Prosper's Response to Fool Article

[Tokyo Joe]

Nora, I think what Bama meant was that if it wasn't publicly aired Prosper wouldn't have done anything about it.  (Bama, not that I want to speak for you but...)

Nora, I have to think he's right.....

I know that's what he meant. It's his opinion. It isn't a fact, as he said it was. I'm tired of people being sloppy with language. They say things that aren't quite right and then other people misinterpret and off we go on a wild ride of speculation and misunderstanding.

I'm an editor having a bad day.

I understand where you're coming from, Nora.  Some of my best friends are editors. 

[christoofar215]

I think it's hilarious that Prosper went to great lengths to silence us...


But then the principals who are at Prosper come here daily to check up on information about their own company, including all the ridiculous shit we find on it that they can't seem to catch.

[ira01]

you would have run down your entire list of loans on Eric's as above (not just the currently 4+month lates) and see which, if any, had 4+month status in the past but not now.  More of a pain (considering you have 818 loans), but still perhaps doable

Somehow I missed the "status history" feature of ericscc.  That's nice.  I knew that info was in one of the tables in Prosper's export database, but didn't know anyone was making that data visible.

It is daunting.  

What am I gonna gain by doing this calculation?  Doug is apparently saying we got about 1%  (ie 2/3 of the 1.5% bid he mentioned in earlier blog).  You doubt that they've collected 1%?  That doesn't seem like a difficult number to achieve.  He expressed this in a very positive light in the blog, but I don't see 1% as very positive.  How about getting me 10%, or 20%, or 30% ?

Actually, as you can see from HO's spreadsheet, the JDB offer was apparentrly $232,761 for $6,367,288 of bad debt -- 3.5%.  So Doug's claim that Prosper has recovered 2/3 of that would be 2.4%.  That is still nothing great, but it is considerably more than 1%.  And considering that this is on the worst paper (4+ and sometimes 4+++++++++months late), and considering the annecdotal reports by lenders here of receiving little or nothing on their PCOCT (post-charge off collections techniques) loans, yes, I am skeptical that Doug is telling the truth.  Maybe he is, but I would like to see some evidence, not just his say so.  Because Prosper has certainly proven that their say so isn't worth much.

And there's another issue here as well -- lenders' portfolios aren't fungible.  In December 2007, the JDB paid 12.5% for all homeowner loans.  So assuming the April 2008 "one-third" offer continued this categorization, any lender on a loan by a homeowner (and many lenders, including myself, preferred homeowners, because past JDB sales paid a premium for those -- a whopping 27%-30% in the December 2006 JDB sale, for instance) would have received 4.2%.  Unless the PCOCT are recouping a proportionally greater amount of money from homeowner borrowers, which is highly doubtful IMHO, those lenders are getting screwed.  And perhaps the lenders on Texas loans are reaping a windfall, given the paltry price paid for those loans in December 2007.  Who gave Prosper the right to redistribute money from one group of lenders to another?

[mothandrust]

Disaggregating the 4+ lates that were previously bundled for sale has the amusing unintended consequence of aggravating the maximum number of lenders.

A tiny few will receive payments, such as the EveryDay People loan discussed on the other thread, but the vast majority will receive ZERO.

By distributing the payments among all the lenders in the May Aborted Debt-sale Group (call it the "MAD" Group) Prosper could ameliorate the anger about the Penncro/Amsher railroading and the debt sale cancellation.

But now most of the members of this MAD Group are going to get nothing from their 4+ lates, while a lucky few might get 30 cents on the dollar eventually.  Those that get nothing are going to stay MAD.

[onthefence]

But now most of the members of this MAD Group are going to get nothing from their 4+ lates, while a lucky few might get 30 cents on the dollar eventually.  Those that get nothing are going to stay MAD.

At the very lest, Prosper needs to write up a new Lenders Agreement that accurately reflects what is done with their money.  If Prosper is going to be jockeying around with peoples loans & treating it like monopoly money they they need to state so.

Most everyones negative argument here is that they are failing to live up to the Lender Agreement.  When they fail to live up to the agreement & cost people money, they have big issues.  When people expect it to happen, people could grumble about the policy, but they knew it was coming & part of the deal.

[DakotahFury]

you would have run down your entire list of loans on Eric's as above (not just the currently 4+month lates) and see which, if any, had 4+month status in the past but not now.  More of a pain (considering you have 818 loans), but still perhaps doable

Somehow I missed the "status history" feature of ericscc.  That's nice.  I knew that info was in one of the tables in Prosper's export database, but didn't know anyone was making that data visible.

It is daunting.  

What am I gonna gain by doing this calculation?  Doug is apparently saying we got about 1%  (ie 2/3 of the 1.5% bid he mentioned in earlier blog).  You doubt that they've collected 1%?  That doesn't seem like a difficult number to achieve.  He expressed this in a very positive light in the blog, but I don't see 1% as very positive.  How about getting me 10%, or 20%, or 30% ?

