015$683$329$22
7/2015$694$422$33
8/2015$613$332$46
9/2015$593$424$37
10/2015$580$443$22
11/2015$520$563$94
12/2015$531$574$93


Regardless, the returns and risks were not worth the investment. I'll admit, I did not go through and hand select notes as so many investors did. If I had, I may not have seen so many notes get charged off.

Lastly, as zombiehunter noted, the investment really needs to be in a tax-advantaged account. It was silly for me to set this up in an after-tax account when I was still working. Now that we're FIREd, it's not too bad. But paying 33%+ on the profits a couple years ago was a big 'whoopsies'.
Title: Re: Lending Club - Time to panic?
Post by: zombiehunter on July 07, 2016, 05:41:21 AM
In regards to the "sneaky" practices of Lending Club regarding their fees, I've noticed something apart from the above discussion on recovery fees:  Lending Club is supposed to charge a 1% servicing fee.  In fact, they charge more than this. 

This does not seem to be true.
http://kb.lendingclub.com/investor/articles/Investor/What-fees-does-Lending-Club-charge-investors/

"All fees are calculated to the tenth decimal place and will appear rounded to the nearest whole cent in your account.  To see the full amount of the fees calculated to the tenth decimal place, you can hover your cursor over the dotted line below the rounded number."
wow, this is true - thanks for telling me!
Title: Re: Lending Club - Time to panic?
Post by: AM43 on July 07, 2016, 07:11:02 AM

Lending Club has absolutely no motivation to send more loans into charge-off status. They charge an upfront 5% origination fee to the borrowers and a 1% fee to investors. If this does not make up 100% of their profits, it is at least 95%. I doubt the 18% fee they charge for collections even breaks even for them. Collections is a very expensive process and there is no conspiracy. A run of bad notes is not something done because Lending Club wants to screw investors and collect their fee.

I'll admit, I did not go through and hand select notes as so many investors did. If I had, I may not have seen so many notes get charged off.



I've been investing with LC since 2009 and all my notes have been hand picked and I only recently(1-2 years) started using automated option to invest in notes and I can tell you that I did not like what automated system picked out for me so I switched it off.
I can honestly tell you that hand picked notes have less charged off rates, but yes it takes time to go thru every note and pick one you like. I don't mind though, as I find it fun activity.
Title: Re: Lending Club - Time to panic?
Post by: robartsd on July 07, 2016, 08:32:04 AM
I can honestly tell you that hand picked notes have less charged off rates, but yes it takes time to go thru every note and pick one you like. I don't mind though, as I find it fun activity.
Isn't that part of the idea of peer-to-peer lending - individuals deciding who to lend to. Glad to hear that extra work pays off.
Title: Re: Lending Club - Time to panic?
Post by: JZinCO on July 07, 2016, 09:09:02 AM
With several big boys no longer fronting money, LC is desperate for cash to lend out. If no cash comes in than there are no new loans or revenue, and LC goes under.

Yeah, maybe.  But things usually don't work out that poorly.  I look at the current bad news for LC as practice for the emotional discipline  of staying in the market when there is a big drop.  You can't panic at every bump in the road.  I added a small amount to my LC account last week.  There's still performing loans listed on the secondary market with good payment histories, at better than usual discounts.

The secondary market is still reverting to normal, the week after the bad news there were 571,000 listed.  A couple days ago there were 466,000 listed.  Normal before all the bad news was about 300,000.

I thought about how I should react and I'm still not sure. My IPS says 5% in alternative platforms. Do I stay the course? Did I do wrong in selecting the course?
I don't know; I did turn off contributions to m LC account but I'm still reinvesting pay-backs and interest...

I'm fairly concerned about platform risk. I might even redirect my LC money into other crowdfunding platforms. At least I'd be more hedged against platform risk...
Title: Re: Lending Club - Time to panic?
Post by: AM43 on July 07, 2016, 09:14:29 AM
I can honestly tell you that hand picked notes have less charged off rates, but yes it takes time to go thru every note and pick one you like. I don't mind though, as I find it fun activity.
Isn't that part of the idea of peer-to-peer lending - individuals deciding who to lend to. Glad to hear that extra work pays off.

Majority of LC investors use automated option to purchase notes.
Even with filters in place, I find that automated system picks some questionable notes that I would never pick on my own.
Title: Re: Lending Club - Time to panic?
Post by: robartsd on July 07, 2016, 09:31:10 AM
I can honestly tell you that hand picked notes have less charged off rates, but yes it takes time to go thru every note and pick one you like. I don't mind though, as I find it fun activity.
Isn't that part of the idea of peer-to-peer lending - individuals deciding who to lend to. Glad to hear that extra work pays off.

Majority of LC investors use automated option to purchase notes.
Even with filters in place, I find that automated system picks some questionable notes that I would never pick on my own.
I understand that a majority of LC investors use automated options; however, that's not the idea behind peer-to-peer lending. One should not expect to get great returns as a small time investor using automated tools that someone else developed and owns.
Title: Re: Lending Club - Time to panic?
Post by: tonysemail on August 26, 2016, 03:26:58 PM
and it gets worse
http://www.bloomberg.com/news/features/2016-08-18/how-lending-club-s-biggest-fanboy-uncovered-shady-loans

In Portland, over coffee, Sims said he’d found thousands of instances from 2009 through 2011 in which Lending Club seemed to allow borrowers to split their loans in two if their first attempt to get a loan didn’t find any takers. For instance, in June 2011, a user from the Phoenix area requested $25,000 for debt consolidation. The user was relatively risky, with a FICO score in the low 700s. Lending Club rated the loan “E2”—one of its riskier categories—offering it at an interest rate of about 18 percent. But investors were skeptical, and only $20,525 worth of the loan’s notes were sold. Later that month the same person, according to Sims, borrowed the difference, $4,475, at an interest rate of just 7.5 percent. (Sims guessed that Lending Club’s algorithms gave the second loan a higher rating because it was smaller and thus less risky.) To the outside, it looks like one reliable loan and one risky loan; in fact they were both risky. “


I hope for their sake they close this loophole quickly.
there's always someone trying to game the system.
Title: Re: Lending Club - Time to panic?
Post by: Kwill on August 26, 2016, 03:55:41 PM
It's too bad. It's such a good idea in principle.

I've had pretty good luck with my Lending Club account for the past two years. I kept it small, never much more than $300 at the highest point, but it's showing over 10% for the "adjusted net annualized return." It was over 12% until the other day when one of the loans went into a grace period. Nothing charged off yet. Four or five loans got paid off early, one I sold, and I'll have to wait and see what this one does. I listed it on the trading platform as soon as it went into the grace period, but I might need to offer more of a discount. This was just a trial run with the idea of putting more in once I saw that this was solid, but with all the news about the company, maybe I'll just let the trial wind down and keep transferring out money from repayments.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on August 27, 2016, 06:28:24 PM
I saw this too. The story also presents evidence that employees of Lending Club applied for multiple loans and then paid them back immediately to make the site appear artificially busier than it was, so they'd look good to investors.

The other story wasn't as much of a big deal to me, but this one is. If you can't trust that their ratings reflect the true risk, you can't have confidence in your returns. I may let the proceeds from my LC account automatically reinvest, but I think I'm going to stop adding new money and focus on Vanguard instead for the time being.
Title: Re: Lending Club - Time to panic?
Post by: uwp on August 31, 2016, 12:34:34 PM
MMM did an update to the LC Experiment post.  http://www.mrmoneymustache.com/the-lending-club-experiment/
I'm not too well-versed in P2P lending but the YOY comparisons don't look great... $6,000ish increase in late/default/charged off and $7,000ish in interest.

Is everyone else still holding steady?
Title: Re: Lending Club - Time to panic?
Post by: Seppia on August 31, 2016, 01:48:56 PM
I am, but i have about 1% of my NW in LendingClub.
The worrysome thing about it is that i tried to sell the notes on the secondary market more than once and they are basically untradeable.
It was a valuable lesson because you learn from your mistakes, but with hindsight I would definitely have stayed out
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on September 01, 2016, 08:15:19 AM
I am but that's because it will take forever to get the money out from loan payments anyhow.  And as Seppia said, the secondary market is more like selling at a loss.  I've never put any new money in, just holding steady with what I've got and letting it work.
Title: Re: Lending Club - Time to panic?
Post by: robartsd on September 01, 2016, 08:45:12 AM
And as Seppia said, the secondary market is more like selling at a loss.
If everything selling on the secondary market is selling at a loss, then there may be good opportunities to buy there.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on September 01, 2016, 09:41:12 AM
And as Seppia said, the secondary market is more like selling at a loss.
If everything selling on the secondary market is selling at a loss, then there may be good opportunities to buy there.

Yep, I make good money there.
Title: Re: Lending Club - Time to panic?
Post by: Kwill on September 02, 2016, 04:00:18 PM
And as Seppia said, the secondary market is more like selling at a loss.
If everything selling on the secondary market is selling at a loss, then there may be good opportunities to buy there.

Yep, I make good money there.

I've only ever bought notes from the secondary market. It's nice to be get a discount and be able to see a steady payment history for a few months. My one in-grace note came back, so now I'm feeling more positive about the site again. I don't know if I could handle having a large investment in Lending Club when I worry about one or two people being a few days late now and then.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 08, 2016, 09:24:31 AM
How is everyone feeling now that the LC story had calmed down?  I've taken a little money from payments in the last month, but turned back on automatic investing this week.  I'm still disappointed that the returns keep dropping.  I'm concerned the early numbers were inflated by insider loans that were repaid after 2-3 months. 

Almost 11% of the notes I've issued have gone bad (265 defaulted notes out of 2412) in a 5 year period.
Title: Re: Lending Club - Time to panic?
Post by: tonysemail on September 08, 2016, 10:17:24 AM
i continue to draw down my account and transfer cash out.
it's slow and steady and the bad news hasn't caused me to cash out any faster.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on September 08, 2016, 10:23:04 AM
I'm still leaving cash in and letting it reinvest because even though the rate is lower (~9.5% now), it still beats the returns I've been getting from the stock market.  I'm not adding any new cash in, just letting it work its magic.  I've yet to go with the secondary market and to be honest, I do wonder exactly what people are using the money for.  As someone who sits with good credit and follows this board, I just wonder what could really be doing and how safe an investment it is.  But out of about 1000 loans, I'm only sitting at a ~4% default rate right now.  That includes just the late notes and charged off.  Even if you include the grace, it's only about 4.6%.  I guess the real question is do you get more out in interest than what's charged off at a loss.  Not gonna lie, for August I have seen very little increase in my adjusted account value.  Overall sure, but the charged off numbers just started adding into the mix finally.  We'll see how September goes.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 08, 2016, 11:00:27 AM
Fudge - How long have you been invested in LC?  I didn't start seeing my returns drop until most of my notes got 12-18 months old.

I think most people used LC to consolidate credit card debt, but those habits are tough to break and the cards get run up again causing defaults/BKs.  Early on, I think there were more people with better credit using it for RE investing and home renovation.  Prime financing has gotten easier for that stuff now.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on September 08, 2016, 08:02:47 PM
I started in February.  So it's only been about 7 months for me now.  But still, compared to when MMM started, the numbers are sure different.  DOn't know if that's good or bad.
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe on November 02, 2016, 02:50:56 PM
I am, but i have about 1% of my NW in LendingClub.
The worrysome thing about it is that i tried to sell the notes on the secondary market more than once and they are basically untradeable.
It was a valuable lesson because you learn from your mistakes, but with hindsight I would definitely have stayed out

For those it may help (and at the risk of creating a run on the bank), I'll share that I'm using LENDINGROBOT to help liquidate my LC assets. It's an automated way to liquidate your LC assets. They charge a fee if you use their site to PURCHASE notes (but only after you have over $5000 managed by them in this way). However, they don't charge for selling (beyond the 1% already charged by LC for selling). I've been able to fairly quickly (couple months) sell a fair portion of my current notes for 1-3% above remaining principal and interest -- enough to ensure I don't take a loss after the 1% fee.  I haven't had a lot of success selling even Grace Period notes using the discount rates indicated by LC's loss rates -- suggesting that buyers believe the real loss rate to be higher too.  This only confirms my concerns about LC's falling returns.

I plan to liquidate all my LC notes as quickly as I can (while minimizing losses). My returns had been fairly steady, but I have made just about no money in 2016 there. My concern is that this may be an early indicator of rising defaults -- or even that we're headed for a recession soon. Either way, my comfort with this unsecured debt is shaken.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on December 31, 2016, 06:28:38 AM
I wanted to bump this thread and see what others are experiencing in their total return/lifetime return:

My "Adjusted Annualized Net Return" is now running 5.22%.   If I don't adjust for doubtful loans, its 7.06%.   I've been pretty vanilla on this, automated investing with minimal filters.  I probably have a few more 36 month loans in it compared to the average investor.
Title: Re: Lending Club - Time to panic?
Post by: zazpowered on January 01, 2017, 07:41:10 PM
I have a Adjusted Net Annualized Return of 4.01% over the last few years on mostly A and B loans. I recently started buying riskier notes using LendingRobot so I have yet to see how those will perform.
Title: Re: Lending Club - Time to panic?
Post by: Kwill on January 02, 2017, 06:14:36 AM
I'm at 12.25%. I bought one risky loan but sold it back within a few days because I'm a chicken. Other than that, I've only bought A, B, C, and one D note on the trading platform that already had several months of perfect payment record but that were being sold at a discount. I've also been reading their information to see if they sounded like reliable people. I've had several people pay off loans early but nobody has gone into a grace period for more than a few weeks.

I don't know if this would scale up, though. I have a tiny little account with 14 current loans, and I transfer money out to my bank account regularly.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on January 02, 2017, 10:45:36 AM
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%.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on January 02, 2017, 10:49:38 AM
I'm happy I hear I'm not the only one. My startegy over the past 8 months or so was to buy solely off the secondary market. Returns were hovering at 14% and have dropped to about 10-11%. Thankfully I only buy at a 10-30% discount, so I've stayed positive. Hopefully this clears up soon and continues trending up.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on January 02, 2017, 10:57:28 AM
This is the first I've actually looked into it since I'm a huge fan of setting up an automated strategy then ignoring it for a while. But doing some googling now and came across this blog dedicated to peer to peer lending, and a guy who posts his quarterly returns:

http://www.lendacademy.com/my-returns-at-lending-club-and-prosper/

You can see his returns taking the same drop a couple people here have mentioned. He wrote this in his latest update:

"I am beginning to wonder when the decline will stop. I thought it would have stabilized by now but in Q3 my overall returns saw another substantial decline. I think it is safe to say that Q3 was my worst quarter ever when it comes to defaults at Lending Club. I have been focused on the higher risk end of the spectrum and those loans with vintages in 2014 and particularly 2015 continue to perform worse than previous years. Both Lending Club and Prosper have increased interest rates several times this year as well as tightened their underwriting and that will help going forward. But because these are three and five year loans I am investing in I won’t be seeing the benefit in my returns here for quite some time."

"This past quarter saw another decrease in my overall trailing twelve-month (TTM) return from 8.72% to 8.21%. It has now been six quarters in a row where my returns have declined by approximately 0.5%. Just two years ago my TTM return was at 11.28%. I have been hearing from many other investors who have been experiencing similar drops in returns so I know I am not alone. "

I'm not sure what to think of it yet, the note that loans in the last couple years have defaulted at a higher rate than the prior years suggests there could be some selection bias. Perhaps lending club is doing advertising and or getting more exposure to the wrong people (or the opposite for prior years).
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on January 02, 2017, 01:13:06 PM
I wanted to bump this thread and see what others are experiencing in their total return/lifetime return:

My "Adjusted Annualized Net Return" is now running 5.22%.   If I don't adjust for doubtful loans, its 7.06%.   I've been pretty vanilla on this, automated investing with minimal filters.  I probably have a few more 36 month loans in it compared to the average investor.

LC reports my "Adjusted Annualized Net Return" as about 12.8%.  I calculate it in Excel with XIRR as about 12.6%.

I had more defaults this year than earlier too, however that may be because over the past year I have bought the great majority of my notes on the secondary market.  I spend time hand-picking notes, but enjoy it.
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal on January 02, 2017, 02:01:55 PM
My major problem with Lending club is how illiquid it is.  I didn't panic, per se, when the shady dealings at the company were exposed, but I decided to pull out my money.  Alternative investments are a dime a dozen.
It's going to take me multiple years to take out my rather small 10k investment.  The returns look good, but how useful are they, when you can't access money you need?  To me, it's kind of like using home equity as part of your mustachian net worth.  Technically, it does count as part of your net worth.  But it's not accessible, so not part of the formula for my mustachian net worth.
Title: Re: Lending Club - Time to panic?
Post by: AM43 on January 03, 2017, 12:29:09 PM
I have been investing with LC since 2009 and I have seen my share of defaults.
My returns on average for the past 4 years or so have been around 8.5% or 7.5% adjusted.
Like others I am not happy about defaults, but I am happy with my 8.5% returns.
No mater what economy is doing, defaults are always going to happen, some years more and some less.
If you as investor is not Ok with defaults, this product is not for you and one should stick with other investment products.
At the end of a day I don't know any other products where I can earn 7%-8% besides stock market and we all know well that it also comes with major risks.

Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on January 03, 2017, 01:44:20 PM
7-8% is relative.  I just started back in February with LC.  While mine was starting rather high as foretold, I too have run into the issue of the past few months.  I'm not sure if it's tied into the news of LC or what, by my rates are down to barely 4%.  The past two months have actually seen a decrease in value.  I have a feeling that the number of defaults will only increase from hear.  Perhaps we are seeing the results of the bad press?  The people who would normally use the service didn't, and the higher default individuals just didn't care?  The question right now is, is it worth continuing?   Even MMM has paused his automated investments...
Title: Re: Lending Club - Time to panic?
Post by: Capyy on January 03, 2017, 05:22:24 PM
7-8% is relative.  I just started back in February with LC.  While mine was starting rather high as foretold, I too have run into the issue of the past few months.  I'm not sure if it's tied into the news of LC or what, by my rates are down to barely 4%.  The past two months have actually seen a decrease in value.  I have a feeling that the number of defaults will only increase from hear.  Perhaps we are seeing the results of the bad press?  The people who would normally use the service didn't, and the higher default individuals just didn't care?  The question right now is, is it worth continuing?   Even MMM has paused his automated investments...

Sorry, I'm hew here - where did you read MMM paused his automated investments?

I cut my automated investing in half, and am going to monitor more frequently. If there are still issues in 6 months I'll probably stop altogether.
Title: Re: Lending Club - Time to panic?
Post by: Glaeweth on January 04, 2017, 01:13:37 AM
I am also quite concerned by the huge drop in returns over the last year.

I have a highly diversified porftolio (thousands of notes) with Weighted Average Interest Rate of about 20% (mostly high yield with relatively simple investment criteria), and now seeing a ANAR of 4.6%. I should have logged the previously reported values, but it has brutally fallen to this level over 2016 (before the decrease was more gradual as expected). Something is going wrong in terms of default rate and they are not communicating anything about it.

Now, the worse thing is that if I understand correctly, ANAR refers to returns since inception, not just recent returns. Which means recent returns could well be into negative territory... ANAR also doesn't try to estimate a discount factor to "current" notes in the account, though some of them will obviously default as well. This can delay what would be appropriate reactions to a sudden increase in default such as the one we are seeing.
 
LC reports the ANAR as being in the median for this kind of portfolio (duration about 19-20 months), so this is not just bad luck, other investors must be experimenting the same thing. The same automated investment allocation expected return (computed by LC) has fallen from about 10% to 7% and now up to 8%... It looks like they have silently updated them.

I have paused automated investing while I review how the performance evolves. Transparency and trust is paramount, so I hope this was just a temporary drop but that the trend reverses.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on January 04, 2017, 04:56:55 AM
I'm glad I could re-open this discussion.  I've been with them since 2011 and have around $20,000 tied up with them.  I made one large deposit and have been drawing out funds, so the portfolio is flat in principal balance in 2016.

That being said, total returns have fallen to 5.06% and in November and December chargeoffs exceeded interest/recoveries.

