6th November Loan - Rehab rental properties

Lowered amount...Rehab rental properties (Loan #22058)
177 bids

Borrower APR:	13.70%
Mo. payment:	$219.01 (3y loan)

oasismgt -

YOUNGSTOWN, OH

Lending Limits

(Close)

	Second Mortgage Lender License #SM.501506.000
Ohio limits as of Nov-17-2007
Min. Loan Max. Loan Max Rate $1,000 $25,000 25.00% APR
Max. borrower cap	23.24%
Failed payment fee	$15
Late fees	the greater of 5.00% of the unpaid installment amount, or $15

Credit Profile

Help

B credit grade	Homeowner Account verified			28% debt to income ratio
Now delinquent:	0	First credit line:	Jul-1998	Employment status:	Full-time
Amount delinquent:	$0	Current / open credit lines:	10 / 7	Length of status:	5y 5m
Delinquencies in last 7y:	8	Total credit lines:	31	Income range:	$1-$24,999
Public records last 12m / 10y:	0 / 0	Revolving credit balance:	$903	Occupation:	Self Employed
Inquiries last 6m:	2	Bankcard utilization:	10%

Description I just relisted to see if my home owner status and debt to income ratio were corrected and they are not....I am an active lender on prosper with over 168 active loans and 24 loans pending review....I am owner of 2 multi family properities with no mortgage 100 percent free and clear with over 1300.00 month profit in which on one property I pay only water bill which is 40-46 a month payment...I keep a close watch on my credit report thru true credit and my scores are as follows trans union - 660... experian- 640 equifax- 658 and I am truly working my way to an A credit rating.....I dont understand how debt to income ration is 37% when I have no real bills...my credit cards are paid in full and student loan is a 10.00 a month payment in which I have been paying 300.00 a month or 100.00 a month...In which will be paid off by the end of march.

7% is my state max sorry....

This was my previous listing.....As stated I have since rasied credit score and paid off student loan in full...I have a few projects that I am trying to finish that Includes upgrades to properties...such as replacement windows in which I have already Installed most of them myself and have 5 left to Install....I am replacing carpet thu out and kitchen and bath remodling..Tile flooring, new vanities etc...It would be of great help If this loan could get funded as I dont want to use credit cards to finance..

Thank you for considering this loan

no endorsements from friends

no questions / answers

Looking at this loan it is a fellow lender who has a steady stream of income just from prosper. There is a credit history that tells us that 8 late payments have been made but the debt to income is extremely low for Prosper borrowers. The interest rate that I normally look for in a "B" credit grade is 14%+ but I feel this is a safe loan with the fellow lender or "blender" as they are frequently called in the forums. I think giving him 1 less point is fair. Again I am happy to be part of this loan as well.

5th November Loan - Debt Free Listing #231830

$4,000.00 @ 13.36% AF
42 bids

Borrower APR:	14.07%
Mo. payment:	$135.47 (3y loan)

erac1006 - Alabama

Credit Profile

Help

A credit grade	Homeownership not verified Account verified			32% debt to income ratio
Now delinquent:	1	First credit line:	Oct-1997	Employment status:	Full-time
Amount delinquent:	$256	Current / open credit lines:	15 / 7	Length of status:	1y 1m
Delinquencies in last 7y:	0	Total credit lines:	31	Income range:	$25,000-$49,999
Public records last 12m / 10y:	0 / 0	Revolving credit balance:	$1,390	Occupation:	Retail Management
Inquiries last 6m:	1	Bankcard utilization:	5%

Description Purpose of loan:
I will be using this loan to pay off my credit card and become debt free within 2 years or less with the exception of my car loan.

