Collections Test- Blog part 3

[Beerbud1]

Well I found it interesting that it only took a letter from a law firm to get 5% of the loans brought current that had been written off.

Do we have anyway of knowing if this is true?  If they were brought current, do we know if the lenders recieved any of the recovered money?

I opted in! I did not get anything!

[yankeefan]

First Prosper recovers the money paid the opt-out lenders, and the cost of the collections.  We cash in later 

[animalhouse]

First Prosper recovers the money paid the opt-out lenders, and the cost of the collections.  We cash in later 

Understand, but Prosper said the loans were brought current, shouldn't the lenders recieve any additional payments made after the initial 'true up' payments?

[ira01]

First Prosper recovers the money paid the opt-out lenders, and the cost of the collections.  We cash in later 

Understand, but Prosper said the loans were brought current, shouldn't the lenders recieve any additional payments made after the initial 'true up' payments?

ALL payments on the NAT loans, even a PIF, would be considered proceeds of the NAT (and only paid to lenders once Prosper recouped all of its costs).  After all, the lawsuits sought the full amount owed, not just the arrearages. 

[Urbi_et_Orbi]

Somehow, this blog did not make it onto Prosper's facebook page or onto their Twitter...

[ira01]

Somehow, this blog did not make it onto Prosper's facebook page or onto their Twitter...

A technical glitch, I'm sure.   

[bamalucky]

Wasn'tthere supposed to be another blog to clear up some of the things he left out?

[Shenandoah]

First Prosper recovers the money paid the opt-out lenders, and the cost of the collections.  We cash in later 

Understand, but Prosper said the loans were brought current, shouldn't the lenders recieve any additional payments made after the initial 'true up' payments?

ALL payments on the NAT loans, even a PIF, would be considered proceeds of the NAT (and only paid to lenders once Prosper recouped all of its costs).  After all, the lawsuits sought the full amount owed, not just the arrearages. 

But of course, all of what they collected from NAT loans and how much the costs are, and what percent of the costs were covered with the payments was all explained in the statements sent out to those lenders who opted in to the NAT loans, right? 

[ira01]

First Prosper recovers the money paid the opt-out lenders, and the cost of the collections.  We cash in later 

Understand, but Prosper said the loans were brought current, shouldn't the lenders recieve any additional payments made after the initial 'true up' payments?

ALL payments on the NAT loans, even a PIF, would be considered proceeds of the NAT (and only paid to lenders once Prosper recouped all of its costs).  After all, the lawsuits sought the full amount owed, not just the arrearages. 

But of course, all of what they collected from NAT loans and how much the costs are, and what percent of the costs were covered with the payments was all explained in the statements sent out to those lenders who opted in to the NAT loans, right? 

Yes, those statements were written in invisible ink, as part of Prosper's new "transparency."   

[pacino58]

Doug Fuller | August 26th, 2008 at 7:01 pm

In the realm of legal collections, the first step is to obtain the judgment. Liens and garnishments are “post judgment remedies”. In the case of a lien, the judgment is abstracted and recorded in the local deed office. In the case of a garnishment, you have to go back to court and get a separate order signed.

As funds are collected, disbursements will be made via posting to Prosper accounts.

Available at: http://blog.prosper.com/2008/08/25/collections-update-2/

In any manner, I realize it is a moot point since nothing has been turned over from the NAT loans, but at least it is in writing that disbursements would be made AS funds are collected.

[ira01]

Doug Fuller | August 26th, 2008 at 7:01 pm

In the realm of legal collections, the first step is to obtain the judgment. Liens and garnishments are “post judgment remedies”. In the case of a lien, the judgment is abstracted and recorded in the local deed office. In the case of a garnishment, you have to go back to court and get a separate order signed.

As funds are collected, disbursements will be made via posting to Prosper accounts.

Available at: http://blog.prosper.com/2008/08/25/collections-update-2/

In any manner, I realize it is a moot point since nothing has been turned over from the NAT loans, but at least it is in writing that disbursements would be made AS funds are collected.

Except that first Prosper has to recover all of its costs, including what it paid to the opting-out lenders.  IIRC, that was a six-figure sum, so because Prosper screwed the NAT up so badly, I doubt the opting-in lenders will ever see a penny.

[havastat]

You're wrong.  As Prosper itself has stated, it offers borrowers "a short term reduced payment."  If Prosper tried to sue the borrower for the late payments (as it would be perfectly within its rights to do) soon after agreeing to such an arrangement, it would lose, due to the new payment agreement.  Thus, this most certainly IS a "legally relevant modification." 

ira01,

 Is it your position that everything that might result in deferal of a judgement, including a continuance or agreeing to a calendering order, is illegal? Obviously if Prosper filed a suit immediately after a continuance or calendaring it would also lose. In your opinion does this also change the substance of the underlying agreement as distinct from being a procedural collection tactic resulting in a temporary delay?

[ira01]

You're wrong.  As Prosper itself has stated, it offers borrowers "a short term reduced payment."  If Prosper tried to sue the borrower for the late payments (as it would be perfectly within its rights to do) soon after agreeing to such an arrangement, it would lose, due to the new payment agreement.  Thus, this most certainly IS a "legally relevant modification." 

ira01,

 Is it your position that everything that might result in deferal of a judgement, including a continuance or agreeing to a calendering order, is illegal? Obviously if Prosper filed a suit immediately after a continuance or calendaring it would also lose. In your opinion does this also change the substance of the underlying agreement as distinct from being a procedural collection tactic resulting in a temporary delay?

This makes no sense -- you can't have court proceedings (such as continuances or calendering) until AFTER a suit is filed. 

If your question is whether agreeing to a continuance in a collections lawsuit brought by Prosper would violate the LRA, the answer is "no, of course not."  Because while that might defer a JUDGMENT, it would have no effect on when the monthly LOAN PAYMENTS were due.  Which is unlike Prosper's unauthorized side-deals with borrowers, which DO defer the monthly payments, contrary to the LRA.

[xraider]

You're wrong.  As Prosper itself has stated, it offers borrowers "a short term reduced payment."  If Prosper tried to sue the borrower for the late payments (as it would be perfectly within its rights to do) soon after agreeing to such an arrangement, it would lose, due to the new payment agreement.  Thus, this most certainly IS a "legally relevant modification." 

ira01,

 Is it your position that everything that might result in deferal of a judgement, including a continuance or agreeing to a calendering order, is illegal? Obviously if Prosper filed a suit immediately after a continuance or calendaring it would also lose. In your opinion does this also change the substance of the underlying agreement as distinct from being a procedural collection tactic resulting in a temporary delay?

Havastat, to explain further, if Prosper and the borrower agree to modify the contract, that agreement replaces the original contract, and requires a new breach.  OK, there are a few possible exceptions, but not many.  If you DON''T modify the contract, and sue, any court delays are likely to do nothing more than add to the amount of interest you will be entitled to recover.  The court (again, generally speaking) won't modify (also known as "reform") the contract without the agreement of the parties.


There are lots of legal ways to modify the contract.  Involuntary modification by the court is called reformation.  ("My insurance policy doesn't have the limits I requetsted.")  VERY hard to do unless there's an error in the way the contract is written, and the intent to write the contract otherwise is clear.

Settlements, accord and satisfaction, and other doctrines may kick in if the parties AGREE, but those aren't generally mposed by the courts.

[jazzpianist]

Settlements, accord and satisfaction, and other doctrines may kick in if the parties AGREE, but those aren't generally mposed by the courts.

I would say all of the opt-in NAT folks would unanimously hum "we ain't got no satisfaction..."

jazz