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Yes - At the same or higher levels as before

10 (13.9%)

Yes - But more cautiously

6 (8.3%)

No - I am waiting to see new default rates

3 (4.2%)

No - I won't bid again, cashing out as notes mature

47 (65.3%)

No - I won't bid again, selling notes and bailing out!

6 (8.3%)

Total Members Voted: 69

[AiriusTorpora]

I might bid in the future if
- my state was allowed to bid
- I had any real belief that Prosper would still be around in three years.

So basically if they were bought out and all the current management and owners sacked .... gotcha.

[cowdog]

I like to think I'm a big part of the reason the forums were wiped, although I was never banned it came close on 3 separate occasions. I was let off with warnings after it was determined I couldn't possibly have engineered or predetermined the fiascoes that resulted from my actions.  

I bid for 3 weeks in October 2006 when I suddenly realized I had been brainwashed, that all the loans would probably default. Turned out 3 years later that 3/5 did, but I had stopped at $300 so no loss there really, I think -$88. Whatever.

It is my opinion that Prosper is a criminal enterprise. Craig Larson had eLoan and saw that literally hundreds of thousands wanted loans, but their financial position disqualified them, either with CR, lack of income or jobs or assets. He had to reject all those apps, and there were piles and piles. He also knew they would default, and so a corporation's funds couldn't be used to fund them even if there was a way to get them their money... and so a public bidding format was devised. Win for the borrowers, win for the corporation making the loans since the funds were someone else's... but loss to the lenders. Hence lenders were never the customers; borrowers were.

Never mind that this was an illegal security subject to SEC regulations... that would be to deal with later. In the meantime, launch a public relations blitz, get yourself a few awards by stuffing ballot boxes with scripts, have a few splashy events complete with videotaping, make a big web entry.

Add to that I believe management knew of this... hence John Witchel always stating there are no resources, changes can't be made, its a shoestring operation... they KNEW it was going to fail, that the borrowers would default, and it was therefore senseless to pour any money into operations.

Collections were always mostly non-existent, when specialists were hired they never accomplished anything, when something began to be a bother and sap any resources at all, they were stopped or shut down (forums and others).

Unilateral changes to lenders agreements and other changes that were made illegally without consent, unethical management, and a host of other problems should make investors turn and run from this operation.

[best_commanding_funds]

I would like to invest, but the company's finances make it's survival dubious at best.

I see no reason for this business not to be perfectly viable provided it was run scrupulously and efficiently. Perhaps it will be bought out by a competent bank or private equity group? It seems unlikely that the necessary changes will come from within the company given their track record.

Perhaps the loans since relaunch will prove to be reasonable investments. It seems that more recent loans actually have significantly lower default rates compared to early loans of similar credit rating and age in months. I have lent on 28 loans since the relaunch in 2009, most were D rating. One was paid in full and the rest are current. Of course, I stopped investing new money months ago and stopped reinvesting payments last month when they dropped the auction model.

[ira01]

It seems that more recent loans actually have significantly lower default rates compared to early loans of similar credit rating and age in months.

But they are NOT of "similar credit rating."  Prosper keeps redefining the credit ratings, so that a D now is MUCH better than a D of two years ago.  I'm not saying that is a bad thing -- but it makes comparisons as you made irrelevant. 

[locorooster]

Hilarious that cowdog, after three years, has nothing better to do than lob ridiculous allegations at an organization that is trying to provide loans with reasonable terms to people that have been ransacked by what the mainstream credit industry has offered. Criminal enterprise? What luxury to accuse hard working individuals of crime from the comfort of your internet terminal.  

As a lender, I have done well after recent changes. And prior to recent changes...we the lenders saw the first wave of the worst financial crisis since the great depression. Unfortunate, unexpected (well for most of us), but flat out insane to chalk up solely to the practices or collection techniques of Prosper. To expect no significant losses in the global environment of rampant default is absurd. Imagine telling people ten from years from now your performance while lending money during this period. "I lost 0-10% percent" or "I made 0-3 %". Even now, with the most modest of pre-recoveries, it seems ridiculous to complain of such an experience.