My financial situation:
I have great credit, make all payments, and pay more on loans than expected

Monthly net income: $2,500


Monthly expenses: $
Housing: $ 280.00
Insurance: $
Car expenses: $ 434.00
Utilities: $ 50.00
Phone, cable, internet: $
Food, entertainment: $ 200.00
Clothing, household expenses $
Credit cards and other loans: $ 250.00
Other expenses: $ 200.00

No endorsements from friends

Q: Please explain the current delinquency and the reason the first loan attempt did not fund. Thank you -calculating1

A: Iam working on finding out where the delinquency comes from. I'm never late on any of my bills. The first loan attempt didn't go through because I sent off the wrong information and they didn't receive the correct info in time. (Nov-14-2007)

Looking at a "A" credit grade there is one current DQ but this may be inaccurate reporting and leads to higher interest rates. There is a 10 year credit history with no DQ's I think this loan is going to pay off and be on that helps the portfolio stay in the double digits!

4th November Loan - Paying off debt!

Paying off debt!

Listing #228317
$2,500.00 @ 23.15% AF

24 bids

Borrower APR:	23.90%
Mo. payment:	$96.97 (3y loan

drawintheline

Alabama

Credit Profile

D credit grade	Homeowner Account verified			40% debt to income ratio
Now delinquent:	0	First credit line:	Aug-1992	Employment status:	Full-time
Amount delinquent:	$0	Current / open credit lines:	18 / 15	Length of status:	5y 7m
Delinquencies in last 7y:	1	Total credit lines:	37	Income range:	$50,000-$74,999
Public records last 12m / 10y:	0 / 0	Revolving credit balance:	$4,175	Occupation:	Other
Inquiries last 6m:	1	Bankcard utilization:	38%

Description Purpose of loan: The purpose of this loan is to pay off some credit cards that I had to use when my wife went out for emergency surgery and I am needing to pay them off and try to get going again.And also using this to pay the hospital loans off that had acquired since then from the surgery,so then each month I can pay off those hospital bills and creditcards that have added up to be paid off and save me money each month as well.I am greatful to have the opportunity to do this and greatful for the company or person who came up with this.And an average person like me who is not rich just needs a little help every now and then to get ahead,so please consider my request for this loan and thank you.
(explain what you will be using this loan for)

My financial situation: My financial situation is good I pay all my bills each month and able to take my family out to dinner and buy what we need when they need it.I am a good father and a good provider and I do things to help my family out!And I am a good candidate for paying back this loan because each month it comes out no matter what and I do everything in my power that I can to always make my payments on time,even if it means to set @ home for a weekened.
(explain why you are a good candidate for paying back this loan)

Monthly net income: $ My monthly net income is 3600.00

Monthly expenses: $ 2974
Housing: $ 732
Insurance: $ 202
Car expenses: $ 1300
Utilities: $ my wife pays with her check
Phone, cable, internet: $ 150
Food, entertainment: $ 200
Clothing, household expenses $ 100.00
Credit cards and other loans: $ 240
Other expenses: $ 50.00

no endorsements from friends

no questions / answers

Again looks to be a safe bet. Credit history indicates only 1 late in the last 7 years. The debt to income is a little high but hey its America. The monthly expense report indicates that this family should be able to make the monthly payments and help their financial situation. Glad to be in on this one as well.

3rd November Loan - Credit Card Consolidation

Credit Card Consolidation

Listing #229312
$9,100.00 @ 14.00% AF (auto fund)

76 bids

Borrower APR:	14.71%
Mo. payment:	$311.02 (3y loan)

Now delinquent:	0	First credit line:	May-1999	Employment status:	Full-time
Amount delinquent:	$0	Current / open credit lines:	11 / 11	Length of status:	0y 8m
Delinquencies in last 7y:	0	Total credit lines:	17	Income range:	$25,000-$49,999
Public records last 12m / 10y:	0 / 0	Revolving credit balance:	$6,889	Occupation:	Retail Management
Inquiries last 6m:	0	Bankcard utilization:	23%

