It seems that prosper must pool these small loans and sell them in some sort of auction format, and since some loans don't sell there must be some type of reserve price for each pool. Therefore
I don't see any evidence of pooling. In fact, I have some evidence pointing the other way. I've had 38 loans sold so far, and no two ever sold for the same fraction of outstanding principal. Therefore, none of these were ever in the same pool.
Evidence of pooling would be that they are all sold at the same time, if they were sold individually, there should be an ongoing sale. Prosper could have some way of splitting up the proceedes of each pool that results in unequal payments among different loans. And as I stated above, even the management at prosper couldn't be so incompetent not to pool tiny loans for a sale.
See edit in my previous post
If you think prosper is not getting as much as they could for these loans, your first step should be to find out how they sell them,
They keep this secret.
Also as stated above, that's BS on prospers part
See edit in my previous post
and get involved in that process from the position of a potential buyer.
Several lenders have tried, and have been rebuffed every time.
If lenders have tried to buy individual loans, I can see why prosper would not listen (though they should give a reason why that is not possible), but if a lender showed interest in purchasing a basket/pool of loans and was rejected, that could get them in some trouble.
Though, given that these are pools of significantly past due usecured consumer debt from mostly sub-prime (to say the least) borrowers, $0.08 on the dollar seems pretty fair to me.
Why do you say "subprime to say the least"? Some were AA credit grade. Some were A.
The credit grade is much less significant once the loan goes 4+ months late. The credit grade only shows us the best guess as to if this person will pay the loan back or not, once they have proven that they are unable or unwilling to pay it back, it's still crap, even with a AA grade. For example; which would you rather have in your portfolio, a AA that has not made a payment in 4 months or an HR which has been paying on time?
Once these unsecured small loans don't pay for months, go through collections and finally get to a sale, they are garbage, and no one pays much for garbage.