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[onthefence]

I agree with wftrust.  Prosper negotiating with borrowers who are behind on payments will benefit lenders and I applaud them for their action.

A good concerning point is that the Performance data may no longer be reliable.  Unless Prosper want's the lending community to start making more bad loans, I would suggest they find some way to flag loans that are behind so lenders can accurately access this risk.

[Fred93]

A good concerning point is that the Performance data may no longer be reliable.  Unless Prosper want's the lending community to start making more bad loans, I would suggest they find some way to flag loans that are behind so lenders can accurately access this risk.

My understanding is that the loans in question will continue to show as late on the prosper web pages, in the prosper performance data, etc, but will be reported as on time to the credit reporting agencies.  That's my reading of Doug Fuller's blog on the subject.  Please reread Doug's blog and tell me if you agree.  If I've interpreted this correctly, it does not distort the prosper statistics.

My feeling about this program is that it is misleading (and therefore unfair) to non-Prosper lenders because the credit report will contain false information.  This fails my "don't mislead people" principle.  I don't know whether it technically violates the agreement Prosper has with the credit reporting agencies.

[big-al]

A good concerning point is that the Performance data may no longer be reliable.  Unless Prosper want's the lending community to start making more bad loans, I would suggest they find some way to flag loans that are behind so lenders can accurately access this risk.

My understanding is that the loans in question will continue to show as late on the prosper web pages, in the prosper performance data, etc, but will be reported as on time to the credit reporting agencies.  That's my reading of Doug Fuller's blog on the subject.  Please reread Doug's blog and tell me if you agree.  If I've interpreted this correctly, it does not distort the prosper statistics.

My feeling about this program is that it is misleading (and therefore unfair) to non-Prosper lenders because the credit report will contain false information.  This fails my "don't mislead people" principle.  I don't know whether it technically violates the agreement Prosper has with the credit reporting agencies.

My understanding is the CRA reporting is correct.  Once they make a new agreement with the borrower and that agreement is met the borrower is paying on time.  In general I don't have a big issue with this as long as the borrower was significantly late before the agreement was made.  In this specific instance, while I can see where this sort of agreement could benefit the lenders, there are two minor problems.  First is the LRA.  Second is the fact that Prosper has a long history of failures, so I have little faith that the well-meaning change will be implemented in a manner which will actually benefit lenders.

[Fred93]

My understanding is the CRA reporting is correct.  Once they make a new agreement with the borrower and that agreement is met the borrower is paying on time.

Well think about its "correctness" this way...

You're a lender.  Maybe you're a bank, or maybe you're an individual lending thru some P2P thing, like Lendingclub.  Joe Borrower comes to you to borrow $10,000.  To assess the risk of this loan, you pull a credit report on Joe.  You look at his credit score, and you look at things like whether he is delinquent on any existing credit lines.  You know that people who are presently delinquent are in financial trouble, and are bad risks.  This matters a lot to you, because making choices based on good data is critical to your profit or loss.  You depend on the credit report.

Unfortunately, the credit report shows that Joe is current on all his credit lines, when in fact he can't pay the loans he has already taken out, and is paying a little tiny payments each month under an "agreement" with Prosper and other lenders.  The credit report doesn't represent reality.  But wait, there's more.  The credit reporting agency computes a credit score based on this incorrect information   You use this bogus credit score and the bogus current delinquents data to decide to make a loan to Joe.

Joke's on you ... Joe defaults on your loan.  He was in bad financial trouble when you loaned him the $10,000.   This information was hidden from your view.  You've been mislead, and the crime is material.  The misinformation has cost you money.

In general I don't have a big issue with this as long as the borrower was significantly late before the agreement was made.

They're doing at at the 1-month-late point as I understand it.

In this specific instance, while I can see where this sort of agreement could benefit the lenders,

It might benefit the lenders.  I don't know whether it will, but it is certainly possible.  However I don't think it is appropriate for Prosper to violate various contracts (lender agreement for example) just because they think it benefits the lender.  Long ago Prosper should have and could have amended these agreements to add various issues such as delayed payment agreements, loan acceleration, etc.  They didn't.  Every time Prosper violates their contracts they give the guys on the other side of those contracts (borrowers and lenders) license to do the same.  This is bad business.  

Second is the fact that Prosper has a long history of failures, so I have little faith that the well-meaning change will be implemented in a manner which will actually benefit lenders.

Community payments come to mind.

[Senator]

Community payments come to mind.

Anyone receive a community payment lately?  In 2009?

[bamalucky]

I agree with wftrust.  Prosper negotiating with borrowers who are behind on payments will benefit lenders and I applaud them for their action.

A good concerning point is that the Performance data may no longer be reliable.  Unless Prosper want's the lending community to start making more bad loans, I would suggest they find some way to flag loans that are behind so lenders can accurately access this risk.

WGAF what you think as you aren't a lender.

[wftrust]

I agree with wftrust.  Prosper negotiating with borrowers who are behind on payments will benefit lenders and I applaud them for their action.

A good concerning point is that the Performance data may no longer be reliable.  Unless Prosper want's the lending community to start making more bad loans, I would suggest they find some way to flag loans that are behind so lenders can accurately access this risk.