Loan history		Payment history		Credit grade history
Active / total loans:	1 / 1	On-time:	12 (100%)	A (Oct-2006)	Drop of 1 credit grade since last loan
Principal borrowed:	$3,000.00	<1>	0 (0%)
Principal balance:	$2,102.18	1+ mo. late:	0 (0%)
		Total payments billed:	12

Description

Hello, I am looking to consolidate a couple of credit card balances and a prosper loan into asingle loan. I have had my current prosper loan for over ayear and have made my payment on time each month. I am a responsible individual and will use this money to pay off my credit cards to improve my credit score. I am a retail manager at a national big box chain. This loan will be my only debt payment as my car note has been paid off for over a year. I am currently living with a close friend and therefore my monthly rent payment is very low at $360 a month. I will most likely make prepayments on the loan to pay it off early and be completely debt free.


Monthly Net Income:

$2350

Monthly Expenses:

Prosper Loan: $311
Insurance: $100
Car Expenses (gas, mantenance,etc): $500
Housing: $360
Utilities and Phone: $250
Food, Entertainment: $300
Clothing, household expenses: $200

No endorsements from friends

No questions / answers

Jessie4209

Location:	Illinois
Member since:	Oct-29-2006

This looks to be a promising loan. The credit history is clean as well as already having a prosper loan out for 12 months with zero late payments. The debt to income ration is relatively low even with the new loan. Glad to be part of this one.

Single Dagger

Well my first late for the Holiday season seems to be flipping current! I assumed that this was most likely a banking issues and it appears that I was correct. While i am not out of the woods until the funds hit my account I feel that the A credit grade gives us more hope than normal. A credit grade default rates are extremly low but still out there.

Official Prosper.com Forums

Prosper has brought back the community forums. There have been a few changes for the better of the community and continued Prosper success. First they completely removed access to the old forum to bring people onto the new forum. While this may seem like Prosper going back the their bag of tricks and erasing history yet again it was needed. Many of the older forums members had posted many negative things about Prosper when in fact their (older lenders) made bad decisions and have been blaming someone else (Prosper.com) ever since their ROI dropped below double digits.

Prosper also has enabled a cool new feature that we needed from the start. From the beginning of time at forums.prosper.com borrowers have had full access to the lenders side of the forums and could easily tailor their listings to meet exactly what we were looking for and created a edge for themselves over possibly better borrowers that were not as forum savvy. There is a very easy way to get access to all areas....simply apply for borrower or lender status. The group leader role may be more difficult these days but about a year ago anyone interested was granted the role as long as they had a phone and could respond to a system generated email.

The moderation team will have its hands full in the coming months as many lenders expect higher than normal lates and defaults which will in turn generate many more posts inquiring what happened to double digit ROI. Posting on the Prosper.com forums is no longer John Wayne style, every post is read and approved or declined by the Prosper.com moderating team. Big Brother...

Double Dagger

Today brings new hope to my late loan. The loan is showing the infamous double daggers. This is prospers way of telling lenders that they are attempting another pull from the borrowers bank account. This process can take up to 4 days to find out the results. The double daggers will change to a single dagger if payment is in transit. If the payment is unsuccessful prosper will follow up with phone calls and emails to the borrower. The borrower on this loan has A credit grade and has not missed a payment yet so I am hopeful that the late status of the loan is just a banking issue rather than the beginning of default status.

1st Late for the Holiday season

Loan to pay off credit cards -
Nutritionman - UTAH
Mo. payment: $164.64 (3y loan)
Origination date: Dec-15-2006
Collection Agency: Penncro Associates, Inc.
Principal balance: $37.77
Principal paid: $12.23
Interest paid: $4.23

A credit grade - Account verified
17% debt to income ratio
Delinquencies in last 7y: 0
Inquiries last 6m: 0
Total credit lines: 13
First credit line: Feb-1993

Listing Description

I am a hard-working family man who is just trying to catch up. If I can get this loan, it will allow me to pay off my high-interest credit cards and put a little in savings for emergencies.

