zcommodore

I don't know how many people check out any of the charts I've created that I post on the statistics page, but if you're interested, I've updated them all based on data through the end of December, 2007.

It took a bit more time than usual this time around since I found that Prosper changed a bunch of loans from "Current" to "Paid" when looking back at the data.  In other words, if I set an observation date of, for example, June 1, 2007, I should see the same number of loans marked paid for a given set of data.  In this case, I found numerous "observation dates" showed more loans paid and less current than they did the previous time I looked.

My goal for the statistics page is to show how things would look if anyone set the observation date the same as I did.  For this reason, I had to go back through and update all the data points to account for the new change.  I'm guessing Prosper found a mistake in the performance page data and hopefully have now fixed it.

Apparently there are still a few lenders out there still lending.  I approved the first listing in my group in a long time a little while ago and within minutes it had more than a dozen bids.  This is a big change from the previous time that the same borrower had a listing up a couple of months ago.

The only difference in the credit data between the last listing and this one is the amount of time the borrower has been employed.  However, Prosper made a big change in their bidding guidance segments and now this borrower is in the top segment of the C grade loans.  Previously this same borrower was in a segment that Prosper suggested might have a 12+% loss to factor in when bidding.  Now the lender guidance suggests a loss of only a little over 3% including the 1% lender fee.

In the earlier version of Prosper's segments, they focused a lot on number of delinquent accounts whereas now they focus more on DTI and loan size for C grade borrowers.  Since there are a few non-zero numbers in the extended credit data where one would like to see zeros, it is nice to see that there are other factors being used so that she has a better chance to get a loan this time around.

This post is probably looking like a "loan pimp" and it is but since this is my blog, I can post what I want.  :-)  I do believe this borrower will continue to improve her credit and financial situation with a loan on Prosper.  After all, since last May, her credit grade has moved up from an E to a C.  Getting more training in order to get more income seems like a good idea, right?

I just placed my first bid since before Thanksgiving.  Once again, it's an autofund loan.  For some reason I can't stop bidding on those.  However, in this case it's a friend from IRC who has AA credit but is somewhat rate-capped in Texas at 8.32%.

Anyway, I have noticed Prosper is continuing to make improvements towards profitability.  Even though the totals for December are flat compared to January of last year, they increased borrower fees significantly so that will help their bottom line.  Lenders are making significantly better choices overall as far as loan quality based on credit grade it appears and Prosper is continuing to work on collections--all good signs.  Also, Prosper is working on correcting some mistakes they made in the various lender/group leader agreements and compensating the lenders and group leaders so that tells me that Prosper is trying to do the right thing.

For me, the acid test will be if Prosper can finally start to attract enough of the higher-grade borrowers such that total loans starts to go up significantly.  I want to believe in this company but it's hard when I see the number of loans staying flat when I know they are losing money and there's no sign of stopping.

Since it is the time for Peace on Earth, I thought I'd post a few positive thoughts about Prosper.

Over the past year, anyone who wishes to be fair must admit that Prosper has made some very significant improvements to it's site.  Even though month-to-month the amount of loans hasn't changed much, the quality of loans originated has improved significantly and a lot of it has to do with changes Prosper has made IMO.

Bidding Guidance: At the end of October, Prosper added some numbers to the bid screen with Prosper-based default rates that act as a reference for lenders, especially newbies, to see how similar loans have done in the past for lenders.  Since that time, the median loan by credit grade has moved from the C/D range to the low B range.  That change right there will probably be one of the biggest factors that reduces the total number of defaulted loans as a percentage of all loans per month.

Additional Credit Information: In mid-February, coinciding with Prosper Days 2007, Prosper added a lot more credit information including amount delinquent, revolving credit balance, bankcard utilization, and income range.  There were a number of other items added as well but I feel these are the most useful of the bunch.  Shortly after these were added, the number of the highest risk loans being made started dropping.  Default rates (loans going 1-month late or worse) started going down as well.

Removal of Group Fees: At the end of May, Prosper eliminated the "Match Reward" for group leaders and started it's referral program to replace it.  In the middle of September, Prosper eliminated all group fees entirely.  These two changes put an end to some of the worst abuses of Prosper that a few sleazy people acting as group leaders had practiced.  Group leaders no longer had any incentive to simply "pump & dump" (fully fund a listing at maximum rate only to be completely outbid in the end) listings for borrowers.  Many times it appeared this was done only to collect group rewards.  If a few of those borrowers stopped paying, no problem since there were enough others who were paying to make up for it.  In the end, the lemnders who focused mostly on fully funded listings were left holding the bag.  It is my opinion that this has helped decrease default rates as well.  Unfortunately, there were a few "good groups" who did earn their fees who have closed.  Overall, this was a big plus for Prosper I believe.

Collections Improvement: It is very early in this process but I've started to see a bit of evidence that Prosper is working to improve collections.  Lenders have been asking for this for a long time and I believe there are some changes being made in the right direction so I don't see how anyone can complain about that.

Ease of Use: There aren't many options outside of Prosper for p2p Lending but from what I've seen, Prosper has the best user interface.  It is easy to search for listings based on specific credit criteria beyond interest rate and/or credit grade.  It is easy to set up a standing order to do auto-bidding if you like.  Part of my thoughts on this might be just because I've been using the site for well over a year but I've seen others mention some of these things as well.

There are other things I consider positive but these were the high points from my perspective.  Merry Christmas all. 

WARNING: Apparently, according to Prosper, the website that hosts this blog is out to steal your identity.  Reading, posting or having anything to do with Prospers.org should be done at your own risk.  Don't say you weren't warned.

Since the removal of the Prosper spreebb forums and then the subsequent addition of a fully-moderated set, Prospers.org has seen a huge increase in traffic according to the Prospers.org stats page.  Then, last weekend, when Prosper went through and deleted every mention of Prospers.org from people's profiles on Prosper, it brought even more traffic and drove the owners/participants to make the forums there more public.  In fact, Monday this week almost saw a new high in number of people logged in to the site at the same time.  In addition to the increase in traffic, we've also seen several new blogs pop-up as has been documented in various places.  You can find links to a number of them here.

Someone mentioned in another blog (I'm too lazy to go find out exactly who it was) about something known as the Barbara Streisand effect.  Basically it means that attempts to suppress something cause the exact opposite effect, an increase in knowlege about it.

At any rate, I don't know exactly what Prosper was hoping to accomplish with it's attempts to suppress the community it started.  I do know that every day, I keep seeing more and more people doing things to expand the community and knowlege of Prosper's actions as widely as possible.  I wonder if Prosper was just trying to get the community off their hands so they didn't have to deal with them at all.  Then they could spend more time on their core business?  Would that make sense?  I don't know.