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[Xenon481]

In the case of your E bankruptcy, LS seems to believe that 14 payments were made, for a total of $2400, and that's why it's pegging you for only a $300 loss on your $900.  It thinks you've already gotten back $450 or so of those $900.  Why it thinks that is another question, I guess, since from ericscc's status tracker, it appears to me that only four or five payments were made, and that you got something close to $150 from those.

http://www.prosper.com/lend/listing.aspx?listingID=35390

For the record, I'm on that loan for an original principal of $900.  4 on time payments (and none others) were made totaling a net amount returned of $123.35 with an outstanding principal balance of $818.80 and a remaining break even amount of $776.65.  The last activity on this loan was on Jan-19-2007.  LS's loss estimate for me on this loan is only $308.67.  I don't believe that LS's loss estimate for that loan has changed over the past few months.

LS's Loss Estimate / Remaining Break Even Amount = $308.67 /  $776.65 = ~39.74% Loss

So, LS is assuming that over 60% of 14+ Month Late E Bankruptcy's will cure.....

[NPX]

In the case of your E bankruptcy, LS seems to believe that 14 payments were made, for a total of $2400, and that's why it's pegging you for only a $300 loss on your $900.  It thinks you've already gotten back $450 or so of those $900.  Why it thinks that is another question, I guess, since from ericscc's status tracker, it appears to me that only four or five payments were made, and that you got something close to $150 from those.

http://www.prosper.com/lend/listing.aspx?listingID=35390

For the record, I'm on that loan for an original principal of $900.  4 on time payments (and none others) were made totaling a net amount returned of $123.35 with an outstanding principal balance of $818.80 and a remaining break even amount of $776.65.  The last activity on this loan was on Jan-19-2007.  LS's loss estimate for me on this loan is only $308.67.  I don't believe that LS's loss estimate for that loan has changed over the past few months.

LS's Loss Estimate / Remaining Break Even Amount = $308.67 /  $776.65 = ~39.74% Loss

So, LS is assuming that over 60% of 14+ Month Late E Bankruptcy's will cure.....

I disagree with the last sentence.  Note that if you look at the loan in lendingstats:

http://www.lendingstats.com/listings/35390

you'll see that it THINKS that 14 payments were made, for a total of over $2400, or almost half of the original loan amount.  That's wrong, but that's the assumption that LS is using when it estimates the loss amount.  So it THINKS that you've already got back roughly $450 of your $900, and it's suggesting that you might see another $150 in either recovery or debt sale.

I'm also going to guess that the debt sale or recovery projections don't know that it's 14 months late, only 4+ months late, and that they also don't know about the BK designation.  I haven't seen any change in the loss estimates on the loans of mine that have gained the coveted "In Bankruptcy" label....

[iLIE]

Laymans terms.LS only goes to 4+ late.

A loan 10 months late ,LS reads it as 5 payments(maybe 6)made  & 4+ late

[NPX]

Laymans terms.LS only goes to 4+ late.

A loan 10 months late ,LS reads it as 5 payments(maybe 6)made  & 4+ late

Yes indeed.  I had been thinking that Xenon's loan was somehow an anomaly, but not so: all of my 4+ lates are showing more payments than they actually made.  This is, needless to say, a pretty severe distortion in the "estimated late loss amount" values in the audits.  Anyone know LS personally and feel like inviting him to comment?

[msava]

When our 36 month payments start kicking in, I'd be willing to bet both LS and Eric will drastically change. A lot of lenders have stopped loaning and this will also affect the numbers?

[iLIE]

When our 36 month payments start kicking in, I'd be willing to bet both LS and Eric will drastically change. A lot of lenders have stopped loaning and this will also affect the numbers?

Can anyone translate this?

[Nora_Lenderbee]

NPX, that was a very clear explanation of the LendingStats issue. Thank you.

[ira01]

Laymans terms.LS only goes to 4+ late.