Endorsements from Friends
Michael has always been a financially responsible person. I have lent him money (sometimes sizeable amounts) through the years and have ALWAYS been repaid as agreed or better--sometimes much better. He is always a good investment. Operator 17

-operator17, Feb-24-2007

At first glance this loan looks ok. Look closer at operator 17 there is a strong facial similarity. Most likely his father. So it looks like we have a father vouching for his son on a unsecured loan... I bet that means a lot.

I have sent a email to the borrower to see if Prosper.com has has issues with the bank withdrawal again. If a reply is not receive within the next few days I will contact the endorsement to see if there are any system issues preventing him from making payment. Prosper does have its share of system issues.

I believe this loan will flip current due to the low payment amount and the fact that he has made 1 payments on time and sees himself as hard working and hopefully is going to use that emergency cash that we help him put away to take care of his Prosper.com loan.

till next time

Happy Lending!

Strong Demand for Prime & Near Prime Loans

People-to-People Lending: Strong Demand for Prime & Near Prime Loans

link to article

It seems that Prosper.com lenders have been lending in line with fed rate cuts. Since Prosper isnt directly tied to any other credit markets it seems to be following them. The report outlines the rates that have been available in the Market place dating back to 2006 and also list the top 5 lending states.

Top Lender States

1) California

2) Texas

3) New York

4) Florida

5) Illinois

There was also some great information at the bottom of this report. Email and phone numbers to a prosper employee. So if you are having trouble getting Prosper.com to answer the phone and/or emails.... give her a call or send her a email perhaps she will respond.

Prosper Marketplace, Inc.
Tiffany Fox, 415-593-5416
Communications Director
tiffany@prosper.com

Strong Demand for Prime & Near Prime Loans

link to article

It seems that Prosper.com lenders have been lending in line with fed rate cuts. Since Prosper isnt directly tied to any other credit markets it seems to be following them. The report outlines the rates that have been available in the Market place dating back to 2006 and also list the top 5 lending states.

Top Lender States

1) California

2) Texas

3) New York

4) Florida

5) Illinois

There was also some great information at the bottom of this report. Email and phone numbers to a prosper employee. So if you are having trouble getting Prosper.com to answer the phone and/or emails.... give her a call or send her a email perhaps she will respond.

Prosper Marketplace, Inc.
Tiffany Fox, 415-593-5416
Communications Director
tiffany@prosper.com

HR Problem on Prosper.com Fixed

It seems that HR ( High Risk) borrowers not Prosper.com has actually fixed the HR problem. In a effort to make people more aware of the risks associated with HR loans Prosper.com has added new features while bidding. When preparing to place a bid for the loan there is a option to calculate the estimated ROI (Return on Investment). Currently even with a 29% interest rate on a HR borrower the expected ROI is still only 5.54% as of today 11/12/2007

It seems that most people werent taking the time to do some research or even visit the prosper.com forums before lending to HR borrowers. Now that its directly in your face it seems that less HR loans are being funded. Prosper now displays a message when placing a bid for low ROI loans advising that you may be able to get the same or better rates on www.bankrate.com using standard CD's. CDs pay higher yields than liquid savings accounts, but to earn that, you need to let someone else hold your money for a specific period of time.

2nd november loan - Paying off a Personal Loan

I'm off to a great start in the month of November. I have funded two loans and both are meeting market standards for interest rates. I was lucky enough to get in at the right time and not get out bid. The second loan that I chose to fund was also a "A" credit grade.

Paying off a Personal Loan - Listing #224708

There were a total of 165 bids placed on this listing adn when it closed the lenders locked in a great 10% rate!

