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[Fred93]

For those tracking how prosper's business is doing, I've updated the monthly loan volume chart.  Loan volume has been flat over the last several months.  They seem to be having trouble holding above the $2 million per month level.

[mothandrust]

Thanks, Fred.  Can't wait to see the late loan update now that the performance data is back up.

[God-Father]

Lobby

[pioneer11]

Thanks Fred.

They can't be sustainable at those rates and I think it will get much worse with their new rules that will drive away legitimate AA-B borrowers.

Second for lobby.

[christoofar215]

I would love it if Prosper could TEST income verification.

Just pick a few listings and before they're allowed to go live, force the borrower to prove income.   When income is proven, Prosper can put a silver star or something to make the listing look "special" to entice lenders to throw money at it.

Then when the note is created, we can control the loan against similar 3.0 loans where income was NOT verified and determine what the savings is and how much more Prosper lenders are willing to fund if the borrower had independently verified income.


All you have to do is have a Prosper borrower do is fill out a 4506-T form online, most of it already filled out by Prosper, then sign the form and fax it back with the barcoded coversheet to Prosper, and then it is filed with the IRS.   When the 2-page computer readout comes back from the IRS, someone can just input the key figures (AGI for tax years 2009, 2008).   Whatever the borrower stated as income is suppressed and only the figures that show on the 4506-T is displayed to lenders.

This process is EASY TO AUTOMATE using OCR SOFTWARE so Prosper humans don't need to be deeply involved.


Of course, Larsen knows he can do this but he doesn't give a shit or he would have already done it.   They already have fax-autodetect systems running at Prosper because they use it for verifying ID on the FEW cases that they actually use it.

[ira01]

All you have to do is have a Prosper borrower do is fill out a 4506-T form online, most of it already filled out by Prosper, then sign the form and fax it back with the barcoded coversheet to Prosper, and then it is filed with the IRS.   When the 2-page computer readout comes back from the IRS, someone can just input the key figures (AGI for tax years 2009, 2008). 

I suggested this 3 years ago.  Hell, just collecting signed 4506-T forms from borrowers would cut down a lot on fraud, since borrowers would think Prosper is going to check their income claims.  Especially if Prosper referred fraudulent claims for prosecution, and publicized that in a few cases. 

[112233]

Ive only been asked for 4506-Ts on mortgages

of course I havent had very many personal loans so maybe Im missing something

[christoofar215]

Prosper could "sell" the income verification indicator on loan listings, if this is legal... by asking borrowers to volunteer for the 4506-T.

So Prosper could have continued to allow the normal NINJA listings like they do now, but offer "preferred" listings by letting lenders discriminate against the NINJAs in favor of those who verify their income.


A lot of Prosper fraud would disappear if you ask the borrowers to sign an IRS form, and those who refuse to are greeted with a much less likely chance of funding.

[christoofar215]

Ive only been asked for 4506-Ts on mortgages

of course I havent had very many personal loans so maybe Im missing something

You will be asked to produce a 4506-T or you will be given a partially filled-out 4506-T if you ever fill out a FAFSA and approach a student lender for an education loan IF you tell the lender that you're going to school AND you are also working.

If you're jobless or part-time (like most college students) they will not bother with this part because they know you aren't earning anything and will have to pay them later after you finish undergrad; and they already expect once you walk the stage you will probably ask for a deferment right out of the gate.


Student lenders only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge.   That's also why they even offer stuff like deferments because they know they will probably get paid before you die.  Private SL lenders could also take out dead-peasant insurance against you so if you killed yourself while on deferment or died in a freak car accident they still wouldn't lose a nickel.

[Senator]

Student lenders only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge.   

lenders?

[cubbiesnextyr]

Student lenders only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge.   

lenders?

Yes, as in those who make student loans.  Without the Fed's rules about dischargibility, the rates would be much higher for student loans (which probably wouldn't be a bad thing, the cost of college would be lower to compensate).

But now all non-dischargible student loans will be made direct from the federal government.

[Senator]

I see.  it would also read well as

Student borrowers only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge. 

[cubbiesnextyr]

I see.  it would also read well as

Student borrowers only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge. 

But that doesn't make any sense.  Why would a borrower WANT to borrow BECAUSE the debt wasn't dischargeable? 

[Senator]

I see.  it would also read well as

Student borrowers only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge. 

But that doesn't make any sense.  Why would a borrower WANT to borrow BECAUSE the debt wasn't dischargeable? 

I read it as

Student borrowers only wanted to get in the Prosper game because Uncle Sam made normal SL debt almost impossible to discharge. 

[cubbiesnextyr]

I see.  it would also read well as

Student borrowers only wanted to get in the game because Uncle Sam made SL debt almost impossible to discharge. 

But that doesn't make any sense.  Why would a borrower WANT to borrow BECAUSE the debt wasn't dischargeable? 

I read it as

Student borrowers only wanted to get in the Prosper game because Uncle Sam made normal SL debt almost impossible to discharge. 

Stupid ambiguous language.