A cautionary tale for lenders

[HollowOak]

I know it's kind of irrelevant right now, but some of the recent borrower defaults spurred me on to think of this.

Perhaps if we collect, without too many comments, so that the listings and words of borrowers speak for themselves, some of the "deserving" listings that were championed by lenders and where eventually the borrowers defaulted, new lenders will learn from our mistakes.

I know, for instance, that I specifically cautioned DroolingElmo about the HockeyFamily loan for Christmas presents.

So, without much comment, I present to you a listing of loans, not all made with my heart, that either paid off or defaulted.

• Loans that paid
  
  • Airman in Trouble - 13 payments before payoff.
  • Loan Consolidation - 6 payments before payoff¹
  • Help Me Reduce My Debt By $700 A Month-Good Payer - 8 payments, 1 payment reversal before payoff²
  • Restructure Finances-Vetted by GL - 2 payments before payoff.
  • Wanting to Consolidate - 7 payments and then Olga Petranovich made 3 additional payments.
  • Island Listing offering Max Interest Rate - 20 payments before payoff
  • Buying an engagement ring. I saved 7000 in 4 months - 18 payments before payoff
  • Help free this credit card slave!! - 19 payments before payoff
  • house for sale - 2 payments before payoff
  
  
  
  
• Loans that are still paying^{touch wood}
  
  • buy used car - 20 payments and this old claydog is still honoring his obligations.
  • Help Student Out of A Bad Situation - 19 payments, sometimes late, but this NC student is still staying the course.
  • Second time - Excellent Borrower - 11 payments on a second loan that paid off the first loan for this struggling artist.
  • Island Borrower Rebuilding Credit - 19 payments for this HR borrower from Hawaii.
  • A step in the right direction - 27 payments from this divorced mom.
  • Loan to cover temporary setback - 30 payments from this low-income, HR Mom
  • Professional Devlopment[sic] and Debt Reduction - 24 payments for this single Mom starting a new career.
  
  
  
• Loans that defaulted
  
  • Mother of three, needs a little help - 0 payments, repurchased by Prosper.
  • Second Time Around: Ponty needs a new heart! - 6 payments and then a sale to the JDB³.
  • Need car down payment*******Please read me - 17 payments before the loan languished in PCOCT limbo⁴.
  • Need to fix the house and car -18 payments and 8+ months of PCOCT limbo⁵.
  • Bringing Family Home - 18 payments and ... well, you know the refrain⁶
  • Debt Consolidation, expand eBay business - 12 payments and then a Ch7 Bk sinkhole⁷.
  • Digging out - 7 payments before they stopped digging out due to Ch 13⁸.
  • Daddy Needs Help - 7 payments before he found out that being a backyard mechanic isn't enough to bring the bacon home.
  • Consolidate High Interest Loans - 6 payments before his $150,000 annual salary wasn't enough to stave off a Ch13 BK.
  • Scrub Shop Needs A Push - After 6 payments, no amount of pushing could prevent this loan from being scrubbed.
  • NO DELINQS- Expanding the Business- Expanding the Family - after 4 months, I guess the real estate calamity hit this one hard. Hope that pretty little girl gets a visit from Santa this year.

¹ This loan has a cautionary element to it. The borrower came back, borrowed $23,500 and eventually filed Ch7 BK.
²&deity knows, I didn't think this one would actually pay off.
³I actually championed this one on the old forums, based on a belief that the significant cash flow improvement would aid her in paying off the loan.
⁴Who could resist the tug at the heartstrings of saving that baby from having to get up at 4 am every morning? It was a heck of a lot more appealing than Christmas gifts to the HockeyFamily.
⁵Agin, who could resist the appeal of helping an invalid with a penchant for NASCAR races, trapped in a broken country house with no transport?
⁶Widowed bail bondwoman, wanting to bring her family and grandchildren closer to home - who wouldn't trust someone like that?
⁷Last I looked the eBay business was still there, probably just not making enough to pay lenders.
⁸In all fairness, it was an early Portfolio Plan that bid on this.

[Nontyper]

Great Idea, I will put mine up, with minor comments - these are the ones that were questionable and why I did it..  my good ratings, low payment loans are all good.. I will not put them here.

• Loans that paid
  
  • Money for marraige - 10 payments before payoff.¹

• Loans that are still paying^{touch wood several times.. lol}
  
  • Refinance my loan - 14 payments another military
  • Consildating High Interest Credit Cards!!! - 14 payments.
  • Soldier needs Emergency Loan for his Family - RE LIST- 13 payments another MIlitary.
  • Help with Credit Card Debt - 11 payments In the Air Force.²
  • Giving THANKS! Read why! Loan for real estate. - 29 payments many small payments.³
  • Restructuring Debt - 9 payments³
  • A Lenders Loan - Bid w/ confidence! Consolidation & Tuition - 9 payments
    ³
  • CONSOLIDATING PAYMENTS -State Cap Max. - 9 payments Nurse that convinced me
  • Help My Mom Thru Hard Times. - 2 payments very small loan, increased credit rating

• Loans that defaulted
  
  • real estate investment - 3 payments, My very first loan.⁴

The one thing that I have leared since I have been doing this.. When things get tight, small payments are easier to come up with than big ones. 