[ira01]

And prior to recent changes...we the lenders saw the first wave of the worst financial crisis since the great depression. Unfortunate, unexpected (well for most of us), but flat out insane to chalk up solely to the practices or collection techniques of Prosper. To expect no significant losses in the global environment of rampant default is absurd.

Completely bogus.  As can be seen from Fred93's monthly charts, Prosper's performance got no worse due to the global macroeconomic conditions than it was before.  Roughly 40% of all Prosper 1.0 loans defaulted, including those made in 2006.

No one here blames Prosper for things beyond its control, or even for our losses.  Rather, we blame Prosper for its own shameful conduct.  If you spent a little time reading here, you will see that Prosper has done much worthy of all the blame it gets.  It wasn't the "worst financial crisis since the great depression" that made Prosper executives spout ridiculously absurd misrepresentations about actual lender performance to any journalist who would listen, even long after the truth was well known to Prosper and us here (who often pointed out to Prosper the errors in its methodologies). 

It wasn't the "global environment of rampant default" that made Prosper ignore its so-called "100% identity theft guarantee" except and until such cases as lenders were able to publicly shame Prosper into abiding by its legal obligation to repurchase identity-theft loans in those relatively few cases where lenders had sufficient information about a borrower's identity to put 2 and 2 together. 

It wasn't the global economic conditions that made Prosper repeatedly breach its legal obligations to lenders, including its failure to conduct junk debt sales as required. 

It wasn't the borrowers that made Prosper fuck up its litigation test project beyond all conceivable belief. 

It wasn't the "worst financial crisis since the great depression" that made Prosper ban lenders who tried to alert other lenders about specific cases of borrower fraud, including the infamous case of the lender who raised Prosper ire (instead of receiving its thanks) for posting a link to an FBI press release pointing out that a borrower with a then-active listing was under federal indictment for loan fraud, and then eventually deleting its entire official forum without notice when that forum became the repository of too much negative information about Prosper (and then threatening a frivolous "cyber-squatting" lawsuit against the .org member who had archived the forum and made it publicly available after Prosper's attempt to hide history -- until that .org member got a lawyer who promptly made Prosper STFU).  Etc., etc., etc.

[ira01]

I nominate this thread for the Lobby.

[cowdog]

Hilarious that cowdog, after three years, has nothing better to do than lob ridiculous allegations at an organization that is trying to provide loans with reasonable terms to people that have been ransacked by what the mainstream credit industry has offered. Criminal enterprise? What luxury to accuse hard working individuals of crime from the comfort of your internet terminal.  

As a lender, I have done well after recent changes. And prior to recent changes...we the lenders saw the first wave of the worst financial crisis since the great depression. Unfortunate, unexpected (well for most of us), but flat out insane to chalk up solely to the practices or collection techniques of Prosper. To expect no significant losses in the global environment of rampant default is absurd. Imagine telling people ten from years from now your performance while lending money during this period. "I lost 0-10% percent" or "I made 0-3 %". Even now, with the most modest of pre-recoveries, it seems ridiculous to complain of such an experience.

You might have a bit more credibility if it weren't for your long standing relationship with Prosper.

Locorooster was a recipient of one of the first Friends and Family loans made in 2005.

[cowdog]

I nominate this thread for the Lobby.

I second this.

[Snapshot]

I third it.

[locorooster]

>> Completely bogus.  As can be seen from Fred93's monthly charts, Prosper's performance got no worse due to the global macroeconomic conditions than it was before.  Roughly 40% of all Prosper 1.0 loans defaulted, including those made in 2006.

Do loans default when they are originated or when times get tough? While it doesn't explain every default, times got tough even (actually especially) for the loans made in 2006. "Completely bogus", hardly.


>> No one here blames Prosper for things beyond its control, or even for our losses.  Rather, we blame Prosper for its own shameful conduct.  If you spent a little time reading here, you will see that Prosper has done much worthy of all the blame it gets.  It wasn't the "worst financial crisis since the great depression" that made Prosper executives spout ridiculously absurd misrepresentations about actual lender performance to any journalist who would listen, even long after the truth was well known to Prosper and us here (who often pointed out to Prosper the errors in its methodologies).  

