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[Mark12547]

This will let them know that the real "customers" aren't very happy.

I thought the borrowers were the real customers.   

That's definitely how Prosper acts! 

[BigGulp]

All I have to say is:

It's about friggin' time!!

...Gulp

[bamalucky]

Latest Member:  RateLadder_com

Joins the sekrit forum.

[cubbiesnextyr]

Latest Member:  RateLadder_com

Joins the sekrit forum.

no he didn't.

ETA:  Unless you're talking about some other forum that I dont' know about...
ETA2:  Oh, that forum.  I suppose he did join it...

[BrassKnuckles]

http://digg.com/business_finance/Prosper_lenders_retain_lawyer_claim_breach_of_fiduciary_duty

dugg +1

[Mtnchick]

PMI has time after time after time after time to talk about the questions in the letter. Heck, they had 3 weeks to talk about it after the letter was sent! But they have consistently dodged the ball when it was in their court. Even now it's taken me almost a WEEK just to find out why a 2+ month late isn't in collections. They either are completely held together by rubber bands and spit, or they just don't care. Or maybe both.

A lender with $600K tried to have a talk with Chris Larsen and either 1. it never happened or 2. it didn't satisfy the lender because he took his ball and went home. Bravo, PMI.

I don't understand how a company can be run like it is - it's honestly beyond anything I've ever seen in my 30 working years.

[Beachey]

<poof>

[Urbi_et_Orbi]

As a President would say, no option is off the table.

[xraider]

Beachey, as Ira said on another thread, the first goal is transparency.  We want information - answers to our questions.  Where we go next depends on what we learn. 

[LoanChimp]

I.    Failure to Provide Accurate Information About Risks Presented By Certain Locations or Types of Loans

http://www.prosper.com/help/topics/lender-default_sale_history.aspx

(iirc, this link has been there for quite a while)



II.    Poor Collections Results

At the moment we are told whether a late loan is in collections or not, and see a collection payment applied if one (hopefully) comes. I’m not sure what the group of lenders is looking for here. How many times the borrower was called? How many “promises to pay” were made? I don’t see how that improves lender performance. I see this only satisfying curiosity.

As pointed out here: ( http://www.prospers.org/forum/informed_response_to_my_blog_post-t6383.0.html;msg96555#msg96555 – limited access) I would guess Prosper believes they cannot themselves pursue collections after receiving a CnD.

Sure, the blender offset would be nice to have.



III.    Failure to Sell Defaulted Loans

As I’ve already stated, I don’t know how Prosper could have won either way with the last debt sale attempt. There seems to be an even split of lenders that are glad the loans weren’t sold hoping for another payment, and those who are disappointed that the debt sale didn’t happen.

Perhaps if the loans were sold at the time for pennies on the dollar, this 3rd point would have been “Prosper didn’t sell my bad loans for enough”.



IV.    Failure to Prosecute “New Agency Test” Lawsuits

Lenders participating in the test sold (gave) these loans back to Prosper. Lenders no longer have ownership of the notes; I don’t see how lenders can demand much of anything on these.

(I opted out of the New Agency Test, but am still curious about the results myself.)


 
V.    Failure to Protect Lenders’ Interests After A Borrower Claims to Have Declared Bankruptcy

Much of this appears to be resolved with the recent update. I would hazard a guess that junk buyers wouldn’t buy any loans where Prosper was notified of BK, and the BK tag was used to keep these out. All is moot now.



VI.    Failure to Honor Repurchase Guarantee

I fail to see the problem with this 102017? How do lenders know this is identity theft?

The rest is not unreasonable. There should be some sort of third party oversight if Prosper wishes to continue with the ID theft guarantee.



VII.   Failure to Protect Lenders From Other Instances of Borrower Fraud

The funny part about this section is that there are two cases where known lenders still bid on a listing despite what was known based on the forums. Incredible.

But, like VI, I don’t think it would be unreasonable to have third party oversight regarding reports of fraud.



VIII.   Failure to Provide Accurate Performance Information

I have never heard the first 3 paragraphs brought up before the letter was sent. I’m not even sure why this is on in the letter.

The rest of the section was corrected since the letter was sent.   

   

X.    Retroactive Changes to Terms of Service, to the Detriment of Lenders

The whole second loan thing has been discussed in depth on this forum by both sides. I for one am not bothered by second loans.

I think it’s reasonable to expect the overcharge from AmSher to be fixed. I think it’s unreasonable to expect this to be fixed immediately. The dollar amount here has to be extremely small.



meh...

[Mtnchick]

V.    Failure to Protect Lenders’ Interests After A Borrower Claims to Have Declared Bankruptcy

Much of this appears to be resolved with the recent update. I would hazard a guess that junk buyers wouldn’t buy any loans where Prosper was notified of BK, and the BK tag was used to keep these out. All is moot now.

