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[Senator]

I'm barely staying afloat using Prosper Fantasy Accounting (PFA).

[Elmslice]

Fully 23% (!) of my account value (as calculated by Prosper) is dead money as defined here. 

This issue has bugged me more and more as loans age and go late, and as Prosper takes no action to remove 4++++ lates from their system through sales or charge offs or whatever they are supposedly planning to do.   I now have a couple of non-bankruptcy lates that have gone a full year since they last made a payment, and Prosper of course continues to include the loan value plus all accrued interest in my account value.

What a sad story Prosper turned out to be.  Just about the worst execution of a good idea I've ever seen.

Since I posted my sorry statistic above, I've had another BK and another 2 loans have gone 4+ late.  So now my dead money is >25% of my total account value as calculated by Prosper.  Also, I now have three loans (not in bankruptcy status) which have not made a payment in over a year.

I've never been one for Prosper conspiracy theories, so I'll surmise that they aren't trying to manipulate their default data.  That leaves only one explanation:  operational incompetence and contempt for lenders.

[Elmslice]

Another month has come and gone, with no action from Prosper to either sell or charge off non-performing loans. 

I started lending in mid 2006 and did most of my bidding over the following 9 months.  I stopped bidding altogether in September 2007.  Lendingstats calculates my weighted average loan age at 516 days.  In other words, I've got an old portfolio by Prosper standards.

As of August 31, 17 of the 99 active loans in my account were 4+ months past due.

The "dead money" in my account as a percentage of Prosper's calculated account value now stands at 29%.  This percentage includes accrued interest for all 4+ late loans, most notoriously several which have not made a payment in over a year. 

I just.... don't..... understand how Prosper can allow this situation to drag on without resolution.   Prosper, we know you read here.  Any update?   Will you allow my dead money percentage to ultimately reach 100%, which without action on your part will happen in September 2010?

[bamalucky]

You can't expect them to answer you.You are no longer making new money for them.They exist to lure in the new & dumb.

[Elmslice]

You can't expect them to answer you.You are no longer making new money for them.They exist to lure in the new & dumb.

I'm sure you're right -- I don't really expect any response from Prosper.   

That said, I still can't believe the degree to which Prosper has allowed the basic mechanics of their business to fall apart.

[bamalucky]

I don't think the basic mechanics were ever there

[Texaswatchdog]

Every time I look at my Prosper account this irritates me anew.



See that nice (nearly round) $5,000 account value?  Well, that's bogus. Complete bullcrap. I remember the early days, when pensioner still gave interviews and posted in the (old) forums. He was questioned on his lates and defaults and optimistically mentioned that his account value was still greater than the money he put in. Poor man, he was as deceived as most of us probably are.

In my (and in everyone else's) account value is included not only the full outstanding principal value of all late loans, but also the accumulated interest on these self-same late loans.

So, simply taking my 12 4+ lates that include 4 bankruptcies and 3 loans that Prosper has already brought back from the collections agencies since their announcement that they won't sell these loans (due to a combination of an unacceptably low price and unacceptable conditions imposed by prospective buyers), there is a grand total of $612.02 in unpaid principal included in that total. But it gets worse. Prosper is kindly increasing my account value on a monthly basis with the accumulated interest on these dead, lifeless loans. So, in total, there is already a princely sum of $696.12 in my account value that is, for all intents and purposes less useful than monopoly money.

Check back next month and my account value will be inflated even more with dead money. Money that exists nowhere except in Prosper's accounting system.

Take this a step further. Prosper kindly shows me a net gain/loss figure (bottom of the image above). Looks nice, don't it? I've made a nice $1,300 on Prosper. Uh no. Wait a second. Deduct the $696 from that and I've made a much less respectable $604. And don't forget those other 7 loans drifting slowly and inexorably down to the 4+ month late category. They are in that lovely account value too, and they too are "earning" interest on a monthly basis to swell the pool of dead money in my account.

The way things stand now, if all my loans defaulted to 4+ months late overnight, then my account value on Prosper would remain unchanged in the short term and would show a steady increase over time as they accumulate more unrecoverable interest and late fees.

  Wow, so this how Prosper maintains their positive image in the media to future lenders.  "Just look at all the money our lenders are making."  This goes way beyond cooking the books. This is a barn fire. We should ask Prosper to pay us the face value for our loans.

It would really suck if the IRS decided to tax lenders based on our imaginary loan values.

[Mark12547]

Yes, it must be murder for the accrual tax payers!

Fortunately, almost all individual filers are on a cash basis, so our taxes are based on when our accounts actually get credited, not when there is some imaginary accrual. 

[Senator]

How long will this loan show full value + interest in my Total Account Value?