I really think the institutions that are happy with 6% returns are driving out the underwriting quality.  Additionally, access to consumer credit has gotten a lot easier over the past five years, so people who borrowed from lending club now have access to more credit and use it.
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on January 04, 2017, 06:25:12 PM
7-8% is relative.  I just started back in February with LC.  While mine was starting rather high as foretold, I too have run into the issue of the past few months.  I'm not sure if it's tied into the news of LC or what, by my rates are down to barely 4%.  The past two months have actually seen a decrease in value.  I have a feeling that the number of defaults will only increase from hear.  Perhaps we are seeing the results of the bad press?  The people who would normally use the service didn't, and the higher default individuals just didn't care?  The question right now is, is it worth continuing?   Even MMM has paused his automated investments...

Sorry, I'm hew here - where did you read MMM paused his automated investments?

I cut my automated investing in half, and am going to monitor more frequently. If there are still issues in 6 months I'll probably stop altogether.

http://www.mrmoneymustache.com/the-lending-club-experiment/

In the key update right below the tables.  He stated that he's paused his automated investing since the return rate has changed.  He believes it's no longer what it once was...
Title: Re: Lending Club - Time to panic?
Post by: Capyy on January 07, 2017, 01:20:15 PM
Thanks for the link.

I'm hoping this was just a blip. Only cutting my automated investing in half for now.
Title: Re: Lending Club - Time to panic?
Post by: HAPPYINAZ on January 07, 2017, 02:26:42 PM
I haven't seen a dip in returns for me yet, mine is at around 8%.  I didn't pick many of the higher interest loans since I thought they were higher risk.  I have a few C and D class loans, but mostly all A rated loans.   I never liked the idea of automated investing, so I hand picked mine.  I started with Lending Club in Nov 2015.  I have 18 loans total, 4 paid in full, and 14 are paying on time and no defaults.  Cross-fingers....
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe on January 12, 2017, 02:51:03 PM
My major problem with Lending club is how illiquid it is.  I didn't panic, per se, when the shady dealings at the company were exposed, but I decided to pull out my money.  Alternative investments are a dime a dozen.
It's going to take me multiple years to take out my rather small 10k investment.  The returns look good, but how useful are they, when you can't access money you need?  To me, it's kind of like using home equity as part of your mustachian net worth.  Technically, it does count as part of your net worth.  But it's not accessible, so not part of the formula for my mustachian net worth.

As far as liquidity goes, I wanted to quickly mention again the ease and simplicity (and lack of fees) of using LendingRobot to automatically sell notes.  Instead of waiting 3-5 years for all my notes to be paid off, I've been able to liquidate over half of my $12K account in 6 months while losing little or no money. Most of this has been selling current notes at a 1-3% premium (to ensure that it covers at least the 1% fee that LC charges). To sell Grace Period and Late notes, however, I HAVE had to discount them MORE than the loss estimates from LC -- which suggests to me that loss rates are increasing (and makes me even more confident in my decision to get out of LC).

Note: I'm NOT a shill for LendingRobot -- they only charge/make money if you BUY more than $5K in notes through them (I haven't).  I just want to share with the group here a good way I've found to liquidate LC holdings and get out if they want (as I am doing).  LendingRobot doesn't make money from people selling notes through them (or at least they don't charge any fees -- maybe LC gives them some form of kickback for any transactions).

On a broader note, I think something that hasn't been discussed much here is the possibility that the drop in returns that everyone is seeing may actually be an early indicator of a impending recession (given that we're long overdue for one given historical patterns) instead of just a problem with LC or P2P lending. FWIW, beyond working to quickly liquidate my LC account, I'm shifting my other investments to increasingly defensive positions.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on January 12, 2017, 03:43:36 PM
I don't think the discount on selling Lending Club notes that are currently in Grace Period or Late, means that LC is reporting incorrectly on their notes, it's more of a combination of the fact that notes that are late are extremely risky and that the number of buyers of late note are relatively few. To sell your notes you'll be looking at:

Always Current: 0-5% surplus
Current Now, but not always: -15 - 0%
Grace Period: -25-(-20)%
Late Early: -50-(-25)%
Really Late: -75% (Likely won't sell)

The lower grade notes will be closer to the bottom of the spectrum, and higher grades closer to the top.
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal on January 13, 2017, 07:37:58 AM
My major problem with Lending club is how illiquid it is.  I didn't panic, per se, when the shady dealings at the company were exposed, but I decided to pull out my money.  Alternative investments are a dime a dozen.
It's going to take me multiple years to take out my rather small 10k investment.  The returns look good, but how useful are they, when you can't access money you need?  To me, it's kind of like using home equity as part of your mustachian net worth.  Technically, it does count as part of your net worth.  But it's not accessible, so not part of the formula for my mustachian net worth.

As far as liquidity goes, I wanted to quickly mention again the ease and simplicity (and lack of fees) of using LendingRobot to automatically sell notes.  Instead of waiting 3-5 years for all my notes to be paid off, I've been able to liquidate over half of my $12K account in 6 months while losing little or no money. Most of this has been selling current notes at a 1-3% premium (to ensure that it covers at least the 1% fee that LC charges). To sell Grace Period and Late notes, however, I HAVE had to discount them MORE than the loss estimates from LC -- which suggests to me that loss rates are increasing (and makes me even more confident in my decision to get out of LC).

Note: I'm NOT a shill for LendingRobot -- they only charge/make money if you BUY more than $5K in notes through them (I haven't).  I just want to share with the group here a good way I've found to liquidate LC holdings and get out if they want (as I am doing).  LendingRobot doesn't make money from people selling notes through them (or at least they don't charge any fees -- maybe LC gives them some form of kickback for any transactions).

On a broader note, I think something that hasn't been discussed much here is the possibility that the drop in returns that everyone is seeing may actually be an early indicator of a impending recession (given that we're long overdue for one given historical patterns) instead of just a problem with LC or P2P lending. FWIW, beyond working to quickly liquidate my LC account, I'm shifting my other investments to increasingly defensive positions.
I'll be sure to check it out. You say that it's losing little to no money. But it's a percentage, as you state. I don't want to pay a percentage to access my money. I will still consider it illiquid.


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Title: Re: Lending Club - Time to panic?
Post by: bassman2003 on January 13, 2017, 08:50:00 AM
My major problem with Lending club is how illiquid it is.  I didn't panic, per se, when the shady dealings at the company were exposed, but I decided to pull out my money.  Alternative investments are a dime a dozen.
It's going to take me multiple years to take out my rather small 10k investment.  The returns look good, but how useful are they, when you can't access money you need?  To me, it's kind of like using home equity as part of your mustachian net worth.  Technically, it does count as part of your net worth.  But it's not accessible, so not part of the formula for my mustachian net worth.

As far as liquidity goes, I wanted to quickly mention again the ease and simplicity (and lack of fees) of using LendingRobot to automatically sell notes.  Instead of waiting 3-5 years for all my notes to be paid off, I've been able to liquidate over half of my $12K account in 6 months while losing little or no money. Most of this has been selling current notes at a 1-3% premium (to ensure that it covers at least the 1% fee that LC charges). To sell Grace Period and Late notes, however, I HAVE had to discount them MORE than the loss estimates from LC -- which suggests to me that loss rates are increasing (and makes me even more confident in my decision to get out of LC).

Note: I'm NOT a shill for LendingRobot -- they only charge/make money if you BUY more than $5K in notes through them (I haven't).  I just want to share with the group here a good way I've found to liquidate LC holdings and get out if they want (as I am doing).  LendingRobot doesn't make money from people selling notes through them (or at least they don't charge any fees -- maybe LC gives them some form of kickback for any transactions).

On a broader note, I think something that hasn't been discussed much here is the possibility that the drop in returns that everyone is seeing may actually be an early indicator of a impending recession (given that we're long overdue for one given historical patterns) instead of just a problem with LC or P2P lending. FWIW, beyond working to quickly liquidate my LC account, I'm shifting my other investments to increasingly defensive positions.

I too liquidated my LC holdings from Aug thru Dec .  I had the EXACT same thought about this being a possible early sign of recession vs a LC problem (but that wasn't why I liquidated my LC ). 

Since I can't tell the future though, I'm not changing any of my core investments and sticking to the plan
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on January 17, 2017, 12:35:34 PM
The risk of owning LC shares or loans is the sum of the debtors' default risk plus LC's default risk. ROI may not compensate for this double-risk. There are junk bonds with better risk/reward characteristics.
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe on January 17, 2017, 03:40:45 PM

I'll be sure to check it out. You say that it's losing little to no money. But it's a percentage, as you state. I don't want to pay a percentage to access my money. I will still consider it illiquid.


It's definitely less liquid than stocks, mutual funds, etc.  I'm just pointing out a way to make it MORE liquid than just waiting for all the notes to be paid off (3-5 years) and without the agonizing effort of individually listing every single note for sale...

I also agree 100% that it's a bummer to take a hit to sell your notes. The good news is that I've had pretty good success selling current notes at a 1-3% premium (sufficient to offset the 1% fee that LC charges for selling).  Even selling for +1% that means you're effectively breaking even.
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe on January 17, 2017, 04:35:51 PM
I don't think the discount on selling Lending Club notes that are currently in Grace Period or Late, means that LC is reporting incorrectly on their notes, it's more of a combination of the fact that notes that are late are extremely risky and that the number of buyers of late note are relatively few. To sell your notes you'll be looking at:

Always Current: 0-5% surplus
Current Now, but not always: -15 - 0%
Grace Period: -25-(-20)%
Late Early: -50-(-25)%
Really Late: -75% (Likely won't sell)

The lower grade notes will be closer to the bottom of the spectrum, and higher grades closer to the top.

On further examination, I think you're right. I think was just getting impatient to unload those non-current notes, but was only seeing 1 or maybe 2 sell each month. In thinking about it more, since I have far fewer non-current notes (less than 10), it shouldn't be surprising that I've sold only 1 or 2 per month -- since I've only ever sold ~10% of my current notes in any month. I'm probably being too impatient about dumping those notes -- which I realize may be a bit unwise. That said, it's a pretty small fraction of my total portfolio and so not that big a deal.

FYI, the discount rates I've been offering for my non-current notes (mostly C, D, and E) are pretty similar to those you suggested:
Grace Period: -22 to -27%
Late (16-30 days): -54 to -59%
Very late (31-120 days): -71 to -76%
Title: Re: Lending Club - Time to panic?
Post by: Capyy on January 17, 2017, 07:14:29 PM
Return last Thursday was at something like 8.9%. This morning 8.7%, now 8.5%. I've got over 400 loans.

Plan is below 8% stop all investing. Below 7%, start liquidating.
Title: Re: Lending Club - Time to panic?
Post by: Indexer on January 17, 2017, 09:36:10 PM
If LC goes belly up, I query whether the SEC will look into bloggers that pushed the LC stock and/or the LC loan investments. SEC interprets "investment adviser" broadly.

See below SEC guidance:

Who Is an Investment Adviser?

Subject to certain limited exclusions discussed below...

Exclusions include "Publishers of bona fide newspapers, magazines or financial publications of a general and regular circulation."

MMM should be fine. ;)



I've always avoided Peer to Peer lending because I could care less what the default rates are during an expansion. What are those default rates in a recession? Even bigger question, what does liquity look like in a recession?

Loans to people who have a hard time getting conventional loans = we have seen this story before. It's fine when unemployment is low. These people are already having a hard time getting loans at the bank. I use to be a loan officer at a bank. If I declined to loan you the bank's money when you were in my office(and I had your credit report) I'm not going to go loan you my own money over the internet.

EDIT: I know lending club was around in '08. I also know they have limited data from then, the data they do have isn't good, and based on what I've read the average FICO score is lower now than it was back then.
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe on February 01, 2017, 02:14:41 AM
Another issue I've noticed: LC has becoming less and less transparent about their statistics. They used to show a lot of data about return/loss rates for different loan classes, increases in loans issued through LC. For a while they even had a feature where you could compare your returns versus those of other account holders based on risk and number of loans, etc.

Slowly, less and less of that content has been available. Now they don't even have the "Statistics" tab/link. This seems like yet another sign that they are not doing well -- and are trying to cover up that fact.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on February 01, 2017, 05:58:20 AM
My 2500 note portfolio I've had since 2011 just dropped below a 5% adjusted return.  30%+ in E notes as well.

Only positive I'd say about Lending Club is they just integrated with TurboTax!  That's a huge help
Title: Re: Lending Club - Time to panic?
Post by: Stache-O-Lantern on February 05, 2017, 10:20:10 AM
I have noticed the last 2 years in my account a bump in late notes in January.  My thought is it's classic consumer spendypants behavior where people spend too much during the holidays, and then have trouble with the bills.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on February 05, 2017, 11:56:42 AM
If you must invest in subprime debt, Rent-A-Center junk bonds maturing in 2020 have APYs over 11%.
Title: Re: Lending Club - Time to panic?
Post by: Heroes821 on February 06, 2017, 08:16:13 AM
As a means of diversifying I put $3000 to test the waters on LC last March and in a year I've made around $300 and have 3 charged off notes out of 163 notes.  13 of which are in various late sections.  Now I'm not saying LC is a complete loss or unrecoverable, but I'm discovering that this level of illiquidity and risk is more than I'm willing to mess with.  Now I might just move it all to vanguard, or I was planning on testing the waters at fundrise.
Title: Re: Lending Club - Time to panic?
Post by: Cc15gec on February 07, 2017, 03:56:02 AM
Another issue I've noticed: LC has becoming less and less transparent about their statistics. They used to show a lot of data about return/loss rates for different loan classes, increases in loans issued through LC. For a while they even had a feature where you could compare your returns versus those of other account holders based on risk and number of loans, etc.

Slowly, less and less of that content has been available. Now they don't even have the "Statistics" tab/link. This seems like yet another sign that they are not doing well -- and are trying to cover up that fact.

CJ~ The stats are still there...  Login to LC account -> Account Summary -> Understand Your Returns (it is under your ANAR percentage) -> Info should be there!

:-)
Title: Re: Lending Club - Time to panic?
Post by: zombiehunter on February 27, 2017, 01:19:47 PM
Well this sucks.  I have a Lending Club IRA and decided to start the process to slowly roll out of Lending Club and move the funds over to my Vanguard IRA in traditional investments.  Just haven't been happy with the return in my LC IRA, as it didn't match my prior experience with a taxable Lending Club account (late-note adjusted return is just about 5% with average age of notes less than 1 year... barf).

For my taxable LC account, I've set up some automated sales with lending robot, and have sold most everything with no discounts, other than late notes.  Over the past year, I've wound down the account to just 25% or so of the value it was this time last year.  I usually pull out the cash weekly, without fee, via ACH -- super easy. 

Winding down the LC IRA won't be so easy.  The fee for any "partial transfer" is $50, courtesy of SDIRA.  And then the account termination fee is $150.  Note sure if one transfer and termination would therefore cost $200.  Shit. 

https://quikforms.com/viewform/zpWO-MeLbKwAm --> Fee Schedule actually indicates partial transfer fee of $100 and account termination fee of $250, but apparently it's lower for Lending Club IRAs. 

Does anyone have experience getting out of an LC IRA?  I suppose to minimize fees it would be best to sell everything and transfer it once, but that means either (i) sitting on cash sitting for a long time while winding down slowly using automated sales, or (ii) trying to liquidate more quickly, but that likely requires significant discounts. 

Of course when Googling IRA transfers and Lending Club, I find a million articles about how to roll IRAs to Lending Club, but have not easily found info about getting out.  IMO, these fees are absurd (esp. for the partial transfer), given that Lending Club itself doesn't charge anything to withdraw from their taxable accounts.  Perhaps I should've considered this more carefully when opening the account, but I was more focused on how to get the annual fee waived and how much better the returns would in the tax-advantaged account.  Please feel free to punch me in the face for this one, and then let me know if there are any strategies for dealing with this headache. 
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on February 27, 2017, 01:45:40 PM
Well this sucks.  I have a Lending Club IRA and decided to start the process to slowly roll out of Lending Club and move the funds over to my Vanguard IRA in traditional investments.  Just haven't been happy with the return in my LC IRA, as it didn't match my prior experience with a taxable Lending Club account (late-note adjusted return is just about 5% with average age of notes less than 1 year... barf).

For my taxable LC account, I've set up some automated sales with lending robot, and have sold most everything with no discounts, other than late notes.  Over the past year, I've wound down the account to just 25% or so of the value it was this time last year.  I usually pull out the cash weekly, without fee, via ACH -- super easy. 

Winding down the LC IRA won't be so easy.  The fee for any "partial transfer" is $50, courtesy of SDIRA.  And then the account termination fee is $150.  Note sure if one transfer and termination would therefore cost $200.  Shit. 

https://quikforms.com/viewform/zpWO-MeLbKwAm --> Fee Schedule actually indicates partial transfer fee of $100 and account termination fee of $250, but apparently it's lower for Lending Club IRAs. 

Does anyone have experience getting out of an LC IRA?  I suppose to minimize fees it would be best to sell everything and transfer it once, but that means either (i) sitting on cash sitting for a long time while winding down slowly using automated sales, or (ii) trying to liquidate more quickly, but that likely requires significant discounts. 

Of course when Googling IRA transfers and Lending Club, I find a million articles about how to roll IRAs to Lending Club, but have not easily found info about getting out.  IMO, these fees are absurd (esp. for the partial transfer), given that Lending Club itself doesn't charge anything to withdraw from their taxable accounts.  Perhaps I should've considered this more carefully when opening the account, but I was more focused on how to get the annual fee waived and how much better the returns would in the tax-advantaged account.  Please feel free to punch me in the face for this one, and then let me know if there are any strategies for dealing with this headache.

Err yeah, sorry that you bought an IRA. I was close to buying one until I saw that fee schedule. I didn't like the fees to get out. I don't know how much money you put in, but trying to sell everything on the Secondary Market and just close it out all at once sounds like the way to go.

I've recently decreased my minimum discount requirement in my Sec. market buy account. Whereas before I bought notes at 10-15% (making about a 8-9% return) discount, I require a 15-25% discount now with he same note conditions as before. The recent lending club wave of defaults is going to make liquidating more expensive. My best investment buys on the secondary market are A-C loans. Lending Club in my estimation has been way off in D-G loans, and you'll likely have to sell those at discount.
Title: Re: Lending Club - Time to panic?
Post by: SeattleCPA on February 27, 2017, 02:39:26 PM
Not to pile on, but this post by White Coat Investor (from today) discusses his decision to move out of LC:

http://whitecoatinvestor.com/why-i-decided-to-liquidate-my-lending-club-account/

Title: Re: Lending Club - Time to panic?
Post by: zombiehunter on March 02, 2017, 08:55:17 AM
Well this sucks.  I have a Lending Club IRA and decided to start the process to slowly roll out of Lending Club and move the funds over to my Vanguard IRA in traditional investments.  Just haven't been happy with the return in my LC IRA, as it didn't match my prior experience with a taxable Lending Club account (late-note adjusted return is just about 5% with average age of notes less than 1 year... barf).

For my taxable LC account, I've set up some automated sales with lending robot, and have sold most everything with no discounts, other than late notes.  Over the past year, I've wound down the account to just 25% or so of the value it was this time last year.  I usually pull out the cash weekly, without fee, via ACH -- super easy. 

Winding down the LC IRA won't be so easy.  The fee for any "partial transfer" is $50, courtesy of SDIRA.  And then the account termination fee is $150.  Note sure if one transfer and termination would therefore cost $200.  Shit. 

https://quikforms.com/viewform/zpWO-MeLbKwAm --> Fee Schedule actually indicates partial transfer fee of $100 and account termination fee of $250, but apparently it's lower for Lending Club IRAs. 

Does anyone have experience getting out of an LC IRA?  I suppose to minimize fees it would be best to sell everything and transfer it once, but that means either (i) sitting on cash sitting for a long time while winding down slowly using automated sales, or (ii) trying to liquidate more quickly, but that likely requires significant discounts. 

Of course when Googling IRA transfers and Lending Club, I find a million articles about how to roll IRAs to Lending Club, but have not easily found info about getting out.  IMO, these fees are absurd (esp. for the partial transfer), given that Lending Club itself doesn't charge anything to withdraw from their taxable accounts.  Perhaps I should've considered this more carefully when opening the account, but I was more focused on how to get the annual fee waived and how much better the returns would in the tax-advantaged account.  Please feel free to punch me in the face for this one, and then let me know if there are any strategies for dealing with this headache.

Err yeah, sorry that you bought an IRA. I was close to buying one until I saw that fee schedule. I didn't like the fees to get out. I don't know how much money you put in, but trying to sell everything on the Secondary Market and just close it out all at once sounds like the way to go.

