I decided to pursue selling some notes on the secondary
market, FOLIOfn. I had used the platform to purchase notes in the past, but
didn’t have any success selling any. There are a couple of things to note about
trading on this market. First it is done by a company independent from Lending
Club, Folio Investing. They are a broker with some unusual features that I
really like. I had used them as one of my test accounts two years ago. You
could look back at my posts in early 2015 to read about it.
Next, there is a 1% fee for selling notes, but no fee for
the purchaser. Then, the seller can specify the markup or discount percentage.
This pretty much applies to the principle of the loan. I always purchased loans
that were selling at a discount. I had tried to sell a couple of notes at a 1%
markup to offset the fee, but had no success.
In my recent flurry of activity, I purchased a couple of new
notes that were 5-year notes that didn’t expire until 2022 (past my intended
close out date). I offered these for sale asking $25 and got no takers. I then
marked them down to $24 and both sold relatively quickly.
My current experience is with four 5-year notes ending in
2021. I offered at a 1% markup and got no takers. Then I offered at basically
0% and again got no interest. Then I marked them down 1% and sold 1 rapidly and
a 2nd was cancelled due to payment processing. That apparently means
there has been a change in the status of the note, specifically Lending Club
has a pending payment. The other two are still open sell offers.
I’ll update the status of these next week. Follow me on
Twitter, @billlanke, and I’ll let you know when that occurs.
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