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[havastat]

Lending Club increased its spread by lowering interest rates but increasing origination fees. APRs don't actually change so much, but lenders got a smaller share of the cut, and some borrowers are more impressed by the lower interest rate component of the total cost and don't notice the fee change.

Are they up to something similar?

[God-Father]

... a lot of lenders were making a killing.

How do you know this? 

ericscc says lenders aren't compensated for the risk they take.

http://www.ericscc.com/stats/lender-return-distribution

I'm just talking about current lenders. Everybody knows that 1.0 lenders lost a shitload, we're not talking about them. But current lenders are doing very well. Reflective-rupee, Aberdeen (post relaunch), cashflow13, laxa, Jguide, lendstats_com are all making a pretty hefty return and there are plenty of others. The only post relaunch lender to lose a lot is im-sharky.

btw, I get this data from my own calculations.

I hope you are right, but your loans are soooooooooooo young.   Aberdeen (post-SEC) has an average age of only 6.8 months.  RR is 9.8 monhts.

[kenL]

I'm just talking about current lenders. Everybody knows that 1.0 lenders lost a shitload, we're not talking about them. But current lenders are doing very well. Reflective-rupee, Aberdeen (post relaunch), cashflow13, laxa, Jguide, lendstats_com are all making a pretty hefty return and there are plenty of others. The only post relaunch lender to lose a lot is im-sharky.

btw, I get this data from my own calculations.

I hope you are right, but your loans are soooooooooooo young.   Aberdeen (post-SEC) has an average age of only 6.8 months.  RR is 9.8 monhts.

The biggest flaw of calculating ROI's on young portfolios is that the ROI's get a big early boost because the first few months are the least likely to see a loan go delinquent. Once loans reach about 6 or 9 months the rate of dq peaks, then you can expect the roi make a steady decline for a year or even 2 years. Nevertheless, if a portfolio is really bad, you can still easily see the signs within the first 6 months and if a pf is really good you should be able to see that in the first 6 months too.

Aberdeen's post relaunch pf performance has been nearly flawless. I'm shocked at how well it's performing. Of course his post relaunch ROI will come down but it will never come crashing down and should stay a healthy positive, unless of course (s)he suddenly just starts or has started picking stinkers.

[Urbi_et_Orbi]

I see you're showing Aberdeen at slightly better than break-even, plus/minus an amount that could conceivably just as well place Aberdeen back in the red.

I also see that Aberdeen has several loans in the 3 Month late category, including one where Aberdeen took a $5,000 position. This is an older loan, and not knowing when it went late, how much has been paid on it, etc., can you shed some light on how LendStats has treated, categorized and weighted such a loan as part of the estimated performance calculation - as compared to, for example the similarly aged $3,400 loan that is currently "only" 1 month late - or the smaller loans that are currently delinquent, but are much younger?

I am sure I could have worded this question more elegantly, but I am basically trying to understand what assumptions you build in - or what data you have - to help you estimate the value of the potential gain/loss, both in terms of principal remaining, interest earned (with fees subtracted) and assumptions regarding likelihood of default and/or recovery for loans in various stages of lateness and life-cycle.

[God-Father]

*(includes only billed loans, not newly issued loans)
Losses on delinquent loans are calculated according to the following table:
1-15 day late: 0%-60% loss
16-30 day late: 30%-90% loss   
31-60 day late: 75%-95% loss     
61-90 day late: 80%-100% loss     
91-120 day late: 90%-100% loss     
defaulted: 98%-100% loss     
***Please note. These are the notes that resulted from bids placed on Prosper.
Folio trades are not reflected in this data. The Folio data is not yet available.

[Faithful_Steward1]

Only problem is who would lend on a 5% unsecured loan with the probability of borrower default or prosper bk? Even with prosper bk not looming, 5% isn't enough to compensate on borrower risk. With prosper bk over the term of the loan at least at 50%, how could one justify this risk?

[havastat]

It does seem difficult to compete with credit card companie's 0% teaser offers. But it's much easier to compete once the teasers end.

When prime borrowers can easily get second and third helpings of teaser rates, the prime targets would seem to be folks with somewhat lower credit.