>> 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.
As seen from Fred's charts, the early loans went kablooey at a ridiculous rate long before the economy turned sour.
>> 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.
There are an enormous number of well-documented facts here. Feel free to point out any you disagree with.
>> 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.
Uh huh. How about the infamous Leporello ID-theft case? He not only found (and provided to Prosper) evidence that a particular loan was identity theft, he even gave Prosper the name and phone number of the NYPD detective who was working the criminal case.
Yet Prosper still refused to repurchase the loan, until Lep made the whole sad saga public causing a huge shitstorm to erupt on Prosper's forum (when the loan was about a YEAR delinquent). THEN Prosper repurchased the loan.
Regarding ID-theft, it was Prosper LENDERS (not Prosper employees) who discovered many cases of ID-theft, including the famous Victoria Crawford case (in which she took out a dozen bogus Prosper loans under different ID's -- Prosper used the information discovered by Prosper lenders to sue her and obtain an injunction freezing her bank accounts). So how did Prosper use this wonderful and free resource? It methodically stripped all personal information from borrower listings (despite Prosper's own official Privacy Policy expressly allowing borrowers to include such information), thereby preventing lenders from ferreting out fraud (and thereby saving Prosper the money of having to repurchase the bogus loans). You think it was a coincidence that Prosper repurchased almost ZERO loans after its actions to hide such fraud from lenders? Read
http://www.prospers.org/forum/empty-t7013.0.html for more information.
>> 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 "expectations" that were violated -- it was Prosper's legal obligations. And your assertion that the debt was "unsellable" is inaccurate. Prosper admitted that it had a JDB that offered to purchase the defaults in early 2008 -- but Prosper didn't like the supposedly "unacceptable" (to PROSPER) conditions attached to the offer (which Prosper steadfastly refused to explain to lenders, despite the fact that WE were the OWNERS of the debt in question). It is no wonder that lenders think that a likely "unacceptable" condition was that Prosper had to repurchase any debt found to be identity-theft. That would, of course, be totally "unacceptable" to Prosper, because then it would have to repurchase the loans from the lenders at 100 cents on the dollar.
Moreover, in another case, Traveler505 made a binding offer to purchase one particular default, via a certified letter to Prosper, explaining that the laws of New Mexico (where both he and the borrower resided) did NOT require a license for such a transaction or to conduct collections activities on the loan once purchased, and offering to indemnify Prosper for any liability due to selling him the loan. Instead of acting in accordance with its fiduciary duty to lenders to maximize recovery on defaulted loans, Prosper rejected Traveler's offer, and sold the loan to a JDB for HALF of Traveler's offer -- collectively costing the lenders on that one loan $500. Certainly that loan wasn't "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.
I can tell you from personal experience that is complete bunk. I am a volunteer small claims judge sitting frequently in Los Angeles Superior Court. I hear collections cases all the time, brought by every type of institutional creditor -- payday lenders, credit card lenders, check cashing places, auto finance companies, retail finance companies, rent-to-own places, etc. A typical small claims calendar (one day, either morning or afternoon) might have 10 or more such cases. In the vast majority of such cases the defendant doesn't show up in court, and in the vast majority of such cases the creditor wins a default judgment. Even when the debtor defendant does show up in court, most of the time they admit they owe the money but since they don't have money, they just want a payment plan. Prosper's legal cases should have been a slam dunk. Instead, they were fucked up. In many of the cases, Prosper and/or its attorneys simply didn't get the defendant served properly/timely, or didn't get the proper default paperwork filed.
>> 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?
It means that if you have read here as much as you say, you should know much of this.
Would you want to borrow from a bank where dozens of holier than thou people publicly ridiculed you in a baseless manner?
Please point out the baselessness.
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