[Sean Cash]

Not to mention, they lie about performing vs. non performing loans by ACH'ing $1 out of accounts from borrowers in default. This way they can keep the loans on the books as "performing" instead of "non-performing".

... is this true?

[FUNd]

At the slightest uptick of danger in the economy, their default rate will go up and lender/marketplace capital will get spooked.

Make hay while the sun shines boys and girls.

[Ocean Financing]

... is this true?

I've personally seen this done at a lender we do business with... anything to keep that default % down.

[Michael I]

... is this true?

they have been doing that for years

[Sean Cash]

they have been doing that for years

$1 though?

[Michael I]

$1 though?

my guy daily was supposed to be 736 and they did 8 dollars a day . this was 3 and a half years ago .

[GoodCustomerService]

It wouldn't shock anyone, Sean. I know funders whose system would list a deal as "performing" or "active" as long as they are paying something.

[Sean Cash]

It wouldn't shock anyone, Sean. I know funders whose system would list a deal as "performing" or "active" as long as they are paying something.

I get that. But there's a difference when it's a publicly traded company and we're literally talking about $1 payments to circumvent a trigger.

[FUNd]

I get that. But there's a difference when it's a publicly traded company and we're literally talking about $1 payments to circumvent a trigger.

Are you guys blowing the lid off of something? You heard it first here on Daily Funder folks...

[MCNetwork]

Are you guys blowing the lid off of something? You heard it first here on Daily Funder folks...

I'm gonna sell my shares tomorrow

[CreditGuy]

There's no way OD has been through as much due diligence as they have (all the rounds of VC funding, Goldman, BofA, DBRS securitization, IPO, Chase, etc.) and every single person working for ever single very large, very sophisticated bank that has underwritten them missed something that obvious. Beyond a bunch of extremely low/single dollar ACHs with huge deltas from contract terms on the data tape, which would be a huge red flag, it would be impossible to hide the anomalies in all the other places it would impact reporting, like charge off cohorts, ALLL, loans beyond max term issued, etc..

For a bunch of folks that hold themselves out to be smart, finance minded, movers and shakers, some of you can be really dumb at times.

[MCNetwork]

All these super smart, sophisticated bankers totally missed the boat on the mortgage collapse so I wouldn't be surprised if the same thing happened here.

[CreditGuy]

A single lender doing this and the massively complex securitization and derivatives markets surrounding the housing bubble are entirely different animals. If you think they are, please show your work.

[dailyPLUNDR]

^ Totally different animals. Although when all you can see is dollar signs I'm not sure you recognize any type of 'animal', especially if you're a sophisticated corporate financier who thinks that he's a lot smarter than everyone else in the room.

[staten]

A single lender doing this and the massively complex securitization and derivatives markets surrounding the housing bubble are entirely different animals. If you think they are, please show your work.

Nope. They wouldn't care. Default rate consistent between 8-10% check. % of merchants on payment plan consistent. check. Relative dollar amount on payment plans consistent. check.

An auditor might call BS on a $1 payment plan. If I was the CEO I would argue good faith, if I was the auditor I would add up the exposure and see if material.

I've been a big 4 auditor, I've been an institutional investor at one of these so called sophisticated banks and for better or worse I have extensive experience in MCA.

Ondk's portfolio performance is fine (yes-despite the fact they are doing some extremely aggressive deals AND being stacked on left and right).

It's the operating performance that is the problem. They spent 100s of millions of dollars building out an origination capability. Now they want to be a software service company? Note that the Chase deal is not past the "parameters" stage.

Lack of direction, lack of cohesive strategy. Taking in the bad debt provision by 20% is very unsophisticated. As a CFO, you always have reserves to pull from so if you want smooth earnings its not in your face. This was an in your face reduction to boost earnings. Had to be a factor in the sell off.

Having said all of this. The Ondk mgt team did a simply amazing job of raising capital, scaling the company and creating a liquidity event for early investors. I wouldn't underestimate their ability to learn and adapt.........just not on my dime

[FUNd]

I think they should have stuck with the ISO model and just been a lender. In my estimation, they seem like they are trying to be too many things to too many people. A software company, a data aggregate, a sales organization, a lender.

[AndyYSCISOdept]

I think they should have stuck with the ISO model and just been a lender. In my estimation, they seem like they are trying to be too many things to too many people. A software company, a data aggregate, a sales organization, a lender.

Agreed. Its as simple (or maybe not so) as knowing what you're good at and doing that to the best of your abilities. Lets use Michael Jordan as an example, Great Athlete and Amazing basketball player Arguably the greatest of all time, but that doesn't mean that he would be a great baseball player (we saw how that worked out) and definitely not a quarterback in the NFL. Past successes in one arena do not predict future successes in others. And ultimately when you spread yourself to thin trying to do too many different things you aren't nearly as good at what got you there to begin with.

[HDF]

True. MJ is horrible as an owner of a basketball team too. Which is probably even a better example.

[dpFund]

Agreed. Its as simple (or maybe not so) as knowing what you're good at and doing that to the best of your abilities. Lets use Michael Jordan as an example, Great Athlete and Amazing basketball player Arguably the greatest of all time, but that doesn't mean that he would be a great baseball player (we saw how that worked out) and definitely not a quarterback in the NFL. Past successes in one arena do not predict future successes in others. And ultimately when you spread yourself to thin trying to do too many different things you aren't nearly as good at what got you there to begin with.

I couldn't agree more, Andy. What you are saying applies to us as individuals here on this forum, as much as it does OnDeck and Michael Jordan. In the last few years I took this approach to heart and laser focused on the exact things that I was good at and only I could do, foregoing or delegating everything else. The result was my income tripled.

[AndyYSCISOdept]

I couldn't agree more, Andy. What you are saying applies to us as individuals here on this forum, as much as it does OnDeck and Michael Jordan. In the last few years I took this approach to heart and laser focused on the exact things that I was good at and only I could do, foregoing or delegating everything else. The result was my income tripled.

That's great to hear. What you did is something people struggle over and spend a lot of time money and effort trying to accomplish.

[blKC]

There is a difference between structuring a payment plan and collecting a low dollar amount in order to fudge default numbers vs collecting a small dollar amount while still accounting for the potential losses in their bad debt reserve.

I don't know the answer, but I suspect it's the latter.

[MCNetwork]

ONDK is making new 52 week lows. This stock officially sucks!

[TheShitzuofMCA]

Its dangerous to put too much trust in Bank of America, the government, etc; For any checking or auditing (remember black lady with 3.5 million tax return); When in the past we have seen how incompetent or untrustworthy a for profit corporation in today's capitalist market can be. I mean poisoning the population isn't even out of the ordinary anymore. Doesn't surprise me they would of missed it or that even ON Deck does it.

[Chambo]

... is this true?

Can does the same thing

[mcaguru]

Chambo! you've been quiet recently?