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[xraider]

As you say, lenderguy, it's ARGUABLY.  There are several things we could do, including obtaining injunctive relief requiring Prosper to abide by the terms of the contract.

[NewHorizon]

Don't mean to overlook this forgiving-the-debt thing, but I'm still back at:

Of this population, 1,966 (37.7%) failed to respond or provided unsatisfactory information in response to the request. 

Don't know 'bout the rest of you, but to me 37.7% is a scary high number.
Welcome to the sub-prime underbelly, I guess.

[NewHorizon]

On another lesser note...

From the signatures page.

*By:
   

/s/ Christian A. Larson
   
Christian A. Larson

Attorney-in-Fact

Mr. Larsen is the CEO, but who's Mr. Larson?  

Corrected in the June 9th version.

[JammingJAY]

Don't mean to overlook this forgiving-the-debt thing, but I'm still back at:

Of this population, 1,966 (37.7%) failed to respond or provided unsatisfactory information in response to the request. 

Don't know 'bout the rest of you, but to me 37.7% is a scary high number.
Welcome to the sub-prime underbelly, I guess.

The sample was 22.6% of loans funded over 70%.

Like Freds charts ~40% defaults.

So prosper knew this, as the fraudulent loans piled up they created the charge-off shredder. 

Nifty!

Now you can quit the verification nonsense and when the collection agent bounces the late account back as nonexistent person or such in a couple weeks, you can toss it into the charge-off bid.

 

[lenderguy]

As you say, lenderguy, it's ARGUABLY.  There are several things we could do, including obtaining injunctive relief requiring Prosper to abide by the terms of the contract.

Which then makes the issue a matter of fact, not law, and therefore suitable for a jury trial, even if Prosper might be likely to prove its side, right?

[Fred93]

Don't mean to overlook this forgiving-the-debt thing, but I'm still back at:

Of this population, 1,966 (37.7%) failed to respond or provided unsatisfactory information in response to the request.  

Don't know 'bout the rest of you, but to me 37.7% is a scary high number.
Welcome to the sub-prime underbelly, I guess.

Horrible scary high number.  

My position on this is that any reasonable responsible person, upon seeing that his sample got this horrible high rate of bad (ie "failed to respond or provided unsatisfactory information"), would immediately switch to verifying 100% of the borrowers.  Prosper did not.

[xraider]

As you say, lenderguy, it's ARGUABLY.  There are several things we could do, including obtaining injunctive relief requiring Prosper to abide by the terms of the contract.

Which then makes the issue a matter of fact, not law, and therefore suitable for a jury trial, even if Prosper might be likely to prove its side, right?

No.  There is a breach, and the breach could give rise to injunctive relief.  That would be decided by the court.  Juries don't get involved in injunctions.  If we sued for damages, we would need to prove them.

[xraider]

Don't mean to overlook this forgiving-the-debt thing, but I'm still back at:

Of this population, 1,966 (37.7%) failed to respond or provided unsatisfactory information in response to the request.  

Don't know 'bout the rest of you, but to me 37.7% is a scary high number.
Welcome to the sub-prime underbelly, I guess.

Horrible scary high number.  

My position on this is that any reasonable responsible person, upon seeing that his sample got this horrible high rate of bad (ie "failed to respond or provided unsatisfactory information"), would immediately switch to verifying 100% of the borrowers.  Prosper did not.

Prosper's response, on the other hand, was to tell lenders that it wasn't going to verify anything.

THAT'S where I think there's that small fiduciary duty issue.

[ira01]

Don't mean to overlook this forgiving-the-debt thing, but I'm still back at:

Of this population, 1,966 (37.7%) failed to respond or provided unsatisfactory information in response to the request. 

Don't know 'bout the rest of you, but to me 37.7% is a scary high number.

I wonder how many of those were situations like Big Gulp's brother, where supposedly he sent Prosper all the requested information, but Prosper couldn't open the .pdf so they canceled his listing without providing an opportunity for him to send the info again?

