Steps to sell Lending Club notes on FOLIOfn

As I’ve discussed before, I am attempting to liquidate my Lending Club IRA account by selling all the currently active notes on the trading platform, FOLIOfn. This has turned out to more difficult and time consuming than you would think. Following is the process involved.

1.       Go to “Invest” from your Lending Club account.

2.       Follow the steps under “Trading Account” to get to the “Note Trading Platform”.

3.       This will lead you to Folio Investing.

4.       Click on “Sell Notes” which leads you to some selection options.

5.       Select the notes you wish to sell by clicking on the empty box and hitting “Sell Notes”.

6.       Then you can list the asking price or click the markup/discount to set the asking price.

7.       Click “Submit”.

Sounds easy enough. But there are some obstacles. The primary issue is with notes in the payment pending status. In step 4, these will not have an empty check box, but an “!” mark. These cannot be listed for sale until their status is changed. Also, in this list I find some with an outstanding principal of $0.00 or some extremely small amount. Presumably these have been paid off, but their status hasn’t been updated to reflect this. Including these in the sell list has created problems for me when I apply a markup or discount percentage.

Once you are past the steps listed above, the notes are available for sale for 7 days (if you later change the price this period is extended). Some will sell, and they are moved from “Open Sell Orders” to “Sold This Month”. Their status here will initially be “Pending” for a few days until the transaction is completed. When this occurs, the note disappears from your Lending Club account and you get the cash added. Unfortunately, some of these transactions will be cancelled during this period.

A major issue is that some of the notes that listed in the “Open Sell Orders” will have their status changed and they will be moved to “Canceled Sell Orders”. The primary reason is that they enter payment processing. When this occurs, you will have to wait a few days until the payment is completed and then re-list the note.

In my next post, I will list my actual experience with numbers in attempting to wind down my account. Follow me on Twitter, @billlanke, to know when this occurs.