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As someone who does this for a living, I find this interesting. FYI, financial institutions tend to have a CoC on unsecured loans of 2-4%, so 1-2% losses is VERY good. Random strange fact I've learned, borrowers who go one payment past due, but pay late repeatedly, are better credit risks then someone who never goes delinquent at all. Borrower payment behaviour is fascinating.
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Nov 18, 2013 20:01
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| # ¿ Apr 29, 2024 00:44 |
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Random pool of borrowers who go multiple times one payment past due but cured, vs random pool of borrowers who never defaulted...one and two year default rates were consistently higher for the pools that never defaulted. Also credit risk is always measured by loss, specifically: EAD x PD x LGD
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Nov 19, 2013 05:48
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baquerd posted:I'd like to see that sampling method. I can think of a couple potential issues: Sampling issues are possible, it's a subset of a $200mm portfolio. Vintages are controlled for so age isn't a factor. Also, I'm including lines which it seems like you don't have here.
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Nov 19, 2013 06:01
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Could be seasonal effects...this period in time is known for being hard on unsecured loans. The opposite of this effect is known to happen between Feb and April, so you may see some cures then.
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Dec 11, 2013 15:26
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Swingline posted:Utilization rate is far, far more important. Which is why it's an independent variable in FICO and most other credit risk scoring. The only time it becomes a factor is a lot of lines opened up at the same time which could be fraud or other issues, but this gets caught usually by inquiry counts or average age. In fact FICO offers a custom score that takes Inquiry counts OUT of the scoring model because everyone uses these counts as a secondary fraud check outside of scoring.
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Jan 23, 2014 05:23
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smilingmike posted:Have you guys been noticing that it's a lot harder to find notes in the last 2 weeks or so? I used to just go on the site randomly and find notes that I wanted to invest in (based on my criteria) but lately I need to be on at the exact time that they release the new batches of notes. Its so bad that the 5 seconds it takes me to review a note is too long and its closed when I try to buy it. I'm mostly talking about C and D rated notes. A's and low B's are usually still readily available. There is lots of underutilized capital looking for a target.
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Feb 13, 2014 20:59
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Banks love A and B loans because of capital issues, but for an investor, it's not the greatest unless you have LOTS of capital.
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Apr 15, 2014 18:46
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I just broke 100 notes. I've been putting some of the money I budget for poker on this...so far it's going pretty good, although it's been getting harder to find notes at my criteria level.
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May 1, 2014 14:11
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As someone who works in Standardized Risk, it's very hard to standardize business loans.
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Jun 30, 2015 14:25
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chemosh6969 posted:Would you say it's risky? Risky business? Hard to model.
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Jun 30, 2015 16:33
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| # ¿ Apr 29, 2024 00:44 |
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April posted:Some quick napkin math shows that over the past 3 years, I am earning an average of about 2% of my total notes in bonus notes every month - meaning, since I have about 1800 notes right now, if I leave it alone, I will have about 1836 notes in a month. You will hit the wall that financial institutes have already hit and are spending billions trying to move. Customer base.
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Sep 24, 2015 16:18
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