First Prosper V.3 loan headed toward the crapper

[bluestar148]

Second.

ETA: For you onlookers, "Anton" is Prosper's CEO.

If Anton was working for me I'd fire him. Just look at January's loans he made. No rhyme, no reason.

440919  compassion-f...  AA $50.00 9.35% 01-11-10 Current
439618  asset-contro...  AA $490.78 6.15% 01-08-10 Current
439752  brilliant-cr...  AA $50.00 10.35% 01-06-10 Current
431045  tender-bazaa...  C $1,400.00 34.24% 01-05-10 Current
431136  responsibili...  C $475.00 27.40% 01-05-10 Current
438347  reverent-nic...  C $548.67 35.00% 01-04-10 Current
439322  movinup  AA $1,000.00 8.40% 01-04-10 Current
438802  enriching-cr...  C $975.00 21.08% 01-04-10 Current

[Urbi_et_Orbi]

The 2nd 3.0 loan has now flushed.

[TotoMMB]

The 2nd 3.0 loan has now flushed.

And from the looks of things, this one made 0 payments. At least debtcar made one (I'm extrapolating from eric's data).

[Senator]

Do 3.0 loans come with a 100% ID theft guarantee?

[God-Father]

Do 3.0 loans come with a 100% ID theft guarantee?

I have noticed a consistent opinion that zero payment deadbeats are all (or at least likely) ID theft.  What is the basis for that?  Can't they just be people who use to have good lifes, jobs, marriages and now something has gone terribly wrong?

[Senator]

Yes, I have noticed that too, but that doesn't answer my question.

[112233]

Second.

ETA: For you onlookers, "Anton" is Prosper's CEO.

If Anton was working for me I'd fire him. Just look at January's loans he made. No rhyme, no reason.

440919  compassion-f...  AA $50.00 9.35% 01-11-10 Current
439618  asset-contro...  AA $490.78 6.15% 01-08-10 Current
439752  brilliant-cr...  AA $50.00 10.35% 01-06-10 Current
431045  tender-bazaa...  C $1,400.00 34.24% 01-05-10 Current
431136  responsibili...  C $475.00 27.40% 01-05-10 Current
438347  reverent-nic...  C $548.67 35.00% 01-04-10 Current
439322  movinup  AA $1,000.00 8.40% 01-04-10 Current
438802  enriching-cr...  C $975.00 21.08% 01-04-10 Current

They've turned over just about every top-management position. Im not sure why larsen gets a pass.

[God-Father]

Yes, I have noticed that too, but that doesn't answer my question.

http://www.prosper.com/downloads/Legal/Prosper_Prospectus_2009-07-13.pdf

Under the lender member registration agreement, in the event of a material default under a series of Notes due to verifiable
identity theft of the named borrower’s identity, Prosper will repurchase the Notes from the lender members. In the event we breach
any of our other representations and warranties in the lender registration agreement pertaining to the Notes, and such breach materially
and adversely affects a series of Notes, we will either indemnify the lender members, repurchase that series of Notes or cure the
breach. See “About the Platform—Prosper’s Note Repurchase and Indemnification Obligations.” See “About the Platform—
Prosper’s Note Repurchase and Indemnification Obligations.”

http://www.prosper.com/account/common/agreement_view.aspx?agreement_type_id=8

f. In the event of a material default under a Note you purchase from Prosper under this Agreement that is the result of verifiable identity theft of the named borrower's identity, Prosper will repurchase the Note by crediting your Prosper funding account with the remaining unpaid principal balance of the Note. The determination of whether verifiable identity theft has occurred shall be in Prosper's sole discretion. We may require proof of the identity theft, such as a copy of a police report filed by the person whose identity was wrongfully used to obtain the fraudulently-induced borrower loan, an identity theft affidavit or a bank verification letter (or all of the above) in order to determine that verifiable identity theft has occurred. Prosper shall not be required to repurchase a Note under this subsection until such Note is at least 120 days past-due, provided, however, that Prosper may in its sole discretion elect to repurchase a Note at an earlier time. You agree that repurchase of your Note by Prosper is the sole remedy you will have with respect to any such Notes.

[Urbi_et_Orbi]

I think you may have left off an important part from the Prospectus regarding the re-purchase guarantee.

[God-Father]

In general, I think the offer is as good as it has been (except during the very early days).  IMHO - Without a police report, and somebody in jail there will not be a repurchase. 

There is a stuff, such as

Prosper has the exclusive right to investigate claims of identity theft and determine, in its sole discretion, whether verifiable
identity theft has occurred.

There is also stuff about BK.  Please feel free to add any quotes you would like.

My question still stands - why are zero payment deadbeats so closely linked to ID theft in many people's mind?

[bamalucky]

My question still stands - why are zero payment deadbeats so closely linked to ID theft in many people's mind?

Search bmay2 & read about her 2 "kids" loans.

Some of us think parents take out loans in their kids names & said kids never knew about it.

[alexpkeaton]

My question still stands - why are zero payment deadbeats so closely linked to ID theft in many people's mind?

They could just be plain fraud without identity theft.

[God-Father]

Has Prosper ever had any guarantee against fraud?

[ira01]

Do 3.0 loans come with a 100% ID theft guarantee?

I have noticed a consistent opinion that zero payment deadbeats are all (or at least likely) ID theft.  What is the basis for that?  Can't they just be people who use to have good lifes, jobs, marriages and now something has gone terribly wrong?

I think you are mixing up two kinds of fraud.  I don't know if a high percentage of zero-payment loans are ID-theft fraud, but in my opinion, an extremely high percentage of zero-payment loans are fraud.  Sure, there are no doubt a few borrowers who get run over by a bus, come down with a debilitating medical condition, lose their job and savings, etc., in the 30 days between a loan originating and the first payment being due.  But I believe they are a very small minority.  I believe that most zero-payment borrowers had no intention of paying on the loan right from the get-go, which is fraud (if you sign the promissory note agreeing to make monthly payments knowing at the time that you weren't planning to, that is fraud).  As I posted numerous times on Prosper's original official forum, probably almost three years ago, Prosper should have investigated every single zero-payment loan.  If the borrower provided evidence of death, serious illness, job loss, etc., in the 30 days between origination and first payment due date, then fine -- shit happens.  But if there were no such extenuating circumstances, then Prosper should have sued each and every such borrower for fraud, including seeking punitive damages.  It wouldn't have taken very many such (well-publicized) lawsuits for fraudsters to get the message that Prosper is not a good place for them.   In addition, any such borrower who filed BK should have had Prosper file the paperwork to get the Prosper loan adjudicated as non-dischargeable.  But, as we all know, Prosper didn't do any of that, because it isn't Prosper's money going down the tubes, and Prosper doesn't really give a crap about lenders.

ETA:  In addition, Prosper should take a page from the health insurers' playbook, and do some post-default underwriting -- when a borrower defaults under suspicious circumstances (including too soon after origination), investigate their loan application (i.e., the listing and supporting documentation) to see if there are misrepresentations (for example, call the employer if the loan was not verified pre-funding, as most aren't, and verify employment and income).  For any borrowers found to have lied, file a police report, sue the hell out of them, etc.  Again, the idea is to spread the word that Prosper is not a good place to rip-off.

[God-Father]

I think I recognize the different types of fraud.  I just keep reading where a significant number of posters think (or infer) that Prosper was obligated to buy back any type of loans where any type of fraud existed.  I do not believe they were or are.  I do agree that they should have taken all legal means available to them to recoup as much money from the deadbeats that committed the fraud.