HAHAHHA - this one stood out due to some recent info I received - when P-----r gets notice from a borrower that they have filed BK, they have a 60 day "grace period" while the loan is removed from collections until P-----r takes the time to verify that the borrower has, indeed, filed BK. You think that's protecting our interests?!! Note: not 60 days WHILE they're verifying, 60 days BEFORE they verify.

BTW, did you know that P-----r doesn't have a way to note on an account that they've sent in a C&D? It took them a week to find out one of my accounts that was out of collections hadn't sent one in (instead they "said" they filed BK back in May.........but next week, P-----r's going to verify that, lol).

I'll let others take apart your other "mehs" - that one just struck me as hilarious. 

[xraider]

I.    Failure to Provide Accurate Information About Risks Presented By Certain Locations or Types of Loans

http://www.prosper.com/help/topics/lender-default_sale_history.aspx

(iirc, this link has been there for quite a while)

I've never seen that link.  But, my view is that it doesn't go far enough.  Prosper has told some lenders things that make me wonder about loan size, and other states.

II.    Poor Collections Results

At the moment we are told whether a late loan is in collections or not, and see a collection payment applied if one (hopefully) comes. I’m not sure what the group of lenders is looking for here. How many times the borrower was called? How many “promises to pay” were made? I don’t see how that improves lender performance. I see this only satisfying curiosity.

As pointed out here: ( http://www.prospers.org/forum/informed_response_to_my_blog_post-t6383.0.html;msg96555#msg96555 – limited access) I would guess Prosper believes they cannot themselves pursue collections after receiving a CnD.

Sure, the blender offset would be nice to have.

If Prosper had to report on the amount of collection contacts borrowers received, it might give AmSher or whoever incentive to contact them.  I have no clue what AmSher does to collect on lates.  If I knew, I might have some thoughts on how to improve collections.  If Prosper doesn't think it can pursue collections after receiving a C&D, it needs better legal counsel.  Also, if it truly believes that, it needs to change the TOS to permit immediate acceleration upon receipt of a C&D.

III.    Failure to Sell Defaulted Loans

As I’ve already stated, I don’t know how Prosper could have won either way with the last debt sale attempt. There seems to be an even split of lenders that are glad the loans weren’t sold hoping for another payment, and those who are disappointed that the debt sale didn’t happen.

Perhaps if the loans were sold at the time for pennies on the dollar, this 3rd point would have been “Prosper didn’t sell my bad loans for enough”.

Not so.  What does the LRA say?  I want compliance with the LRA.  Now, I have no compliance with the LRA and no idea what Prosper's doing on my 7+ and my 9+ 10+ lates.  

IV.    Failure to Prosecute “New Agency Test” Lawsuits

Lenders participating in the test sold (gave) these loans back to Prosper. Lenders no longer have ownership of the notes; I don’t see how lenders can demand much of anything on these.

(I opted out of the New Agency Test, but am still curious about the results myself.)

As far as the NAT loans go, lenders were given the opportunity to opt in or opt out of the suits.  Those who opted out were cashed out; those who opted in were promised a pro rata interest in any recovery.  Even though I wasn't lending any more, I did recommend that people opt IN to the NAT suits, thinking that Prosper would diligently prosecute them.  My bad.

 

V.    Failure to Protect Lenders’ Interests After A Borrower Claims to Have Declared Bankruptcy

Much of this appears to be resolved with the recent update. I would hazard a guess that junk buyers wouldn’t buy any loans where Prosper was notified of BK, and the BK tag was used to keep these out. All is moot now.

Not so.  What if someone falls out of bankruptcy?  What if the Prosper loan was obtained WHILE SOMEONE WAS IN BANKRUPTCY (yes, that happened).  What if the loan was obtained within 90 days of bankruptcy?  Is Prosper making all necessary filings to protect lenders' interests?

VI.    Failure to Honor Repurchase Guarantee

I fail to see the problem with this 102017? How do lenders know this is identity theft?

The rest is not unreasonable. There should be some sort of third party oversight if Prosper wishes to continue with the ID theft guarantee.

What?  We're not unreasonable on something?  

I'm too lazy to go back right now and see what 102017 was.... but if it's not ID theft, let Prosper tell us!  If it IS ID theft, Prosper should repurchase it.

VII.   Failure to Protect Lenders From Other Instances of Borrower Fraud

The funny part about this section is that there are two cases where known lenders still bid on a listing despite what was known based on the forums. Incredible.

But, like VI, I don’t think it would be unreasonable to have third party oversight regarding reports of fraud.

...

VIII.   Failure to Provide Accurate Performance Information

I have never heard the first 3 paragraphs brought up before the letter was sent. I’m not even sure why this is on in the letter.  The rest of the section was corrected since the letter was sent.   

Doesn't it bother you knowing that your loan value is inflated?  It does me.   

X.    Retroactive Changes to Terms of Service, to the Detriment of Lenders

The whole second loan thing has been discussed in depth on this forum by both sides. I for one am not bothered by second loans.

I think it’s reasonable to expect the overcharge from AmSher to be fixed. I think it’s unreasonable to expect this to be fixed immediately. The dollar amount here has to be extremely small.