Unless I'm overlooking something, I don't think calculating by this method (Ericscc status) is going to be accurate. If a loan falls past 4+ late, to say 6-months late...and a standard payment is made due to collection activity...it is still classified as 4+ late, even though there has been an additional payment. The only way that activity would register in the data output is if that particular loan floated back 3-months late or better. The activity in the blackhole known as the 4+ late category is basically impossible to track accurately.

[Mark12547]

This topic has been split. Part of this topic has been named "ResearchPro's comments on: Prosper's Response to Fool Article" and moved to Lenders - General.

Edited: wrong thread title. 

[lenderguy]

you would have run down your entire list of loans on Eric's as above (not just the currently 4+month lates) and see which, if any, had 4+month status in the past but not now.  More of a pain (considering you have 818 loans), but still perhaps doable

Somehow I missed the "status history" feature of ericscc.  That's nice.  I knew that info was in one of the tables in Prosper's export database, but didn't know anyone was making that data visible.

It is daunting. 

What am I gonna gain by doing this calculation?  Doug is apparently saying we got about 1%  (ie 2/3 of the 1.5% bid he mentioned in earlier blog).  You doubt that they've collected 1%?  That doesn't seem like a difficult number to achieve.  He expressed this in a very positive light in the blog, but I don't see 1% as very positive.  How about getting me 10%, or 20%, or 30% ?

Unless I'm overlooking something, I don't think calculating by this method (Ericscc status) is going to be accurate. If a loan falls past 4+ late, to say 6-months late...and a standard payment is made due to collection activity...it is still classified as 4+ late, even though there has been an additional payment. The only way that activity would register in the data output is if that particular loan floated back 3-months late or better. The activity in the blackhole known as the 4+ late category is basically impossible to track accurately.

My follow up might have gotten split off, but the data dump has a field that does not appear on the performance summary -- days past due.  I don't spend much time at the stats sites myself, but those guys should be able to track the "real" status of those loans.  Whether or not they do, I don't know.

What irritates me with the Prosper data dump is that actual payments aren't recorded.  When a payment is made, we don't know for how much.  The only field that Prosper provides us in that table is the principal balance remaining, which is a bit useless for ultra late loans where all funds go to fees and interest and don't affect the balance.  IOW, we simply don't know how much the borrower paid.

[jmathree]

My follow up might have gotten split off, but the data dump has a field that does not appear on the performance summary -- days past due.  I don't spend much time at the stats sites myself, but those guys should be able to track the "real" status of those loans.  Whether or not they do, I don't know.

Lendingstats shows the days past due, but you have to be logged in to see it.

http://www.lendingstats.com/listings/174832/loanHistory

[RateLadder_com]

These are simple interest loans... a reduction in DPD has a direct correlation to the size of the payment.  (how the payment was split is not relevant to that calculation.)

[lhsbandnurd]

In response to zcommodore’s comment:

First, we want to thank those who took the time find and point out that one of Prosper’s court documents related to the above referenced case incorrectly described the legal relationship among Prosper, the borrower and the lenders. The amended filing (correction) with the court will take place within the week, and we will post a follow-up comment once this has been completed. However, to be clear, this incorrect statement was not germane to the central issue of this case nor did it result in any changes to or have any bearing on Prosper’s legal agreements with lenders or borrowers. Regardless, we agree that we should have corrected this mistake and cleared up the confusion in a much more timely fashion. We sincerely apologize.

(emphasis added)

What are the odds we see a follow up comment?  Perhaps after we receive word from the lawyers on that right-of-offset issue? 

Did P------ ever file the amended amendment?
Did the? really delete that September 2nd blog post or can I just not find it?
Is any of this somehow related to (maybe it even caused) this "quiet" period? (I love how we're the ones expected to be quiet  ) Perhaps SEC investigation?

[xraider]

The amended amendment was filed.  Leave of court was granted.

No updates on settlement or on the merits of that case, though.  I just checked Thursday.

[Senator]

Leave of court was granted.

What does "Leave of court" mean?  Can you enlighten us non-lawyer types? 

[xraider]

Sorry.  Leave of court means that Prosper filed a motion to further amend its papers and the court granted the motion.

I'll try the lawyer for Gaerke again and see if he'll talk to me.

Sorry for being MIA lately.  Husband had hernia surgery 10 days ago (this is our year for medical expenses!) and I've been doing double duty around the house.  He's much more mobile now.

[Cushie]

I have to wonder if the further amendment could be Doug Fuller's (I think it was him) mistake of working for Prosper Bank, rather than PMI.  Is that possible?

Off topic...best wishes to Mr. X.  Hopefully the med bills aren't too awful.