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[Mark12547]

With the removal of most of the Lender content, it feels like Prosper will finally try to make a go of it without us Note Purchasers ("Lenders") putting our money at risk, or would if they wanted to continue. The SEC C&D just deals with the selling of the Notes to us Note Purchasers, not the part dealing with originating loans.

Where is Prosper going to get the money to lend?

Prosper could use some of that cash burn to invest and thereby increase the burn rate. 

Prosper could sell Notes to institutional ... oh wait, they can't sell notes.

I guess Prosper could try to get referral fees. 

[cowdog]

With the removal of most of the Lender content, it feels like Prosper will finally try to make a go of it without us Note Purchasers ("Lenders") putting our money at risk, or would if they wanted to continue. The SEC C&D just deals with the selling of the Notes to us Note Purchasers, not the part dealing with originating loans.

Where is Prosper going to get the money to lend?

Prosper could use some of that cash burn to invest and thereby increase the burn rate. 

Prosper could sell Notes to institutional ... oh wait, they can't sell notes.

I guess Prosper could try to get referral fees. 

They could try to sell some of their options   

[Mark12547]

With the removal of most of the Lender content, it feels like Prosper will finally try to make a go of it without us Note Purchasers ("Lenders") putting our money at risk, or would if they wanted to continue. The SEC C&D just deals with the selling of the Notes to us Note Purchasers, not the part dealing with originating loans.

Where is Prosper going to get the money to lend?

Prosper could use some of that cash burn to invest and thereby increase the burn rate. 

Prosper could sell Notes to institutional ... oh wait, they can't sell notes.

I guess Prosper could try to get referral fees. 

They could try to sell some of their options   

Ah, yes! Prosper Marketplace, Inc., could collect a second SEC Cease & Desist order! Maybe Prosper could sell the SEC C&D's on eBay! 

[Tokyo Joe]

It's called mancrush or bromance, and yes it's sexy in it's own way.

"bromance"? 

[FANAFI]

What I don't understand is how the SEC ruling that Prosper was selling unregistered securities makes anyone more or less harmed than they were 2 months ago.

We were harmed from the beginning.We bought a product from a company that didn't have a license to sell it to us.


When Prosper folds & the promised 3rd party servicer isn't in place,you may turn into the biggest whiner here.

This is why we've contacted Philip (bamalucky's person of trust) for input and to put our names on the list. We had to sleep on it as it made eating turkey a little harder yesterday. We can't just stand by and hope that Prosper has all it's ducks in a row with possible armageddon fallbacks, failsafes, etc. If it did, we wouldn't be here talking about them like this. I'd rather risk losing 33% to a lawyer than 100% to incompetence!

-J & H

---update---

This guy (Mr. Kim) is a totally unreliable guy (aka douche-bag) and doesn't want to put in the work right now it appears (emailed him and he gave me a push off like this case is crap to him). I will see what happens with the fallout of all this with Prosper next week I suppose.
 

[bamalucky]

Don't call him my person of trust.

I found him here just like everyone else did 

Of course i trust everyone here 

[christoofar215]

PROSPER IS NOW DEAD

http://www.techcrunch.com/2008/11/26/sec-outlines-its-reasoning-for-shutting-down-p2p-lender-prosper/


What I see happening now:

- Borrowers now have a legal out to stop paying their notes.   Thanks to the murkiness of the Lending Agreements, it's not exactly clear how 300 lenders are going to sue a single borrower who took the transaction through an intermediary.

- If a Borrower wins a default judgment to stop paying, they can probably also move to strike the record from their credit reports, too... a double win.

- Defaults will skyrocket once the Borrower population learns what has happened; which I see 3-5 months from now as Borrowers occasionally Google around and they realize what is going on.

- Your ability to transfer cash out of your Prosper account may be affected.

[Xenon481]

PROSPER IS NOW DEAD

http://www.techcrunch.com/2008/11/26/sec-outlines-its-reasoning-for-shutting-down-p2p-lender-prosper/

Notice the first comment on that article!