I've recently decreased my minimum discount requirement in my Sec. market buy account. Whereas before I bought notes at 10-15% (making about a 8-9% return) discount, I require a 15-25% discount now with he same note conditions as before. The recent lending club wave of defaults is going to make liquidating more expensive. My best investment buys on the secondary market are A-C loans. Lending Club in my estimation has been way off in D-G loans, and you'll likely have to sell those at discount.

I came up with a strategy to get out of a LC IRA as efficiently as possible, but it's fairly complicated:

--SDIRA, the custodian that manages Lending Club IRAs, allows you to invest in other assets (e.g. ETFs) if you open a separate IRA brokerage account with TD Ameritrade. 

--Funds from the LC IRA can be transferred to TD Ameritrade for a $25 wire fee or for free with check (from SDIRA to TD Ameritrade). 

--Normally this would increase the SDIRA annual fee from $100 to $175.  However, Lending Club covers the annual fee (that is normally $100) that occurs on the 1st anniversary if you have more than $5000 invested in LC notes, and covers the fee on the 2nd anniversary and thereafter if you have more than $10k.

--In my case, the 1st anniversary annual fee is set to be charged in March 2017.  With more than $5k in LC Notes, LC will cover this fee to SDIRA.

--After that fee is covered, I can open a separate brokerage account with SDIRA via TD Ameritrade, and the fee will have already been paid that year (and the $175 fee for the next year will not occur until March 2018).  So basically you get 1 year free with TD Ameritrade.

--Sell notes with Lending Robot over the year, periodically transfer cash from SDIRA LC IRA to SDIRA TD Ameritrade IRA until all funds are held in TD Ameritrade.

--TD Ameritrade has certain commission free ETFs (including VTI).

--Once all cash is converted from LC to TD Ameritrade and held in a single ETF (VTI), this can be transferred to Vanguard IRA.


One negative -- once the whole balance is rolled over to TD Ameritrade, and is then closed out and rolled to Vanguard, there is a $250 account termination fee (and a $100 'partial termination' fee for any partial transfers) rather than the semi-reduced LC IRA fees which are $150 for termination and $50 for partial termination. 

The benefits for this over-complicated solution is that you don't have to choose between (i) cash sitting around while liquidating the Notes, or (ii) liquidating notes at a steep discount to minimize idle cash.  Instead funds can periodically transfer to TD and be invested in an ETF while the LC notes are liquidated more gradually without fire-sale discounts.  Then the ETF holding can be transferred over from TD Ameritrade to Vanguard once so as to minimize fees.  So long as this is completed by March 2018, there should be no additional fee other than the $250 account termination fee. 

Hopefully that strategy will be useful if anyone else attempts to get out of the LC IRA. 
Title: Re: Lending Club - Time to panic?
Post by: AM43 on March 02, 2017, 12:00:21 PM
This is little bit off topic, but did anybody else buy LC stock at IPO only to watch it loose 70% of it's value.
I did not invest much only about $1200 but I don't know what to do, cut my losses and sell or hang on to my shares and wait till they  recover. Thank you for your input.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on March 02, 2017, 12:48:48 PM
This is little bit off topic, but did anybody else buy LC stock at IPO only to watch it loose 70% of it's value.
I did not invest much only about $1200 but I don't know what to do, cut my losses and sell or hang on to my shares and wait till they  recover. Thank you for your input.

I would cut your loses. Lending Club was way overvalued at IPO and is still at a market cap of about 2 bil (probably closer to its actual value). You're basically playing with a penny stock, and if you wouldn't buy it now, I'd drop it.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on April 06, 2017, 03:51:07 PM
Done with lending club. My returns continue to sink. A lot of people said it was a 2015 underwriting issue, but a lot of my loans defaulting now are 16. Somethings broken.

12% returns were too good to be true
Title: Re: Lending Club - Time to panic?
Post by: Fudge102 on April 06, 2017, 08:46:16 PM
Probably when they lowered their standards to allow a wider market access so we could "make more money."  Now it's flooded with bad loans and corporations who flood the investor side as well.  The peer to peer aspect is gone.  If you count all of the charged off loans to date, I've made $700 off of a $20,000 investment over a year.  And that doesn't include the loans that are waiting to close.  I stopped reinvesting at the beginning of the year.  $3000 is out and going off to Vanguard next week.  That only took 3 months to do.  We'll see how long the rest takes.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on April 06, 2017, 09:34:03 PM
Lending club has recently been making changes to improve investor returns. The first is that they now charge interest during the Grace Period. I believe this will push the A-C loans to go late less often. The second is that they will allow interest only payments for certain borrowers. I've been making a lot of changes to my secondary market portfolio. Basically, if you expect to sell your notes, you'll be selling C-G loans at -25%- -70%. I've moved to buying more A and B loans willing to only take a -5% discount. Good money to be made in the secondary market!
Title: Re: Lending Club - Time to panic?
Post by: Heroes821 on April 07, 2017, 05:59:10 AM
Instead of seeing more interest income, I'm simply seeing more defaulting.  In 1 year I have 8 defaults and 16 from 30-180 days late section.  That's only on $3000 invested.  Too much to mess with, I'm probably putting it all back to vanguard.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on April 07, 2017, 08:53:46 AM
Lending club has recently been making changes to improve investor returns. The first is that they now charge interest during the Grace Period. I believe this will push the A-C loans to go late less often. The second is that they will allow interest only payments for certain borrowers. I've been making a lot of changes to my secondary market portfolio. Basically, if you expect to sell your notes, you'll be selling C-G loans at -25%- -70%. I've moved to buying more A and B loans willing to only take a -5% discount. Good money to be made in the secondary market!

Yea, I think if you're going to make money here now, it's in the secondary market. Although, I don't see anything with that kind of discount.
Title: Re: Lending Club - Time to panic?
Post by: Tyson on April 07, 2017, 10:58:17 AM
Instead of seeing more interest income, I'm simply seeing more defaulting.  In 1 year I have 8 defaults and 16 from 30-180 days late section.  That's only on $3000 invested.  Too much to mess with, I'm probably putting it all back to vanguard.

Plus, the people that borrow from Lending Club are by definition more desperate than people that can get regular loans.  Making money off that hardship is just not something I'd be comfortable with.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 07, 2017, 11:09:32 AM
I wonder how many of the defualts are due to outright fraud. How hard is it to buy some identities online and pull in a bunch of loans under those aliases? If it's easy, expect a snowball to form.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on April 07, 2017, 12:04:28 PM
I wonder how many of the defualts are due to outright fraud. How hard is it to buy some identities online and pull in a bunch of loans under those aliases? If it's easy, expect a snowball to form.

Good question. I hadn't thought about that aspect.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 08, 2017, 05:08:11 PM
Outright fraud has been rampant.  I don't think they'll claim its fraud, but I''ve had a number notes with first payment defaults.  If someone doesn't pay their first payment, there was no intention to ever pay.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on May 01, 2017, 03:32:46 PM
I wonder if they changed their calculation of return. Mine bumped up half a % in a week, and I have a lot of notes. Still not buying new notes. Went and looked back and I have several months with more default write offs that interest received.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on May 01, 2017, 03:40:08 PM
I wonder if they changed their calculation of return. Mine bumped up half a % in a week, and I have a lot of notes. Still not buying new notes. Went and looked back and I have several months with more default write offs that interest received.

They mentioned something a while back about changing the way certain returns are calculated. Defaults have still been happening a lot. But I'm seeing my portfolio health improve which is usually a good sign for the near future.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on May 02, 2017, 05:10:00 AM
I'm still waiting for my April statement, maybe my return will turn positive this year.

Through March I have received $897 in interest income but lost $1,203 in charge offs.  I don't see how this is a sustainable business model for them.
Title: Re: Lending Club - Time to panic?
Post by: TheStachery on May 02, 2017, 06:49:45 AM
I don't use the auto investment anymore, and I have been slowly draining my LC account $500 at a time.  5 out of the last 12 months on LC was losing months.  Still waiting on April.
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal on May 02, 2017, 11:06:43 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.


Sent from my iPhone using Tapatalk
Title: Re: Lending Club - Time to panic?
Post by: Heroes821 on May 02, 2017, 11:47:54 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.


Sent from my iPhone using Tapatalk

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.
Title: Re: Lending Club - Time to panic?
Post by: sisto 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: Open Space 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.
Title: Re: Lending Club - Time to panic?
Post by: Capyy 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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?
Title: Re: Lending Club - Time to panic?
Post by: uwp 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

Don't lend to the person who promises to pay you back.
"The more assertive the promise, the more likely he will break it."
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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%
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal 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.


Sent from my iPhone using Tapatalk

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.


Sent from my iPhone using Tapatalk
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd 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.
Title: Re: Lending Club - Time to panic?
Post by: Car Jack 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%.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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%.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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.
Title: Re: Lending Club - Time to panic?
Post by: zazpowered 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
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: retiringearly 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.
Title: Re: Lending Club - Time to panic?
Post by: Tyson 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe 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%
Title: Re: Lending Club - Time to panic?
Post by: coloradojoe 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).
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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.
Title: Re: Lending Club - Time to panic?
Post by: AM43 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: Kwill 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?
Title: Re: Lending Club - Time to panic?
Post by: WonderfulLife43 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.   :-/
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on June 22, 2017, 06:00:33 PM
Finally got my latest withdrawal out, debating doing note liquidations but may just keep withdrawing slowly
Title: Re: Lending Club - Time to panic?
Post by: Padonak 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. 
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: Car Jack 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: HAPPYINAZ 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.
Title: Re: Lending Club - Time to panic?
Post by: Heroes821 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.
Title: Re: Lending Club - Time to panic?
Post by: CanuckExpat 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.
Title: Re: Lending Club - Time to panic?
Post by: Glaeweth 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.
Title: Re: Lending Club - Time to panic?
Post by: CanuckExpat 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?
Title: Re: Lending Club - Time to panic?
Post by: sisto 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
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: Tyson on August 04, 2017, 11:28:19 AM
Wow, higher risk and lower return than index funds.  Sounds like a dog.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: Capyy on August 04, 2017, 08:20:54 PM
My return continues to tank. I'm not investing any new money, just withdrawing interest.
Title: Re: Lending Club - Time to panic?
Post by: neonlight 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.

(https://image.ibb.co/mVNY1a/Screen_Shot_2017_08_08_at_10_55_46_AM.png)

What's your take.

Note: this is not an endorsement of FundingSocieties
Title: Re: Lending Club - Time to panic?
Post by: Dicey 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.

(https://image.ibb.co/mVNY1a/Screen_Shot_2017_08_08_at_10_55_46_AM.png)

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."
Title: Re: Lending Club - Time to panic?
Post by: neonlight 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.

(https://image.ibb.co/mVNY1a/Screen_Shot_2017_08_08_at_10_55_46_AM.png)

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.
Title: Re: Lending Club - Time to panic?
Post by: CanuckExpat 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.
Title: Re: Lending Club - Time to panic?
Post by: neonlight 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.
Title: Re: Lending Club - Time to panic?
Post by: FLBiker on August 11, 2017, 11:28:34 AM
I did a small experiment with Lending Club (just $2K) starting in Sept. 2012.  I had a good run for several years (8-10% return on D-G loans) and I started pulling the money out about a year ago.  I initially tried selling my loans, but I got no bites so I've just been transferring out cash every two weeks as they pay off.  Once the return started to dip into the 5-6% range, I felt like it wasn't worth it, especially since I was hand-selecting the loans.  I've still got over $900 in loans out there, and I'll just keep transferring out the cash.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on August 13, 2017, 05:35:49 AM
It was interesting this week, I got to hear from a respected regional bank CEO when asked about online lenders:

"Lending money is easy, anyone can do it.  What they haven't figured out is how to collect money.  That's the expensive infrastructure to build and they're decades behind the banks"

I thought that was interesting, he complimented their origination platforms, but the problem in banking/lending is nothing is proprietary/patentable and its heavily regulated.   If one institution figures out a new way to acquire customers, everyone else quickly follows and returns get back to the median.  I think we've seen that with Lending Club and the consumer banks like Capital One and Citi now offering unsecured loans.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on August 19, 2017, 08:07:11 PM
What are you guys using to liquidate? How do I do it? Would rather pull the cash out than wait for the loans to expire.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on August 21, 2017, 05:51:59 AM
I'm using their trading platform and listing all my notes at a 1% premium, which is enough to cover the sale fee and break-even.   I list all notes over $10 every week or two and a chunk sell.  There's more sellers than buyers, so its tough to liquidate the entire portfolio.  I figure the lower dollar ones are paying me more principal back and less of an issue.

Not easy to get your money out without a big haircut, just keep plugging away at it.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 03, 2017, 04:17:56 PM
August - Net losses of $95.   8 straight months of losses.

Interesting, Lending Club still only wants to report annualized returns since I opened the account.  I emailed them and ask if lending club can provide performance statistics like any other mutual fund/brokerage account does:  YTD, 1, 3, and 5 year returns.  Here was their response:


"Good afternoon <name ommitted>

Thank you for reaching out to us.
 
We currently do not have the option to display returns for specific increments in time. Our Net Annualized Return calculation is only able to determine the rate you have received from the time you started investing until the present day.

However, we appreciate you taking the time to provide us with your suggestions. Your feedback is valuable, and some of the best updates to our site are largely based on the suggestions that we received from our members."

You can't tell me a publicly traded silicon valley fintech companies doesn't have the ability to do this.  They're intentionally keeping that from the investors. 

If I didn't think their origination platform had some value, I'd short this stock to zero.  I think some bank will eventually buy them for the portfolio they can't seem to collect and can't value that.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on September 03, 2017, 05:01:43 PM
What I am most confused by is the low defaults for years as the economy was picking back up. Now, the economy is really strong and defaults are through the roof.  It makes me think someone has systemically taken advantage and borrowed money fraudulently. The company sure isn't alleviating any fears. It wouldn't surprise me to see they've been sold shortly.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 03, 2017, 06:39:53 PM
Do you have any sources on the default information?  Most of what I'm seeing in aggregate bank charge offs and classified loans are below historical averages.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on September 03, 2017, 07:34:26 PM
I keep track of my annual return, as reported by Lending Club, and it's been steadily decreasing for months. I'm at 4.68% now and it seems to be dropping by about 0.2% per month.

In an economic downturn, I'd understand, but it makes me uneasy that the default rate is ticking upwards even when nothing obvious is happening to cause it in the wider economy. If this continues much longer, I'll probably turn off automatic reinvestment, let my LC account drain to zero and put the repayments into Vanguard. This is making me think that LC has either loosened its standards or hasn't figured out how to properly calculate how risky its loans are.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 04, 2017, 06:50:27 AM
Thanks for posting that.  It'll be interesting to see if that's isolated to auto lending or if it seeps into the economy.  I'm in the business side of banking and don't pay much attention to auto lending.  Also haven't had an auto loan in over 10 years

My guess is the delinquencies are driven by lenders not following Auto Lending 101 - Used cars no more than 3 years, new cars no more than 5 years.  If your loan terms are longer, you run the risk of your loan balance being more than the collateral is worth.  The only other thing I'm aware of is GM and a few of the other player having to really reduce the rates on "subprime" loans because of how expensive used cars got over the last few years.  Minimal production from 2009-2011 shortened the supply of used cars coming off lease.  That's probably calming by now.
Title: Re: Lending Club - Time to panic?
Post by: Capyy on September 04, 2017, 08:41:57 AM
"LendingClub Doesn't Verify Income Data For 66% Of Transactions"

https://finance.yahoo.com/news/lendingclub-doesnt-verify-income-data-202142929.html
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on November 04, 2017, 04:51:15 AM
October for Lending Club:

Exactly 500 Notes left at month-end
$7,827 Invested
Interest Income:  $111.89
Losses:  ($292.06)
Net Losses:  ($179.83)

-27.5% annualized return


The lesson in this - The loans that are good paid off and refinanced early.  The borrowers that don't payoff their loans early really struggle.  The "since inception" return has dropped below 2%
Title: Re: Lending Club - Time to panic?
Post by: Retire-Canada on November 04, 2017, 06:32:23 PM
I'm glad I didn't let MMM seduce me from the simple path of index funds by his LC pimping posts.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on November 05, 2017, 05:25:38 AM
I'm glad I didn't let MMM seduce me from the simple path of index funds by his LC pimping posts.

Surprisingly I don't blame MMM, I blame a culture of dishonesty inside Lending Club.   They had a really good product from 2011 to 2014, but then started loosening lending standards to sell pools of loans to banks (sounds a little like 2005 and mortgages).   The CEO got fired, supposedly there was change, ect.

Now they are intentionally not reporting returns like every other investment firm:  YTD, 1 Year, 3 Year, 5 Year, and Since Inception return.  They only post "since inception" return.  I'm in the finance business, loan defaults are lower when your portfolio is growing and higher when its shrinking because defaults are less common in the first six months of loan origination.
Title: Re: Lending Club - Time to panic?
Post by: Retire-Canada on November 05, 2017, 06:40:07 AM
Surprisingly I don't blame MMM, I blame a culture of dishonesty inside Lending Club.   They had a really good product from 2011 to 2014, but then started loosening lending standards to sell pools of loans to banks (sounds a little like 2005 and mortgages).   The CEO got fired, supposedly there was change, ect.

I'm surprised MMM has not updated his positive 2013 LC post with current info. MMM can only work with info he had at the time agreed, but he's got new info now.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on November 05, 2017, 07:51:27 AM
I saw him update it to the point he wasn't putting any more money in it.

He has not updated it with this year's returns which would be interesting.  As soon as you stop feeding new loans, the return plummets.  I'm also not really finding a market for my loans anymore.  Was able to sell down some of the performing stuff for break-even...but then my remaining return goes down further.

Oh well, lesson learned.  Index away
Title: Re: Lending Club - Time to panic?
Post by: alexpkeaton on November 05, 2017, 10:27:52 AM
I keep track of my LC returns using XIRR in Google Sheets and use mark down my late loans to a more realistic value so returns aren't artificially inflated by new notes. This year I'm at about a 6.5% annualized return, but last year sucked at about 0% even with some $100 bonus offer.

The other day I got an offer for 1 United MileagePlus point for every new $1 invested. I feel like I might be a sucker for considering it, and yet here I am. On the one hand I can get a bonus for an investment that should have a positive ROI. On the other hand it's a tax-inefficient investment, it's also very liquid, and it just causes more hassle on my tax return.
Title: Re: Lending Club - Time to panic?
Post by: CanuckExpat on November 07, 2017, 06:20:49 PM
People with sub par results (this includes me) curious what your percentage of notes were grade F and G?
I saw the note today that Lending Club is temporarily discontinuing issuing those notes for recent substandard performance, and they stated they made up less than 3% of overall note volume. However, they did make up close to 40% of my portfolio. I was purposely tilted towards riskier notes.
Title: Re: Lending Club - Time to panic?
Post by: neil on November 07, 2017, 06:56:37 PM
I recently exited.  My portfolio was focused in the C-D range, and it doesn't take as many delinquencies to tank the results.  I went from an average return of 10% to around 3% within a few months.  My hunch is there were a good deal of borderline fraudulent loans and a lot of refinance gaming going on.  I also focused on 36-month terms because I originally planned to hold to term and didn't want to be stuck with filing for five years.

Not Yet Issued (0)
Issued (0)
Current (165)
Fully Paid* (75)
Charged Off (24)

This was from a statement 2 years in (feb 2017), after starting in 2015, right before I started selling off notes.  I think it's great if those people are really paying off their debt early, but I was simply getting suspicious of a 30% rate in loans being paid off early.  I saw too many individual examples of loans being paid in 1-2 months. 

In the end, it doesn't really surprise me.  I don't expect a retail investment platform to offer me the same quality of loan selection that a bank or institutional investor would get.  LC started in 2006 and grew during a period where banks were unwilling to make loans.  Under normal banking conditions, will platforms like LC really offer fair market returns on consumer debt? 
Title: Re: Lending Club - Time to panic?
Post by: aspiringnomad on November 07, 2017, 07:27:55 PM
August - Net losses of $95.   8 straight months of losses.

Interesting, Lending Club still only wants to report annualized returns since I opened the account.  I emailed them and ask if lending club can provide performance statistics like any other mutual fund/brokerage account does:  YTD, 1, 3, and 5 year returns.  Here was their response:


"Good afternoon <name ommitted>

Thank you for reaching out to us.
 
We currently do not have the option to display returns for specific increments in time. Our Net Annualized Return calculation is only able to determine the rate you have received from the time you started investing until the present day.

