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Author Topic: So you like your lendingstats ROI?  (Read 9407 times)

iLIE

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So you like your lendingstats ROI?
« on: April 29, 2008, 08:27:43 pm »

You think LS is even close? I say no way.Please justify the difference in erics & this

http://www.lendingstats.com/lenders/pensioner
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Xenon481

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Re: So you like your lendingstats ROI?
« Reply #1 on: April 29, 2008, 08:31:35 pm »

Go to this page:
http://www.lendingstats.com/lenders/pensioner/audit?pageNum=-1&sort=lateLossAmount&sortDirection=DESC

And look at the Estimated Late Loss Amount column.

LS is estimating a loss of only $4,797.65 out of $13,569.56 for a 4+ Month Late loan.  He has lots of those.

Nora_Lenderbee

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Re: So you like your lendingstats ROI?
« Reply #2 on: April 29, 2008, 08:32:40 pm »

LS seems to be quite off. According to LS, MsAva is making money
http://www.lendingstats.com/lenders/MsAva

but according to Erics, shes losing almost exactly the same amount of money:
http://www.ericscc.com/lenders/MsAva

Edit: fixed link.
« Last Edit: April 29, 2008, 08:35:17 pm by Nora_Lenderbee »
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iLIE

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Re: So you like your lendingstats ROI?
« Reply #3 on: April 29, 2008, 08:33:08 pm »

Why would you do that? LS knows you will get 10-15% for a 4+ late(at best)

For reference,all you gotta do is look at the 228k in defaults he got 30k for
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iLIE

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Re: So you like your lendingstats ROI?
« Reply #4 on: April 29, 2008, 08:33:58 pm »

LS seems to be quite off. According to LS, MsAva is making money
http://www.lendingstats.com/lenders/MsAva

but according to Erics, shes losing almost exactly the same amount of money:
http://www.lendingstats.com/lenders/MsAva


not only that..Your links carries you to the exact same place.
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Nora_Lenderbee

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Re: So you like your lendingstats ROI?
« Reply #5 on: April 29, 2008, 08:34:07 pm »

You think LS is even close? I say no way.Please justify the difference in erics & this

http://www.lendingstats.com/lenders/pensioner

for comparison:
http://www.ericscc.com/lenders/pensioner
-13%
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onthefence

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Re: So you like your lendingstats ROI?
« Reply #6 on: April 29, 2008, 08:47:15 pm »

Erics data on pensoiner
http://www.ericscc.com/lenders/pensioner
Estimated ROI = -13.06%

You would think that their estimates (both lending stats & ericcs should get more accurate over time, but obviously they dont).
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iLIE

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Re: So you like your lendingstats ROI?
« Reply #7 on: April 29, 2008, 08:48:02 pm »

10/1 says eric is closer on the ROI than LS
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NewHorizon

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Re: So you like your lendingstats ROI?
« Reply #8 on: April 29, 2008, 09:02:53 pm »

I suspect Erics and LS are both open to specific constructions suggestions
... more so than, um, dare I say: ridicule...?
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Xenon481

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Re: So you like your lendingstats ROI?
« Reply #9 on: April 29, 2008, 09:05:50 pm »

Why would you do that? LS knows you will get 10-15% for a 4+ late(at best)

For reference,all you gotta do is look at the 228k in defaults he got 30k for

LS even shows that my $900 Bankruptcy that hasnt made a payment since Jan-19-2007 is still worth $308.67

epetroel

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Re: So you like your lendingstats ROI?
« Reply #10 on: April 29, 2008, 09:06:32 pm »

The LS ROI figure is surely way too high.  Looking at my estimate of -13%, that seems too high as well, especially when you see the $228K in defaults already.

However, a default is not always a total loss - you have some small amount recovered, plus the principal and interest already repaid (which is not factored in to $228K number).  Also, his average interest rate is 26%, so even with a huge loss rate, hes also raking in a huge amount of interest on those ones that are actually paying.

I would bet if he were to run his loan data through XIRR (which is essentially what my ROI figure is trying to estimate) you would get something close to -13% though.