So does this mean I don’t need to payoff my $12K prosper loan?

[Mark12547]

PROSPER IS NOW DEAD
http://www.techcrunch.com/2008/11/26/sec-outlines-its-reasoning-for-shutting-down-p2p-lender-prosper/

The article is wrong on this critical detail:

Even though Prosper is not lending the money itself, the loans would not exist without Prosper.

According to our lending agreements, Prosper originated the loans and more recently Web Bank originated loans and assigned them to Prosper; in both cases, the loans are sold to us "Lenders" (actually, "Note Purchasers"). In most cases, the loans are completely legal.

The SEC C&D deals with the selling of those Notes to "Lenders" (us). If Prosper had the money and desire to do so, Prosper could still originate loans.

What I see happening now:

- Borrowers now have a legal out to stop paying their notes.   Thanks to the murkiness of the Lending Agreements, it's not exactly clear how 300 lenders are going to sue a single borrower who took the transaction through an intermediary.

Actually, they don't have a legal out--their loans were legal. (Well, there may be a few disputes about some loans where Prosper may have inadvertently violated state lending laws in a few states, e.g., some states where later Prosper became aware of legal restrictions, before Prosper had Web Bank as a lending partner.)

The problems with what happens to the loans on the "back end" of the transaction (what Prosper did with the loans after they had originated) does not affect the legal requirement to repay the loans made in good faith.

I have no doubt that some borrowers will try to stretch the SEC C&D to mean they don't have to repay, and it is possible that Prosper's ace lawyers may mess up part of the picture and lose cases there, too. But that is making use of confusion about the details of the platform, not the legal issues as such.

- Defaults will skyrocket once the Borrower population learns what has happened; which I see 3-5 months from now as Borrowers occasionally Google around and they realize what is going on.

Yes, I think you are right about that, but probably sooner than 3 to 5 months; references to SEC's Cease and Desist letter are already in Google's indexes. But as I said, it would be from misinterpreting the ramifications of SEC's C&D letter.

[mtnchickatstore]

People are already falling behind on their mortgage, car payment, etc. Prosper loans will be even further down the list of what to pay than they were (and that was pretty far down already.....)

[Cheerful_Lender]

People are already falling behind on their mortgage, car payment, etc. Prosper loans will be even further down the list of what to pay than they were (and that was pretty far down already.....)

Mortgage
Utilities
Car Loan
Morning Starbucks
Credit Cards
New Computer
Student Loans
Pet Grooming
Medical Bills
....
Christmas gift for cleaning lady
Christmas gift for beautician
Christmas gift for garbage man
....
....
....
Prosper Loan

[bamalucky]

My borrowers must have had a crystal ball.25% of my loans went late in the 4 weeks BEFORE the cease & desist

[sdkester]

Notice the first comment on that article!

So does this mean I don’t need to payoff my $12K prosper loan?

I get visitors from search engines on Prosper keywords occasionally. Two that stuck out the last few days are "do I have to pay my prosper loan" and "what happens if I default on prosper loan".

[Fred93]

- Borrowers now have a legal out to stop paying their notes. 

No.  Nothing in the SEC order affects prosper's borrowers at all.

it's not exactly clear how 300 lenders are going to sue a single borrower who took the transaction through an intermediary.

In the case of the 66 "legal test" loans, prosper bought them back (for zero$ + contingency), to remove this legal uncertainty, then sued.  Unfortunately, they've lost most of those cases even without the problem you describe!  In many cases they never even managed to find the borrower to serve 'em the paperwork.  In  many other cases Prosper dropped the case with no explanation to us whatsoever.  The legal test has had a horrible result.  Prosper has decided to not tell us anything about how this played out.  My guess is that it is their own failure.

[tmullin1217]

Don't call him my person of trust.

I found him here just like everyone else did 

Of course i trust everyone here 

Like you trusted Zopa.
Like you trusted Loanio.

Like you trusted your skills in picking loan listings...