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[Urbi_et_Orbi]

Prefunding Verification
 


Additional verification may be required based on variables such as Prosper Rating, Loan Amount, Income and Debt-to-Income Ratio.  Verification may include:
 
·   Drivers’ License

 
·   Employment Verification

 
·   Proof of Address

 
·   Proof of Income

 
·   Phone Verification

[Urbi_et_Orbi]

I thought Prosper recently objected to being described in the New York Times as a sub-prime lender... 

Some of the borrowers on our platform have “subprime” credit ratings, are considered higher than average credit risks, and may present a high risk of loan delinquency or default.
 
Some of the borrowers on our platform are people who have had difficulty obtaining loans from other sources, including banks and other financial institutions on favorable terms, or on any terms at all, due to credit problems, limited credit histories, adverse financial circumstances, or high debt-to-income ratios.  Therefore, acquiring Notes that are dependent on payments we receive on the corresponding borrower loans of such borrowers may present a high risk of loan delinquency or default.

[Urbi_et_Orbi]

These loans may have been re-purchased by Prosper once things got heated with the SEC, but they WERE sold, were they not?

The significant increase in agency fees for the three and nine months ended September 30, 2010 is due to the fact the Company was not originating any new loans from October 2008 through July of 2009, except for 13 loans originated in the three and six months ended June 30, 2009 when Prosper briefly re-opened in the State of California from April 28, 2009 to May 8, 2009.  These loans were funded by Prosper and no Notes were sold to California residents. 

[Urbi_et_Orbi]

Wow - looks like DoFu's unbeatable legal strategy was successful after all. 

Judgments in our favor have led to recoveries during the period which correspond to certain loan repurchases.  For the three and nine months ended September 30, 2010, we received recoveries on prior repurchased loans of approximately $813 and $4.2 thousand, respectively.

[Urbi_et_Orbi]

Difficult to fathom these people giving themselves raises, considering the state of things.

Compensation and benefits were $1.2 million and $1.1 million for the three months ended September 30, 2010 and 2009, respectively, a $45.5 thousand or 4% increase.  This slight increase was due to normal salary and wage increases and employee relocation expenses, which were partially offset by a decrease in vacation-, sick-, and holiday-related expenses as well as an increase in the amount of salaries that we capitalized related to the development of internal use software.

[Urbi_et_Orbi]

Does anyone know what this means?

Each automated plan represents a group of loan criteria, which if implemented, allow a lender to bid on loans meeting such criteria.  Since the Notes ultimately purchased through an automated plan are the same as Notes purchased manually, they present the same risks of non-payment as all Notes that may be purchased on Prosper’s website.  For example, as with any other Note purchased through Prosper’s website, there is a risk that a loan identified through an automated plan may become delinquent or default, and the estimated return and estimated loss for that loan individually, or the estimated loss or return for the plan as a whole, may not accurately reflect the actual return or loss on such loan.  If this were to occur, a lender member who purchases a Note through an automated plan could pursue a claim against Prosper in connection with its representations regarding the performance of the loans bid upon through the plan.  An investor could pursue such a claim under various antifraud theories under federal and state securities law.  To date, no actions have been taken or threatened against us on this theory.  However, such actions could have a material adverse effect on our business.

[ira01]

Does anyone know what this means?

Each automated plan represents a group of loan criteria, which if implemented, allow a lender to bid on loans meeting such criteria.  Since the Notes ultimately purchased through an automated plan are the same as Notes purchased manually, they present the same risks of non-payment as all Notes that may be purchased on Prosper’s website.  For example, as with any other Note purchased through Prosper’s website, there is a risk that a loan identified through an automated plan may become delinquent or default, and the estimated return and estimated loss for that loan individually, or the estimated loss or return for the plan as a whole, may not accurately reflect the actual return or loss on such loan.  If this were to occur, a lender member who purchases a Note through an automated plan could pursue a claim against Prosper in connection with its representations regarding the performance of the loans bid upon through the plan.  An investor could pursue such a claim under various antifraud theories under federal and state securities law.  To date, no actions have been taken or threatened against us on this theory.  However, such actions could have a material adverse effect on our business.

