what's the current "blender" situation?

[DCS]

I think he's asking about non-bk loans that have gone late but not yet charged-off.  I don't understand why they didn't write that into the new lender agreements either.

[ducks]

Ah, I see. The response didn't say it doesn't apply to late payments, though. What does the new lender agreement say about this? (I'd look myself but I'm about to leave for work.)

[DCS]

Well, I haven't checked the actual lender agreement wording either, but the note from Prosper that blue posted seems to indicate that a blender must default.  Hopefully someone with the time to track it down will post the appropriate wording from the actual agreement to clarify.

Dear blue,

Prosper's new lender service agreements state that should the lender take out a Prosper loan and default, Prosper may use the lender funds to offset the defaulted note. This however, is only available when lenders agree to the new lender service agreements. The borrower/lender in question has not agreed to the new lender service agreement. Prosper is therefore not able to reserve his lender funds. This applies to charged-off notes but not discharged notes due to bankruptcy. These notes have had their balance reduced to zero as a result of the discharge. Thank you for using Prosper, please let us know if you have any further questions.

For future reference, your Prosper support case number is xxx.

Sincerely,
Prosper Customer Support

[mothandrust]

Pushing the offset issue from the other side...

RE: Case # 00409113

It's been 3 weeks now and this problem has still not been resolved, despite numerous maintenance updates since then.  Is this a high priority item?

As a result incoming payments from my loans are being tied up--I cannot transfer them to my bank account.

Since I have a payment on my own Prosper loan due June 13, I would be agreeable if Prosper offset what I will owe Prosper with what Prosper has owed me since May 2.

If not, please ask my lenders for their patience since my June 13 payment will be late.  If they ask me where the money is, I will tell them it is sitting in Prosper's bank account, under Prosper's control.

[blue]

Found it - Lender Registration Agreement (link on bottom of most pages): Legal Agreements
http://www.prosper.com/account/common/agreement_view.aspx?agreement_type_id=8

Section 12: "If you obtain one or more borrower loans through the platform, amounts in your Prosper funding account are subject to set-off against any delinquent amounts owing on your loans. Amounts in your Prosper funding account are also subject to set-off against any shortfall resulting from ACH returns of transfers or deposits of funds to your Prosper funding account. You will not receive further notice in advance of our exercise of our right to set-off amounts in your Prosper funding account against any delinquent amounts owing on any loan or loans you obtain. "

Dated - September 7, 2009

1) So I assume this was the new agreement that everyone signed after the quiet period?
2) I would assume any loans by lenders after 07SEP09 would fall in this category?
3) I also assume Prosper does not check on late loans who is a Blender - and that a note from the Lender to Prosper might speed up the process of collection.

Seems to me this is kinda big news and answers one of the main complaints of many on this site - I am suprised it wasn't pointed out earlier.

[JammingJAY]

Lol.

Search xraider clause on this site or google.

 

[blue]

However, after my call, Prosper instituted the xraider clause, saying that lenders could not contact collection agencies or collection attorneys. 

Good reading so far... Thanks J!