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[onthefence]

Portfolio plans are starting to look like piss poor returns vs. their initial base for those who signed up in January.
http://www.prosper.com/lend/portfolio_plans_choose.aspx

The Conservative Plan has dropped in the predicted ROI from 7.12% to 5.10%:
Here are the changes.
         Conse   Balan   Moder   Aggre
24-Apr   5.10%   7.63%   8.48%   9.03%
14-Apr   7.34%   8.44%   9.04%   9.89%
27-Feb   6.56%   8.09%   9.04%   9.89%
10-Jan   7.12%   8.62%   10.77%   10.68%

For those in the portfolio plans, did prosper ask your permission prior to changing your lending criteria?  Did they even tell you?  Or did they just change it on you without even notification? 
Update: They do notify you. http://blog.prosper.com/2008/04/25/portfolio-plan-updates-are-here/

So what is going on here?  Is Prosper:
A) Providing better estimates on default rates?
B) Mucking around with the borrower brackets.
C) Dropping interest rates to be more competitive with the Zopa CDs (since Lendingclub is on a hiatus it can't be them)?
D) Dropping interest rates to track changes in the prime rate?

Do we think that Prosper is even properly estimating the default rates at this point?  Or are they just screwing around trying to find the right recipe?

Do these ROI rates even look attractive to anyone for the given risks?
Do these portfolio plans look even remotely attractive to anyone knowing that prosper will be mucking about with them on a constant basis?

Will this low balling of ROI significantly, negatively affect the DIY, portfolio bidders & price them out of the market?  Or is there still plenty of meat available?

Does a constantly changing bid rate & portfolio slices serve as a means for lenders to be unable to determine that the portfolio plans are innately flawed by design & will not deliver the estimated ROI (assuming this is the case)?

Note to Prosper employees:  We know most of you are good, hard working Joes & Janes.  I'm not trying to rip you guys up.  But a constantly changing bid rate on portfolio plans, & changing portfolio slices do bring up important questions as to the potential value lenders can/will get out of the prosper environment.  I hope the open & free discussion here provides some value to you in your company's evaluation.  Feel free to set up a dummy account & dive into the conversation.  We actually miss some of you (especially those that valued open discussion).

[patio11]

Is the drop in returns part of the inevitable consequence of pushing tens of thousands of dollars automatically into the same number of quality listings?  I don't use portfolio plans, but I've seen the rate offered on my favorite clean Ds drop 2-3% because they open and then get insta-green due to PP bids.  There used to be at least some PP bids which caused loans at more than the maximum rate -- this does not appear to be true any longer.  If you trigger a PP, you *will* be bid down to the PP's minimum bid rate.

[onthefence]

Scratch a couple of questions off my list.  According to the .com blog, it does ask you if you wish to update your portfolio criteria.  I'm so out of the habit of bothering to look at the .com site for information.
http://blog.prosper.com/2008/04/25/portfolio-plan-updates-are-here/

[Mark12547]

My reading of the official blog is that if we use Prosper's Portfolio Plans, the change in the interest rates (and other criteria) is automatic and without notification; and since the bidding interest rates went down, anyone using Prosper's Portfolio Plans will end up bidding at a lower rate.

On the other hand, if one had modeled one's Portfolio after one of Prosper's Portfolio Plans, one will be asked if one wants to update it.

Since I don't bid, let alone not use portfolio plans, I haven't verified that my reading is correct.