according to prosper marketplace, 61% of prosper lenders lose money

[Xenon481]

Prosper Blog | January 20th, 2010 at 3:38 pm

We received an inquiry as to whether we could comment on whether the graph contains data for loans that are greater than 120 days past due? The labels on your graph indicate that such data is not included. Any delinquency graph that does not contain that information is useless and errant.

Prosper Response:

The new loans are not old enough to have gone 120 days past due. A graph that compared loans past 120 days past due on the new loans versus the old loans would be both flattering and misleading. We did a delinquency comparison because we have relevant data to compare because delinquencies happen earlier than defaults. It is common to do this type of comparison of seasoned and unseasoned vintages to get an early indication of future default performance.

They admit that they are specifically leaving 120+ days past due loans off of that chart! And they are trying to defend it! OMFG!

So, where it implies they have 8% past due principal outstanding, they aren't counting any of the 120+ days past due loans!

[TotoMMB]

I think this just seems like laziness. If we use July as the starting point, they could, in fact, have 120-day lates. But the graph is labeled Q3 2009, so, technically, they wouldn't have any 120-day lates (as of 9/30/09). But I doubt they're rushing to pull Q4 numbers over. Thank you debtcar.

[NewHorizon]

Prosper Blog | January 20th, 2010 at 3:38 pm

We received an inquiry as to whether we could ...

What, no attribution to the inquirer xenon481?
It looks like the inquiry came from an anonymous source!

... Or are the IDs of ORG members verbotton on Prosper's site now?

[Xenon481]

Prosper Blog | January 20th, 2010 at 3:38 pm

We received an inquiry as to whether we could ...

What, no attribution to the inquirer xenon481?
It looks like the inquiry came from an anonymous source!

... Or are the IDs of ORG members verbotton on Prosper's site now?

I did put prospers.org into the "website" field of the form when submitting my comment. That makes my name on the comment a link to .org. So I can see why they anonymized it.

[God-Father]

the rest seem to fall into a hazy, gray area.

Is this hazy gray?

http://www.ericscc.com/stats/lender-return-distribution

This way over states the postive side of Prosper.  If you look at the ROIs of > 5%, they all have an average loan age of less than 2 years.  As you follow the ROIs toward the negative, the average loan age continues to drop close to linearly.

[bamalucky]

Prosper is just trying to buy more time by changing the criteria so they can dupe more lenders.  The class of 2006 have saw this many times already.

[brianguy]

as long as we're being precise, here is the exact statement by prosper

39% of lenders have made money on their Prosper investment

 

[Urbi_et_Orbi]

...and that statement presumably includes some forward-looking assumptions of unknown confidence and validity regarding the future performance of a good chunk of active loans...

[The_Cat]

In 2009, my 401(k) rebounded 30% - and even my new money invested got to experience this nice rebound.  Now, I have another 20-30 years to let it grow.

My Prosper.com account, however, experienced no such rebound and has no such prospects.

Of course -- which is why Prosper's repeated comparisons to the S&P 500 are so bogus.  If you invested $100K in the S&P 500 right before the crash, you had a big paper loss.  But you still had all of your shares, and most of your loss was erased last year (and eventually you will have a profit if you hold on).  By contrast, charged-off loans will NEVER EVER recover (except for a miniscule and irrelevant fraction of them).  The 61% of Prosper lenders who lost money will NEVER get that money back, no matter how long they hold on to their worthless charged-off loans. 

Has anyone reported this yet to the SEC?