¹ This loan was because he was an officer in the military, one of my earliest with bad rating, I would not do it now but he was a great borrower.
²My only HR, but I believed in her after several exchanges
³Championed here pretty hard
⁴Great credit rating, good idea, but the housing marked fell through fast and it was a 25K loan.

[tmullin1217]

Many thanks to all my borrowers, for keeping current with your payments.
Best wishes for 2009 to silverleaf1, eandr123, veestransport, localfoodienyc, et al.

[aurel57]

[/li]
[li]Loans that defaulted

• Mother of three, needs a little help - 0 payments, repurchased by Prosper.
• Second Time Around: Ponty needs a new heart! - 6 payments and then a sale to the JDB³.
• Need car down payment*******Please read me - 17 payments before the loan languished in PCOCT limbo⁴.
• Need to fix the house and car -18 payments and 8+ months of PCOCT limbo⁵.
• Bringing Family Home - 18 payments and ... well, you know the refrain⁶
• Debt Consolidation, expand eBay business - 12 payments and then a Ch7 Bk sinkhole⁷.
• Digging out - 7 payments before they stopped digging out due to Ch 13⁸.
• Daddy Needs Help - 7 payments before he found out that being a backyard mechanic isn't enough to bring the bacon home.
• Consolidate High Interest Loans - 6 payments before his $150,000 annual salary wasn't enough to stave off a Ch13 BK.
• Scrub Shop Needs A Push - After 6 payments, no amount of pushing could prevent this loan from being scrubbed.
• NO DELINQS- Expanding the Business- Expanding the Family - after 4 months, I guess the real estate calamity hit this one hard. Hope that pretty little girl gets a visit from Santa this year.

[/li][/list]

All but 2 of the defaults had lighting bolts, just goes to show how bad that auto funding  was to bid on.

[Tokyo Joe]

Looks like my dire warnings against autofunding way back in Nov. 2006 turned out to be true... 

[NewHorizon]

Maybe Prosper should add other listing features that, if used, would be a red flag for the lenders.

1-day listings, for example.
Or add a few more listing categories like, "Avoiding BK" or "Tithing".
 

[onthefence]

Maybe Prosper should add other listing features that, if used, would be a red flag for the lenders.

1-day listings, for example.
Or add a few more listing categories like, "Avoiding BK" or "Tithing".
 

Keyword search (or elimination) would be very helpful.

[1toolman]

Looks like my dire warnings against autofunding way back in Nov. 2006 turned out to be true... 

It sure feels weird to agree with you about something.  I wish I had heard those warnings.  I'd probably be kissing your ass right now if I had.  I found the forums as my doom was nearing and I had learned the expensive way.

[bamalucky]

Many thanks to all my borrowers, for keeping current with your payments.
Best wishes for 2009 to silverleaf1, eandr123, veestransport, localfoodienyc, et al.

silverleaf1 one month late.. $1500 bid 
collisioninc late $86 bid

[Vees Transport]

Hey Bama,

Long time no see.

Hows trick's?

[bamalucky]

Hey Bama,

Long time no see.

Hows trick's?

Fine & you?

Nice to see you current.Contrary to popular belief.

[Vees Transport]

Things are good. Had a little bout with the prostate last year, but all is fine as kind.

And if I recall, you were one of the few (and loudest) of the "popular belief" crew.

But hey, I didn't stop in for angst. That time is behind us. I meant a sincere and heartfelt passing greeting.

Take care.

[HollowOak]

A few additional lates crept into my portfolio while I wasn't watching.

• More loans that defaulted
  
  • Still On the Quest for Improvement - 20 payments, then an ignominious Ch 7 bankruptcy.¹
  • CREDIT CARD DEBT ELIMINATION - 38 payments was still not enough to repay a 3-year loan, especially if you take into consideration that some of those payments were subsequently reversed.
  • Grad Student consolidating - 24 payments before sinking into Ch. 7 ignominy.
  
  
  

¹ When I checked the footnotes, I had to make sure I wasn't seeing double. This loan, is the same borrower referenced in my first post, and I seemed to know then that she went Ch. 7, but I didn't list it in my defaults. So, she paid us back, then borrowed again and failed to pay us back the 2nd time round. She was in the group that I was supporting (Ourtopia). A list of the great and the good - a "good" borrower that came here often, but never came back to tell us what was going on when the going got tough. A "great" group that wasn't so great after all and a bunch of "great" lenders, myself included only by association, that couldn't see this coming a mile away. This one stings more than many others.

[Urbi_et_Orbi]

"Still on the quest..." was a borrower who showed up at the SoCal M&G with her husband. They presented themselves quite well and successfully paid off their first loan.  Then, they came for a second loan and the rest is history.

Sigh.

[bamalucky]

Many thanks to all my borrowers, for keeping current with your payments.
Best wishes for 2009 to silverleaf1, eandr123, veestransport, localfoodienyc, et al.

silverleaf1 - 3 months late
Adrianne-2 late
adworld-2 late
VeesTransport.-late
collisioninc-1 month late