Print

[bamalucky]

No, in this case I do not think so.

Maybe you need to read how New Horizon had a loan paying half payments till Prosper deemed it "charged off"

Guess what happened then?

what is a contract if you just decide you don't want to abide by it?

Do you even realize what Ira is saying? That this is gonna make current payers stop "because they can"

[bamalucky]

I'm actually tired of turning over 17% to a collection agency that is in all likelehood doing nothing to make borrowers pay & said borrowers were probably gonna pay anyway.

[ira01]

No, in this case I do not think so.

Maybe you need to read how New Horizon had a loan paying half payments till Prosper deemed it "charged off"

Guess what happened then?

I had one of these too.  I think it was perfectly predictable (and predicted by many people here, including myself) that Prosper's "charge-off" scheme was going to suck for lenders, and that is exactly what happened.  Yet another example of how Prosper violated the LRA, supposedly for the benefit of lenders, but in reality wound up screwing lenders more.

[mothandrust]

If Prosper wanted to make a change that would benefit lenders, they would

Ask the lenders first.

Take a poll, and if the change doesn't violate the LRA and the vast majority of the lenders support it, then do it.

Or post here saying, "Hey, we're thinking of accepting reduced payments from borrowers who claim hardship.  It's your money, so what do you think about this idea?"

[wftrust]

Maybe you need to read how New Horizon had a loan paying half payments till Prosper deemed it "charged off"

Guess what happened then?

Appears to me you are making my point. Half payments are better than none, even if eventually that specific borrower or Prosper says that's it. If Prosper believes it can accept partials and not charge off then more funds should come to lenders on those individual loans. This might have been a case where some minority of the lenders screamed bloody murder about how Prosper was not living up to its terms and forced them to charge it off. You and I will probably never know. But if this thread is any indication that is probably the case.

what is a contract if you just decide you don't want to abide by it?

Done deal, so what are you or I going to do about it? I am for the change, so will do nothing. My suspicion is you will as well. Maybe bitch a little more in the meantime is all...  

Do you even realize what Ira is saying? That this is gonna make current payers stop "because they can"

Why would you assume I don't? Because I do not agree?

Yes I fully realize it, but I do not think he (nor you, if you agree, since you did not state your position) is correct in that assessment. Current borrowers will probably not even be aware of the offer; it will only be those on the ropes (already late) that will avail themselves of it. And those are the ones most likely to slow or discontinue paying anything anyway. Borrowers can already do this of their own accord without Prosper offering anything, see your item one. Prosper is just allowing a mechanism (yes against the LRA) so that the lenders may end up with a little more in their pockets instead of the immediate turn over to outside collections, and leaving the agency with a big chunk of any of the funds collected.

Ira01 (and maybe you) is making the assumption that because a borrower can get away with something that they (or a large number of them anyway) will automatically do it, even if it hurts them in the long run. The ones who will do this are already a lost cause in my book, and are ripe for defaults anyway. This plan will only be offered if the borrower is already defaulting. Sending to Collections is a joke, and there is no point in even thinking they are doing anything to help the actual collection process except maybe in large loan sizes. The process in the majority of loans is a simple (probably single) letter sent out and hope that scares the borrower into paying up. Unlikely.

Most borrowers have to realize that this suggestion will cost them more overall (late fees, additional interest, and larger payments later). So this becomes just another tool for us to collect a little more before that specific borrower goes belly up. Nothing more, it is not a blanket offer to all borrowers, just to those who are flaky enough already to eventually default.

Now having said all this, and defending Prosper in this case, is leaving a bad taste in my mouth... I just believe you are barking up the wrong tree here.

WFT

ETA

I'm actually tired of turning over 17% to a collection agency that is in all likelehood doing nothing to make borrowers pay & said borrowers were probably gonna pay anyway.

Perhaps you are actually stating your support for this change here. So maybe you have taken a position.

[bamalucky]

Ira01 (and maybe you) is making the assumption that because a borrower can get away with something that they (or a large number of them anyway) will automatically do it, even if it hurts them in the long run.

Prosper has already admitted that the SEC shutdown made some borrowers quit paying.

Perhaps it was because they thought they could get away with something.

In fact one borrower used the SEC shutdown in court filings.

[bamalucky]

Done deal, so what are you or I going to do about it? I am for the change, so will do nothing. My suspicion is you will as well. Maybe bitch a little more in the meantime is all... 

I'm pretty sure I was the first lender to file a formal complaint with a state attorney general & banking commission.