Here are the extended credit details from this listing

Credit Profile

A credit grade	Homeownership not verified Account verified			15% debt to income ratio
Now delinquent:	0	First credit line:	Jul-1997	Employment status:	Full-time
Amount delinquent:	$0	Current / open credit lines:	15 / 14	Length of status:	2y 7m
Delinquencies in last 7y:	6	Total credit lines:	30	Income range:	$50,000-$74,999
Public records last 12m / 10y:	0 / 0	Revolving credit balance:	$1,544	Occupation:	Computer Programmer
Inquiries last 6m:	1	Bankcard utilization:	5%

There were a few delinquency's that I generally try to steer clear of but 6 in 7 years is far better than a lot of others here on Prosper.com The debt to income ratio is very low here and looks liek the borrower can very much afford to repay this loan and can properly manage their available credit.

The Additional information that the borrower added in the desciption field added to me placing my bid on this listing.

Below is the description from the listing

Description

Purpose of loan: I'm asking for this loan to help pay off higher interest personal loan I took to combine my credit card debt. Since getting this personal loan from a banking institution, I've made inroads on all my other debt and this is the only high interest debt I have left. I'd like to pay this off with a Prosper loan to lessen the amount of interest I pay over the life of the loan. My financial situation: I am employed in a full-time capacity in the IT division of a higher education institution. In addition, I have a regular perlance (permanent freelance) assignment that helps me pay off debt. I don't live paycheck to paycheck, I pay all my bills on time, and I now manage my money well. Monthly net income: $ 3800 Monthly expenses: $ 3000 Housing: $925 Insurance: $ 40 Car expenses: $ 0 Utilities: $85 Phone, cable, internet: $125 Food, entertainment: $650 Clothing, household expenses $75 Credit cards and other loans: $1000 Other expenses: $100

Looking for my next loan to pass the Prosper.com review process. So far this month I find myself taking on little risk and looking for people that are refinancing current debt for lower payments and/or interest rates.

Lender Access Update

Recently Prosper.com changed lender access to listings that had expired unfunded or made them unable to see if you were not in on the loan. After many large lenders in the prosper.com forums publicly announce that it was the last straw and they would halt all lending until it was restored prosper came to and reversed its decision. One forum moderator stated that they didn't see a need to view old listings and didn't realize it would inhibit our abilities to analyzed listings and create strategies based on our findings.

Its seems that lenders who stated they will quit lending have resumed and its one big happy Prosper.com community once again. Some seem to be skeptical of prosper saying it was taken away knowing they intended to give it back......the batter of prosper.com vs the prosper,com forum community continues.

the below info was taken from prosper.com forums: view the entire article

"Allowing members access to old listings is an example of Prosper’s ongoing efforts to balance transparency with privacy in the marketplace. Our original objective was to restrict access to non-active listings if there was no need to see them. However, many of you indicated that lenders use old listing data to formulate ongoing listing strategies. As a result, we changed the access to past listings so lenders can conduct research for future bidding decisions.

The changes include the following:
• Borrowers can access all their past listings
• Registered lenders have access to all past listings
• Potential borrowers and lenders have access to only current, active listings. This will allow registered lenders to conduct necessary research while ensuring borrower privacy.
• All of these changes are reflected in the “Listing not available” page

Thank you for your feedback. We hope this makes a positive impact on your lending strategies.

Sincerely,

Shira"

First Loan Funded in November

I have funded my first loan in the month of November. The listing information is as follows:

Debt Consolidation Listing #225073 - $5,000.00 @ 10.00%

A credit grade - Homeownership not verified - Bank Account verified

Now delinquent:	0	First credit line:	Apr-1982	Employment status:	Full-time
Amount delinquent:	$0	Current / open credit lines:	5 / 1	Length of status:	1y 7m
Delinquencies in last 7y:	0	Total credit lines:	13	Income range:	$25,000-$49,999
Public records last 12m / 10y:	0 / 0	Revolving credit balance:	$5,586	Occupation:	Sales - Commission
Inquiries last 6m:	0	Bankcard utilization:	57%

Purpose of loan:
I would like to consolidate some 22% credit card debt to a manageable level.

My financial situation:
I have a steady income and work history. My credit rating is good because I pay all my debts.

