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[jrr6415sun]

I have been getting really great returns using lending club. I am from Florida and Florida is no longer listed as an available state on lending club, but it is listed as available on Prosper. I would like to invest with a company that lists my state as eligible.

I want to try out Prosper just to see how it is to see if I can get similar returns and not to put everything with one company.

Is it worth it to invest with Prosper? Most posts I read say people are leaving, and I have no idea what all the lawsuit posts are about. Did prosper improve? Is it a good posibility prosper will go bankrupt? Should I stay away?

[ira01]

I thought someone just posted an email from LC saying that Florida lenders who already had a LC account were allowed to keep them.  So you should be fine on LC.

As for Prosper, in the opinion of many people here it is horribly and unethically run, with no sign that there has been any improvement.  Many here believe there is an excellent chance Prosper will go BK, whether due to the class action lawsuit against it that is proceeding slowly but surely, or otherwise.  Even LC, with originations far higher than Prosper, isn't even breaking even yet.  Prosper is so far from breaking even that it is difficult to see that ever happening. 

[pioneer11]

Stick with LC.  If Prosper were to open up for Texas I would not go back.

[God-Father]

So other than we hate Prosper, why is LC better than Prosper?

[ira01]

So other than we hate Prosper, why is LC better than Prosper?

I think I identified a number of reasons in my post above:

1)  Prosper is run horribly and unethically, in the opinion of many here. 
2)  There is an excellent chance that prosper will go BK, in the opinion of many here.
3)  LC, unlike Prosper, doesn't have a ruinous lawsuit pending against it.
4)  LC is far closer than Prosper to reaching the break-even point, and is thus far less dependent on being able to raise additional capital in the future in order to remain solvent.

Isn't that enough?

[Beerbud1]

Read up on Prosper in these threads:

http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=IJS&PRGNAME=ROA22&ARGUMENTS=-ACGC08482329

http://www.prospers.org/forum/the_prosper_quiet_diary_millstones_and_milestones-t25453.0.html

http://www.prospers.org/forum/heres_where_prosper_flipped_the_bird_to_the_sec-t15952.0.html

http://www.prospers.org/forum/anyone_on_ashley_gaerkes_loan_possibly_in_the_name_of_oakland_gaerke-t8232.0.html

http://www.prospers.org/forum/nasaa_announces_national_settlement_with_prosper_marketplace_inc-t10991.0.html

[jrr6415sun]

Thank you for the links and information.

Lending club is definitely better, but as a lending club investor I would never want prosper to go bankrupt.. as an investor and borrow you don't want lending club to have no competition. It would not be good for the industry.

[Fred93]

Lending club is definitely better, but as a lending club investor I would never want prosper to go bankrupt.. as an investor and borrow you don't want lending club to have no competition. It would not be good for the industry.

You may not "want" it, but it is hard to imagine that it could anywhere except bankruptcy.  Prosper's long journey has to end somewhere, and there are not many alternatives.   

They just did so many things wrong over and over again.   Many people have written explanations of some of the things they did wrong.  For example: http://fred93blog.blogspot.com/2009/11/prospercom-paradise-lost-deadbeats-won.html

It is possible that they're working on finding the next sucker VC guy.

[ira01]

Lending club is definitely better, but as a lending club investor I would never want prosper to go bankrupt.. as an investor and borrow you don't want lending club to have no competition. It would not be good for the industry.

You may not "want" it, but it is hard to imagine that it could anywhere except bankruptcy.  Prosper's long journey has to end somewhere, and there are not many alternatives.   

They just did so many things wrong over and over again.   Many people have written explanations of some of the things they did wrong.  For example: http://fred93blog.blogspot.com/2009/11/prospercom-paradise-lost-deadbeats-won.html

It is possible that they're working on finding the next sucker VC guy.

Ah, what a wonderful trip down memory lane it was re-reading your blog post (and my analysis of the NAT that you referenced therein).  Too bad Prosper management was such a bunch of fuck-ups. 

[havastat]

Odd thing is, Prosper has scored a considerably better net return on LendStats each year since 2009.

[mothandrust]

I'm conflicted because the more new lenders Prosper attracts (who lend money to Prosper.Com not to individual borrowers) the greater the asset base that will be available to pay claims for the class action lawsuit.  So please, loan them money and then line up with all the other unsecured creditors!

But my karma would never be the same if I didn't tell you that their customer service has not improved since I started lending.  At the moment they are 30+ days late on one of my loan payments.  They are claiming it is some IT glitch, but that's after being almost 60 days late on the previous payment. 

So if I were you, I would find some other unprofitable small-cap technology company that has an unrated junk bond with a 1-5 year duration and buy that.  It would need to yield at least 15%, which is what Prosper's VC guys are getting.

[xraider]

jrr, if you've read the lobby, you've seen my recent treatment by Prosper.

This is no longer peer to peer lending; it's unsecured lending to strangers over the internet through a company that will do absolutely nothing to protect you, enforce your rights, or otherwise do anything other than try to get your money in the door to repay ITS investors (not your loans). 

Others have posted about Prosper's latest position that if it collects after the payoff date of the note, that's Prosper's money, not yours.

I'm no longer investing, and nothing would entice me to invest through this company again.  Like Moth and many others, I'm watching Prosper do nothing to collect on my delinquent notes, and waiting for the end of the class action.

[mtrauch]

Why do you guys keep going on about unsecured creditors? The only material debt prosper has is from the lenders.

[cubbiesnextyr]

Why do you guys keep going on about unsecured creditors? The only material debt prosper has is from the lenders.

Currently.  Yet nothing would prevent Prosper from putting the loans as collateral on a new debt.  I sure wouldn't want to be a lender who just had my loan put up as collateral for Prosper's debt.

[Xenon481]

Why do you guys keep going on about unsecured creditors? The only material debt prosper has is from the lenders.

If Prosper goes BK due to the Class Action forcing them to repurchase all of the delinquent loans that they sold prior to SEC registration, then Prosper will be on the hook to pay to Pre-SEC-Registration lenders on the order of ~$46million.

Prosper's current amount of active lender notes are only worth ~$92million. So, at the very least, unsecured creditors (lenders) are looking to get on the order of a 50% haircut.

But here is an even worse part. A lot of times, unsecured creditors are paid off in the order of their investment. So, early Post-SEC lenders may get paid in full, but anybody who is putting money into Prosper right now may not get anything back at all.