zcommodore

Prosper introduced their new forums last night in a site update. It appears they are hosted by Prosper itself and don't require a separate login. I was able to create a post as soon as I found the page, having already logged in to my Prosper account.

So far, I'm very unimpressed.

- The forums load very slowly, to the point of being useless.

- Each post is 100% moderated meaning you can post now but who knows when the post will actually appear, if at all.

I don't know if the moderation will be eased but if not, I probably won't be posting there very often. My first post was about a bug I've noticed. That was probably the most useful aspect of the previous forums anymore anyway so I may just stick with that and otherwise not use the forums now unless changes are made.

Most of my research that I do is done on a per-loan basis, not the size of the loans.  My reasoning for this is that lenders tend to lend similar amounts on each loan and the amount they lend seldom correlates to the size of the loan requested by the borrower.  A larger loan will just have more lenders on it.

A few days ago, I noted that the number of loans made on Prosper appeared to be going down after the update a couple of weeks ago.  I've updated the graph and you can see that I posted right around the time when the 10-day moving average was bottoming out and it has recovered somewhat.

I will point out that I don't keep older versions of graphs around since I host them on some webspace granted by my ISP and the space is limited.  I just overwrite the previous graph with the same name for the most part.

I noticed that, while the number of loans being made had appeared to be going down, the size of loans is up significantly this month. (Note this graph shows only the first half of November.)

I suspect the reasons for this are that people with very good credit, like the ones I pointed out yesterday that were getting funded more now, usually ask for and receive much larger loan sizes.  Also, if you have good credit, it is not common for you to ask for a small loan like $1-3K.  You would simply use an existing short-term line of credit rather than pay the 1% origination fee to Prosper unless you are simply "trying out the borrowing side".

Now, here's an interesting graph that seems to indicate an actual uptick in lender activity.

This graph is based on the number of business days when Prosper can manage financial transactions.  Basically, loans only originated on business days so I cut out all weekends and holidays and calculate the total amount of loans made per business day.  Once again, November numbers are for only the first half of the month.  Even still, the uptick in total amount of loans originated seems significant, especially with all the recent changes and an apparent lender backlash on the forums after the last change when listings were no longer viewable for a few days (subsequently changed).

It will be interesting to see how this number holds up through the last half of November and then December with the holidays.

Just over two weeks ago, Prosper's update included guidance to lenders based on actual Prosper data.  I normally collect monthly loan statistics at the end of each month but I decided to do some early checking and found some interesting information I couldn't wait to post so here it is.

Below is a graph I've posted before showing the relative percentages each month based on credit grade for the numbers of loans originated in the month.  Here is the graph again but with November's numbers based on only the first half of the month.

Notice how the lines for AA-B grades of borrowers are going up while all other grades are going down.  Prosper's lender guidance, limited though it is, indicates most lower grades to barely be worth the risk for lenders even though the rates they tend to offer are much higher on average.  As far as I'm concerned this was the best change for lenders yet.

Here's another look at the numbers but with the credit grades grouped together similar to the way Prosper groups them in it's monthly newsletter.

For the first time AA-A grade borrowers are getting a decent share of the loans on Prosper.  Once again, you can see the other grades are going down.

Keep in mind that the November numbers aren't even all in since we're only half-way through the month.  Also, since the new information happened very late last month, there were some loans that were funded prior to the change or shortly afterwards so those loans are probably still reflected in the new information.  Additionally, many lenders who use standing orders only may not have noticed all the recent changes if they don't do manual bidding since the information isn't readily available unless you manually click the bid button.  Regardless, the information is rather dramatic in my opinion.

I hope we see a corresponding decrease in numbers of defaults over the next few months with the new information.  Also, and better yet, I hope we start seeing a lot more prime grade borrowers showing up now that it looks more likely that they can get funded here.

Since group leader fees disappeared in mid-September, I had posted a couple of times about how the number of borrowers with listings in groups had gone down quite a bit.  Well, with the recent change that allows borrowers to get second loans that trend has changed dramatically.  I had noticed that no-group listings had increased up to ~87% of all listings on Prosper.  I just checked a few minutes ago and noticed that no-group listings were down to ~76% due to all the 2nd loan requests, even from otherwise closed and/or inactive groups.

I think one of my earlier posts had a comment from someone who pointed me to a graph on wiseclerk.com that shows a graph of this activity.  You can see how in-group listings dropped dramatically in September and now are on the rise on this page.

I've noticed a lot of the requests for 2nd loans don't seem to be going anywhere.  Many of the borrowers are people who only received their first loan due to "pump & dump" support from their group leaders.  Now they may be current on their existing loan and want to come back for more but can't seem to get funded since group leaders have no incentive to pump & dump anymore.  I wonder if many of these borrowers even understand what is going on such that they are having trouble getting funded.

One more thing: keep an eye on this blog because I intend to post some interesting information I've noticed recently about lender activity later this week.

Last night Prosper had another of their "hot fixes". Among other things it appears they gave back the ability for people to see ended listings. I can now see this very old ended listing picked somewhat at random. Thanks Prosper.

I just checked that it is only visible if I'm logged in though. That is OK with me. I appreciate Prosper's responsiveness on this. Now, about customer service...