Print

[onthefence]

So if they are held as charge offs, does that mean that Prosper & their debt collectors will cease any efforts to contact the borrower & bring the loans back up to date?

I would think as the delinquent amount rises, the servicing companies will have a great incentive to attempt to collect on them.

[cowdog]

oh.

So maybe the strategy is to hold then accruing interest and late charges to inflate the debt amount, then sell them for more money?

 

[Senator]

So maybe the strategy is to hold then accruing interest and late charges to inflate the debt amount, then sell them for more money?

...or to keep lender's Total account value in the black by porking it up with ever growing but noncollectable interest.

[SGriff]

oh.

So maybe the strategy is to hold then accruing interest and late charges to inflate the debt amount, then sell them for more money?

 

Except FTC rules require the original lender to enter charge-off status (no more earning extra interest and fees) after 6 months of non-payment...

[Mtnchick]

oh.

So maybe the strategy is to hold then accruing interest and late charges to inflate the debt amount, then sell them for more money?

 

Except FTC rules require the original lender to enter charge-off status (no more earning extra interest and fees) after 6 months of non-payment...

O-RLY? Wow - got a link to that? That would blow this whole thing totally out of the water

[SGriff]

Trying to re-locate it now, Mtn.

If I wind up with egg on my face for failing to locate the link, it wouldn't be the first time, but I read that a few months ago, when I was investigating remedies for a particular bank with which I once did business harassing me over fees incurred by a former girlfriend forging checks off my account at said bank.

[Flying Missle]

Trying to re-locate it now, Mtn.

If I wind up with egg on my face for failing to locate the link, it wouldn't be the first time, but I read that a few months ago, when I was investigating remedies for a particular bank with which I once did business harassing me over fees incurred by a former girlfriend forging checks off my account at said bank.

I don't work very much on the DQ stuff, but most institutions I'm familiar with use a 90-12 day zero billing (no pyaments) to move a loan or line of credit to chargeoff status.  If the borrower makes partial payments, or is otherwise willing to work with the bank, the loan/line may be put into non-accrual status for a time in order to allow the borrower to work through challenges they are facing.
I can't remember what GAAP says on when the institution should recognize the devaluation of the asset, but I think it's a max of 120 days.

[cowdog]

I see numerous 10-K SEC filings which have this statement:

Consumer loans are subject to mandatory charge-off at a specific
date, typically at the end of the month in which the loan becomes 120 days past
due.

http://sec.edgar-online.com/2004/03/10/0000950137-04-001695/Section15.asp

[yankeefan]

I think the "mandatory" in the filing refers to the lender's standards and practices, rather than a regulation or universal accounting rule.  Thus, the lender doesn't decide whether to charge-off  a particular 4 month late loan, and not charge off another, but charges them all off- for it's accounting purposes.

[regeneration]

"There is no update"


From:     regeneration
Received:    Jun-05-2008 7:26 PM PDT
To:    customersupport
Subject:    Other (I am a lender): Please explain below

Please provide an update generally about the NAT experiment generally. Also, can you please help me find the information about the specific NAT loan I am participating in? I believe there was supposed to be some sort of statement supplement, but I can't find it. Thank you.

_________________________________

Dear <me>,

There is no update on the legal test, the process is still ongoing. We hope to provide an update on our blog soon.

Thank you.

For future reference, your Prosper support case number is #.

Sincerely,
Prosper Customer Support

[xraider]

Thanks for the (non) update, regeneration.  I take that as confirmation that the suits have generally not been served.  Good thing we can do our own public records searches.

[Mtnchick]

There is no update on the legal test, the process is still ongoing. We hope to provide an update on our blog soon.

Again, I find this so incredibly unprofessional. Why are they providing updates on the same site where they are pimping loans for weddings, vacations and college visits??! Emails and/or snailmails should be sent regarding something as important as this (and the JDB sales, or lack thereof).

[Capital_Finance_Group]

PLEASE PLEASE PLEASE
I do not want another update - the last one was bad enough.