I wish I could give a more detailed audit of how my ROI figure is calculated.. maybe an ROI audit similar to what LendingStats has would be a good future enhancement :)
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onthefence

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Re: So you like your lendingstats ROI?
« Reply #11 on: April 29, 2008, 09:09:44 pm »

I suspect Erics and LS are both open to specific constructions suggestions
... more so than, um, dare I say: ridicule...?
By all means, I am very thankful for both Eric & LSs efforts.  Without their help we would not have a clue as to what is really going on.
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ira01

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Re: So you like your lendingstats ROI?
« Reply #12 on: April 30, 2008, 12:34:21 am »

For seasoned lenders, the LS ROI was almost always lower than the Erics ROI.  Lately, however, Ive noticed that the LS ROIs seem significantly higher than they used to be, and are now often higher than Erics.  The only thing that makes sense to me is that LS changed its ROI calculation in some fundamental way a couple months ago.  Whatever they did, they should seriously think about changing it back -- it is way too optomistic now. 
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Xenon481

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Re: So you like your lendingstats ROI?
« Reply #13 on: April 30, 2008, 01:43:27 am »

I said this earlier in the thread, but it didnt look like anybody read it.  The issue is that LS is SEVERELY understating the expected losses from late loans; especially 2, 3, and 4+ month late loans.  LS seems to be assuming that you will get back ~60% of your principle on loans that are 4+ months late!  It even estimates that I will get back over 63% of the outstanding principle on my E Bankruptcy (not defaulted yet...) that hasnt made a payment in over 14 months.
« Last Edit: April 30, 2008, 01:46:16 am by Xenon481 »
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NPX

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Re: So you like your lendingstats ROI?
« Reply #14 on: April 30, 2008, 06:06:30 am »

I said this earlier in the thread, but it didnt look like anybody read it.  The issue is that LS is SEVERELY understating the expected losses from late loans; especially 2, 3, and 4+ month late loans.  LS seems to be assuming that you will get back ~60% of your principle on loans that are 4+ months late!  It even estimates that I will get back over 63% of the outstanding principle on my E Bankruptcy (not defaulted yet...) that hasnt made a payment in over 14 months.

I read it; I just had to think about it for a while.

It looks to me as if LS is incorporating payments already made, both principal and interest, into its estimated late loss amount.  So when its assuming that Pensioner is going to have a loss of only $4,797.65 out of $13,569.56 on listing 28155, thats because LS shows that over $9700 of payments have been made on the original loan amount of $17000.  So Pensioners gotten back over $7700, leaving roughly $5900 "loss" if nothing is gained at the debt sale; apparently LS is presuming the loan will sell for about $1400 total, which is not completely unreasonable.

As another for example, larrybird is in for $1000 of $8500 on loan listing 156, which after 24 payments is now 1 month late.  LS gives larrybird an estimated loss of only $100 on that loan.  According to LS, the loan made $7400 in payments before going late, so larrys received $870, and LS seems to think hell get another $30 for the sale.

Ah, and even a better example:

http://www.lendingstats.com/lenders/kokua/audit?pageNum=-1&sort=lateLossAmount&sortDirection=ASC

Loan listing 2372 is 1 month late and shows an estimate late loss amount of NEGATIVE $41.14.  Because of the 40% interest rate and LS showing this loan making 23 payments before going late, it had actually paid back 10% more than the original principal, so the "loss" is now a negative number.

In the case of your E bankruptcy, LS seems to believe that 14 payments were made, for a total of $2400, and thats why its pegging you for only a $300 loss on your $900.  It thinks youve already gotten back $450 or so of those $900.  Why it thinks that is another question, I guess, since from ericsccs status tracker, it appears to me that only four or five payments were made, and that you got something close to $150 from those.

In short, it looks like LS is using original principal loaned as its "basis" for determining loss amount, while its more intuitive for lenders to think about either "current loan value" (original principle plus interest to date) or "full loan value" (original principle plus 36 months of interest) as appropriate benchmarks.

Whether this is a good way of doing things depends, I guess, on how the "estimated late loss amount" values feed into the estimated ROI calculation, if they do at all (they may just be there for show and tell purposes).
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