Roundup of Social Lending News – May 18, 2012

I am a day early with my weekly news roundup this week because I am heading off on vacation with my family for a few days. But here is the major news of the past week that I shared on Twitter.

We had many blogger updates this week and we also saw not one but two new p2p lending companies launch in the UK. It really is a vibrant marketplace across the pond and just shows what kind of innovation would be happening if the regulations here were not so burdensome. Speaking of innovation I want to point out the article on Gigaom about Lenddo, a new kind of lender that takes social connections into account when making loans. While not a p2p lender they are using many principles that could (and probably will be) easily be adapted by p2p lenders in the future. Enjoy your weekend.

My Money Blog – Prosper vs. LendingClub: Credit Card Debt Consolidation Loan Comparison

Random Thoughts – Lending Club Loan Issued Date and Default Rate

Bible Money Matters – Lending Club Returns Closing In On 12%

Wiseclerk (UK) – Squirrl Launch – Secured Loans to Suppliers

Gigaom – Credit scores, with a little help from your friends

MarketWatch – SoMoLend Closes $1.17M Seed-Round

FT Advisor (UK) – Massow launches peer-to-peer lending venture

Lending Club Experience – Ten Months on Lending Club, Brutal Reality Hits

Lucrative Lending – P2PXML Rate Groups: An Attempt to Standardize Loan Grades Across P2P Lending Platforms

Fast Company – Shaking Up Crowdfunding

Narrow Bridge Finance – Lending Club Update – May 2012

Lucrative Lending – Invest in P2P Lending While in Debt? Generally Not a Good Idea.

Subscribe
Notify of
14 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Louis Lamoureux
Louis Lamoureux
May. 18, 2012 8:09 am

WOW! Marc @Lending Club Experience is a long way from his Sept/Oct postings about being in the top 100% of investors by returns and an NAR above 20%. He appears to be currently sitting on a negative return, Ouch!

Lou

Dan B
Dan B
May. 18, 2012 12:39 pm

Peter…………How can you go on vacation when you’re already on vacation? 🙂

Danny S
Danny S
May. 18, 2012 2:43 pm

I’m not so surprised about the LC Experience post. He’s been buying only on the secondary market.

It’s true that some people sell on the secondary market just for the small markups, but, most people (such as myself) use it to sell problem notes, which I think he had been buying a considerable amount of. Even with the face-value discounts he was getting, problem notes are problem notes, and a high percentage of them eventually go into default/charged off status.

Lou lamoureux
Lou lamoureux
May. 21, 2012 5:53 am

Peter, do you remember that guy with the blog headline proclaiming 24% returns y/y? This was after something like 3 months on LC. We all know his XIRR is going to come crashing down, it’s just going to take a couple months. That was Marc seven or eight months ago announcing he was in the top 99.5% of investors by returns. has he really figured out how to avoid the bad loans? We won’t know for months. maybe he’s picking up DanB’s sloppy seconds (since Dan has a super secret way of getting rid of bad loans before they look bad). If someone had followed Marc’s blog and mimicked his strategy, that person could also be sitting on a negative return.
Lou

Dan B
Dan B
May. 22, 2012 2:35 am
Reply to  Peter Renton

I would bet serious money that regardless of whether you’re a retail investor or not, that it’s virtually impossible to earn a 15% long term return at LC investing in 3 year notes exclusively. I’m no fan of the 5 yr notes, but you would need to allocate at least 30% of your portfolio to them if you wanted to have even the theoretical possibility of achieving15% long term on Lending Club. Of course all of the above is based on the platform interest rates not deviating substantially from the range that we’ve experienced these last 3-4 years.

Brady
Brady
May. 22, 2012 10:35 pm
Reply to  Peter Renton

After reading these comments, I’m looking forward to sharing how my portfolio containing 43% 5-year term notes, all purchased in LC’s secondary market performs as more time passes.

Dan B
Dan B
May. 23, 2012 6:38 am

I’d be very interested too see how the 5 yr. portion of your portfolio performs too…………….assuming that we’re talking about at least 400+ loans & that they are on average 2+ years old when you tell us how they’re doing. Personally, I find that portfolios that don’t meet the above thresholds much less interesting & much less illuminating.