Monthly net income: $ 2k

Monthly expenses: $ 1k
Housing: $ ***Borrower failed to fill in this field***
Insurance: $ ***Borrower failed to fill in this field***
Car expenses: $ ***Borrower failed to fill in this field***
Utilities: $ ***Borrower failed to fill in this field***
Phone, cable, internet: $ ***Borrower failed to fill in this field***
Food, entertainment: $ ***Borrower failed to fill in this field***
Clothing, household expenses $ ***Borrower failed to fill in this field***
Credit cards and other loans: $ ***Borrower failed to fill in this field***
Other expenses: $ ***Borrower failed to fill in this field***

Endorsements from Friends
We met professionally about 5 years ago. "xlr8profits" has always demonstrated to be a hard worker, fair, and accountable. I endorse "xlr8profits" 100%!

-GardenCity, Nov-05-2007

Borrower APR:	10.69%
Mo. payment:	$161.34 (3y loan)

There were 45 total bids on this listing it was a AF ( Auto Fund ) which most lenders stay away from. I really don't have a issue with AF loans. There are a few reasons but most of all its a locked in rate that you do not have to fight for and the default rates are minimally different from standard 7 day listings.

The Reason I chose this loan is that its a little above the average rate for this credit grade. The borrower has had perfect credit history since 1982. They have manage to pay the bills without fail since then. I really don't care how they pay them as long as they are paid. If someone has to go hungry and thats how they pay the bills great. All I know is that somehow this borrower manages to pay the debt they take on. With that kind of track record and offering the right interest rate I felt it was a good time to place a bid.

I feel this is a strong leg to place in my portfolio and these are needed to get me through the Holiday season if for any reason someone was to go late or even default these strong legs will hold the ground.

Chinese stock-bubble, when will it pop

It seems that many are worried about the Chinese stock-bubble and when it will pop... Well it doesn't look like its going to happen tomorrow but is in the future for lenders on the Prosper.com

Teh inability to resell the loans currently makes the Chinese stock-bubble a scary event. Cab drivers, housecleaners, college kids and Buddhist monks are opening brokerage accounts and speculating in stocks for the first time, says ChinaDaily.com. Most of these are part of the army of amateur investors. So everyone is curently in a buy buy buy mentality similar to the .com era.

The Shanghai composite A index — open only to local Chinese investors — is up 245% since the end of 2005 and up 50% so far this year. This has shown some anxiety on wall street as well putting china on some top investors so called risk list. Many top investors have a lot to lose. US investors have put over 14 Billion into China funds.

SEC Filing By Prosper Hints At Secondary Market

Prosper seems to be setting up for a secondary market. This has been a major topic in the Prosper forums from almost the beginning. View the entire article


Key Points in SEC filing

"Prosper is not obligated to repurchase a Note from a Lender if his or her investment is not realized in whole or in part due to fraud (other than verifiable identity theft) in connection with a listing or due to false or inaccurate statements or omissions of fact in a Borrower’s listing, whether in credit data, Borrower representations, user endorsements, group affiliations or similar indicia of Borrower intent and ability to repay the Notes. If Prosper repurchases a Note, the outstanding principal balance will be returned to the Lender."

"The Platform may fail to comply with borrower protection laws such as state usury laws, other interest rate limitations or federal consumer protection laws such as the Truth in Lending Act, the Equal Credit Opportunity Act and the Fair Credit Reporting Act. Borrowers may make counterclaims against us, any collection agency or you after collection actions have commenced."

"

Risks Related to Our Ability to Service the Notes

We have a limited operating history. As an online company in the early stages of development, we face increased risks, uncertainties, expenses and difficulties."

"Notes. If we are unable to increase the capacity of the Platform and maintain the necessary infrastructure, you may experience delays in receipt of payments on your Notes and periodic downtime of our systems."