A loan 10 months late ,LS reads it as 5 payments(maybe 6)made  & 4+ late

Yes indeed.  I had been thinking that Xenon's loan was somehow an anomaly, but not so: all of my 4+ lates are showing more payments than they actually made.  This is, needless to say, a pretty severe distortion in the "estimated late loss amount" values in the audits.  Anyone know LS personally and feel like inviting him to comment?

This also helps explain why the LS ROI numbers have been going up (too much) over the last few months -- as it gets further and further from the last debt sale in December, the average lateness of 4+-month lates increases, meaning this error gets more significant.  In other words, immediately after the last debt sale, most 4+-month lates were just barely 4 months late (having just missed the deadline for being sold off), aside from the BK's and the few older loans not sold off for whatever reason.  So LS's apparent assumption that 4+-month lates were only 4 months late was not too far off the mark.  But now there are lots of loans that are 7 or 8 months late, but only being counted as 4 months late.  This over-inflates the amount paid component of the calculation.  As soon as the next debt sale occurs, LS ROI's will take a sharp move downward.

ETA:  I sent LS an email pointing him to this thread.

[Cheerful_Lender]

ETA:  I sent LS an email pointing him to this thread.

But showing people the high ROI they're making makes for a good experience.  People are more likely to visit the site time and time again if it makes them feel good.  I say keep showing us that we make 13% even if in reality we're making a nifty 2%. 

[LendingStats_dot_com]

Hi everyone,

A couple of reasons why the ROI is 'off'.

1) Late rates were being calculated using the old Penncro Collection rates offered by Prosper, these were significantly higher then the FirstSource rates we’ll be using now.

2) Default sale prices are being calculated based on the first batch of loans Prosper sold. This ’sale price’ has significantly dropped if I’m understanding correctly. (You probably won’t get 30% back for a C homeowner on default now). Going to look into getting a more accurate estimate of default sale prices.

3) Loans are being stuck in the 4+ month band. What we do currently is estimate how many payments have been made by the lender.

e.g. If a loan is 12 months old and 4 months late then we assume it has made 8 payments. However many of the 4+ month loans are hitting the 8month late mark. The calculation assumes it's only 4 months late.

-------------------------------------------------------------------------------------------------------------------------------

Fixes:

1) This is already updated, we are now using the collection rates listed from FirstSource instead of Penncro (login to your prosper account and look at the FirstSource collection recovery rates).

2) This is pending an update, I need to get a better estimate of the default sale prices in order to update this part. I have a couple of ideas but they are a little tricky to automate.

3) This is the same as #2 and will need automation.


Definately will look into this though so give me some time. Thanks

[Cheerful_Lender]

Fixes:

1) This is already updated, we are now using the collection rates listed from FirstSource instead of Penncro (login to your prosper account and look at the FirstSource collection recovery rates).

2) This is pending an update, I need to get a better estimate of the default sale prices in order to update this part. I have a couple of ideas but they are a little tricky to automate.

3) This is the same as #2 and will need automation.


Definately will look into this though so give me some time. Thanks

Thanks for all the hard work and thought you put into this.  We really appreciate it!

[Nora_Lenderbee]

Thanks for all the hard work and thought you put into this.  We really appreciate it!

Hear, here!

[bamalucky]

Thanks LS.I'm on the way over to the sight now to click a few ads.

[NewHorizon]

Laymans terms.LS only goes to 4+ late.

A loan 10 months late ,LS reads it as 5 payments(maybe 6)made  & 4+ late

Apparently fixed.
http://www.lendingstats.com/blog/2008/06/01/estimated-roi-update-bug-fixes

[arebelspy]

Laymans terms.LS only goes to 4+ late.

A loan 10 months late ,LS reads it as 5 payments(maybe 6)made  & 4+ late

Apparently fixed.
http://www.lendingstats.com/blog/2008/06/01/estimated-roi-update-bug-fixes

lendingstats still has me like 5% higher than erics does (like 6% vs 1%).. i'm betting eric is still closer?

EDIT: pensioner is now in neg roi (barely) on LS