Makes me glad that I resisted temptation when I saw some decent listings some while ago. I really don't trust that Prosper as a company will be alive to service my loans til they actually mature.
On the basis that if you say something enough it is bound to be true.
This is exactly how Prosper should move in an orderly transition to servicing-only mode.
From another post of mine:
I'm not saying it is, but the QP is exactly how Prosper can achieve an orderly transition into "servicing-only" mode. They're closing down aspects of the site that are processor- and cost-intensive (bidding and new listings). Now they have a smaller, cheaper platform with less (or no)changes required to run indefinitely (or until all the loans are either paid off or moved into the charge-off status.
Note that the charged-off status is radically different than what Doug Fuller promised us re "Post Charge-off Collections Techniques" in that they have written down the loans. The loans are not carried "on the books" for lenders (or for Prosper) anymore. If you want an orderly end to things, this is where you want to be. Loans either paying (and you passing the disbursement on to lenders at minimal cost), or written off and not requiring any effort or manpower.
Anyone that speaks to borrowers should reassure them that there is noting to fear from their perspective regarding their payments going astray.
If we take the two events of Andrew's announcement of the change to "Charge-off" from "+4 late" and now entering a quiet period in which the loan originating process is curtailed, they're pretty much all the way there.
Queue the evil plot theory: Since way back (sometime around when JW left) the writing was on the wall. We all know Prosper had no intention of doing anything with that damn SEC filing, otherwise it wouldn't have languished there for nearly a year (LendingClub got theirs resolved in a much shorter time and with several amending filings, of which Prosper has done none.) So queue the announcement by Doug Fuller that loans will not be sold to JDBs anymore, but will be subject to
PCOCT and you are done with the group of people soliciting bids from JDBs. Then Andrew's announcement that loans will transition to Charge-off rather than +4 late and you're done with PCOCT and whatever manpower is involved with that. Now you shut down lending, bidding and loan originations and you're pretty much down to a skeleton staff. Next, since they can't talk to customers anyway, you can shut down Customer service and leave a recorded message. You can pretty much get rid of all the R&D guys and the Marketing folks as well. Putting affiliate links on your site to other loan companies ensures a residual income from the Prosper brand.
But
loan servicing can continue for a period of time. At some point in time the revenue stream will diminish and they may look at making a bulk sale of the remaining securities to a 3rd party (I bet they're hoping the credit crunch eases before then).