However, we appreciate you taking the time to provide us with your suggestions. Your feedback is valuable, and some of the best updates to our site are largely based on the suggestions that we received from our members."

You can't tell me a publicly traded silicon valley fintech companies doesn't have the ability to do this.  They're intentionally keeping that from the investors. 

If I didn't think their origination platform had some value, I'd short this stock to zero.  I think some bank will eventually buy them for the portfolio they can't seem to collect and can't value that.

LC stock is down another ~18% after earnings this evening. Down ~30% since this was posted.
Title: Re: Lending Club - Time to panic?
Post by: Padonak on November 07, 2017, 07:36:59 PM
People with sub par results (this includes me) curious what your percentage of notes were grade F and G?
I saw the note today that Lending Club is temporarily discontinuing issuing those notes for recent substandard performance, and they stated they made up less than 3% of overall note volume. However, they did make up close to 40% of my portfolio. I was purposely tilted towards riskier notes.

Same thing. I chose riskier notes because I used the lending robot automated service based on their "model" and chose the settings to pick the most "profitable" notes which happened to be high risk ones.

Good thing is that I limited my exposure to a little more than 10,000 to avoid paying lending robot for the (dis)service. I think the standard limit is 10K, but i had a little extra because there was a promo.

Anyway, my current estimated return is a little over 1% and has been declining slowly but surely.

I will never invest with Lending Club again, should have just opened a CD instead.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on November 08, 2017, 04:47:15 AM
I thought about shorting LC Stock.  Financially, its a no brainer, but there's this problem called "The Greater Fool"

There are 2-3x more banking institutions than management talent to run them (and this problem is getting worse every month).  There's also arcane rules in banking that prevent activist investors from resolving under performing institutions, so we're stuck with a bunch of empty suits that will do anything necessary to keep their level of employment.

One of them will eventually buy lending club.
Title: Re: Lending Club - Time to panic?
Post by: alexpkeaton on November 08, 2017, 08:29:24 AM
One of them will eventually buy lending club.

Which is why I'd actually consider buying some small amount of LC stock. Purely a speculative bed, obviously.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on November 08, 2017, 08:25:35 PM
One of them will eventually buy lending club.

Which is why I'd actually consider buying some small amount of LC stock. Purely a speculative bed, obviously.

Take both positions. If they're either going into the dirt or getting bought out for a fat premium, purchase a straddle:
buy Jan 2020 $5 put: -$1.25
buy Jan 2020 $5 call: -$1.45
--------------------------------
net outlay per share: -$2.70

Current LC price: $4.59, down like 15% today

If they go bankrupt by 2020, you earn 5 - $2.7= $2.3 per share, or a 2.3/2.7 = 85% return.
OR...
If the price rises above 5 + 2.70 = $7.70, you get some positive return depending on how high they go.

A bolder bet would be to just buy the $3 put for $0.60 and let it ride. The ROI on a bankruptcy scenario would be 500%. This would also be a good way to hedge your portfolio against a recession, which would wipe out most of these loans and the vulnerable LC along with them. We already know these are the new "liar loans" (remember 2008? good times.)

https://finance.yahoo.com/quote/LC/options?p=LC&straddle=true&date=1579219200  (https://finance.yahoo.com/quote/LC/options?p=LC&straddle=true&date=1579219200)
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on December 06, 2017, 05:21:31 AM
Lost $66 on a portfolio around $6,000 for the month.  That'll come out to a sweet negative 13% annualized return.

I've almost cracked $1,300 in net losses for the year.  At least I'll finally see a tax benefit.  Lending Club still isn't reporting YTD, 1, or 3 year returns, only returns since inception.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on December 06, 2017, 12:37:22 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on December 07, 2017, 05:31:07 AM
I still worry that there's a greater fool out there sitting in a Bank CEO role.  Capital One comes to mind, they want to be a tech company so badly.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on December 07, 2017, 09:05:09 PM
I still worry that there's a greater fool out there sitting in a Bank CEO role.  Capital One comes to mind, they want to be a tech company so badly.

Good point.
Title: Re: Lending Club - Time to panic?
Post by: Outside the Box on December 11, 2017, 03:29:20 PM
I chronicled my exit from LendingClub here (https://forum.mrmoneymustache.com/investor-alley/lendingclub-ira-liquidation-strategy-(minimize-cost)/msg1654663/).

It's (mostly) finished. Only the remaining money transfers/account closures remain. It is completely liquidated.

What began as $17,043.60 in "account value" at Lending Club has finally concluded as $16,429.08 of actual cash. I will then have to pay $250 to close/transfer the IRA, resulting in a final $16,179.08.

5% hit to the asset. 0.2% hit to the portfolio. I will be moving that into Vanguard which will line up with my strategies going forward (https://forum.mrmoneymustache.com/investor-alley/please-help-me-overhaul-my-portfolio/msg1621956/#msg1621956) in a more coherent manner.

It's all in Vanguard now. Started liquidating in July and finished in September. Took another month or so for all the medallion guarantees, paperwork, closures, transfers, etc. It feels good to be done.
Title: Re: Lending Club - Time to panic?
Post by: meatgrinder on December 13, 2017, 05:15:45 PM
I have about 3% of assets in LC and went from 12% net return down to 7.5% according to lending clubs calculation, however, my statements have been showing losses for over 12 months so its probably close to -5%.  I'm actively getting out through the secondary market now but its slow going. In addition, the tax treatment on a non-tax advantaged accounts is horrible - paying full tax on the interest and not not able to write off the full amount of charge-offs. 

My Notes at-a-Glance 4843
Not Yet Issued $0
Issued & Current $68,395
In Grace Period $1,988
Fully Paid $178,568
Late 16 - 30 Days $965
Late 31 - 120 Days $4,488
Default $430
Charged Off $55,473

Payments $366,840.12
Payments to Date $366,840.12
Principal $261,505.21
Interest $105,303.91
Late Fees $30.99

Title: Re: Lending Club - Time to panic?
Post by: chasesfish on December 14, 2017, 05:18:52 AM
@ Meatgrinder - Why wouldn't you be able to writeoff the full amount of the chargeoffs?

Thats the only thing I'm looking forward to about lending club, I'm in the same spot you're in except about six months ahead of these terrible returns.

I heard a large Bank CEO say in a private event "The thing about online lending is its really easy for anyone to originate loans, different non-bank companies have popped up originating loans for decades.  They usually struggle at collecting, where Banks have generations more of experience on staff"
Title: Re: Lending Club - Time to panic?
Post by: Car Jack on December 14, 2017, 07:17:29 AM
Here are Pete's latest comments on the MMM blog at the end of October:

Quote
Here in October 2017, the balance is still drifting downwards. It has now been over a year of flat or negative performance, a time period which should have brought in about $6000 of net interest according to original estimates. If this were a stock market investment, it would all be part of normal fluctuations. But interest bearing loans aren’t supposed to do this.
Therefore I have turned off automatic investments and will begin winding down this experiment – cashing out my money as the surviving loans are repaid. I have withdrawn $19000 in cash so far (although leaving it virtually in the table above to keep the month-to-month comparisons meaningful). This will tend to suppress the reported return rate, but the balance should still be rising if the loans were performing properly, which obviously they are not.

So he is exiting.  I'm 100% out now and am happy I got out even before Pete did.  I sold all my notes and avoided any charge offs, but was much smaller in what I invested.  I was in for about 2 years or so.
Title: Re: Lending Club - Time to panic?
Post by: meatgrinder on December 16, 2017, 09:48:14 AM
@ Meatgrinder - Why wouldn't you be able to writeoff the full amount of the chargeoffs?

Thats the only thing I'm looking forward to about lending club, I'm in the same spot you're in except about six months ahead of these terrible returns.

I heard a large Bank CEO say in a private event "The thing about online lending is its really easy for anyone to originate loans, different non-bank companies have popped up originating loans for decades.  They usually struggle at collecting, where Banks have generations more of experience on staff"

Good question. Short-term capital loses (lending club bad debt) can be deducted against ordinary income up to $3k per year.

The problem is, I have a lot more than $3K short term loses per year in LC bad debt (and due to tax loss harvesting). So I have a large carry over from year-to-year where I can only deduct $3K off of ordinary income (which interest is considered ordinary income).

For example:

So far in 2017 I have $20K in interest and $20K in charged off loans making it a break even year from an investment perspective, however, for tax purposes I'll only be able to deduct $3k of the $20K bad debt from income.  This results in $17K of interest earned ($20K interest income - $3K charged off bad debt) being taxed as ordinary income. 

Given my marginal tax rate this results in an additional $3K to $4K in income taxes!  Someone please tell me I'm doing this wrong and don't have to pay this.






Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on December 18, 2017, 04:15:19 AM
I believe you have that right. You can instead try to tax loss harvest from your other investments' short term gains if you want. Unless you have a lot of investments, it might be difficult to find 20k of short term gains. Otherwise yep, you just carry those losses forward.

Like many others here, I too am removing myself from LC. I won't be selling, just waiting for all the loans to eventually end. That might take a few years, but like many others have said here, the LC investment returns have been misleading and just plain wrong.

Im hoping to come out without too many losses, but I currently only have about 6k in so I'm not too worried about my returns. I more or less would prefer to be one account fewer to keep track of.
Title: Re: Lending Club - Time to panic?
Post by: meatgrinder on December 18, 2017, 09:16:41 AM
Thanks for the info.  Agree that the returns they state are highly misleading and its surprising they continue to do so. The general perception around p2p lending was/is a big caveat emptor so not surprising.

The first 5 years were great and overall I think I will come out ahead, but I am selling notes due solely to the taxation.
Title: Re: Lending Club - Time to panic?
Post by: retirementnestegg on December 20, 2017, 01:04:23 PM
I recently exited.  My portfolio was focused in the C-D range, and it doesn't take as many delinquencies to tank the results.  I went from an average return of 10% to around 3% within a few months.  My hunch is there were a good deal of borderline fraudulent loans and a lot of refinance gaming going on.  I also focused on 36-month terms because I originally planned to hold to term and didn't want to be stuck with filing for five years.

Not Yet Issued (0)
Issued (0)
Current (165)
Fully Paid* (75)
Charged Off (24)

I had a very similar experience. I had a lot of C and D notes, and near the end of my run I bought more B and A.

I had a maximum of about 50k in Lending club and loved the program and concept.
I went from about a 13-14% return, and each month the return would drop due to chargeoffs. The return went all the way down to 4.xx return and I decided I had enough and liquidated. I have about $8000 left and will continue to let it ride out and sell notes.

My return is now showing 2.57% return. What a joke. Ive got much better investments to put my money into.
I was happy with about a 9-10% return but the
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on December 20, 2017, 02:55:10 PM
Ugh, still have $5,500 in here with no easy way to liquidate without taking a bit haircut.   I wish I could just ignore this account
Title: Re: Lending Club - Time to panic?
Post by: Retire-Canada on December 20, 2017, 02:59:19 PM
Ugh, still have $5,500 in here with no easy way to liquidate without taking a bit haircut.   

I'd rather get a haircut than a brazilian. Just saying....
Title: Re: Lending Club - Time to panic?
Post by: topshot on December 21, 2017, 06:45:42 AM
For those that followed MMM's LC HQ post (http://www.mrmoneymustache.com/the-lending-club-experiment/), he noted the first sign of decline in Oct 2016 which continued for a year and thus summarized his current position with this:
Quote
Therefore I have turned off automatic investments and will begin winding down this experiment – cashing out my money as the surviving loans are repaid.
Title: Re: Lending Club - Time to panic?
Post by: meatgrinder on December 21, 2017, 08:06:30 AM
Ugh, still have $5,500 in here with no easy way to liquidate without taking a bit haircut.   

I'd rather get a haircut than a brazilian. Just saying....

I'd rather get a Brazilian than a crab.  Just saying....
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on December 21, 2017, 06:22:46 PM
Ugh, still have $5,500 in here with no easy way to liquidate without taking a bit haircut.   

I'd rather get a haircut than a brazilian. Just saying....

I'd rather get a Brazilian than a crab.  Just saying....

This current pace feels like having hairs plucked one by one down there
Title: Re: Lending Club - Time to panic?
Post by: frozen on December 27, 2017, 03:34:50 PM
I've had my Lending Club account for nearly 2 years. I don't have much in there -- only an adjusted account value of $1,925 and it's showing a net annualized return of 8.61%. I am planning to x-fer in the $2,500 for the United Mileage Plus bonus, use it to purchase all 3-year notes, and then slowly divest. Most of my notes are 3-year, with a few 5-year, and all expire by the end of 2021. I invest each note manually using a filter.

Here are my stats:
Available Cash $6.75
Committed Cash $50.00
Outstanding Principal $1,922.04
Account Value $1,978.79
Adjustment for Past-Due Notes  ( $52.97 )
Adjusted Account Value $1,925.82

My Notes at-a-Glance 133
Not Yet Issued 2
Issued & Current 96
In Grace Period 1
Fully Paid 29
Late 16 - 30 Days 1
Late 31 - 120 Days 2
Default 0
Charged Off 2

Title: Re: Lending Club - Time to panic?
Post by: Heroes821 on January 03, 2018, 08:01:15 AM
My last update.  Before Jan 1st I got my Lending Club to close out.

May 2016-Dec 2017

$3000 initial investment.

All notes purchased with the default $25 funding.

14 Fully paid. ($350)
22 Charged off ($478)
126 Traded Notes 11.13%
Primary Return -47.35%
Combined Return -4.75%

Cash pulled out while closing down account: $2700. 

After $478 charged off I made $178, but functionally lost over $300 and had that money tied up for 20 months.

$3000 put into VTSAX with my other investments for 20 months would be: ~$4000 before dividends.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on January 03, 2018, 04:00:40 PM
Roughly 1 month update on the synthetic short idea posted earlier:

As of today, that synthetic short would be up $0.13/share in addition to the $0.08 credit taken to open the position.

But of course I only point out my good ideas. :)
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on January 04, 2018, 06:25:24 AM
First positive month of the year, got $63 in recoveries to offset a net $60 loss between interest income and chargeoffs.

Ugh.  At least I'm down to $5500 or so
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on February 17, 2018, 01:45:24 PM
Well this sucks.  I have a Lending Club IRA and decided to start the process to slowly roll out of Lending Club and move the funds over to my Vanguard IRA in traditional investments.  Just haven't been happy with the return in my LC IRA, as it didn't match my prior experience with a taxable Lending Club account (late-note adjusted return is just about 5% with average age of notes less than 1 year... barf).

For my taxable LC account, I've set up some automated sales with lending robot, and have sold most everything with no discounts, other than late notes.  Over the past year, I've wound down the account to just 25% or so of the value it was this time last year.  I usually pull out the cash weekly, without fee, via ACH -- super easy. 

Winding down the LC IRA won't be so easy.  The fee for any "partial transfer" is $50, courtesy of SDIRA.  And then the account termination fee is $150.  Note sure if one transfer and termination would therefore cost $200.  Shit. 

https://quikforms.com/viewform/zpWO-MeLbKwAm --> Fee Schedule actually indicates partial transfer fee of $100 and account termination fee of $250, but apparently it's lower for Lending Club IRAs. 

Does anyone have experience getting out of an LC IRA?  I suppose to minimize fees it would be best to sell everything and transfer it once, but that means either (i) sitting on cash sitting for a long time while winding down slowly using automated sales, or (ii) trying to liquidate more quickly, but that likely requires significant discounts. 

Of course when Googling IRA transfers and Lending Club, I find a million articles about how to roll IRAs to Lending Club, but have not easily found info about getting out.  IMO, these fees are absurd (esp. for the partial transfer), given that Lending Club itself doesn't charge anything to withdraw from their taxable accounts.  Perhaps I should've considered this more carefully when opening the account, but I was more focused on how to get the annual fee waived and how much better the returns would in the tax-advantaged account.  Please feel free to punch me in the face for this one, and then let me know if there are any strategies for dealing with this headache.

Err yeah, sorry that you bought an IRA. I was close to buying one until I saw that fee schedule. I didn't like the fees to get out. I don't know how much money you put in, but trying to sell everything on the Secondary Market and just close it out all at once sounds like the way to go.

I've recently decreased my minimum discount requirement in my Sec. market buy account. Whereas before I bought notes at 10-15% (making about a 8-9% return) discount, I require a 15-25% discount now with he same note conditions as before. The recent lending club wave of defaults is going to make liquidating more expensive. My best investment buys on the secondary market are A-C loans. Lending Club in my estimation has been way off in D-G loans, and you'll likely have to sell those at discount.

I came up with a strategy to get out of a LC IRA as efficiently as possible, but it's fairly complicated:

--SDIRA, the custodian that manages Lending Club IRAs, allows you to invest in other assets (e.g. ETFs) if you open a separate IRA brokerage account with TD Ameritrade. 

--Funds from the LC IRA can be transferred to TD Ameritrade for a $25 wire fee or for free with check (from SDIRA to TD Ameritrade). 

--Normally this would increase the SDIRA annual fee from $100 to $175.  However, Lending Club covers the annual fee (that is normally $100) that occurs on the 1st anniversary if you have more than $5000 invested in LC notes, and covers the fee on the 2nd anniversary and thereafter if you have more than $10k.

--In my case, the 1st anniversary annual fee is set to be charged in March 2017.  With more than $5k in LC Notes, LC will cover this fee to SDIRA.

--After that fee is covered, I can open a separate brokerage account with SDIRA via TD Ameritrade, and the fee will have already been paid that year (and the $175 fee for the next year will not occur until March 2018).  So basically you get 1 year free with TD Ameritrade.

--Sell notes with Lending Robot over the year, periodically transfer cash from SDIRA LC IRA to SDIRA TD Ameritrade IRA until all funds are held in TD Ameritrade.

--TD Ameritrade has certain commission free ETFs (including VTI).

--Once all cash is converted from LC to TD Ameritrade and held in a single ETF (VTI), this can be transferred to Vanguard IRA.


One negative -- once the whole balance is rolled over to TD Ameritrade, and is then closed out and rolled to Vanguard, there is a $250 account termination fee (and a $100 'partial termination' fee for any partial transfers) rather than the semi-reduced LC IRA fees which are $150 for termination and $50 for partial termination. 

The benefits for this over-complicated solution is that you don't have to choose between (i) cash sitting around while liquidating the Notes, or (ii) liquidating notes at a steep discount to minimize idle cash.  Instead funds can periodically transfer to TD and be invested in an ETF while the LC notes are liquidated more gradually without fire-sale discounts.  Then the ETF holding can be transferred over from TD Ameritrade to Vanguard once so as to minimize fees.  So long as this is completed by March 2018, there should be no additional fee other than the $250 account termination fee. 

Hopefully that strategy will be useful if anyone else attempts to get out of the LC IRA.
Thanks for posting this, zombiehunter. I am in the same un-enviable position as you. I opened a Roth IRA and funded it with the majority of my contribution limit in 2014 and 2015. $9700 invested at the absolute worst time (in terms of loan origination) for this fucking company. My current balance is just barely above my original investment, but adjusting for notes that will almost certainly be charged off, my ANAR is negative and I'll almost certainly lose money on the whole thing. Thankfully a small amount in the big picture, but still very frustrating. My taxable account which has been in draw-down mode for several years is even down to about 7% NAR. So much for beating index funds with a steady stream of income.

Worse yet, it's in an IRA so I can't even deduct the losses :cry: :cry:

I will take a look at your strategy with TD and run some rough opportunity cost numbers on just letting the cash accumulate before making one rollover to Vanguard. Your strategy looks sound for minimizing idle cash, but I don't have a lot of mental energy to throw at this problem.

I had also completely forgotten about the SDIRA fees that LC pays for you at certain balances. I put in just enough that I would "obviously" be above $10k at the 2 years mark. BZZZZZZZT. nope. I should have been changed the yearly fee for at least the last year, but I don't see it on my statements. Probably just need to look harder.
Title: Re: Lending Club - Time to panic?
Post by: ePalmtrees on February 17, 2018, 05:23:47 PM
I've invested 20k, reinvesting some of it in the beginning and then stopping. I have about $5500 of loans left that are still in payment. My net annualized return when adjusted for projected right offs over the entire 3 year period is 2.63%.

I emailed them wondering if I was understanding what numbers I was looking at. I ended up on the phone with someone who was very nice. Basically I had a larger than expected number of grade A and B loans written off.

Another thing he said to explain it was that I had stopped reinvesting the money back into new loans. The rate of return is higher in the beginning before the charge off's start. I said well isn't that artificially inflating the returns though, and he said yes.