Oh, I've spent a more than a little time reading here. You assume because you type something into the internets that it is fact. I've always loved it that people dedicate themselves to methodology error finding instead of creating value in this great society of ours.


>> It wasn't the "global environment of rampant default" that made Prosper ignore its so-called "100% identity theft guarantee" except and until such cases as lenders were able to publicly shame Prosper into abiding by its legal obligation to repurchase identity-theft loans in those relatively few cases where lenders had sufficient information about a borrower's identity to put 2 and 2 together.  

I am not aware of any cases of this, nor do I think you are other than suspicion. A key component to an identity theft is actual evidence that an identity has been stolen or misused.


>> It wasn't the global economic conditions that made Prosper repeatedly breach its legal obligations to lenders, including its failure to conduct junk debt sales as required.  

I agree that expectations were violated on timing of debt sales. But you have to realize that there came a time in this happily diminished crisis when the debt was effectively unsellable.


>> It wasn't the borrowers that made Prosper fuck up its litigation test project beyond all conceivable belief.  

This remains a mystery. But let me offer this: Occam's razor, a concept that is yielded to in favor of conspiracy theory on these forums, might suggest that credit card companies have abused the legal system to the point where statute and judiciary are unduly in favor of the borrower.


>> It wasn't the "worst financial crisis since the great depression" that made Prosper ban lenders who tried to alert other lenders about specific cases of borrower fraud, including the infamous case of the lender who raised Prosper ire (instead of receiving its thanks) for posting a link to an FBI press release pointing out that a borrower with a then-active listing was under federal indictment for loan fraud, and then eventually deleting its entire official forum without notice when that forum became the repository of too much negative information about Prosper (and then threatening a frivolous "cyber-squatting" lawsuit against the .org member who had archived the forum and made it publicly available after Prosper's attempt to hide history -- until that .org member got a lawyer who promptly made Prosper STFU).  Etc., etc., etc.

Does etc, etc, etc mean you have run out of things to say or are you tired after your 10,000th+ negative nancy post? Would you want to borrow from a bank where dozens of holier than thou people publicly ridiculed you in a baseless manner? If you ran a business would you put your most harsh criticism on your website? In hindsight, I think the Prosper sponsored forums while fun and camaraderie building were a mistake to ever offer.

[locorooster]

>> You might have a bit more credibility if it weren't for your long standing relationship with Prosper.

>> Locorooster was a recipient of one of the first Friends and Family loans made in 2005.

I agree! But I hope you don't mistake posting numerous accusatory comments to a forum consisting of like minded individuals as credibility building activities either.

[Fred93]

Do loans default when they are originated or when times get tough? While it doesn't explain every default, times got tough even (actually especially) for the loans made in 2006. "Completely bogus", hardly.

Unfortunately, you make this argument (excuse for prosper) without any data to back yourself up. 

The data shows the opposite of what you claim.  Prosper's default rates didn't track the economy at all.

I wrote a blog entry about this...
http://fred93blog.blogspot.com/2009/10/prospercom-dont-blame-economy.html

[locorooster]

Fred, I appreciate the effort you have put into studying prosper. You tend to do deep analysis on prosper lumped as an entire marketplace though, recklessly lumping hr and aa in the same trendline and then come to a sweeping conclusion.

I don't have the same amount of time to produce a possible alternative of your analysis but a quick google search led me to this site, which actually looks a little shady to me but struck me with a similar chart that you like to present: http://www.researchrecap.com/index.php/2010/05/24/cumulative-default-rates-on-recent-vintage-us-mortgage-loans-increasing-at-an-alarming-rate/

You assume that default rates and unemployment rates are tightly corrolated. On the surface it seems they would be, however, I suspect that real analysis would show there are a number of factors that contribute to default rates.

[ira01]

>> You might have a bit more credibility if it weren't for your long standing relationship with Prosper.

>> Locorooster was a recipient of one of the first Friends and Family loans made in 2005.

I agree! But I hope you don't mistake posting numerous accusatory comments to a forum consisting of like minded individuals as credibility building activities either.

So in the interest of full disclosure, what exactly is/was your relationship with Prosper?