"

We are subject to extensive federal, state and local regulation. There can be no guarantee that we will be able to continue our servicing obligations.

We are subject to extensive federal, state and local regulation, non-compliance with which may expose us to adverse consequences. Additionally, new laws and regulations could be enacted that could have a negative impact on our ability to service the Notes, provide a resale market for the Notes, or maintain the Platform. We could suffer adverse consequences if we were to fail to comply, even inadvertently, with these laws and regulations.

Additionally, we are licensed as a finance lender under the California Finance Lenders Law and are regulated and examined by the California Department of Corporations. We hold similar lending licenses or authorizations in 24 other states, which also supervise and examine our activities. If we do not comply with applicable laws, we could lose one or more of our licenses or authorizations, which may have an adverse effect on our ability to continue to perform our servicing obligations or to maintain the Platform. See “Description of the Securities – Regulatory Matters – Licensing and Consumer Protection Laws” beginning on page 41 for more information regarding governmental regulation of the Platform.

The federal Fair Debt Collection Practices Act and similar state debt collection laws regulate debt collection practices by “debt collectors” and prohibit debt collectors from engaging in certain practices in collecting, and attempting to collect, outstanding consumer loans. For example, debt collectors are prohibited from contacting debtors at unreasonable times, revealing or discussing the nature of the debt with third parties, making false representations in association with efforts to collect the debt, seeking collection fees or other charges not permitted under contract or by state law, making threats of arrest or legal action without actual intention of action on the threat, and using abusive or profane language in the course of collection on the debt. While Prosper obligates its collection agencies to comply with applicable law in their efforts to collect Loans made on the Platform, it is possible that improper collection practices may occur which could adversely impact the collectability of particular Loans originated through the Platform."

"We may not realize enough fees from our services to offset the cost of maintaining the Platform. In the event that we should fail to maintain operations, you may experience a delay in realizing your investment or an inability to resell the Notes or Borrowers may default on their Notes."

"In most instances, Prosper does not verify the income, employment and occupation or other information provided by Borrowers in listings. The Borrower’s income, employment and occupation is self-reported, and the Borrower’s DTI is derived by Prosper from a combination of the Borrower’s self-reported income and information from the Borrower’s credit report. The credit data that appears in listings is taken directly from a credit report obtained on the Borrower from a credit reporting agency, without any review of verification by Prosper."

Credit Grade

AA

A

B

C

D

E

HR

Experian Scorex PLUSSM Credit Score

760 and up

720-759

680-719

640-679

600-639

560-599

520-559

How it feels to lend on Prosper.com

Some slick looking guy comes up to you...

Guy: Hey! I know a guy who needs a loan and is willing to pay X% interest. Do you want to make a loan?
You: Oh. For how long?
Guy: Three years.
You: Okay. Well can I sell off the loan?
Guy: Maybe later. But for now you can't.
You: So I'd be stuck with it?
Guy: Yeah. For now.
You: Ok. What's his name?
Guy: Uh...well I can't tell ya.
You: Where does he live?
Guy: I can't tell you that either.
You: How about a phone number.
Guy: Nope.
You: Then how can I tell if I'll get my money back?
Guy: Well, I can give you a summary of his credit history...
You: A summary?
Guy: Yeah...and a credit grade.
You: Oh a credit score.
Guy: Not a score, a grade.
You: Uh, ok. Does it tie into something like Experian scores or something.
Guy: Kind of.
You: Kind of?
Guy: Well, they're supposed to but they're not a reliable measure.
You: I see...well what's he make? How's his debt load?
Guy: He says he's got a low debt load and makes somewhere between $XX,XXX and $YY,YYY a year.
You: You mean you don't know?
Guy: Well, I don't actually verify those details. But I can verify his identity.
You: The identity that you can't tell me.
Guy: Yep.
You: And what happens if this guy doesn't pay back the loan? Then can I go after him?
Guy: Oh no no no. I handle that.
You: You do? How?
Guy: Well, I turn the loan over to a collections agency.
You: Are they any good?
Guy: No. Not really.
You:
Guy: What?
You: So let me get this straight. You want me to lend money to someone that I don't know, that you won't tell me, based on a credit grade that's not reliable, a summary report, and a bunch of information that you don't verify. And if the loan goes bad, you turn the loan over to a collections agency that has poor performance.
Guy: Exactly!
You: And why would I want to do this?
Guy: Because...*flips hair back"...I'm COOL!
You:
Guy: Hey...hey where are you going? Ah who cares...hey you...I know a guy who wants a loan...