I didn't ask what the average return is for people who don't reinvest the loans. I was widely diversified as far as I know so I still don't know why my I had so many write offs.

After taxes, I would have done better in a risk free CD. Not too impressed.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on February 17, 2018, 06:30:59 PM
I had another crummy month in January.  I struggle with their company not providing me 1,3,5 year returns.

$5000 or so left, hopefully I see most of it.  The only nice thing about all these chargeoffs is I may see recoveries for years
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on February 19, 2018, 07:52:56 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.

The above synthetic short on Lending Club is now up $0.38 plus the original $0.08 credit = $0.46.
Title: Re: Lending Club - Time to panic?
Post by: Fireball on February 19, 2018, 08:52:16 PM
Another thing he said to explain it was that I had stopped reinvesting the money back into new loans. The rate of return is higher in the beginning before the charge off's start. I said well isn't that artificially inflating the returns though, and he said yes.

This is true. I work at a mortgage company that carries all of its own paper(we don't sell to the GSEs). We only look at a 6 month static delinquency, meaning any loans newer than 6 months aren't included in our delinquency calculation. Gives a more true number.
Title: Re: Lending Club - Time to panic?
Post by: Villanelle on February 19, 2018, 10:16:41 PM
Stopped investing some time ago and am exiting slowly via attrition/loan pay off.  I should be done with my 11 remaining loans by the end of this year. 

Issued & Current ?11
In Grace Period ?0
Fully Paid ?113
Late 16 - 30 Days ?1
Late 31 - 120 Days ?0
Default ?0
Charged Off ?44

LC says I'm at a 9.08% adjusted NAR.  So overall, it's not terrible, but not worth continuing, especially as it got so much more difficult to find loans I wanted to fund.  (I never did auto-investing.)

Nearly all my loans were D, E, and F. 
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on February 20, 2018, 06:54:50 AM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.

The above synthetic short on Lending Club is now up $0.38 plus the original $0.08 credit = $0.46.
I got in on the LC IPO since they let early customers of the platform get some shares at the IPO price. A small amount of cash, I think around $400. I wasn't interested in holding it long term, but most IPOs seem to pop in the first couple days and it was probably the only time in life I'll have the opportunity to participate before the stock hits the open market.

I sold at $25 after debating whether to hold out for $30. I hadn't kept tabs on the stock and only checked it after reading this thread. Yikes, guess I played that one right.
Title: Re: Lending Club - Time to panic?
Post by: AM43 on February 20, 2018, 07:53:53 AM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.

The above synthetic short on Lending Club is now up $0.38 plus the original $0.08 credit = $0.46.
I got in on the LC IPO since they let early customers of the platform get some shares at the IPO price. A small amount of cash, I think around $400. I wasn't interested in holding it long term, but most IPOs seem to pop in the first couple days and it was probably the only time in life I'll have the opportunity to participate before the stock hits the open market.

I sold at $25 after debating whether to hold out for $30. I hadn't kept tabs on the stock and only checked it after reading this thread. Yikes, guess I played that one right.

I got in on LC IPO as well. About 1k invested.
Sitting on their shares at below $4 and debating whether I should sell it at a loss and move on with my life or hold on and see if it recovers enough where I can recoup some  money.
Title: Re: Lending Club - Time to panic?
Post by: hgjjgkj on February 20, 2018, 09:20:05 AM
From the customer perspective I tried to get a 10k loan to essentially refinance my student loans. I have 6 figure income, no debt aside from student loans, credit score in the mid to low 700s and very low housing cost. Somehow was quoted 9% interest rate. There is no way anyone credit worthy would use these guys
Title: Re: Lending Club - Time to panic?
Post by: uwp on February 20, 2018, 01:10:55 PM
It's been a while since MMM updated the "experiment" page.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on February 20, 2018, 02:07:40 PM
It's been a while since MMM updated the "experiment" page.
I think it would be great if MMM updated his initial LC article with the current status of the company. That being returns are way down and it pretty much doesn't make any sense to use this over the stock market.
Title: Re: Lending Club - Time to panic?
Post by: Paul der Krake on February 20, 2018, 07:25:09 PM
From the customer perspective I tried to get a 10k loan to essentially refinance my student loans. I have 6 figure income, no debt aside from student loans, credit score in the mid to low 700s and very low housing cost. Somehow was quoted 9% interest rate. There is no way anyone credit worthy would use these guys
This has been my experience too. High 700s, debt-to-income < 1%, and they wanted twice the rate of a competitive unsecured loan.

Pretty sure that their customer base is made entirely of people who either:
1) don't have the chops to shop around
2) don't give a shit because they intend on missing a payment
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on February 21, 2018, 05:17:33 AM
It's been a while since MMM updated the "experiment" page.
I think it would be great if MMM updated his initial LC article with the current status of the company. That being returns are way down and it pretty much doesn't make any sense to use this over the stock market.

He updated the post to say he's letting it wind down.  The problem is its really manual to calculate your annual returns.

I'm hoping I get a bump in paydowns since its tax refund season.  That happened in past years, but not this year
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 11, 2018, 06:56:29 AM
Update, LC still sucks.  On a $5000 or so portfolio, I had $230 in losses against $90 in interest income and recoveries.   Then they emailed me a survey wanting to know about my experience.

I still think its time to short them...or just buy a bunch of $3.50 put options
Title: Re: Lending Club - Time to panic?
Post by: frozen on March 11, 2018, 07:16:51 AM
From the customer perspective I tried to get a 10k loan to essentially refinance my student loans. I have 6 figure income, no debt aside from student loans, credit score in the mid to low 700s and very low housing cost. Somehow was quoted 9% interest rate. There is no way anyone credit worthy would use these guys
This has been my experience too. High 700s, debt-to-income < 1%, and they wanted twice the rate of a competitive unsecured loan.

Pretty sure that their customer base is made entirely of people who either:
1) don't have the chops to shop around
2) don't give a shit because they intend on missing a payment
Agreed. I noticed on of my borrowers declared bankruptcy immediately after receiving the loan. The person never even made a payment!

I added some more money to my Lending Club account late last year for the United Mileage Plus promotion and still have not received the miles! Plus their stock is down to single digits. I just don’t trust them.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 11, 2018, 08:47:59 AM
I'm about to buy some put options for this coming October in case the company goes bankrupt.  I just don't see how this model is sustainable and at the pace they're loosing money and the failure of their origination platform, I no longer think the IT is valuable to competitors.

We will see, there may not be someone dumb enough to write the put option on the other side
Title: Re: Lending Club - Time to panic?
Post by: frozen on March 11, 2018, 12:27:09 PM
I'm about to buy some put options for this coming October in case the company goes bankrupt.  I just don't see how this model is sustainable and at the pace they're loosing money and the failure of their origination platform, I no longer think the IT is valuable to competitors.

We will see, there may not be someone dumb enough to write the put option on the other side

Great idea!
I will look into this as well.
I still have about $4K with Lending Club that I am slowly divesting. If they go bankrupt, what do you think happens to the lenders and borrowers?
Title: Re: Lending Club - Time to panic?
Post by: ePalmtrees on March 11, 2018, 01:50:41 PM
I'm about to buy some put options for this coming October in case the company goes bankrupt.  I just don't see how this model is sustainable and at the pace they're loosing money and the failure of their origination platform, I no longer think the IT is valuable to competitors.

We will see, there may not be someone dumb enough to write the put option on the other side

Not too familiar with put options, why for this coming October specifically?
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 11, 2018, 07:30:44 PM
I'm about to buy some put options for this coming October in case the company goes bankrupt.  I just don't see how this model is sustainable and at the pace they're loosing money and the failure of their origination platform, I no longer think the IT is valuable to competitors.

We will see, there may not be someone dumb enough to write the put option on the other side

Not too familiar with put options, why for this coming October specifically?

A put option allows me the option to places 100 shares of Lending Club with the other party.  There are only so many contract dates you can pick, I'm guessing this crap blows up in another quarter or two.

How much you pay for the option depends on the price you want to put the stock on the counterparts.

If I buy out options for .30/share at 3.50, I make my investment back st $3.20 and start profiting higher.  A put option has a maximum loss vs a short sale so theoretically has unlimited loss potential.

It's rare to do, but it's an interesting gamble if you think a company will fail.  I'm kicking myself for not doing this earlier.  Someone still has to agree to sell me the put.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on March 12, 2018, 09:26:33 AM
I started attempting to liquidate all the notes in my LC Roth IRA via the trading platform. Wish me godspeed.
Title: Re: Lending Club - Time to panic?
Post by: hgjjgkj on March 12, 2018, 10:03:23 AM
Still a ton of FIRE bloggers repping these P2P companies. Which is honestly disgusting given the state of these firms.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on March 12, 2018, 12:22:12 PM
I'm about to buy some put options for this coming October in case the company goes bankrupt.  I just don't see how this model is sustainable and at the pace they're loosing money and the failure of their origination platform, I no longer think the IT is valuable to competitors.

We will see, there may not be someone dumb enough to write the put option on the other side

Good luck and keep your position size reasonable! Go for the longest duration you can get, even though it's more expensive to do so. Zombie companies like this can linger around for years, and then there's the threat of them being acquired. Bear in mind how LC jumped 18% on March 1 for no apparent reason!

You will find a seller for your puts. The question is, at what price? I would use an aggressively priced limit order.
Title: Re: Lending Club - Time to panic?
Post by: robtown on March 12, 2018, 07:37:03 PM
I started attempting to liquidate all the notes in my LC Roth IRA via the trading platform. Wish me godspeed.

Good luck.  I sold on the secondary market and took my loses a year ago.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 12, 2018, 07:57:37 PM
@ChpBstrd No real takers yet, it's just hobby money with a capped upside.  I wish I had the guts to buy $30,000 in puts
Title: Re: Lending Club - Time to panic?
Post by: frozen on March 13, 2018, 01:50:47 PM
If you get a chance, read the feedback from Lending Club employees on Glassdoor. I read posts about them complaining about the stock, worrying the company would go bankrupt, and complaining about borrowers with little financial literacy. One person posted that some people will borrow money for an expensive vacation with no understanding of what it will take to pay it back.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 13, 2018, 07:15:36 PM
Looks like I need an account, but I bet those reviews are awesome.

I remember our bank's CEO was asked about LendingClub/Prosper two years ago, he politely said non-bank lenders have been making loans for years, but they fail at collecting loans
Title: Re: Lending Club - Time to panic?
Post by: yachi on March 14, 2018, 06:17:57 AM
@ChpBstrd No real takers yet, it's just hobby money with a capped upside.  I wish I had the guts to buy $30,000 in puts

What do you think are the chances of bankruptcy in the next year and a half vs a takover?  Capital One just sold off their former sharebuilder ownership to Etrade, I'm not sure what else they have been buying.  I think maybe Prosper would buy them, or Renaud Laplanche's new company Upgrade Inc.  Then again, I'm not sure either of these companies would trust the loan portfolio they would be buying.
At the rate they're losing money, it looks like they have less than 5 quarters of cash left.
Title: Re: Lending Club - Time to panic?
Post by: yachi on March 14, 2018, 09:04:51 AM
@ChpBstrd No real takers yet, it's just hobby money with a capped upside.  I wish I had the guts to buy $30,000 in puts

I just did this with a January 2019 expiration.  At worst, it's better than buying my dream sportscar and wrecking it w/o insurance.  At best (stock drops to $1) I get a x5 return.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 14, 2018, 12:33:04 PM
Capital One is the one company I'm worried about buying one of these....its a consumer bank that wants to believe its a tech company.  Spends all this money on small business and mortgage, then lays off the entire division.  No real clue what they're doing
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on March 14, 2018, 09:06:16 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.
I'm checking in on the performance of my synthetic short idea from December 6th.

Last put price 1.55
Last call price 0.91
----------------------
Current profit: 0.64

Assuming you had to deposit 100% margin ($4.50/share) for the short call, that's an ROI of 14.2% since December 6th. Multiply by roughly three to annualize that! Interestingly, most of the profit came from deterioration of the call.
Title: Re: Lending Club - Time to panic?
Post by: frozen on March 25, 2018, 08:55:03 PM
I wonder if Lending Club is falling victim to Bust Out Fraud like the credit card companies are. I have been reading about how people are creating synthetic identities and it made me wonder how LC verifies they are loaning money to an actual person.

I’ve noticed a few of my loans lately that default before 1 payment has even been made!
Title: Re: Lending Club - Time to panic?
Post by: Padonak on March 25, 2018, 09:08:31 PM
I wonder if Lending Club is falling victim to Bust Out Fraud like the credit card companies are. I have been reading about how people are creating synthetic identities and it made me wonder how LC verifies they are loaning money to an actual person.

I’ve noticed a few of my loans lately that default before 1 payment has even been made!

Even if they use their real identities, they may get a loan with Lending Club, spend a bunch of money on their credit cards, get  personal loans with banks and default on all of their obligations.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 26, 2018, 04:56:54 AM
1st payment defaults aren't anything new for Lending Club, I saw a few of these in my portfolio back in 2011 and 2012.

The entire banking industry has been forced to retain more capital from 2010 through 2016, they have to put it to work somewhere and are making the same higher rate/higher loss loans as lending club was exclusively making in 2011.

Making loans is easy, collecting loans is harder.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on March 29, 2018, 11:47:30 AM
I noticed today that on MMM's initial LC article, there is now a disclaimer near the top. I don't know when this went up, but it makes me feel a little better that he isn't actively steering people that way anymore:
https://www.mrmoneymustache.com/2012/09/24/the-lending-club-experiment/
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 30, 2018, 06:52:18 AM
I noticed today that on MMM's initial LC article, there is now a disclaimer near the top. I don't know when this went up, but it makes me feel a little better that he isn't actively steering people that way anymore:
https://www.mrmoneymustache.com/2012/09/24/the-lending-club-experiment/

I started my account in 2011.  It had a good run from 2011 to 2014, then fell off a cliff
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on March 30, 2018, 09:10:14 AM
I noticed today that on MMM's initial LC article, there is now a disclaimer near the top. I don't know when this went up, but it makes me feel a little better that he isn't actively steering people that way anymore:
https://www.mrmoneymustache.com/2012/09/24/the-lending-club-experiment/

I started my account in 2011.  It had a good run from 2011 to 2014, then fell off a cliff
I started later than you, but had a similar good run that ended. I'm too lazy to look up the dates exactly, but like most everyone now I am losing money month over month (and actively trying to get out). I followed the MMM strategy of high risk/high return; I wonder if the lower-risk notes have also had increased default rates. Of course the return rates were never high enough in the A-C notes to justify allocating money there away from stocks/bonds.

On the liquidation front, so far I haven't sold a single loan that is in either late period (16-30 days or 31-120 days). I have sold a couple Grace Period loans, and a bunch of current.

Anyone know what kind of discount is needed before someone will take a chance on these toxic assets? I've been ratcheting up the discount over time, currently at 10%.
Title: Re: Lending Club - Time to panic?
Post by: Outside the Box on March 30, 2018, 10:32:51 AM
On the liquidation front, so far I haven't sold a single loan that is in either late period (16-30 days or 31-120 days). I have sold a couple Grace Period loans, and a bunch of current.

Anyone know what kind of discount is needed before someone will take a chance on these toxic assets? I've been ratcheting up the discount over time, currently at 10%.

For lates, I couldn't sell any for more than 50%. The 31-120 I had to discount even more deeply. I'm so glad to have completed my liquidation months ago.

I was more conservative, so thankfully I had many current. If you look through my post history, I detailed the process.
Title: Re: Lending Club - Time to panic?
Post by: LWYRUP on March 30, 2018, 10:38:02 AM
On the liquidation front, so far I haven't sold a single loan that is in either late period (16-30 days or 31-120 days). I have sold a couple Grace Period loans, and a bunch of current.

Anyone know what kind of discount is needed before someone will take a chance on these toxic assets? I've been ratcheting up the discount over time, currently at 10%.

For lates, I couldn't sell any for more than 50%. The 31-120 I had to discount even more deeply. I'm so glad to have completed my liquidation months ago.

I was more conservative, so thankfully I had many current. If you look through my post history, I detailed the process.

I have no experience in lending club but I do work in commercial real estate so am very familiar with lending generally.  A 10% haircut for a loan that is late beyond grace period on a troubled platform seems wildly optimistic.  Would you advise someone to buy what you are trying to sell?  50% sounds more likely. 
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on March 30, 2018, 10:41:40 AM
On the liquidation front, so far I haven't sold a single loan that is in either late period (16-30 days or 31-120 days). I have sold a couple Grace Period loans, and a bunch of current.

Anyone know what kind of discount is needed before someone will take a chance on these toxic assets? I've been ratcheting up the discount over time, currently at 10%.

For lates, I couldn't sell any for more than 50%. The 31-120 I had to discount even more deeply. I'm so glad to have completed my liquidation months ago.

I was more conservative, so thankfully I had many current. If you look through my post history, I detailed the process.

I have no experience in lending club but I do work in commercial real estate so am very familiar with lending generally.  A 10% haircut for a loan that is late beyond grace period on a troubled platform seems wildly optimistic.  50% sounds more likely.
Thanks to both of you for the context. I don't have any experience in this arena, so I didn't know how optimistic I was being! I will go in and re-price my notes to try to shed them.

Honestly, just looking at what Lending Club thinks those notes are worth in their "adjusted NAR" view should have been a clue.
Title: Re: Lending Club - Time to panic?
Post by: Outside the Box on March 30, 2018, 10:46:14 AM
Thanks to both of you for the context. I don't have any experience in this arena, so I didn't know how optimistic I was being! I will go in and re-price my notes to try to shed them.

Honestly, just looking at what Lending Club thinks those notes are worth in their "adjusted NAR" view should have been a clue.

What I did was price everything, and then 2 times a day I did the "minus button" to decrease them by 25bp until they sold. I would individually sometimes lower the late ones by 50bp or 100bp depending on how I was feeling.

That way you have a process which will eventually sell them at the highest price the market will pay.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on March 30, 2018, 11:07:56 AM
Thanks to both of you for the context. I don't have any experience in this arena, so I didn't know how optimistic I was being! I will go in and re-price my notes to try to shed them.

Honestly, just looking at what Lending Club thinks those notes are worth in their "adjusted NAR" view should have been a clue.

What I did was price everything, and then 2 times a day I did the "minus button" to decrease them by 25bp until they sold. I would individually sometimes lower the late ones by 50bp or 100bp depending on how I was feeling.

That way you have a process which will eventually sell them at the highest price the market will pay.
That's pretty much how I started. I just made a huge jump in the discount of my late notes. I'll keep going from here.

I may not get the highest possible price, but there's an opportunity cost as well. Since you can't sell notes in Default, if you wait trying to sell a late note and it goes to default, you have lost the chance to sell (unless it comes back, which is possible but unlikely). Plus the opportunity cost of the cash I have sitting around in the account until the whole debacle is finished. Since it's an IRA I am going to end up paying Strata (the IRA custodian) for the pleasure of rolling my account over, and if I am reading the terms correctly, this fee is per withdrawal/rollover, and not small (I think $100 or something ridiculous). So I'm trying to fast track this process, at the cost of maybe not totally maximizing the prices I sell at.
Title: Re: Lending Club - Time to panic?
Post by: Tyson on March 30, 2018, 12:00:11 PM
Good lord, what a clusterf*ck this whole thing turned out to be.  I'm glad I stuck with plain old boring indexing. 

I mean, I maybe have a little bit of stress when the market goes down, but nothing like the aggravation and stress I see around Lending Club investments.  Sheesh.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 30, 2018, 12:44:34 PM
I'm just resigned to having $2500 or so that can't be liquidated.   That plus another 575 notes that charged off while I owned them should have a nice string of residual recoveries $10-$50 at a time. 

The problem with the recovery idea is who knows what happens to recoveries once Lending Club goes bankrupt.

Oh well, I kept this to a percent or two of my net worth at the peak, lessons learned
Title: Re: Lending Club - Time to panic?
Post by: Million2000 on March 30, 2018, 01:44:47 PM
Good lord, what a clusterf*ck this whole thing turned out to be.  I'm glad I stuck with plain old boring indexing. 

I mean, I maybe have a little bit of stress when the market goes down, but nothing like the aggravation and stress I see around Lending Club investments.  Sheesh.

