tag:blogger.com,1999:blog-7209606.post4260982182129431663..comments2023-08-24T02:55:54.336-07:00Comments on Random Thoughts: Lending Club Loans - Months of Payment before DefaultAnil Guptahttp://www.blogger.com/profile/04626638497955200142noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-7209606.post-11085161739416003562014-08-17T15:40:50.023-07:002014-08-17T15:40:50.023-07:00anil, thanks for your analysis. As other readers s...anil, thanks for your analysis. As other readers suggest, good stuff. Can we get these graphs in tabular format? want to hook this up with my secondary screens. Anonymoushttps://www.blogger.com/profile/03834514487666776227noreply@blogger.comtag:blogger.com,1999:blog-7209606.post-80925793964482006972013-02-28T09:36:52.425-08:002013-02-28T09:36:52.425-08:00I agree it would be biased. It was more for the s...I agree it would be biased. It was more for the sake of discussion. I wonder to what degree the bias selection criteria would have. I suppose that's impossible to know for certain but it's fun to think about.Anonymoushttps://www.blogger.com/profile/04995954763070685442noreply@blogger.comtag:blogger.com,1999:blog-7209606.post-27603126049895581002013-02-28T09:11:39.974-08:002013-02-28T09:11:39.974-08:00Andrew, a well-diversified portfolio of loans meet...Andrew, a well-diversified portfolio of loans meeting certain selection criteria will be biased. A large portfolio of randomly selected loans most likely will mimic the results better.Anil Guptahttps://www.blogger.com/profile/04626638497955200142noreply@blogger.comtag:blogger.com,1999:blog-7209606.post-10890925847676434342013-02-28T00:54:00.171-08:002013-02-28T00:54:00.171-08:00Andrew, remember assuming equal note size, you los...Andrew, remember assuming equal note size, you lose less for late defaults.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7209606.post-16962847888009504592013-02-27T17:34:03.183-08:002013-02-27T17:34:03.183-08:00My apologies, I meant to imply with estimated loss...My apologies, I meant to imply with estimated loss at 10 months as jumping to the conclusion of treating a late loan at that time as charged off (technically untrue, but forcing the absolute worst case).<br /><br />Great insight, I had not thought of one of those caveats. Realistically though, wouldn't a "well-diversified portfolio" mimic the data presented to a high degree? Anonymoushttps://www.blogger.com/profile/04995954763070685442noreply@blogger.comtag:blogger.com,1999:blog-7209606.post-20037032962039974402013-02-27T16:42:54.304-08:002013-02-27T16:42:54.304-08:00Andrew, at high level your rough estimate will be ...Andrew, at high level your rough estimate will be correct with some caveats. The 10 months is number of months a borrower made monthly payment, so actual loan age by the time LC charges off may be 14 or even 16 months. Also, your loan portfolio will need to mimic typical LC loans (all LC loans). As the early defaults can be deadly for overall return, the lender should focus on loans that default later in maturity cycle to reduce impact from default. Anil Guptahttps://www.blogger.com/profile/04626638497955200142noreply@blogger.comtag:blogger.com,1999:blog-7209606.post-34953880045428407322013-02-27T15:23:08.324-08:002013-02-27T15:23:08.324-08:00Excellent information! This confirms my recollect...Excellent information! This confirms my recollection that I posted in our discussions on Lend Academy.<br />I wonder then if a portfolio of loans have an average age of 10 months and have an estimated loss of x%, then as a rough estimate would the eventual total loss on that portfolio approximately be equal to 2x%?Anonymoushttps://www.blogger.com/profile/04995954763070685442noreply@blogger.com