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[Fred93]

Fred has updated his blog again, with the lastest charts, and not many words.
http://fred93blog.blogspot.com/2010/01/prospercom-122009-late-loan-stats.html

Its tough to think up lots a words, 'cause there's so little happening at prosper.com these days.

The meat...

[ira01]

So it looks like the very BEST month of all those with loans that have gone the full term is 34% defaults, with the rest ranging from about 37.5% to 44%.  And none of the rest of the months look like they're likely to do any better.  What a complete disaster. 

[NewHorizon]

Is it me, or are the v3.0 loans not launching off the bottom of the chart like the pre-3.0 loans did?

[onthefence]

Is it me, or are the v3.0 loans not launching off the bottom of the chart like the pre-3.0 loans did?

Yes, initially it looks that way.  Tighter constraints on what loans can be made & better loan guidance for the newbs.  Plus very low competition for loans means people were selecting better prospects.

[God-Father]

I mostly agree, but it is a little early.  If you look back in the January 1, 2008 time frame, the first few data points looked very similar to the 3.0 data.

I perceive, but haven't done any analysis, that the rates for the 3.0 loans are lower than the 1.0 loans.  If this is true and the defaults are lower, it is yet to be seen if decent ROIs are probable.

[bankomatic]

Do you think the fact that prosper is in a weak financial state has anything to do with why the lawsuits went so poorly? I am wondering if they just couldn't afford to dedicate proper amount of resources into it.

[xraider]

Prosper is represented by top notch and VERY expensive counsel. 

[ira01]

Do you think the fact that prosper is in a weak financial state has anything to do with why the lawsuits went so poorly? I am wondering if they just couldn't afford to dedicate proper amount of resources into it.

No.  These should have been very easy lawsuits, and Proser found a variety of creative ways to screw them up.  I don't think a shortage of resources had anything to do with it.  Moreover, at the time of the NAT, Prosper was sitting on almost $20M in VC money that it stuck in the bank. 

[yankeefan]

Prosper is represented by top notch and VERY expensive counsel. 

I know you're half right.  I have knowledge of the other half.

[xraider]

Prosper is represented by top notch and VERY expensive counsel. 

I know you're half right.  I have knowledge of the other half.

Oops.  I was thinking about the class action and coverage litigation, not the collection actions.

[God-Father]

I mostly agree, but it is a little early.  If you look back in the January 1, 2008 time frame, the first few data points looked very similar to the 3.0 data.

I perceive, but haven't done any analysis, that the rates for the 3.0 loans are lower than the 1.0 loans.  If this is true and the defaults are lower, it is yet to be seen if decent ROIs are probable.

P1.0 average lender rate 18%
P3.0 average lender rate 19% (I am surprised)

So if more data shows the default rate is lower and the lender rates stay this high, then higher ROIs are on the way up.  Then the trouble is how do keep from losing everything when Prosper runs out of money. 

[Fred93]

P1.0 average lender rate 18%
P3.0 average lender rate 19% (I am surprised)

So if more data shows the default rate is lower and the lender rates stay this high, then higher ROIs are on the way up.  Then the trouble is how do keep from losing everything when Prosper runs out of money. 

Absolutely.  The numbers are much better now.  I would invest again if I saw some big VC bucks coming in and a change in some management.

[Urbi_et_Orbi]

I would invest again if I saw some big VC bucks coming in and a change in some management.

Not much left of the original team...

 

[112233]

The original CEO is still there. Im not sure why though. Maybe Jerry Yang is telling him how irreplaceable he is.

[bankomatic]

In a lot of ways there has never been a better time to be a place like prosper. People can't get high yields by having their money sit in a bank account and banks have tightened lending to the point where you can't get an unsecured loan from Bank of America for example at *ANY* credit grade. They just don't do those types of loans anymore. The problem is that now I have to take prosper credit risk into consideration and in addition to that the cut that they are taking from the borrower yield is massive now. For example, borrower APR is 11.45% but the lender only gets 8.35% PRE tax? That's a huge cut.

http://www.prosper.com/invest/listing.aspx?listingID=440174