Sounds like Prosper is worried that it will be sued over its Portfolio Plans not living up to Prosper's marketing hype -- i.e., it advertised its Plans as having particular expected returrns (10.4% or whatever), and if (when) those exagerated returns don't materialize, people might sue.

[ira01]

Yipes, I found this... In exhibit G "Collections policy"...

It is the current policy of Prosper that loans which exceed 120 days delinquent shall be marked for sale to a qualified Debt Buyer.  At the time of the sale, the proceeds shall be credited against the outstanding principal and remainder charged off as a defaulted loan.

That is an absurd claim.  IIRC, Prosper's last JDB sale was in December 2007 -- almost three years ago.  How could Prosper make the above claim with a straight face?  I guess that's Prosper's way of falsely claiming to be abiding by its legal agreements with lenders which require them to sell the 120+ day delinquent loans to a JDB, which Prosper unilaterally chose not to do over many lenders' objections. 

[ira01]

Wow - looks like DoFu's unbeatable legal strategy was successful after all.  

Judgments in our favor have led to recoveries during the period which correspond to certain loan repurchases.  For the three and nine months ended September 30, 2010, we received recoveries on prior repurchased loans of approximately $813 and $4.2 thousand, respectively.

Wow, $4,200 collected in the first 9 months of this year -- be still my heart.    Wasn't the NAT aggreggate balance over $600,000?  That's not even 1%.  And for all we know, some or all of that money may not even be from the NAT -- Prosper repurchased other loans, some of which we know it sued on -- like that scammer discovered by forum detectives who took out around a dozen loans under different names.  

ETA:  That scammer was Victoria Crawford. 

[ira01]

This thread clearly belongs in the Lobby.

[Urbi_et_Orbi]

There are two MAJORLY interesting sections in 10.3 regarding Prosper's internal policies for handling collections and issues related to identity theft.

[pioneer11]

This thread clearly belongs in the Lobby.

Yup, second.

[ira01]

The overall decrease in the number of repurchases is due in large part by the Company's increased efforts in identifying and preventing various fraud schemes. Although we believe our fraud controls have resulted in a lower incidence of fraud in 2010, as compared to prior years, our controls are largely based on experience from past fraud attempts. Accordingly, future repurchase and repayment obligations could vary significantly from our estimates.

Of course Prosper would say that.  In the real world, of course, we all know that it is far more likely that the "decrease in the number of repurchases" is due to Prosper doing everything it could to prevent lenders from identifying fraud and making Prosper repurchase loans over its desire not to.  Lenders identified a large portion of the fraudulent loans Prosper repurchased, and in a number of cases, Prosper only repurchased them after major shitstorms erupted in the forums over Prosper's failure to repurchase them for extended periods of time, despite being presented with overwhelming evidence of the frauds -- like the infamous Leporello id-theft loan in which Prosper didn't even want to investigate a loan after being spoon-fed reams of information including the name and telephone number of the NYPD detective who was handling the identity fraud case!  IIRC, it took a forum shitstorm after close to a YEAR before Prosper finally repurchased that loan.  

As the old-timers here know, forum detectives identified MANY fraudulent loans (including the aforementioned Victoria Crawford fraud where the borrower took out almost a dozen loans using fake identities, which eventually led to Prosper filing a lawsuit to freeze the borrowers bank accounts).  After being forced to repurchase a number of fraudulent loans, Prosper started making it harder and harder for lenders to ferret out such frauds, by carefully scraping listings of any identifying information (even though Prosper's own official Privacy Policy expressly permitted borrowers to include such information in their listings).  Once lenders became unable to discover fraud and force Prosper to repurchase loans, what a surprise -- Prosper essentially stopped repurchasing ANY loans under its so-called "100% identity-theft guarantee."    It is laughable for Prosper to now claim that the absence of repurchases shows what a good job it is doing finding fraud on its own.  Bwahahaha.  Prosper couldn't find its own ass with a flashlight and two hands.

[ladeeda]

I love you guys.     

Happy Sunday to you all - I hope you had a nice weekend. The weather was incredible here!

[Urbi_et_Orbi]

Full disclosure: I am a Prosper employee, but I don't speak for the company in any capacity.

Thanks for the disclosure.  It was pretty clear to us all along.