People backtesting found that those states had a higher level of default. If you look at the most recent couple of years, I don't believe that trend holds true, and was related to so many people underwater.
FYI, all my defaults were on people with DTI greater than 25%, I've since changed my filter to exclude any notes for those with DTI in excess of 20%, hopefully that stops the sinking.
thanks for the info. u must be getting primarily A B and C loans w/ the dti that low?
I've been selecting them a little at a time by hand to get a maximum spread (only 1 note per loan)...
Here's my fund break down (current interest rate is about 18%): A(4%) B(16%) C(21%) D(27%) E(17%) F(13%) G(3%)
If you log in, here's an example of a nice loan I invested in:
https://www.lendingclub.com/account/loanDetail.action?loan_id=1600785Things that stuck out to me were:
Debt-to-Income (DTI) 6.29%
Length of Employment 8 years
Interest Rate 23.63%
Loan Length 3 years (36 payments)
With these factors, I was willing to overlook their 1 DQ 79 months ago. Had they had more than 1 DQ, I would have passed, but sometimes you have to be willing to give someone a second chance if you want a nice interest rate. I want to see someone with their current employer at least 5 years, and there has to be something really enticing for me to give them a 5-year term, because that indicates to me they aren't really serious about getting out of debt.