Back in 2012 I dipped my toes into Lending Club, buying secondary market notes at discounts (the state I was living in at the time forbade buying directly from LC) and recall being really excited about the concept even though it should have been obvious to me how dodgy this was-50% of notes on the secondary market were selling for more than the total cash you could possibly get out of them, i.e. a scam. After about 6 months I liquidated everything. There wasn't just one thing that was a trigger, but I think the biggest was actually reading the prospectus. The structure of the platform is incredibly complex and the risk is inordinately put on the investor. If LC goes bankrupt, you're screwed, if the borrower defaults, you're screwed, if WebBank (I believe this was the bank holding cash for the transaction) went out of business, you're screwed. The lesson here is read the prospectuses folks.

I also recall an early review of Lending Club calling into question the model of securitization and how it compared to the dodgy securities during the financial crisis. I registered the article in my mind then, and it's becoming apparent to me now how accurate they were. I'm glad I got out while I did.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on March 30, 2018, 03:20:42 PM
Hmmm. Feeling frustrated at work and tempted to go all in with the Jan 2020 put options at the $1.50 strike. At the asking price of $0.20/share the ROI would be 650% in the event of a bankruptcy in the next 21 months.

LOL, not gonna do it. Too risk averse. Not a millionaire either...hmmm.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on March 30, 2018, 06:16:47 PM
Hmmm. Feeling frustrated at work and tempted to go all in with the Jan 2020 put options at the $1.50 strike. At the asking price of $0.20/share the ROI would be 650% in the event of a bankruptcy in the next 21 months.

LOL, not gonna do it. Too risk averse. Not a millionaire either...hmmm.

I own a few $2.50 for this June...I may throw a grand or two at that strategy above
Title: Re: Lending Club - Time to panic?
Post by: HAPPYINAZ on April 01, 2018, 03:41:00 PM
I haven't had any problems with Lending Club.  I originally invested 10K in 21 different loans (most are A, B, C) and have earned $1163 interest.   8 loans are fully paid off, 12 are in repayment, and 1 was charged off (a $263 loss).   I wasn't going after the riskier loans.  I tried to pick loans that I thought would have high probability of payback and so for that has worked for me.  I have been pulling my money out though since I like Peer Street better with it's shorter loan periods. 
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on April 19, 2018, 08:42:24 AM
Thanks to both of you for the context. I don't have any experience in this arena, so I didn't know how optimistic I was being! I will go in and re-price my notes to try to shed them.

Honestly, just looking at what Lending Club thinks those notes are worth in their "adjusted NAR" view should have been a clue.

What I did was price everything, and then 2 times a day I did the "minus button" to decrease them by 25bp until they sold. I would individually sometimes lower the late ones by 50bp or 100bp depending on how I was feeling.

That way you have a process which will eventually sell them at the highest price the market will pay.
That's pretty much how I started. I just made a huge jump in the discount of my late notes. I'll keep going from here.

I may not get the highest possible price, but there's an opportunity cost as well. Since you can't sell notes in Default, if you wait trying to sell a late note and it goes to default, you have lost the chance to sell (unless it comes back, which is possible but unlikely). Plus the opportunity cost of the cash I have sitting around in the account until the whole debacle is finished. Since it's an IRA I am going to end up paying Strata (the IRA custodian) for the pleasure of rolling my account over, and if I am reading the terms correctly, this fee is per withdrawal/rollover, and not small (I think $100 or something ridiculous). So I'm trying to fast track this process, at the cost of maybe not totally maximizing the prices I sell at.
I'm now up to selling current notes at a 10% discount and 31-120 days late notes at 92% discount.   90 notes left...
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 19, 2018, 11:33:51 AM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.

The above synthetic short on Lending Club is now up $0.38 plus the original $0.08 credit = $0.46.

Update: the synthetic short described above is now up $0.90 plus the original $0.08 credit = $0.98 per share (Using today's "last" prices).

This might be the smolder before the dumpster fire. I'm kicking myself for only being a spectator on this one.
Title: Re: Lending Club - Time to panic?
Post by: jrbrokerr on April 19, 2018, 01:19:35 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.

The above synthetic short on Lending Club is now up $0.38 plus the original $0.08 credit = $0.46.

Update: the synthetic short described above is now up $0.90 plus the original $0.08 credit = $0.98 per share (Using today's "last" prices).

This might be the smolder before the dumpster fire. I'm kicking myself for only being a spectator on this one.

What if LC gets bought by a bigger company at a higher price ?? this could lose big...
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 19, 2018, 02:26:25 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.

The above synthetic short on Lending Club is now up $0.38 plus the original $0.08 credit = $0.46.

Update: the synthetic short described above is now up $0.90 plus the original $0.08 credit = $0.98 per share (Using today's "last" prices).

This might be the smolder before the dumpster fire. I'm kicking myself for only being a spectator on this one.

What if LC gets bought by a bigger company at a higher price ?? this could lose big...
There's that risk of being acquired and then there's the risk they do some kind of operational improvement to make their business model work. I've seen dumber acquisitions and I've seen stranger turnarounds succeed. Guess I shouldn't kick myself too hard. After all, a synthetic short can lose a theoretically infinite amount.

Risk #1 became less likely as interest rates rose and volatility returned. That probably explains the past few months.

Risk #2 is an issue of "if they haven't been able to fix the problems in all these years..." However a leadership shakeup could really pop the stock in the short term.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 19, 2018, 03:10:16 PM
I bought some $2.50 put options for June, it hasn't dumpster fired enough yet for me to make any money
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 20, 2018, 12:24:09 PM
I bought some $2.50 put options for June, it hasn't dumpster fired enough yet for me to make any money
Well, if the overall market tanks, LC is likely to double-tank, so at least this short exposure offsets some systemic risk from the rest of your portfolio. It's definitely a multi-year play. I might wait for a bout of good news and then get in. It's rare for an individual investor to obtain essentially a customer satisfaction survey like this thread.
Title: Re: Lending Club - Time to panic?
Post by: Outside the Box on April 20, 2018, 01:33:53 PM
Well, if the overall market tanks, LC is likely to double-tank, so at least this short exposure offsets some systemic risk from the rest of your portfolio. It's definitely a multi-year play. I might wait for a bout of good news and then get in. It's rare for an individual investor to obtain essentially a customer satisfaction survey like this thread.
I feel bad dancing on their grave. I liked the business model. Lend to people at rates lower than banks and get paid higher than bank interest. I viewed it as high-interest bond investing.

I filtered by purpose, long employment history, low utilization ratio, low DTI, etc. I only invested in A-C. I was very non-risk tolerant when it came to this platform.

It was fine for a long time. I remember what a punch in the gut my first default felt like. I felt like "how could they do this (the borrower)?" But, I persisted for years. I dumped more and more money into it through the Roth IRA because it still seemed like a good investment overall in my portfolio. It was never over 10% of my portfolio.

Then, I started noticing lots more defaults and the rates were much higher. Why would a good borrower borrow from LendingClub if they could get the same or better rate from a real bank? They wouldn't, right? Ergo, sub-prime, in my opinion.

The whole thing looks like a house of cards to me now. I'm glad I took the hit and liquidated last year and got my money out to Vanguard, even though Trump has tanked the market since then with his trade war. I have long-term hope in the US/Intl stock markets that I no longer have in LC.

Again, I hate to dance on their grave, but the company as it is now seems beyond saving to me. I'm worried the people currently invested don't know what they really own. I hope I'm wrong.
Title: Re: Lending Club - Time to panic?
Post by: bdbrooks on April 24, 2018, 03:06:21 PM
About a year ago I took the plunge and invested in LC. I put in $115k. I almost exclusively bought loans on the secondary market. I wrote a program that would search the available loans whenever they put a new batch out (if you go to sell they don't put it up instantly). LC says my returns are double digits, but my calculations come in around 9%. I mostly bought 60 month loans that had 2-3 years worth of payments AND at a discount (you still have to keep an eye out for FICO score dropping). It has worked well, but my wife is wanting me to simplify our finances, and LC (specifically how I am using LC) is not simple.

Even with my program I only catch about 10% of the loans I want. My program checks to make sure there are no notes in the collections log (sometimes customers will call in BEFORE a missed payment). Even when I disabled this check, I didn't get more than 12-15% of the loans I requested. So that tells me that there are some quick people probably with co-located servers. They probably have as much capital to buy loans that return >12% after defaults. So that probably caps my gains at 10%.

Those two reasons have led me to wind down the portfolio. I have started withdrawing $5000 every 2 weeks. My portfolio is mostly notes with less than 2 years left, so payments are mostly principle at this point. I have been listing by loans to sell for a 5-10% premium and I have sold about 3-4% of my portfolio that way, but I'm mostly letting it unwind.

I thought I would share since I took a different approach than most people here. I had better results over the last year than most people on lending club, but it still didn't seem worth it since it is a matter of time before those bots buying up the secondary loans eat up more and more of the loans I would have bought.
Title: Re: Lending Club - Time to panic?
Post by: uwp on April 25, 2018, 11:01:31 AM
More bad news...
"FTC charges LendingClub with collecting hidden fees on loans"
https://www.marketwatch.com/story/ftc-charges-lendingclub-with-collecting-hidden-fees-on-loans-2018-04-25
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on April 25, 2018, 11:39:54 AM
Ohh yep LC stock is hitting a new low. Looks like it will be dropping to the 2.80 range.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 25, 2018, 12:31:44 PM
My $125 investment in put options doubled today.  Still waiting out the earnings report.
Title: Re: Lending Club - Time to panic?
Post by: Outside the Box 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd 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!
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd 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 (https://firechecklist.net/2018/04/21/downside-to-r-e-crowdfunding)/
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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...
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd 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.
Title: Re: Lending Club - Time to panic?
Post by: uwp on May 10, 2018, 11:14:07 AM
Options are tough, you gotta be right on direction and timing.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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 (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.
Title: Re: Lending Club - Time to panic?
Post by: Dollar Slice 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...
Title: Re: Lending Club - Time to panic?
Post by: Syonyk 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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 (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
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid 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).
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid 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.
Title: Re: Lending Club - Time to panic?
Post by: sisto 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.
Title: Re: Lending Club - Time to panic?
Post by: FLBiker 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.
Title: Re: Lending Club - Time to panic?
Post by: AM43 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...
Title: Re: Lending Club - Time to panic?
Post by: Million2000 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 (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.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid 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.
Title: Re: Lending Club - Time to panic?
Post by: Yankuba 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: Villanelle 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.   
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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%
Title: Re: Lending Club - Time to panic?
Post by: Villanelle 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!
Title: Re: Lending Club - Time to panic?
Post by: sisto 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.
Title: Re: Lending Club - Time to panic?
Post by: Villanelle 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. 
Title: Re: Lending Club - Time to panic?
Post by: sisto 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.
Title: Re: Lending Club - Time to panic?
Post by: teltic 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.
Title: Re: Lending Club - Time to panic?
Post by: sisto 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%
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: sisto 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.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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.
Title: Re: Lending Club - Time to panic?
Post by: Padonak 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.
Title: Re: Lending Club - Time to panic?
Post by: MrUpwardlyMobile 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid 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.
Title: Re: Lending Club - Time to panic?
Post by: uwp 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?
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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.
Title: Re: Lending Club - Time to panic?
Post by: MrUpwardlyMobile 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.
Title: Re: Lending Club - Time to panic?
Post by: laserlady 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.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose 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?
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on September 05, 2018, 02:27:01 PM
I think I have it figured out. Probably a bug I ran into on the site.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish 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
Title: Re: Lending Club - Time to panic?
Post by: DaveSch 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!
Title: Re: Lending Club - Time to panic?
Post by: Syonyk 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
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid 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.
Title: Re: Lending Club - Time to panic?
Post by: sisto on September 07, 2018, 11:36:21 AM
I should have all of my stuff resolved in about 2.5 years so right before I FIRE all my money should be free from LC. Just logged in and I have $443 available, I usually like to have around $500 and then cash out and buy some VTSAX.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on September 17, 2018, 02:08:22 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.
I'm checking in on the performance of my synthetic short idea from December 6th.

Last put price 1.55
Last call price 0.91
----------------------
Current profit: 0.64

Assuming you had to deposit 100% margin ($4.50/share) for the short call, that's an ROI of 14.2% since December 6th. Multiply by roughly three to annualize that! Interestingly, most of the profit came from deterioration of the call.

Today the call is worth 0.53 and the put is worth 1.45. Factor in the 0.08 received upfront to enter the trade and you'd be up $1 per share. In that time, the share price dropped about 84 cents.

It might still be a good deal to short LC. Options expiring in 2021 are now available, plus several reliable recession indicators are now in the red zone. However, someone might still acquire LC for a premium. High risks and high rewards...
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 17, 2018, 06:36:09 PM
I think this company is going to zero, but still pretty negative on my $2.50 put options for Jan 2019 and Jan 2020.  I can't see how a company providing a negative return to its investors and lying about returns can survive
Title: Re: Lending Club - Time to panic?
Post by: MrUpwardlyMobile on September 29, 2018, 05:40:44 AM
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....
Title: Re: Lending Club - Time to panic?
Post by: OrchardTree on September 29, 2018, 08:17:24 AM
How does a stock go to 0 in 2 years when a company's debt is all collateralized by loans or cash and it even has excess cash?
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on September 29, 2018, 10:59:37 AM
How does a stock go to 0 in 2 years when a company's debt is all collateralized by loans or cash and it even has excess cash?

Well if the loans won't be paid back and the business still can't make a profit, it's a worthless company.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 30, 2018, 06:52:14 AM
How does a stock go to 0 in 2 years when a company's debt is all collateralized by loans or cash and it even has excess cash?

It can't make a profit...its operating costs exceed servicing fees it receives on loans.

If the loans its selling to investors are garbage and the portfolio is declining, they make less in servicing fees.  No money to pay people and IT.  Company bankrupt.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on October 01, 2018, 05:43:59 AM
I have about $8K left in Lending Club that I'm withdrawing as repayments trickle in, to the tune of a few hundred bucks a month. At this point, I'm just hoping they survive long enough for me to get all my money out.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on October 01, 2018, 06:08:40 AM
I have about $8K left in Lending Club that I'm withdrawing as repayments trickle in, to the tune of a few hundred bucks a month. At this point, I'm just hoping they survive long enough for me to get all my money out.

This was me last year.  I ended up listing all notes someone would pay me the principal balance plus 1% and got $7500 or so back
Title: Re: Lending Club - Time to panic?
Post by: chaskavitch on October 01, 2018, 06:37:53 AM
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on October 01, 2018, 06:46:07 AM
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

I've been selling off somewhat successfully. I'm fine with taking a 5% discount though. I have about $600 left in LC notes, but I see I get about $2-3 per month on recoveries...
Title: Re: Lending Club - Time to panic?
Post by: WonderfulLife43 on October 01, 2018, 01:51:22 PM
Celebration time:  Withdrew my final $0.02 from LC today !!
Title: Re: Lending Club - Time to panic?
Post by: DS on October 01, 2018, 01:54:43 PM
Celebration time:  Withdrew my final $0.02 from LC today !!

Woohoo! Time to panic? :D
Title: Re: Lending Club - Time to panic?
Post by: FIREball567 on October 01, 2018, 07:12:59 PM
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.
Title: Re: Lending Club - Time to panic?
Post by: Padonak on October 01, 2018, 07:16:15 PM
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

I have 3K and change left, also withdrawing funds regularly. Can't be bothered trying to sell notes.
Title: Re: Lending Club - Time to panic?
Post by: marty998 on October 02, 2018, 03:04:35 AM
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Wow - you might have bought your notes from a seller on this page....
Title: Re: Lending Club - Time to panic?
Post by: chaskavitch on October 02, 2018, 06:22:18 AM
https://www.sec.gov/news/press-release/2018-223

Everything you need to know about lending club straight from the SEC....

Ouch. 

I've just been cashing out any accrued balance at the end of every month.  Is it even worth it to try to sell what I have left on the trading platform anymore?  I've got about $1600 left in my account, but listing my notes for sale after that nonsense ^ just seems like a waste of time.

I have 3K and change left, also withdrawing funds regularly. Can't be bothered trying to sell notes.

I just put the 20 or so newest notes up at about a 2% discount.  If they don't sell, I'll increase the discount and see what happens.  I'm mostly trying to get as much out as I can in case they go completely under.
Title: Re: Lending Club - Time to panic?
Post by: Syonyk on October 02, 2018, 08:42:33 AM
I'm still not selling notes, but am not reinvesting and am pulling cash out. I need the money for next year's solar installation anyway.

I don't think them totally going under is likely, but I expect the note repayment will drop badly at some point. Hoping to be clear by then, but if I take a loss on the last notes, oh well.
Title: Re: Lending Club - Time to panic?
Post by: FIREball567 on October 02, 2018, 08:17:45 PM
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Wow - you might have bought your notes from a seller on this page....

Yikes! What is the time frame for getting the notes paid? I've had the account for a month and only have earned $4.77.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on October 03, 2018, 06:00:03 AM
I have $5,000 invested in 200 notes that I started a month ago. Now I'm regretting putting my money in here. It's a taxable account and I've made about $4.77. Don't think I should reinvest anymore.

Wow - you might have bought your notes from a seller on this page....

Yikes! What is the time frame for getting the notes paid? I've had the account for a month and only have earned $4.77.

Well if you bought the notes all at the same time, the first payment is going to be until you hit about 1 month + 1-2 weeks. So give it a bit of time, it'll come in waves.
Title: Re: Lending Club - Time to panic?
Post by: grettman on October 04, 2018, 05:15:27 AM
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.
Title: Re: Lending Club - Time to panic?
Post by: MrUpwardlyMobile on October 04, 2018, 05:19:01 AM
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

http://www.mrmoneymustache.com/the-lending-club-experiment/

He felt it was private welfare for responsible borrowers to offset deadbeats
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on October 05, 2018, 05:52:13 AM
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

The praises were due to high referral/affiliate fees.  Those dried up, performance tanked, and praises stopped.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on October 05, 2018, 08:11:09 AM
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

The praises were due to high referral/affiliate fees.  Those dried up, performance tanked, and praises stopped.
Sure, that's the cynical view. The more optimistic outlook is that MMM legitimately thought it was an opportunity for another passive revenue stream. It did look pretty good at the start.

I'm not saying he didn't get affiliate revenue (he is very transparent about this). But when the performance tanked, he was transparent about that as well and no longer recommends LC. His original article is still up, with some in-line edits saying he doesn't recommend it anymore.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on October 05, 2018, 07:36:05 PM
I am really surprised people from this forum invested with lending club. 

I recall a couple years ago LC had the financial blogging community sing their praises. 

I think MMM was one of them.  Curious to know if he feels differently and has said so.

I invested with Lending Club because I want to be diversified and it seemed like a good idea to have one income source that wasn't stocks (here was my reasoning if you're curious (https://forum.mrmoneymustache.com/journals/maybe-we'll-make-it-after-all/msg977902/#msg977902)).

Naturally, this was dependent on them delivering the return they promised. For a while, they did. But my rate of return started to sink in 2017 and never recovered. Either their risk model is bad or they've loosened their standards, and either way I've lost faith in them.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on October 06, 2018, 06:27:16 AM
There's nothing more telling with Lending Club than pulling the YTD Performance on the right hand side of the statement:

Interest Earned:  $494.65
Late Fees:  $1.32
Loan Losses:  ($1,028.72)

Wowza

No wonder this company won't report YTD, 1 Year, 3 Year, and 5 Year Returns.  They continue to just report return since inception, which included 2011-2013 notes when this was a good idea. 
Title: Re: Lending Club - Time to panic?
Post by: MarciaB on April 18, 2019, 10:36:57 AM
Any new updates from anyone?
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 18, 2019, 12:06:12 PM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.
I'm checking in on the performance of my synthetic short idea from December 6th.

Last put price 1.55
Last call price 0.91
----------------------
Current profit: 0.64

Assuming you had to deposit 100% margin ($4.50/share) for the short call, that's an ROI of 14.2% since December 6th. Multiply by roughly three to annualize that! Interestingly, most of the profit came from deterioration of the call.

Today the call is worth 0.53 and the put is worth 1.45. Factor in the 0.08 received upfront to enter the trade and you'd be up $1 per share. In that time, the share price dropped about 84 cents.

It might still be a good deal to short LC. Options expiring in 2021 are now available, plus several reliable recession indicators are now in the red zone. However, someone might still acquire LC for a premium. High risks and high rewards...