WGAF what you think as you aren't a lender.

This is a sad statement and to my point…

You should care what he thinks. This thread was put in a public forum, not only to showcase to the public what you select negative nellies thought but to also allow the public (non-lenders) to tell you what they think. So his response does not require a personal attack, the forum solicited the response by making the thread public.

This was the only reason I spoke out. Once something like this becomes public you discourage Prosper from making ANY attempts to help the lender community. And your attack is just an attempt to shut up honest discourse that disagrees with you. I for one would prefer for Prosper to continue to try to make it a better platform. And perhaps collect a little more money for me, before they go belly up.

Yes I could wish for something better from them: More lender input, advance agreements, a wait for 60-90 days late before offering, etc. But just because that did not happen I am not going to look a gift horse in the mouth.

I have not looked at a new contract, since I haven’t been making loans, does the new contracts contain any of this language? Or because, it appears that, Prosper owns the loan this is now a moot point? Prosper would have a real nightmare if they tried to go back and change these LRA’s retroactively. So to do it unilaterally and creatively within a grey area of the agreement, was IMHO good.

Hopefully the result will be as well.

WFT

[bamalucky]

You should care what he thinks. This thread was put in a public forum, not only to showcase to the public what you select negative nellies thought but to also allow the public (non-lenders) to tell you what they think. So his response does not require a personal attack, the forum solicited the response by making the thread public.

Why should I care about the opinion of someone else about MY money?

My attack wasn't personal,i'm just tired of the silly defense argument. Selective nellies? You mean the 99% of lenders here who think Prosper is screwing us over?

Can you tell me why not a single lender in the year 2006 top 25 are still lending bar "anton" the founder?

[Urbi_et_Orbi]

Prosper would have a real nightmare if they tried to go back and change these LRA’s retroactively. So to do it unilaterally and creatively within a grey area of the agreement, was IMHO good.

 

[ira01]

Once something like this becomes public you discourage Prosper from making ANY attempts to help the lender community.

Oh please.  There are lots and lots of things that Prosper could do to "help the lender community" that don't involve Prosper breaching its contracts with lenders.  For example, how about if Prosper actually handled the NAT legal test project with a modicum of competence, instead of the sheer ineptitude in which it actually ran the test (to the substantial detriment of lenders who opted-in to the test)? 

Or how about if Prosper actually lived up to its so-called "100% id-theft guarantee"? 

Or if Prosper complied with its Privacy Policy and allowed borrowers to include their own personal information in listings to allow lenders to investigate them before throwing their money away on loans to fraudsters? 

Or if Prosper punished borrowers who posted fraudulent listings, rather than punishing lenders who identified and outed the frauds? 

Or if Prosper stopped overcharging collection agency fees to lenders who had loans that were with Pencro before Prosper unilaterally chose to move those loans to AmSher at a higher cost (but apparently no better results)? 

Or if Prosper verified the borrower information on more than a small fraction of loans before origination (especially considering that a minority of loans chosen for verification actually pass verification)?

Do I need to go on?

[Fred93]

I have not looked at a new contract, since I haven’t been making loans, does the new contracts contain any of this language? Or because, it appears that, Prosper owns the loan this is now a moot point?

New agreement doesn't matter, because they're doing it on the OLD loans, which are under the OLD agreement.  Prosper doesn't own the OLD loans.

[Shenandoah]

Under the Prospectus* (which only applies to new notes, not to the old loans), they have the right to modify the terms.  It also states that they will notify the lenders via email whenever the terms have been modified for one of their borrowers.
Has anyone received one of those notifications?  Does anyone here have a borrower paying on modified terms?


* pg 64-65 under Servicing Covenant

[BigCowboy]

Under the Prospectus* (which only applies to new notes, not to the old loans), they have the right to modify the terms.  It also states that they will notify the lenders via email whenever the terms have been modified for one of their borrowers.
Has anyone received one of those notifications?  Does anyone here have a borrower paying on modified terms?


* pg 64-65 under Servicing Covenant

I have borrowers paying (apparently) under modified terms.  I have NOT received any notification by any means on these loans.

-BigCowboy

[God-Father]

I have communicated with one borrower that is paying 50% for 4 months, per agreement with Prosper.  She has made 2 of the 4 payments so far.  I have not received any notification from Prosper. 

[God-Father]

I agree with wftrust.  Prosper negotiating with borrowers who are behind on payments will benefit lenders and I applaud them for their action.

A good concerning point is that the Performance data may no longer be reliable.  Unless Prosper want's the lending community to start making more bad loans, I would suggest they find some way to flag loans that are behind so lenders can accurately access this risk.

WGAF what you think as you aren't a lender.

This is a sad statement and to my point…

You should care what he thinks. This thread was put in a public forum, not only to showcase to the public what you select negative nellies thought but to also allow the public (non-lenders) to tell you what they think. So his response does not require a personal attack, the forum solicited the response by making the thread public.


WFT

You are confussed.  IMHO - Topics get put in the lobby so Google will pick them up and share the Prosper hater opinions with the public to prevent them from making the same mistakes.