[wftrust]

Done deal, so what are you or I going to do about it? I am for the change, so will do nothing. My suspicion is you will as well. Maybe bitch a little more in the meantime is all... 

I'm pretty sure I was the first lender to file a formal complaint with a state attorney general & banking commission.

Ahh so we will have you to thank for Prosper collecting less money before they go bankrupt....

[wftrust]

Ira01 (and maybe you) is making the assumption that because a borrower can get away with something that they (or a large number of them anyway) will automatically do it, even if it hurts them in the long run.

Prosper has already admitted that the SEC shutdown made some borrowers quit paying.

Perhaps it was because they thought they could get away with something.

In fact one borrower used the SEC shutdown in court filings.

Again, sounds like they were already the deadbeats looking for a way out. So why would you beleive they would not have stopped paying anyway? Someone who is not going to pay, is not going to pay. The reason is just thier justification. Will still happen, they will just point to some different reason.

Did someone do a study to see if the rates of delinquency increased during the SEC timeframe? Perhaps they did, and I can beleive that it might have gone up. But again this partial payment is a policy that most non-secured lending organizations would reasonably have in their quiver to use to try and collect anything on an unsecured loan. So why would we handcuff our only administrator (aren't allowed to have anyone else) hands in that collection effort?

[zapp05]

it is starting to sound like wft is really Corey, but with a change to his meds   

[wftrust]

it is starting to sound like wft is really Corey, but with a change to his meds   

Nope, just feel this has been an unjustified public attack and felt I had to finally speak out. Many items are fully justified (or even partially, so no reason to get excited) here, but this one seems like we are begging P to shoot us in the foot, just because we can.

Been a lurker for a long time, and will go back to that now probably.... Made my point, know I will not change many minds, and it is not agreed with. It has been too negative around here for way too long to have long time members see anything positive from a new solution anyway.

WFT

[Urbi_et_Orbi]

Somehow, this blog did not make it onto Prosper's facebook page or onto their Twitter...

[ira01]

Somehow, this blog did not make it onto Prosper's facebook page or onto their Twitter...

What, another technical glitch?   

[Shenandoah]

Nope, just feel this has been an unjustified public attack and felt I had to finally speak out.

I can't see how it's unjustified at all.

Prosper made a legal agreement with us.  Legal agreements/contracts exist for a reason - so that both sides know what to expect of the other.
My company holds many contracts with the government.  We can't decide to do anything differently just because we think it would be in the government's best interest.  We often see areas where breaking the contract would benefit the government.  We have to go through a process of getting an amendment to the contract, which involves both sides agreeing to the new terms.  If we just started doing business against the contract you can be sure that many people would be in a lot of trouble.

Perhaps Prosper's collection actions are for the best, but without formally changing their legal agreements, they are hurting lenders.  You can bet that if the tables were turned, and a lender did something against the agreement that they felt was in Prosper's best interest, they wouldn't be forgiven so easily.

Again, legal agreements exist for a reason, and there are formal procedures for changing them for a reason.  You can't just decide to do things against the contract because you feel that it's in the other party's best interests.  There would be no point to having contracts at all if that was the case.

[Beerbud1]

Nope, just feel this has been an unjustified public attack and felt I had to finally speak out.

I can't see how it's unjustified at all.

Prosper made a legal agreement with us.  Legal agreements/contracts exist for a reason - so that both sides know what to expect of the other.
My company holds many contracts with the government.  We can't decide to do anything differently just because we think it would be in the government's best interest.  We often see areas where breaking the contract would benefit the government.  We have to go through a process of getting an amendment to the contract, which involves both sides agreeing to the new terms.  If we just started doing business against the contract you can be sure that many people would be in a lot of trouble.

Perhaps Prosper's collection actions are for the best, but without formally changing their legal agreements, they are hurting lenders.  You can bet that if the tables were turned, and a lender did something against the agreement that they felt was in Prosper's best interest, they wouldn't be forgiven so easily.

Again, legal agreements exist for a reason, and there are formal procedures for changing them for a reason.  You can't just decide to do things against the contract because you feel that it's in the other party's best interests.  There would be no point to having contracts at all if that was the case.

I couldn't agree with you more Shen, Why couldn't they do conference calls, and explain or suggest what they want to do. They could do them east of the mississipi, and west of the mississipi, or by time zone or by region. they could have skype like conference calls as well. People could IM questions and get those questions explained.

what do they do? Nothing, just tell us months after they've done it. Its our money not theirs. they've violated the LRA so many times to their liking. If we do something they don't like, they suspend us. Typical double standard.