I do agree, however, that when 38% of the borrowers chosen for verification fail, Prosper had a duty to do more -- whether verify a larger sample, or figure out which factors led to an unacceptably high failure rate and at least verify more of those.  Instead, Prosper just said "fuck it, not our money at stake" and left us lenders holding the bag.

[ira01]

As you say, lenderguy, it's ARGUABLY.  There are several things we could do, including obtaining injunctive relief requiring Prosper to abide by the terms of the contract.

Which then makes the issue a matter of fact, not law, and therefore suitable for a jury trial, even if Prosper might be likely to prove its side, right?

No.  There is a breach, and the breach could give rise to injunctive relief.  That would be decided by the court.  Juries don't get involved in injunctions.  If we sued for damages, we would need to prove them.

I think you're both right.  To recover damages, we would need to prove them.  But to survive a demurrer, we need only allege them.  Prosper couldn't show that as a matter of law there were no damages -- for all it knows, one or more of those seven loans might have PIF'd had it not reduced the principal.  Maybe the borrowers needed to clean their credit report up -- did Prosper also agree to report the Prosper loan as "paid as agreed"? 

Also, arguably, Prosper's reduction of principal in violation of its contract with us DID cause us damages beyond the seven loans in question -- how many OTHER borrowers, who find out that Prosper is willing to do this -- will choose to pay a fraction in return for forgiveness of the balance, rather than continue making full payments? 

[NewHorizon]

Don't mean to overlook this forgiving-the-debt thing, but I'm still back at:

Of this population, 1,966 (37.7%) failed to respond or provided unsatisfactory information in response to the request. 

Don't know 'bout the rest of you, but to me 37.7% is a scary high number.

I wonder how many of those were situations like Big Gulp's brother, where supposedly he sent Prosper all the requested information, but Prosper couldn't open the .pdf so they canceled his listing without providing an opportunity for him to send the info again?

That occurred to me too.  Or more accurately, I recall all those faxed-over drivers licenses that Prosper said they couldn't read.  Could be wrong, but I've assumed Prosper had a lousy fax machine.  Or I could be right. 

[Fred93]

...I recall all those faxed-over drivers licenses that Prosper said they couldn't read.  Could be wrong, but I've assumed Prosper had a lousy fax machine.  Or I could be right. 

Driver's licenses are difficult to fax.  They have all that copy protection stuff on them these days.  Here's what you gotta do:

1. Use copier to enlarge the driver's license.
2. Put enlarged copy in the fax machine.
3. Be sure to press "fine" or "superfine" button on fax machine, to specify increased resolution.

If you make a 1:1 copy of a modern driver's license, and then fax in the default 100 scan lines per inch mode, the person at the receiving end usually can't read it.

[ira01]

...I recall all those faxed-over drivers licenses that Prosper said they couldn't read.  Could be wrong, but I've assumed Prosper had a lousy fax machine.  Or I could be right. 

Driver's licenses are difficult to fax.  They have all that copy protection stuff on them these days.  Here's what you gotta do:

1. Use copier to enlarge the driver's license.
2. Put enlarged copy in the fax machine.
3. Be sure to press "fine" or "superfine" button on fax machine, to specify increased resolution.

If you make a 1:1 copy of a modern driver's license, and then fax in the default 100 scan lines per inch mode, the person at the receiving end usually can't read it.

So if a company routinely asks for driver's licenses to be faxed in, shouldn't they post these instructions?

[Fred93]

So if a company routinely asks for driver's licenses to be faxed in, shouldn't they post these instructions?

Well... I would.

[ira01]

So if a company routinely asks for driver's licenses to be faxed in, shouldn't they post these instructions?

Well... I would.

Me too.  That's one of the things that makes Prosper so unbelievably incompetent -- that it never seems to foresee any problems (even ones that are perfectly foreseeable), and that even once a problem becomes obvious (and/or is pointed out to Prosper), it still fails to take reasonable actions to prevent/mitigate the problem.