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[God-Father]

Poof

[kenL]

Verification & origination should be fluid

You think it would be, but I don't work there so I don't know how it is.

[cowdog]

Maybe its just their monthly cycle of work.

sorry bud..That's not how loan originations work..
Prosper doesn't get paid till the loan is approved.

I don´t get your point.

Verification & origination should be fluid

Prosper has never had a competent dir ops.

Heck, I remember saying this back in 2006, that the Dir Ops and the CTO positions were highly suspect in their management. It was one of the many reasons I wasn't bidding another penny; Prosper was clearly not a viable investment in part because of management.

Imagine.

[Senator]

..., or face one month with what appears to be a decline in numbers.

I thought they already have month to month declining numbers.

From Eric's

[triad]

In corporate America we would call these 35 day months.

It wasn't legal and at several CEOs went to jail over it.

[NewHorizon]

This has been brought up before as to why the loan originations are always so back loaded. I'd love to know an answer as to why this is happening.

@Fred93 - did you ask Prosper?  (If not, why not?)

[nonattender]

This has been brought up before as to why the loan originations are always so back loaded. I'd love to know an answer as to why this is happening.

I have no idea why this is/would/might be an issue - but I assume the implication is that loans originated
toward the end of a month in a "rush to game the stats" would not be subject to as much fraud scrutiny
as those issued in what looks like "the normal course of business"...  But since the jump in origination vol
apparently happens every month, as several of you are quick to point out, it would seem NOT to be stat
gaming, since that would simply average out, as it occurs every month - so, no net gain to be had there.

It seems possible that the OPPOSITE of what people are implying could be true, too:  That since Prosper
seems to be holding onto a bunch of loans and not issuing them until the end of the month, that it could
be because they're actually taking their time with the loans IN ORDER TO ensure a proper verification job
is done.  Funny how that works.  This "pattern of ominous behavior" could, in fact, be the polar opposite.

Then again, they may have just found that people tend to have fat bank accts toward the end of month,
and have chosen to originate loans close to when people get paid, so as to minimize issues and NSF fees.

Naturally, though, I understand that there MUST be a conspiracy...

[baeventures]

If someone could compile irrevocable data indicating that this push in loan originations towards the end of the month results in higher default/charge-off rates among these loans, perhaps we'd have an argument. I don't believe anyone has done that legwork to date.

I can tell you from personal experience that my most recent loan taken from Prosper was scrutinized much more closely than my previous two loans. I was asked all sorts of personal information, in addition to being requested to verify revolving credit accounts, installment accounts, social security number, mother's maiden name, car loan, loan amount requested, previous Prosper loan information, etc. I was quite impressed considering that for my 2nd loan (the one before my latest) I didn't even receive a phone call. Both of these loans were taken during Prosper 3.0.

I can't attest if it is an increase in security and protocol by Prosper, or if my name just happened to be drawn from the hat this time.

BAEVentures

[Urbi_et_Orbi]

I can tell you from personal experience that my most recent loan taken from Prosper was scrutinized much more closely than my previous two loans. I was asked all sorts of personal information, in addition to being requested to verify revolving credit accounts, installment accounts, social security number, mother's maiden name, car loan, loan amount requested, previous Prosper loan information, etc. I was quite impressed considering that for my 2nd loan (the one before my latest) I didn't even receive a phone call. Both of these loans were taken during Prosper 3.0.
BAEVentures

Your first loan (Pre-3.0, by the way) had you as an A-rated borrower seeking less than $1,700.

When you came back for your second loan (with your first loan still active), your credit rating dropped to a B and you requested almost $9K.

I'm guessing your overall borrower-profile triggered the additional review - and, if so, it would be an appropriate escalation by Prosper.

[Urbi_et_Orbi]

@ nonattender - it's true that we don't know what's happening with the originations and we don't know if the pattern represents increased or decreased risk - or whether loans originated during the past few days of the month perform better or worse than other loans.

All we know is that there are months with unusual funding patterns.

Some months are rather peculiar with the very last day of the month originating a disproportional amount of loans, followed by almost nothing on the following days - the first few dates of the new month.

It's primarily noteworthy because it happens regularly and has been that way for a fairly long time.

[nonattender]

@ nonattender - it's true that we don't know what's happening with the originations and we don't know if the pattern represents increased or decreased risk - or whether loans originated during the past few days of the month perform better or worse than other loans.

Ok - so far, we're in agreement:  "We don't know if this means anything, nothing, or everything."  Check.
(I don't see a "risk" component, but if you want to actually check on that, go correlate for performance.)

All we know is that there are months with unusual funding patterns.

"Lots" of loans seem to be originated toward the end of each month.  Check.

Some months are rather peculiar with the very last day of the month originating a disproportional amount of loans, followed by almost nothing on the following days - the first few dates of the new month.

"Lots" of loans seem to be originated toward the end of each month.  Check.
Conversely, "not lots" seem to be originated toward their beginnings.  Check.

It's primarily noteworthy because it happens regularly and has been that way for a fairly long time.