Thanks for the reminder to check in @MarciaB

Put price: 1.40
Call price: 0.20
————————
Synthetic short value: 1.20
+ 0.08 original credit
————————
1.28 gross profit per share

Well that escalated quickly!
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on April 18, 2019, 12:33:45 PM
Any new updates from anyone?

I have 2 more loans left. I've been selling them when they're current at about a 10% discount. I think I'll come out overall at a 5% loss over 3 years. I'll be very happy to have my money OUT! I should be able to dump them within the next 2 months. I'll keep the account around for the rest of the year to see if anything recovers and then close it out.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 18, 2019, 04:32:21 PM
Any new updates from anyone?

My portfolio still sucks.  Finally had a month where interest income exceeded chargeoffs
Title: Re: Lending Club - Time to panic?
Post by: Villanelle on April 18, 2019, 05:04:30 PM
I have no notes left, but I am still seeing some recoveries.  I just checked (after ignoring for months) and in March I made a few dollars and paid $.27 (I think) in recovery fees. 

I wonder, at what point, it will be done.  I just want to be finished dealing with it come tax time.  But I assume that I have to keep dealing with this as long as they keep recovering.  It's not worth the $10, or whatever it is I will make this year. 

Also, I looked through the charged off notes and have $25 (meaning they didn't make a single payment), $24.0X, etc.  Hard to believe these people didn't take the loans knowing they weren't going to pay them off.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 18, 2019, 07:22:38 PM
Easy to loan money, not always as easy to collect.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on April 18, 2019, 07:28:42 PM
I have about $4000 left in LC, I'm withdrawing the cash in hundred-dollar increments as repayments come in. I'll probably draw the account down to 0 by the end of 2019 or early 2020.

When all's said and done, I'm guessing I'll make a profit, but only a small one. I would've done better to just put the money in Vanguard.
Title: Re: Lending Club - Time to panic?
Post by: pdxvandal on April 18, 2019, 10:57:32 PM
I've put in 15k into Lending Club overall in the last 11(!) years. I have $46 remaining. Made roughly $3k and an additional $1k on their IPO. Small profit, but glad to be done with it.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 19, 2019, 04:55:43 AM
One question for those who've wound out your account - At what level do you say "I'll keep $500 or $1000 in here".   I have 633 charged off notes that are generating some recoveries for me every month and theoretically should for years now that almost all of my loans are at the end of their life.

Its so little money for me now and they finally fixed the ability to import into turbotax.
Title: Re: Lending Club - Time to panic?
Post by: Tyson on April 19, 2019, 09:27:32 AM
Investing in something like Lending Club seems to be not much different than trying to pick stocks.  Its GREAT if you happen to pick a winning company.  But it can be downright brutal if you don't.  Glad everyone seems to be getting their money out, I think it's clear now that investing with Lending Club was hella risky.
Title: Re: Lending Club - Time to panic?
Post by: Villanelle on April 19, 2019, 11:28:34 AM
One question for those who've wound out your account - At what level do you say "I'll keep $500 or $1000 in here".   I have 633 charged off notes that are generating some recoveries for me every month and theoretically should for years now that almost all of my loans are at the end of their life.

Its so little money for me now and they finally fixed the ability to import into turbotax.

I kept basically no money in (I think due to the scheduling of my withdraw, I never dropped below $.27) , and I'm still getting money from recoveries, so unless I'm missing something, there is no need to keep that $500 in the account. 
Title: Re: Lending Club - Time to panic?
Post by: sisto on April 22, 2019, 10:05:12 AM
I'm finally down to under $600 left in my LC account. Waiting for it to die a slow painful death so I can be free LOL
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on April 22, 2019, 01:35:41 PM
2019 will be the last year I have to deal with P2P lending on my taxes. Praise Xenu!
Title: Re: Lending Club - Time to panic?
Post by: meatgrinder on June 18, 2019, 12:21:46 PM
My Lending Club Returns.  Its turned out ok somehow but the taxes are brutal since defaults don't offset gains and are deferred.  I started investing in 2013 and started winding down over 1 1/2 years ago.

Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on June 19, 2019, 10:26:30 AM
My Lending Club Returns.  Its turned out ok somehow but the taxes are brutal since defaults don't offset gains and are deferred.  I started investing in 2013 and started winding down over 1 1/2 years ago.
As I remember, once a loan is charged off it goes into a 1099 as a capital loss, right? So eventually it will offset income, but yeah deferred.

But with that much invested, I imagine you could hit the $3k cap in writing off capital losses against income.
Title: Re: Lending Club - Time to panic?
Post by: meatgrinder on June 19, 2019, 12:27:48 PM
My Lending Club Returns.  Its turned out ok somehow but the taxes are brutal since defaults don't offset gains and are deferred.  I started investing in 2013 and started winding down over 1 1/2 years ago.
As I remember, once a loan is charged off it goes into a 1099 as a capital loss, right? So eventually it will offset income, but yeah deferred.

But with that much invested, I imagine you could hit the $3k cap in writing off capital losses against income.

Right, thanks for the clarification. My account goes way past the $3K cap so a majority is deferred. 
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on June 19, 2019, 01:48:56 PM
My Lending Club Returns.  Its turned out ok somehow but the taxes are brutal since defaults don't offset gains and are deferred.  I started investing in 2013 and started winding down over 1 1/2 years ago.
As I remember, once a loan is charged off it goes into a 1099 as a capital loss, right? So eventually it will offset income, but yeah deferred.

But with that much invested, I imagine you could hit the $3k cap in writing off capital losses against income.

Right, thanks for the clarification. My account goes way past the $3K cap so a majority is deferred.
That does suck. It's annoying that the charge offs can't go against the income in the same category and cancel out in the same year. Shrug.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on July 30, 2019, 10:36:34 PM
Well my last note has gone into default. I withdrew all my money, but then I found out: I have been making about $5-7 a week on recoveries. Sigh, well I guess I'll keep my account open through next year to see the recoveries roll in. I'm glad I'm almost done with this experiment.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on July 30, 2019, 10:41:10 PM
Oh I didn't notice this, but LC just did a reverse stock split this month of 5:1. So their stock of $3 is now readjusted up to $15. Why is this company still valued at 1.25 Billion?
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on July 31, 2019, 04:32:52 AM
Oh I didn't notice this, but LC just did a reverse stock split this month of 5:1. So their stock of $3 is now readjusted up to $15. Why is this company still valued at 1.25 Billion?
Its amazing to me.  I didn't earn anything on my put options, I guess the market can remain irrational longer than my options can remain open
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on July 31, 2019, 07:47:49 AM
Oh I didn't notice this, but LC just did a reverse stock split this month of 5:1. So their stock of $3 is now readjusted up to $15. Why is this company still valued at 1.25 Billion?
Its amazing to me.  I didn't earn anything on my put options, I guess the market can remain irrational longer than my options can remain open

My guess is that your option were also readjusted? Can you tell what happened to them? Does it only represent 20 stocks now or how does that work? I have to think selling .2 of an option isn't possible.
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on July 31, 2019, 09:52:04 AM
Two weeks ago I started selling off my LC loans.  I am probably 80-90% into cash by now.  The returns have just not been worth keeping the account open and the larger worry of something else going to zero. 

All my loans are in a IRA account, does anyone know what the fees will be to transfer the balance to my Schwab IRA?  I fear that I will be left with 5.32$ in the account and it would cost 20$ to do a transfer. 
Title: Re: Lending Club - Time to panic?
Post by: sailinlight on July 31, 2019, 10:51:37 AM
Two weeks ago I started selling off my LC loans.  I am probably 80-90% into cash by now.  The returns have just not been worth keeping the account open and the larger worry of something else going to zero. 

All my loans are in a IRA account, does anyone know what the fees will be to transfer the balance to my Schwab IRA?  I fear that I will be left with 5.32$ in the account and it would cost 20$ to do a transfer.

What discount you do you offer them at? I've been trying to sell my notes for several months now, and only get a few bites. Usually offer at around a .25% discount. Should I go lower?
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on July 31, 2019, 11:07:40 AM
Two weeks ago I started selling off my LC loans.  I am probably 80-90% into cash by now.  The returns have just not been worth keeping the account open and the larger worry of something else going to zero. 

All my loans are in a IRA account, does anyone know what the fees will be to transfer the balance to my Schwab IRA?  I fear that I will be left with 5.32$ in the account and it would cost 20$ to do a transfer.

What discount you do you offer them at? I've been trying to sell my notes for several months now, and only get a few bites. Usually offer at around a .25% discount. Should I go lower?

Depends on the loan, but yes. Much much lower.

Here is my general assessment for what you can sell notes for:

Never late/ credit score is up since bought: -5 to +2%
Never late/ credit is same/down: -5 to 0%
Current: -15 to -5%
In grace period: -30 to -20%
Late: -40 to -30%
Super Late: -50 to -40%
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on July 31, 2019, 11:52:03 AM
Oh I didn't notice this, but LC just did a reverse stock split this month of 5:1. So their stock of $3 is now readjusted up to $15. Why is this company still valued at 1.25 Billion?
Its amazing to me.  I didn't earn anything on my put options, I guess the market can remain irrational longer than my options can remain open

My guess is that your option were also readjusted? Can you tell what happened to them? Does it only represent 20 stocks now or how does that work? I have to think selling .2 of an option isn't possible.

They're January puts at $2 share.  I only have $150 worth left, made the trade break-even back in December when the market was crashing.  Just holding them until end of year then I'll take the loss to get it into this tax year
Title: Re: Lending Club - Time to panic?
Post by: CanuckExpat on July 31, 2019, 03:16:59 PM
What discount you do you offer them at? I've been trying to sell my notes for several months now, and only get a few bites. Usually offer at around a .25% discount. Should I go lower?

At what discount would you consider buying the notes if you didn't already own them?
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on August 09, 2019, 12:32:40 PM
Two weeks ago I started selling off my LC loans.  I am probably 80-90% into cash by now.  The returns have just not been worth keeping the account open and the larger worry of something else going to zero. 

All my loans are in a IRA account, does anyone know what the fees will be to transfer the balance to my Schwab IRA?  I fear that I will be left with 5.32$ in the account and it would cost 20$ to do a transfer.
Do you have STRATA as your custodian? I think that's the only option...(formerly SD IRA Services).

I recently went through this, but STRATA closed my account (can't even log in) so I'm not 100% sure what the fee was. Basically you have to transfer it twice. First you go to your LC account and tell them to ACH all your cash to the custodian. Then the custodian (STRATA) has your cash and you initiate the rollover with the destination IRA (Schwab in your case). In my case, Vanguard was able to initiate the rollover and grab the money. I think it was a $200 fee for this crap (which was noted in the initial SD IRA account agreement docs). So you really only want to do it once.

It was a balancing act for me... I wanted to get the money out of cash ASAP and back into my investment portfolio, but I also wanted to collect those recoveries for as long as possible. Basically I had to cut it off at a certain point and just pull the trigger.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on September 25, 2019, 08:12:09 PM
This is new. When I sign in to my Lending Club account, I get a banner that says:

Quote
Investment activity in LendingClub Notes is limited for residents of some states. We are working to expand access in these states.

AK, AZ, FL, NC, ND, NM, NY, PA, TX: Residents are unable to purchase LendingClub Notes on the primary market. However, they are permitted to buy and sell LendingClub Notes on the Folio Investing Note Trading Platform.

OH: LendingClub Notes are currently unavailable for residents to purchase or trade.

I'm positive this wasn't there last week. I live in New York, and although I haven't been putting new money into Lending Club for a while, I never ran into any issue doing so before now. There's no explanation of what specifically has changed, and other people seem baffled and frustrated by it:

https://www.lendacademy.com/some-investors-locked-out-of-investing-in-lendingclub-loans/

This could be another sign that Lending Club is circling the drain. I'm just glad that I've been withdrawing my money for months rather than reinvesting. Just over $2000 left to go now.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on September 26, 2019, 04:15:17 AM
I'm not surprised.  This is the same company that refuses to just provide standard investment reporting data, showing my YTD, 1yr, 3yr, and 5yr returns.   It still wants to show me 1.89% and include 2011 data in the numbers
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on September 26, 2019, 05:48:32 AM
@FireLane, I think I saw a headline to that effect in the last week or so.  Did not click on it. 

The bulk of my balance was sold off and is in the process of being transferred to my schwab account.  I ended up with ~400$ in loans that I could not sell off, I progressively raised the discount every few days and still no takers.  Figure I will give it a few months and try again or just let the loans mature/default then transfer the balance.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on September 26, 2019, 11:36:52 AM
We have information the stock analysts don't have: Absent the sort of changes that would make it just another small bank, LC is going to fail as a lending platform.

If you'd like to place a bet, you can set up a synthetic short all the way out to January 17, 2020.

Buy the $4.50 strike put for $1.40.
Sell the $4.50 strike call for $1.48.

Thus you take an $0.08 credit to enter a trade that moves the opposite of LC stock (over time, not immediately/daily). LC is already down 21% YTD.
Wait two years for this house of cards company to tumble, or cash out at the next earnings release. Your breakeven is $4.58, which is 8% higher than today's price.
Best of all, this is portfolio insurance. If the broader stock market declines, speculative companies like LC will get hit hard and your synthetic short will make up for some of your other losses. With this synthetic short, your leverage is about 3:1 on a company that is 60% more volatile/risky than the market.
I'm checking in on the performance of my synthetic short idea from December 6th.

Last put price 1.55
Last call price 0.91
----------------------
Current profit: 0.64

Assuming you had to deposit 100% margin ($4.50/share) for the short call, that's an ROI of 14.2% since December 6th. Multiply by roughly three to annualize that! Interestingly, most of the profit came from deterioration of the call.

Today the call is worth 0.53 and the put is worth 1.45. Factor in the 0.08 received upfront to enter the trade and you'd be up $1 per share. In that time, the share price dropped about 84 cents.

It might still be a good deal to short LC. Options expiring in 2021 are now available, plus several reliable recession indicators are now in the red zone. However, someone might still acquire LC for a premium. High risks and high rewards...

Time to check the progress of this synthetic short idea. Since my last update LC did a one-for-five reverse split to prop up their stock price, so the options are now “non-standard” and represent 20 shares instead of 100. For comparison, I will multiply the usually quoted option price per share by 20 and compare it to the value of the entry position which is multiplied by 100.

Original idea:
     Buy a put for 100 shares at 4.50 strike for $140
     Sell a call for 100 shares at 4.50 strike for $148
     ———-
     Net: +$8

Current value:
     Sell a put for 20 shares at (1.68 x 20=) $33.6
     Buy a call for 20 shares at (0.025 x 20=) $0.50
     ———
     Net: +$33.10

Total return excluding commissions is +$33.1 + $8 original credit = $41.10

If I held this position I would have long ago rolled it closer to the money and to a later expiration. The reverse split and time decay have already knocked it down almost 77% since my last check in. The bleeding of time value is very high for far-OTM options nearing expiration such as these, and the liquidity of the non-standard options might get worse.

Still, this company with its horrible product still has a unicorn market cap of $1.21 BILLION. Half of that valuation will evaporate if either of the following happens next year:

1) a correction in which LC debt becomes more toxic than 2008-era NINJA mortgages, or
2) no correction and business as usual.

A short position in LC remains a compelling way to offset portfolio market beta while maintaining a chance for the appreciation of one’s hedge even if the market does go up (as would have worked in 2017 & 2018). This is offset by the risk of some fool buying LC for a premium, a change of leadership/strategy, or the issuance of a cryptocurrency by LC). Entering a bear spread would be a way to profit from LC’s probable decline while limiting risk.

Title: Re: Lending Club - Time to panic?
Post by: chasesfish on November 04, 2019, 05:47:21 AM
One of the more interesting things about Lending Club, I have about $11,000 in charged off notes.

I wonder what my residual will be and for how long from those?   Right now its between $5 and $15 per month.
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on November 04, 2019, 10:56:56 AM
I was able to sell most all of my notes and transfer the balance to my primary schwab ira.  currently have 66$ in cash and 425$ as an adjusted balance.  will probably let it sit for a year or more then try to get the remainder out; I expect fees to eat a large percent but still should be positive.

some notes that on the surface looked fine just would not sell even as I retched up the discount.  maybe someone knows something about 38yo men in Ohio who make between 45-55k/year and needed to consolidate debt...? 

I am not sure it was a mistake to try LC but I dont think it worked out in my favor.  Even beyond LC I have been simplifying things, KISS and go outside to have some fun. 
Title: Re: Lending Club - Time to panic?
Post by: laserlady on November 22, 2019, 11:30:11 AM
I just received and withdrew my last payment from Lending Club (absent the unlikely possibility of getting small amounts in recoveries in the future).  Of the 97 loans I invested in, 66 were paid in full, and 31 were charged off.  (I never participated in the secondary market.)

I received $716.24 in interest, and lost $550.16 in charge offs.  So, not as bad as it could have been, but far from a good investment, especially when you consider the unfavorable tax situation and the time I spent trying to pick good loans.

I'm now happily going back to simple, automated index-fund investing.
Title: Re: Lending Club - Time to panic?
Post by: freya on November 22, 2019, 01:41:47 PM
Same here.  I put in an experimental $3000 investment in 2013, and finally sold the last couple of notes (at a 2% discount) and pulled out the last of the money just a few weeks ago.  After tax I made less than if I'd just left it in the online savings account, even accounting for things like capital losses. 

However, that doesn't include the cost of Turbotax Online, which I was buying mainly for its unique ability to import Lending Club 1099s (and its multiple pages of note transactions).  I am so looking forward to using freetaxusa or Credit Karma starting in 2020.

Not sure how long to wait after the last chargeoff to close my account...9 months probably.  after that they'll just have to mail me a check.   I'm sure it'll be < $10/year so not worried about taxes.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on February 22, 2020, 05:55:31 PM
I notice Lending Club has taken away another feature.

In the "My Notes at-a-Glance" section of the account summary, there used to be an option to show the total amount of loans that were either in repayment, fully paid, or defaulted and charged off. I used that option to compare the amount of money I'd lost in charged-off loans to the amount of money I'd made in interest.

Now that feature is gone, and they only let you view the total number of loans in each status, which is much less useful. This makes it harder to judge overall performance, and I bet that's deliberate.

Just over $800 left in my account. I should have all my cash back within a few months.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on February 23, 2020, 06:38:36 AM
I notice Lending Club has taken away another feature.

In the "My Notes at-a-Glance" section of the account summary, there used to be an option to show the total amount of loans that were either in repayment, fully paid, or defaulted and charged off. I used that option to compare the amount of money I'd lost in charged-off loans to the amount of money I'd made in interest.

Now that feature is gone, and they only let you view the total number of loans in each status, which is much less useful. This makes it harder to judge overall performance, and I bet that's deliberate.

Just over $800 left in my account. I should have all my cash back within a few months.

They've been taking away anything that shows transparency in performance for years.  I still can't see a 1, 3, 5, and 10 year return data on my portfolio.
Title: Re: Lending Club - Time to panic?
Post by: chaskavitch on February 23, 2020, 06:46:08 AM
I have two dang loans left, both >30 days late, both worth basically nothing, but I just can't get rid of them.  I'm so irritated that they didn't sell before the end of 2019, so now I'll have to wait for my Lending Club form for 2020 taxes next year.  Boo.
Title: Re: Lending Club - Time to panic?
Post by: appleshampooid on February 24, 2020, 08:54:42 AM
I notice Lending Club has taken away another feature.

In the "My Notes at-a-Glance" section of the account summary, there used to be an option to show the total amount of loans that were either in repayment, fully paid, or defaulted and charged off. I used that option to compare the amount of money I'd lost in charged-off loans to the amount of money I'd made in interest.

Now that feature is gone, and they only let you view the total number of loans in each status, which is much less useful. This makes it harder to judge overall performance, and I bet that's deliberate.

Just over $800 left in my account. I should have all my cash back within a few months.
Ooooof, that sucks, and there is NO justification for removing that feature. I used it every day back when I still had open notes.

2020 should be the last year I have to report any P2P stuff on my taxes, and even this year (2019) it was almost nothing. Neither Prosper or LC paid me enough interest to merit reporting it on a 1099-INT or 1099-OID, but I added it up and reported it anyway as a good little tax payer.

I will have some recoveries into 2020 that will probably still be reported on a 1099-B. Like, maybe a whole couple dollars!
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on April 28, 2020, 06:55:32 AM
I am trying to sell my last three notes, no buyers :-( I am at a 75% mark down.  If this does not work I am just let it sit for a few months.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 28, 2020, 07:35:29 AM
I bought 12 January puts on LC at the $5 strike in October, and another 5 last month. I'm up 70% or $563 so far. I think this is the proper way to make money on Lending Club and may add to my position.