Misappropriation of lender funds by Prosper

Another interesting day in the Prosper.com community. A lender that goes by traveler505 has uncovered a huge issue with the prosper accounting system per the legal agreement of the loans that we have been funding for almost 2 years.

It has been proven that Prosper.com has been taking its servicing fees from loans that had gone past the 30 day late mark. Per the lending agreement "With respect to each Note you purchase from Prosper, the Servicing Fee is payable only upon Prosper's receipt of the full monthly payment from the borrower on such Loan no later than thirty (30) days after the due date of the payment."

This has caused a big stir with forum members. Prosper Andrew quickly came to the rescue to tell lenders that Prosper was on top of it and would have resolution in a few days. While they (Prosper.com) were thinking of solutions and most likely consulting attourneys most lenders in the forums assuemed that one of two directions would be taken. Either Prosper would simply rewrite history once again and backdate the legal agreement and basically screw lenders or they would spend enormous amounts of time and money to refund everyone that was affected.

I don't think that anyone anticipated that they would do both. Per Prosper.com forum moderator Shira "Thank you for unearthing this error: a classic example of how the Prosper community helps us improve the site and our operations on an ongoing basis. You are correct: there is a discrepancy between our legal agreements and the way we collect servicing fees.

As compensation for its loan servicing activities, Prosper currently charges Lenders a servicing fee. Prosper’s servicing fee is deducted from monthly payments as they are received. Prosper collects its servicing fee on all payments received on loans, regardless of when the payments are received, and regardless of the amount of the payment received. This is the way loan servicing fees are customarily charged on consumer credit transactions, and it is the way Prosper has always collected its servicing fee.

You brought to our attention that certain language in the Lender Registration Agreement (LRA) was inconsistent with the manner in which Prosper has been collecting its servicing fee on loans. The following language appeared in the Servicing Compensation paragraph of Section 5 of the LRA:

“With respect to each Note you purchase from Prosper, the Servicing Fee is payable only upon Prosper’s receipt of the full monthly payment from the borrower on such loan no later than thirty (30) days after the due date of the payment.”

This language does not reflect Prosper’s actual method of charging loan servicing fees, because Prosper collects its servicing fee on payments without regard to the amount and timing of the payment received. For example, servicing fees are charged on a full or partial loan payment received more than 30 days following the due date of a payment.

The discrepancy between this language in the LRA and Prosper’s actual practice was an unintended drafting error on Prosper’s part, and is being corrected in the LRA. Going forward, loan servicing fees will continue to be charged on all payments received on promissory notes, regardless of the amount and timing of the payment received. However, we will give appropriate credits to lenders who are impacted by this error.

Lenders who were charged servicing fees in a manner inconsistent with the language quoted above will receive an appropriate credit in their funding account. Prosper is reviewing its loan records in order to determine which lenders are affected by the error, and the amount of the credit. We apologize for this inadvertent error and appreciate your patience in allowing us to rectify it.

Thank you again for helping us improve operations, Traveler505, we appreciate your diligence.

Sincerely,

Shira"

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There has been talk a lot of talk regarding litigation over the misappropriation of lenders funds and other questionable practices but one has yet to be filed. I feel that if they continue down the same road of what seems to be blind the lenders game someone is bound to find something that will be to big for them to fix and lenders will be forced to file suit to remedy the situation.