Teddie, that's a very interesting question in THIS circumstance.
Keep in mind that we have a man in bankruptcy (OK, chapter 13) who really isn't looking at paying a whole lot on his debt. He is certainly looking at paying his lawyer a lot for the adversarial complaint.
We have the husband alleging that Prosper did not contact him to verify that he sought the loan.
We have 2 companies who have determined that the husband did not take out the debt.
We have no information from Prosper on there being suspected identity theft here.
I'd say, given the totality of the circumstances, that Prosper just doesn't want to honor its guarantee. In this instance, where we are aware of the claimed id theft, we can monitor the bankruptcy case and make sure that if (when) the husband is exonerated of the debt, Prosper makes good on its guarantee.
In the meantime, I take some solace in the fact that with 3!!! law firms representing it, Prosper is likely to pay a LOT of money to lawyers in addition to having to honor the id theft guarantee ultimately.
Let me ask you, though, Teddie: If Prosper learns that a "borrower" claims identity theft, what do you think Prosper should do about it? Should Prosper require the "borrower" to obtain a court order that it's not his debt? If that hasn't happened on the other (small) number of repurchased loans, why here?