Lots of loans seem to be originated toward the end of each month - and not just one month.  Check.

I guess the part that confuses me is why this matters.  If you think it's ominous (I don't - but, knock
yourself out), then go do a regression study on performance of loans that've originated near the EOM.

Saying "Lots of loans were originated toward the end of every month" is one thing (and kinda dopey).
Saying "Lots of loans that default originated toward the ends of the months" is another thing entirely.

I hear the former being repeated over and over, as if repetition will somehow impart meaning.
I do not see anyone saying the latter, or, for that matter, trying to confirm such a suspicion.

So, am I missing the point, or is there, simply, not one?  If you've proof of the latter, say so.

-t

[Urbi_et_Orbi]

So, am I missing the point, or is there, simply, not one?  If you've proof of the latter, say so.

-t

I see it primarily as a point of curiosity. 

[nonattender]

So, am I missing the point, or is there, simply, not one?  If you've proof of the latter, say so.
-t

I see it primarily as a point of curiosity. 

Thank you, my point exactly.  Nothing but suppositional logic:  "If my aunt had balls, she'd by my uncle."

Fred93's blog post, which is the genesis of this entire thread, is also one long trip down this rabbit-hole:

"The most often discussed hypothesis is that Prosper rushes at the end of each month to push thru any
 loans that can be pushed thru to make the best possibly monthly numbers. If so, this would be bad for
 lenders, because..."

And, off we go, conflating "the most often discussed hypothesis" (here, being "conspiracy") with "facts".

Exhausting.

-t

[cowdog]

So, am I missing the point, or is there, simply, not one?  If you've proof of the latter, say so.
-t

I see it primarily as a point of curiosity. 

Thank you, my point exactly.  Nothing but suppositional logic:  "If my aunt had balls, she'd by my uncle."

Fred93's blog post, which is the genesis of this entire thread, is also one long trip down this rabbit-hole:

"The most often discussed hypothesis is that Prosper rushes at the end of each month to push thru any
 loans that can be pushed thru to make the best possibly monthly numbers. If so, this would be bad for
 lenders, because..."

And, off we go, conflating "the most often discussed hypothesis" (here, being "conspiracy") with "facts".

Exhausting.

-t

You know, you seem to talk a really good pro-prosper game...

Funny thing is, the last loan you are on originated 05/23/08, almost 2 years ago. I don't even see bids from you after that point.

With 32% defaults on your personal portfolio, I think you got the picture a long time ago that Prosper isn't a viable investment, otherwise you would still be bidding in addition to challenging anything that might be negative to Prosper.

Really makes me wonder one more time what you have to gain. Options? Personal friendships? Maybe you work for Prosper?

http://www.ericscc.com/lenders/nonattender

 

[Urbi_et_Orbi]

You'd be well advised to check under your aunt's skirt...

11/2   19   $80,200
11/3   23   $84,909
11/4   20   $112,800
11/5   19   $91,400
11/6   23   $113,837
11/9   29   $148,750
11/10   22   $92,730
11/12   25   $129,696
11/13   41   $196,277
11/16   20   $103,350
11/17   20   $77,350
11/18   20   $97,800
11/19   15   $71,434
11/20   25   $93,300
11/23   20   $72,963
11/24   33   $255,225
11/25   27   $124,925
11/27   34   $180,875
11/30   69   $337,700

12/1   7   $21,200
12/2   16   $61,800
12/3   20   $82,400
12/4   12   $51,080
12/7   10   $30,700
12/8   25   $82,235
12/9   14   $65,112
12/10   19   $65,175
12/11   18   $78,625
12/14   24   $106,420
12/15   27   $104,250
12/16   25   $165,849
12/17   23   $147,299
12/18   19   $63,300
12/21   27   $145,680
12/22   7   $37,550
12/23   9   $44,100
12/24   16   $64,462
12/28   4   $6,000
12/29   34   $135,350
12/30   57   $258,725
12/31   74   $408,503

1/4   9   $20,200
1/5   8   $31,600
1/6   19   $89,400
1/7   20   $122,835
1/8   7   $48,250
1/11   13   $104,400
1/12   12   $55,150
1/13   23   $105,900
1/14   12   $93,050
1/15   20   $96,300
1/19   13   $77,636
1/20   20   $90,765
1/21   24   $83,048
1/22   22   $54,200
1/25   29   $195,800
1/26   35   $139,709
1/27   24   $148,245
1/28   37   $145,999
1/29   44   $250,911

2/1   2   $3,500
2/2   11   $44,400
2/3   2   $4,250
2/4   22   $124,750
2/5   4   $5,000
2/8   12   $88,000
2/9   17   $77,800
2/10   17   $87,787
2/11   17   $66,300
2/12   19   $58,200
2/16   17   $105,207
2/17   21   $119,800
2/18   13   $64,200
2/19   21   $94,300
2/22   10   $67,500
2/23   37   $222,280
2/24   22   $118,800
2/25   25   $125,150
2/26   68   $240,881
      
3/1   8   $20,100