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[NewHorizon]

We can contact those lenders & invite them here.

I think you just volunteered to do the contacting.   

[Mtnchick]

They deleted the link on Facebook again - at least someone has job security if their title is "Putting Out Fires". 

[pacino58]

at least someone has job security if their title is "Putting Out Fires". 

Maybe that was Ed's job before he "left"

[Senator]

In case it gets *poofed*

Prosper Blog | January 20th, 2010 at 3:38 pm

We received an inquiry as to whether we could comment on whether the graph contains data for loans that are greater than 120 days past due? The labels on your graph indicate that such data is not included. Any delinquency graph that does not contain that information is useless and errant.

Prosper Response:

The new loans are not old enough to have gone 120 days past due. A graph that compared loans past 120 days past due on the new loans versus the old loans would be both flattering and misleading. We did a delinquency comparison because we have relevant data to compare because delinquencies happen earlier than defaults. It is common to do this type of comparison of seasoned and unseasoned vintages to get an early indication of future default performance.

[Mtnchick]

There's a listing in Check my Listing that does NOT adhere to:

Prosper has instituted a minimum credit score requirement of 640 to request a loan from Prosper’s lenders as well as a bid floor.

Apparently if you have a previous loan, the minimum credit score requirement is NOT 640. In fact, you can be an "E" rated borrower with lower than 640.

(didn't post a link to the listing since this is in the lobby)

[pacino58]

From prospectus, so you don't have to post a listing in the lobby

Currently, a borrower must have a credit score of at least 640 (before October 16, 2008, the minimum was 520) in order to post a listing on our platform, except that the minimum is 600 for borrower members who (1) had previously obtained a Prosper loan and paid off the loan in full, or (2) are seeking a second loan and otherwise eligible for a second loan.  In the future, Prosper may allow borrowers with a credit score below 640 to post listings as long as bids are made primarily from friends and family.

[Mtnchick]

From prospectus, so you don't have to post a listing in the lobby

Currently, a borrower must have a credit score of at least 640 (before October 16, 2008, the minimum was 520) in order to post a listing on our platform, except that the minimum is 600 for borrower members who (1) had previously obtained a Prosper loan and paid off the loan in full, or (2) are seeking a second loan and otherwise eligible for a second loan.  In the future, Prosper may allow borrowers with a credit score below 640 to post listings as long as bids are made primarily from friends and family.

Awesome - thank you

[ira01]

Now that Prosper has added their "refute" to the article, I am not sure I understand why Prosper continues to want to delete references to the article itself.

Yeah, I can't understand why Prosper wants to hide every reference possible to an article that exposes Prosper for the horrible investment that it is.   

[Urbi_et_Orbi]

Another interesting take on the Big Money article.

http://www.ethiopianreview.com/news/13460

I’m still hopeful that Lending Club, in particular, can succeed in this space; it certainly doesn’t suffer from the kind of egregiously misleading public communications that Gimein details at Prosper. But insofar as Lending Club can succeed where Prosper seems to have failed, it will have to do so through overcoming the adverse-selection problem with an extremely tough and diligent underwriting program which rejects as much as 90% of the people asking for loans. As such, it’s only likely to make a difference at the margins — and it might find it hard to make a profit itself out of the 1% take it skims off each loan.

Oops...THIS appears to be the original one...some interesting comments showing up here...

http://blogs.reuters.com/felix-salmon/2010/01/19/the-problem-with-peer-to-peer-lending/

Note comment from Wiseclerk...

You are right, Mark Gimein’s article is a must read.

It is well researched in contrast to the “usual” media articles on Prosper. Over the last years I was always surprised who the media reprinted Prosper statements on default risks and ROIs without questions when several blogs already published critical analysis.

However Prosper is an extreme case. Default levels at othe P2P lending services are higher then initially expected at the time they launched (expect for Zopa UK with low default rates) but they still enably positive ROIs for the majority of lenders.

The article would be better titled “The problem with Prosper”

Best regards

Wiseclerk
Editor
http://www.p2p-banking.com

[ira01]

I left the following comment on The Big Money Article (awaiting moderation):

If you read Prosper's "refute," it is imperative that you also read the many refutes of Prosper's refute:


http://www.prospers.org/forum/article_you_are_unlikely_to_prosper-t18287.0.html;msg322323#msg322323


http://www.prospers.org/forum/article_you_are_unlikely_to_prosper-t18287.0.html;msg322348#msg322348


http://www.prospers.org/forum/article_you_are_unlikely_to_prosper-t18287.0.html;msg322372#msg322372


Unlike the Big Money article, which is completely accurate and non-biased, Prosper's "refute" is full of errors and spin.  Don't be fooled.

The above comment was approved and is now posted.  So I just left another:

Prosper's "refute" argues that the negative returns of most Prosper lenders aren't so bad because "[e]ven a broad index like the S&P 500 saw an annualized loss of 6% in the past three years."  This comparison is fallacious for a number of reasons, but here is just one -- the S&P 500 is NOT a valid comparison for Prosper loans.  A much better comparison would be short-term bonds (which, like Prosper loans, are unsecured debt of around 3-year maturities).  So while most Prosper lenders lost money on their Prosper investments, given the "the context of the worst recession since the Great Depression" (in Prosper's own words), how did that "comparable asset class" perform during that same time period?  Answer:  it put Prosper to shame.  For example, Vanguard's Short-Term Bond Index Fund Investor Shares (VBISX) had an annualized 3-year return of +5.64%.  And to add icing on the cake, VBISX has a 0.22% expense ratio, compared to Prosper's 1% lender servicing fee, and better tax treatment too.

[Urbi_et_Orbi]

...and it keeps spreading...actually the Reuters blog item appears to have quite a reach.

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1567845&_blg=1,1528117

http://fuckfidelity.com/?p=112

http://www.wikio.com/technology/internet/uploading_and_downloading/peer-to-peer

[Cushie]

...and it keeps spreading...

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1567845&_blg=1,1528117

Add this one...

http://www.techdirt.com/articles/20100120/0314167831.shtml

[Urbi_et_Orbi]

Another good find, Cushie, including...

And from there, the article highlights how Prosper appears to mislead potential lenders with some sleight of hand:

I hope the legislators and regulators currently being wined and dined by Prosper's high paid lobbyists at the Podesta Group have the ability to read some of these articles.

[onthefence]

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1567845&_blg=1,1528117

They considered it to be "disappointingly inaccurate" and continued their response with such outstandingly lame counterpoints

Soooooo.... who at Prosper authored that response.  I wanted to criticize & laugh, but I also wanted to to marinade within the media circles first.  Yum, this is soooo delicious.

Prosper, you sacrificed long term credibility for short term spikes in your statistics.  The chickens have come home to roost.

[ira01]

...and it keeps spreading...actually the Reuters blog item appears to have quite a reach.

http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1567845&_blg=1,1528117

http://fuckfidelity.com/?p=112

http://www.wikio.com/technology/internet/uploading_and_downloading/peer-to-peer

I like how the SmartSpending article points out the absurdity of Prosper's blog post "refut[ing]" the Big Money article:

Prosper is incensed by this slander, calling for The Big Money to retract the post. They considered it to be "disappointingly inaccurate" and continued their response with such outstandingly lame counterpoints as:

Hopefully other articles will use our work here to fully debunk Prosper's ridiculous blog post.  Maybe that will teach Prosper to think more before posting pure crap.

ETA:  OTF beat me by 2 minutes on this.