If defaults were this bad during the boom years, just imagine the next 12 mos!
Title: Re: Lending Club - Time to panic?
Post by: ice_beard on April 28, 2020, 08:59:37 AM
Thanks for the reminder to log in and transfer out my available funds. 

Out of 508 original notes, 100 have been charged off.  Unbelievable.  I selected middle of the road level risk tolerance too.  They must have been giving money to anyone who filled out an application. 
I'm still showing something like a 3% gain, which beats the 1% I had the first few years.  Not sure if they simply changed how this is calculated or if the charge offs decreased or what.  I don't care enough to investigate. 
I won't be done with this experiment until next summer. 
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 29, 2020, 03:53:25 AM
Thanks for the reminder to log in and transfer out my available funds. 

Out of 508 original notes, 100 have been charged off.  Unbelievable.  I selected middle of the road level risk tolerance too.  They must have been giving money to anyone who filled out an application. 
I'm still showing something like a 3% gain, which beats the 1% I had the first few years.  Not sure if they simply changed how this is calculated or if the charge offs decreased or what.  I don't care enough to investigate. 
I won't be done with this experiment until next summer.

This has been my experience.

Unlike @ChpBstrd - my LC put options expired in January before everything tanked
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 29, 2020, 07:40:51 AM
Thanks for the reminder to log in and transfer out my available funds. 

Out of 508 original notes, 100 have been charged off.  Unbelievable.  I selected middle of the road level risk tolerance too.  They must have been giving money to anyone who filled out an application. 
I'm still showing something like a 3% gain, which beats the 1% I had the first few years.  Not sure if they simply changed how this is calculated or if the charge offs decreased or what.  I don't care enough to investigate. 
I won't be done with this experiment until next summer.

This has been my experience.

Unlike @ChpBstrd - my LC put options expired in January before everything tanked

The price is still irrational at 7.64. Even more so now that defaults, unemployment, and small business bankruptcies are rising.   
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on April 29, 2020, 11:35:37 AM
The stock jumped at LC laying off 30% of their employees. I don't understand why investors think this means the company is now more valuable. An already small company cutting 30% is not cutting the fat.

However, for those buying puts, I could easily see this stock continuing to maintain a $6-8 price. While LC has still been unable to turn a profit, they are well-positioned to grow their market share. They've been steadily improving their EPS over the past year. They went from -1.52 EPS in 2018 to -0.35 in 2019. The Zacks estimate for this year is 0.09 and 0.41 for 2021. LC is estimated to have +300% growth YOY, and their future earnings estimates puts their P/E at around 17. Of course LC is a wildly speculative stock, but I don't see puts on LC as an obvious win.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 30, 2020, 02:18:39 PM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
Title: Re: Lending Club - Time to panic?
Post by: Paul der Krake on April 30, 2020, 02:26:10 PM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
With what money?
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on April 30, 2020, 03:06:21 PM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
With what money?
They could borrow the money from another lending platform and not pay it back.
Title: Re: Lending Club - Time to panic?
Post by: marty998 on April 30, 2020, 04:03:16 PM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
With what money?
They could borrow the money from another lending platform and not pay it back.
Not unlike most Government budgets lol. We're in the age of debt never having to be repaid.
Title: Re: Lending Club - Time to panic?
Post by: bwall on April 30, 2020, 06:00:20 PM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
With what money?
They could borrow the money from another lending platform and not pay it back.
Not unlike most Government budgets lol. We're in the age of debt never having to be repaid.
If all debt were repaid, what would investors invest in?
Title: Re: Lending Club - Time to panic?
Post by: marty998 on April 30, 2020, 08:56:51 PM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
With what money?
They could borrow the money from another lending platform and not pay it back.
Not unlike most Government budgets lol. We're in the age of debt never having to be repaid.
If all debt were repaid, what would investors invest in?
Equity perhaps. Or maybe useful projects that actually add to the productive capacity of the economy.

As it stands, when you can borrow for nothing, there's a lot of money being pissed away because there are few if any consequences.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on May 01, 2020, 03:57:21 AM
The reason I don't want to buy more puts on this is I never underestimate the supidity of bank leadership, someone like Capital One will buy them
With what money?

Former banker here.  They have plenty of capital and Lending Club has a minimal market cap.  Not going to happen in the next quarter, but could after that.
Title: Re: Lending Club - Time to panic?
Post by: bwall on May 01, 2020, 07:45:38 AM
Not unlike most Government budgets lol. We're in the age of debt never having to be repaid.
If all debt were repaid, what would investors invest in?
Equity perhaps. Or maybe useful projects that actually add to the productive capacity of the economy.

As it stands, when you can borrow for nothing, there's a lot of money being pissed away because there are few if any consequences.

My business borrowed lots of money for useful projects that created jobs. We then paid off the debts and still kept the jobs in place. The business owners now have more money in their pockets, company coffers are full, employees have jobs and people upstream of us in the supply chain also have jobs, as do those downstream. Now the company can invest in other useful projects with their own money. We were very happy that someone was willing to lend to us.

At no time did we ever consider defaulting on our obligations.
Title: Re: Lending Club - Time to panic?
Post by: Padonak on May 01, 2020, 08:24:36 AM
What happens to borrowers who default on Lending Club loans? Does LC send the loan balance to collections? Do their credit scores drop significantly? Do collectors go after their assets (houses, cars)? Do they have their wages garnished?
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on May 01, 2020, 11:49:34 AM
What happens to borrowers who default on Lending Club loans? Does LC send the loan balance to collections? Do their credit scores drop significantly? Do collectors go after their assets (houses, cars)? Do they have their wages garnished?

All of that is done.  As best I can tell at 120 days they charge it off and use contingency collection agencies.  The amount that goes to the investor after the agency takes their fee and lending club charges a recovery fee are minimal.  That's the best I can tell with 646 charged off notes in my account.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on June 01, 2020, 06:34:18 PM
Got an email today that LC is trying to bring in investment money by offering a free 0.5% bonus on all new investment. It's a paltry sum that is screaming "PLEASE INVEST MORE MONEY, BUT WE CAN'T ACTUALLY OFFER A GOOD INCENTIVE".

Also congrats to everyone who bought put options. Looks like you likely will make some good money on it. LC is down 55% on the year. They are currently valued at about 330M.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on June 02, 2020, 09:31:36 AM
Got an email today that LC is trying to bring in investment money by offering a free 0.5% bonus on all new investment. It's a paltry sum that is screaming "PLEASE INVEST MORE MONEY, BUT WE CAN'T ACTUALLY OFFER A GOOD INCENTIVE".

Also congrats to everyone who bought put options. Looks like you likely will make some good money on it. LC is down 55% on the year. They are currently valued at about 330M.

The market seems to like the new strategy. Stock is up 7.5% today. Great time to pick up more puts. Nothing like a band-aid solution to reveal that they can no longer attract investors and might even face liquidity issues.

I have 17 of the January 2021 puts at the $5 strike. I bought some in October and some in March. So far I’m up 113% or $903. Today looks like a good day to add exposure. If I buy more puts, it’ll be at a lower strike price. This play has lots of room to run, all the way to zero.
Title: Re: Lending Club - Time to panic?
Post by: Padonak on June 02, 2020, 11:45:44 AM
I'm just waiting for the last $80 in outstanding loans to be paid off.

Used Lending Club as an investor for almost 5 years. Invested about 15K, mostly through automatic purchases by Lending Robot. Focused on riskier 3 year loans. Stopped investing about 3 years ago mostly because I reached free Lending Robot limit even with their promotions, but also because the return wasn't good enough.

Didn't bother selling any loans.

Adjusted NAR 3.9%. In hindsight, it wasnt worth the hassle of setting everything up and tracking performance. Also too much paperwork with tax returns and less room for tax loss harvesting. Luckily I used turbo tax and didn't have to enter all that BS manually.

I'm glad almost all my loans expired by the time this Covid shitshow started.
Title: Re: Lending Club - Time to panic?
Post by: FireLane on October 07, 2020, 08:34:24 AM
According to an e-mail I got today, Lending Club is getting out of the peer-to-peer lending business. From now on, it's just going to be... a bank.

Quote
Endings & New Beginnings – LendingClub & Radius Bank

Earlier this year LendingClub announced that it signed an agreement to acquire Radius Bancorp, the holding company of Radius Bank. Combining the two companies is ground-breaking. By becoming the only full-spectrum fintech marketplace bank, and the first public U.S. neobank, LendingClub can unlock new value for borrowers and investors by using the marketplace to both pay less when borrowing and earn more when saving.

Since our announcement, we have been hard at work with the team at Radius, regulators, and partners about the product suite of the potential combined business and what it will mean for our members. In connection with these efforts and as part of our anticipated transition to a bank holding company, we have decided to make some changes that are important to our Notes investors.
 
Closing an Important Chapter—Notes Platform Retiring on December 31, 2020

As we move towards becoming a full-spectrum fintech marketplace bank, we have looked closely at our current and future product suite and have started development of new products to help our members keep more of what they earn and earn more on what they keep. Unfortunately, under a prospective banking framework, it is not economically practical for LendingClub to continue to offer Notes. So, we had to make the difficult decision to retire the Notes platform effective December 31, 2020.

This will not affect the existing Notes you own but means that the last day to purchase Notes will be December 27. In addition, we will no longer accept new accounts effective October 8 and we are targeting to retire the mobile app on November 10.

We do not take this decision lightly. Many of our investors consider Notes as a key piece of their investment portfolio, and our individual investors have been an important part of the history and growth of our company.

Ultimately, we believe new banking capabilities will enable us to serve you even better in the future. People helping people is core to who we are as a company and we’re scoping new products that would retain the peer-to-peer spirit of Notes under the prospective banking framework.

In the meantime, we are working with Radius Bank to develop an exclusive high yield savings account, only available to Notes investors, which will allow you to earn more on the available cash in your Notes account—and any additional cash you want to transfer in.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on October 07, 2020, 08:50:29 AM
At the beginning of the year they were almost a $1B company. Right now their stock is sitting right around 1/3 of that. Maybe they can turn this around with all the free covid money, but I still don't see a profit path for them.
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on October 08, 2020, 07:24:44 AM
Thanks for posting this firelane, I had ignored that email :-)
Title: Re: Lending Club - Time to panic?
Post by: Mr. Green on October 08, 2020, 11:05:43 PM
What the heck is a "public U.S. neobank?" Sounds like a made up buzzword to me.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on October 09, 2020, 02:47:04 PM
I was right on my puts, just couldn't buy them far enough out.

Goodbye Lending Club....you scummy people still would never give me a simple 1/3/5 year return calculation on my account, only wanting to tell me I've made 1.XX% since inception in 2011.
Title: Re: Lending Club - Time to panic?
Post by: ChpBstrd on October 11, 2020, 08:24:10 AM
I was right on my puts, just couldn't buy them far enough out.

Goodbye Lending Club....you scummy people still would never give me a simple 1/3/5 year return calculation on my account, only wanting to tell me I've made 1.XX% since inception in 2011.

LC has kind of flatlined lately. Apparently their bank acquisition has put a floor on the value, so my $2 puts maturing in January will most likely be worthless. I had figured they would bleed value faster or run out of liquidity faster than the bank earnings could make up for.
Title: Re: Lending Club - Time to panic?
Post by: sisto on December 04, 2020, 10:38:10 AM
I'm down to only 4 notes now, waiting on them to fully mature to close out everything. So happy to be almost done with it.
Title: Re: Lending Club - Time to panic?
Post by: ice_beard on December 04, 2020, 10:54:06 AM
Down to 15 notes!  I'm glad this pops up every once in awhile...  good reminder to transfer out whatever is available.  My "growth" rate was 3.6%!! 
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on December 04, 2020, 11:54:04 AM
sent the paper work to transfer the last ~500$ to my other ira accounts last week :-)  will be left with like 15$ from one note that I could never sell, I think the transfer fees are more than 15$ so will probably just leave it in LC (or whatever there new name is...)
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on January 01, 2021, 08:34:58 AM
$750 left stuck in this thing.  2020 might actually be a positive year overall for my LC return...mainly thanks to a high level of chargeoffs from 2015-2018 having recoveries trickle in
Title: Re: Lending Club - Time to panic?
Post by: Syonyk on January 01, 2021, 11:32:58 AM
Thanks for the reminder, transferred $500 out.  I have $200 or something left in it.

It's been an interesting experiment, but... like many things, it's over now.
Title: Re: Lending Club - Time to panic?
Post by: Villanelle on January 01, 2021, 03:09:56 PM
Ignorant question:

All my loans are either paid in full or charged off, and have been since at least 2019.  At what point can I just be done thinking about this? If I understand correctly, charge-off recoveries could still trickle in.  Is that correct?  Is there some cut off, or could--theoretically--I get $1.15 from LC in 2050 for some recovered defaulted loan?
Title: Re: Lending Club - Time to panic?
Post by: Syonyk on January 01, 2021, 05:08:09 PM
"Check it at tax time," and if it's not been a thing for a few years, I wouldn't worry about it.  Honestly, I doubt LC will even still be around in 2050 in any meaningful form.
Title: Re: Lending Club - Time to panic?
Post by: AlanStache on January 01, 2021, 06:01:36 PM
Ignorant question:

All my loans are either paid in full or charged off, and have been since at least 2019.  At what point can I just be done thinking about this? If I understand correctly, charge-off recoveries could still trickle in.  Is that correct?  Is there some cut off, or could--theoretically--I get $1.15 from LC in 2050 for some recovered defaulted loan?

I did the paper work to close my account last week and move the funds to my other IRA; as part of closing I was given the option to open an taxable account or "donate" any future earning to Leanding Club.  I choose the donate option, dont like LC much but 10$ is not worth the effort. 
Title: Re: Lending Club - Time to panic?
Post by: ColoradoTribe on January 01, 2021, 10:49:47 PM
Finally unwound the last of my Lending Club account this month. I invested a modest $5,000 five or six years back. I did not auction off any notes at a discount, just let it run its course, and cashed out along the way. My APR was just under 3%. Certainly not worth the effort, but happy to get out unscathed.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on January 02, 2021, 04:32:15 AM
Ignorant question:

All my loans are either paid in full or charged off, and have been since at least 2019.  At what point can I just be done thinking about this? If I understand correctly, charge-off recoveries could still trickle in.  Is that correct?  Is there some cut off, or could--theoretically--I get $1.15 from LC in 2050 for some recovered defaulted loan?

I don't know the answer to this, but I have a guess from my professional experience.

Lending club probably bulk sells the rights to all of these charge off notes and distributes what they receive.  Right now it looks like the debt collectors are working on contingency.
Title: Re: Lending Club - Time to panic?
Post by: chaskavitch on January 26, 2021, 06:59:01 AM
I have to get tax forms from Lending club for my last few notes that were sold off in Jan 2020, and their website is constantly down.  I still have a valid log-in, but I just get an error message once I am in my account.  Boo.
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on January 26, 2021, 09:13:10 AM
I wonder how many years worth of recoveries I'll have until Lending Club tax forms are no more...
Title: Re: Lending Club - Time to panic?
Post by: erutio on January 26, 2021, 10:10:38 AM
A few years back, my notes were all charged off and I unloaded the rest on the secondary market at huge mark downs, but I continued to get a tiny trickle of recovered funds.  And then I'd had to account for it on my tax returns.  I got tired of it, so I emailed LC and requested they close my accounts.  They sent me back some forms to sign, which I did, and now I don't ever have to think about that shitty company anymore.  I assume in the signed documents that I give up the right to those recovered funds, which couldn't be more than a few hundred dollars by then, so worth it.
Title: Re: Lending Club - Time to panic?
Post by: laserlady on February 01, 2021, 10:28:43 PM
I have to get tax forms from Lending club for my last few notes that were sold off in Jan 2020, and their website is constantly down.  I still have a valid log-in, but I just get an error message once I am in my account.  Boo.

I'm running into the same problem. I can log in, but then the website always tells me that they're experiencing technical difficulties, so I can't pull up the tax forms. So annoying.
Title: Re: Lending Club - Time to panic?
Post by: chaskavitch on February 02, 2021, 06:17:49 AM
I have to get tax forms from Lending club for my last few notes that were sold off in Jan 2020, and their website is constantly down.  I still have a valid log-in, but I just get an error message once I am in my account.  Boo.

I'm running into the same problem. I can log in, but then the website always tells me that they're experiencing technical difficulties, so I can't pull up the tax forms. So annoying.

I'm glad it's not just me!  I even got an email last week saying that my tax forms were ready to be downloaded, and I still can't actually access anything :(  I emailed them, but I haven't called customer support yet.
Title: Re: Lending Club - Time to panic?
Post by: HappyCheerE on February 04, 2021, 03:55:59 PM
I log in at least a few times a month to see if there's enough accumulated to transfer out, and I haven't had any trouble. Just downloaded my forms. Maybe try again?

Supposedly $800 left to wait for - even if it all vanishes, overall I'm up about 1-2% over what I put in, so technically "in the black" ignoring inflation. I'm glad I was too stubborn to sell at a loss, but I do have years more of taxes to do, so at some point closing the account might make the most sense.
Title: Re: Lending Club - Time to panic?
Post by: Icecreamarsenal on February 05, 2021, 08:30:30 PM
My personality doesn't let me forget about this platform.  I check it at least once a week and end up transferring amounts like 1.16 and 0.89.  Then that goes straight to my vanguard.
No RAGRETS
Title: Re: Lending Club - Time to panic?
Post by: fuzzy math on February 06, 2021, 11:48:30 AM
My personality doesn't let me forget about this platform.  I check it at least once a week and end up transferring amounts like 1.16 and 0.89.  Then that goes straight to my vanguard.
No RAGRETS

Haha me too! I'm down to $13 still invested and I'll be damned if I let them use my slush funds for any period of time.
Title: Re: Lending Club - Time to panic?
Post by: laserlady on February 06, 2021, 09:27:07 PM
I log in at least a few times a month to see if there's enough accumulated to transfer out, and I haven't had any trouble. Just downloaded my forms. Maybe try again?

Thanks! I tried again today and was able to log in and download my tax forms.

But now I see that I had a few more dollars transferred to my account last summer, and I can't transfer the money out. I think Lending Club closed my account automatically in June after all of my loans got charged off, and they said that they'd transfer any recoveries they received to my associated bank account. Clearly that hasn't been happening, and they've disabled my ability to transfer money out myself.  So, the recoveries are still being counted as income on my tax forms, but they're inaccessible to me.   It's not much money for me personally, but it really bothers me to see a company carrying out this kind of fraud, and possibly getting away with it.
Title: Re: Lending Club - Time to panic?
Post by: chaskavitch on February 07, 2021, 07:32:03 AM
I can log in now too. 

I must be completely cashed out, though, because literally the only thing I can see is my statements.  If I click on any of the other links to Summary or Holdings, it just reloads the tax statements page.  At least I know I'm not leaving anything in there!
Title: Re: Lending Club - Time to panic?
Post by: frozen on February 07, 2021, 07:10:07 PM
My personality doesn't let me forget about this platform.  I check it at least once a week and end up transferring amounts like 1.16 and 0.89.  Then that goes straight to my vanguard.
No RAGRETS
I have about $20.00 left to go. 4 notes are current and 2 notes are marked late. I am glad this will be my last year with this company.
Haha me too! I'm down to $13 still invested and I'll be damned if I let them use my slush funds for any period of time.
Title: Re: Lending Club - Time to panic?
Post by: FIPurpose on February 07, 2021, 09:52:15 PM
According to my Tax Statement from them, I had about $8 of recoveries in the second half of 2020. Please be done so that I don't have to look at this website again!
Title: Re: Lending Club - Time to panic?
Post by: sisto on April 21, 2021, 03:23:35 PM
I'm happy to announce I'm completely done with lending club. Initiated the final transfer. Unfortunately I will have to deal with them on my taxes next year, but so glad I'm out!
Title: Re: Lending Club - Time to panic?
Post by: chasesfish on April 22, 2021, 01:58:19 PM
$523 to go

2.22% Net Return
Title: Re: Lending Club - Time to panic?
Post by: sisto on April 22, 2021, 02:44:50 PM
$523 to go

2.22% Net Return
[/squote]
The return is abysmal, especially with all of the hassle. Hang in there!