How much time do you think is reasonable?  It's been about 5 months, IIRC.  At some point, the suspicion has to be that Prosper is hoping we'll forget.

meh right back at you..... but I'll debate this with you (and I bet others will, too) as long as you want.

[Nora_Lenderbee]

III.    Failure to Sell Defaulted Loans

As I’ve already stated, I don’t know how Prosper could have won either way with the last debt sale attempt. There seems to be an even split of lenders that are glad the loans weren’t sold hoping for another payment, and those who are disappointed that the debt sale didn’t happen.

The issue is with loans that are well over 4 months late--some as much as 12 months late, some even more--that Prosper is not declaring "defaulted" (and therefore eligible for a sale). The loans have defaulted for all intents and purposes. By not declaring them to be defaulted, Prosper hurts the lenders in these ways:
--the loans become worth less and less to any debt buyer.
--the lenders can't treat the loan as bad debt on their tax returns

Prosper's actions also keep the official default rate low, and it advertises that misleadingly low default rates in its advertising.

I don't expect prosper to get blood from a stone. I have mentally written off my bad loans and will be content to get even a small percentage back. However, I expect prosper to behave in a commercially reasonable way by treating these loans as defaulted.

Perhaps if the loans were sold at the time for pennies on the dollar, this 3rd point would have been “Prosper didn’t sell my bad loans for enough”.

Loans were sold for pennies on the dollar in all the previous debt sales. Nobody liked it, but I don't recall any serious suggestions of litigation. That is not the issue.

BJust so you know where this lender is coming from, I accept my bad loans as the result of my own decisions. I don't blame Prosper because some borrowers turned out to be deadbeats, or because the "groups" system failed, or because a new and untested investment didn't work out. I knew going into this that I could lose money.

[bookwyrm]

LoanChimp, you say these other lenders go too far by sending official communication to Prosper concerning grievances they have that have not been addressed through less formal attempts for, in some cases, a year.  As I asked you in another thread, if a year isn't long enough to expect them to resolve concerns, how long is long enough?  If agreements are not binding when they are made, when are they binding?

Edit to correct idiocy.  One might have thought I fell into the tequila and drowned.

[ira01]

I agree with xraider's response to LoanChimp's post, but I'll add a little more.

I.    Failure to Provide Accurate Information About Risks Presented By Certain Locations or Types of Loans

http://www.prosper.com/help/topics/lender-default_sale_history.aspx

(iirc, this link has been there for quite a while)

This doesn't state that Prosper will only sue borrowers in California, and apparently won't sue borrowers whose loans are <$5K.  Who knows what other conditions Prosper has secretly attached to making serious recovery efforts on loans meeting certain (undisclosed) criteria?

II.    Poor Collections Results

* * *
As pointed out here: ( http://www.prospers.org/forum/informed_response_to_my_blog_post-t6383.0.html;msg96555#msg96555 – limited access) I would guess Prosper believes they cannot themselves pursue collections after receiving a CnD.

Prosper is wrong if they believe that.  Not only that, as has been explained in the forums before, Prosper's statement to that effect quoted a statute that on its face didn't even support Prosper's conclusion.

IV.    Failure to Prosecute “New Agency Test” Lawsuits

Lenders participating in the test sold (gave) these loans back to Prosper. Lenders no longer have ownership of the notes; I don’t see how lenders can demand much of anything on these.

Prosper is now the legal owner, but the opting-in lenders are the beneficial owners (Prosper is basically the trustee of a trust whose beneficiaries are the opting-in lenders).  Prosper owes those lenders a fiduciary duty to act in their best interest, which it does not appear Prosper has been doing.

V.    Failure to Protect Lenders’ Interests After A Borrower Claims to Have Declared Bankruptcy

Much of this appears to be resolved with the recent update. I would hazard a guess that junk buyers wouldn’t buy any loans where Prosper was notified of BK, and the BK tag was used to keep these out. All is moot now.

As xraider and MtnChick correctly pointed out, all is not moot now.  Just today Prosper confirmed that it has been taking borrowers' word at face value that they are planning to file BK, and has unilaterally decided to give borrowers a 60-day grace period during which no collections activities take place merely on the borrower's say-so.  This is moronic beyond belief.  Do they really think that deadbeat borrowers don't lie about such things?  Or that even if not lying about their intention, that many don't actually follow through?  There is a bright-line in every BK -- the FILING of the petition.  If no petition has been filed, there is NO BK.  That's a simple enough concept that even prosper should be able to understand it.  Furthermore, we know from experience that prosper is not good at follow-through on future events that are not automated.  It is quite likely, I imagine, that Prosper forgets to check into the BK status at the expiration of the 60-day "grace period."  Indeed, we know from one of MountainChick's loans that Prosper did exactly that for roughly a YEAR.

VIII.   Failure to Provide Accurate Performance Information

* * *
The rest of the section was corrected since the letter was sent. 

In RESPONSE to the letter, most likely.