Author Topic: My first - WTH loan - A5 declaring bankruptcy  (Read 2201 times)

OrthoInvest

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My first - WTH loan - A5 declaring bankruptcy
« on: April 02, 2013, 08:24:15 pm »
25 years employed. Explanation well worded. no delinquencies. no red flags. Verified income of 11k/month...

*just shaking my head*

https://www.lendingclub.com/account/loanPerf.action?loan_id=3239337&order_id=5381544&note_id=18869170

https://www.lendingclub.com/account/loanDetail.action?loan_id=3239337

AmCap

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #1 on: April 02, 2013, 08:37:04 pm »
Just for kicks I ran a search on IR for A graded loans w/ IR01s of 400+.  They *do* have a loss rate (not a big one at all but it's there).  I imagine the feeling is surreal if you happened to buy one of the handful of loans that went bad. 

KB

SarahV

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #2 on: April 02, 2013, 10:19:17 pm »
Dang, the company I work for used to do some work with his employer (leaving this deliberately vague ;) ), and with that salary he must be decently high-up in the company... I wonder if I know this person! (Edit: looking them up, there are 18,000 employees, so no, probably not.)

Don't like the revolving line utilization being so high (97.2%). If it's this close to 100% I feel like they're not so much paying down debt as they are desperate to get some breathing room so they can keep spending. Looks like a total scam too, didn't make a single payment. Boo.
« Last Edit: April 02, 2013, 11:56:39 pm by SarahV »

DaveSch

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #3 on: April 02, 2013, 11:29:57 pm »
This is unfortunate!
My first thoughts was that perhaps his bankruptcy lawyer told the person to do this to pay for the bankruptcy? It is a pretty dirty trick as the person likely that this was around the corner! I am new at this p2p investing. Many of these ruin the ROI.

Dave

Dennis

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #4 on: April 03, 2013, 12:59:33 am »
"Borrower added on 01/23/13 > I have been employed with my current company for over 25 years and take my financial responsibilities very seriously which is demonstrated by my payment history with Lending Club and others. I enjoy being a member of the Lending Club community."

I have many defaulted notes that have wording equally compelling.  They promise, guarantee, charm you, etc., that they WILL absolutely pay back the loan.  Then after 1 or 2 payments, they're nowhere to be found.  I really wish LC would go after some of these deadbeats/fraudsters.

rawraw

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #5 on: April 03, 2013, 06:06:54 am »
Defaults are part of the game guys.   No need to get angry :)  I'm sure they aren't sipping drinks on the beach, either.

rockinray

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #6 on: April 03, 2013, 07:44:18 am »
I have an A4 in grace period - the guy has not made a payment yet!

Good stats and a nice write up on how good he will be!

We will see if he brings it current. It does make you mad to see these!

Ray

Fred

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #7 on: April 03, 2013, 07:53:34 am »
Only 1% of my portfolio is Grade A; however, they are 15% of my charged-off loans.   ::)

ee1x

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #8 on: April 03, 2013, 10:30:07 am »
Don't like the revolving line utilization being so high (97.2%). If it's this close to 100% I feel like they're not so much paying down debt as they are desperate to get some breathing room so they can keep spending. Looks like a total scam too, didn't make a single payment. Boo.

I have to agree with Sarah here... I don't think I'd ever be comfortable with a 97% utilization. I'm interested to see how LC's underwriting process rated this borrower so highly.
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Bilgefisher

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #9 on: April 03, 2013, 01:20:25 pm »
The bankruptcy trick is unfortunate, and costs us all.  I really wish LC and prosper would go after more 0-2 payment defaults.  Even the small amounts.  Get the word out that its not wise to try that with these companies.

New Jersey Guy

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #10 on: April 03, 2013, 01:41:30 pm »
The guy says "....which is demonstrated by my payment history with Lending Club"

Indicates to me he may have had a past loan with LC.  He knew by getting the loan the first time he would probably get it a second time.  He applied for the loan late Jan and got it on Feb. 4th.  I think he had a pretty good idea of how the system worked and took advantage of it.  He knew bankruptcy was looming long before he applied.

Blatant fraud.
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investforfreedom

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #11 on: April 03, 2013, 01:58:12 pm »
The bankruptcy trick is unfortunate, and costs us all.  I really wish LC and prosper would go after more 0-2 payment defaults.  Even the small amounts.  Get the word out that its not wise to try that with these companies.

I had a Prosper loan whose borrower declared bankruptcy after making only one payment.  It was an HR loan with a maximum of $4,000.  I called to alert Prosper of possible fraud.  You know what the person at the other end of the line said? "What would you like us to do?"  I just froze and was lost for words.  I couldn't believe what I heard. 

How dare would they ask me this question!  Shouldn't they be asking themselves?!

Obviously, they aren't going after borrowers who default on smaller loans.




Fred

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #12 on: April 03, 2013, 04:41:17 pm »
As P2P investors -- whose majority of loans are for credit card payoff -- we should act like tiny versions of credit card companies: set aside a few percentage for defaults.  Defaults happen to the best of borrowers.

One mitigating factor is of course diversification.  If we have large enough pool of loans, we can expect that our loss won't be worse than the average.

If there is any consolation in any of this, I think it would be on the BK mark on the borrower's credit report.

Defaults, charged offs, bankruptcies are really loss-loss for lenders and borrowers.

AnilG

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #13 on: April 03, 2013, 10:03:14 pm »
I agree with Sarah. Based on my analysis of historical loan data, revolving credit utilization is the second largest 'borrower' attribute, after FICO, contributing to borrowers default. I personally don't lend to anyone with revolving utilization above 60%.

Don't like the revolving line utilization being so high (97.2%). If it's this close to 100% I feel like they're not so much paying down debt as they are desperate to get some breathing room so they can keep spending. Looks like a total scam too, didn't make a single payment. Boo.
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investforfreedom

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Re: My first - WTH loan - A5 declaring bankruptcy
« Reply #14 on: April 03, 2013, 10:40:21 pm »
I agree with Sarah. Based on my analysis of historical loan data, revolving credit utilization is the second largest 'borrower' attribute, after FICO, contributing to borrowers default. I personally don't lend to anyone with revolving utilization above 60%.

Don't like the revolving line utilization being so high (97.2%). If it's this close to 100% I feel like they're not so much paying down debt as they are desperate to get some breathing room so they can keep spending. Looks like a total scam too, didn't make a single payment. Boo.

In my Prosper account, I have borrowers with bankcard utilization of 80-99%.  Interestingly enough, the default rates are among the lowest in my portfolio, with less than 3%.  The highest are in the 60-69% range with nearly a 10% default rate. My account has crossed the "seasoned" threshold and I have been clocking nearly a 14% ROI.  I am not quite sure what to make of credit utilization. 
« Last Edit: April 03, 2013, 10:41:55 pm by investforfreedom »