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[xraider]

Prosper's main product--anonymous homogenized people-to-numbers diversified lending--is broken. 

What is a shame is that the people at Prosper who should be listening are not, and those who are in power to make substantive changes won't.

+1

Or, as my husband has repeatedly told me, "Why would you possibly think that making unsecured loans to strangers on the internet could possibly be a good idea?"

I agree, too, mothandrust, that Prosper has a wonderful idea and some tweaking could make it work.  Unfortunately, Prosper doesn't want to do anything to protect the money sources, leading most of us to the logical endpoint of cessation of all lending activities.  It's too bad.

[bamalucky]

Any tweaking would lead to more information for lenders,which would lead to less loans funded.

We all know they don't want that.

[christoofar215]

CL will realize in the end, that Prosper won't work unless lenders lend, and lenders won't lend when they are being screwed up one side and down the other.


Lenders eventually tell other would-be lenders to avoid the platform, Prosper's reputation is then damaged, and Prosper won't be able to recover from a bad rep.

Prosper's main product--anonymous homogenized people-to-numbers diversified lending--is broken. 

What is a shame is that the people at Prosper who should be listening are not, and those who are in power to make substantive changes won't.

+1

Or, as my husband has repeatedly told me, "Why would you possibly think that making unsecured loans to strangers on the internet could possibly be a good idea?"

I agree, too, mothandrust, that Prosper has a wonderful idea and some tweaking could make it work.  Unfortunately, Prosper doesn't want to do anything to protect the money sources, leading most of us to the logical endpoint of cessation of all lending activities.  It's too bad.

[xraider]

Chris, you're exactly right.  Last year this time I was waxing rhapsodic about Prosper.  A month or so ago, my mother called me to ask how my investments in Prosper were going.  Suffice it to say my parents will not be lending.  Ugh.

[d94e59b6]

MsTabbyKats,
Sad to see this.  You were the one person whom I thought I could follow and get good results. If you are getting lates, then success is a crapshoot.  Your point about getting money from family members is well taken.  Hope you will stick around to upgrade the conversational level around here. 

Grasshopper (Debbie)

PS:  I've got three lates that will probably go into default-- all from the same two day time period when I was experimenting with "autobid."

[Mtnchick]

I won't bid anymore because I am sick and tired of the following (edited from the original post in the verified section):

1. Borrowers ability to dispute payments......If we cannot rescind a bid one second after hitting "Bid Now", why can a borrower rescind a payment?  Ok, the ability of the borrower to dispute a payment is not Prosper's fault...but it's part of a bad system, which puts the lender at a disadvantage.
Example:
http://www.prosper.com/lend/listing.aspx?listingID=143294

2. Prosper's impotence in  collections.....When I signed up I got the clear impression that they did "something".  The worst case scenario is the borrower isn't allowed to get a second loan.

3. Talking about second loans.....when this was first allowed I thought it was great.  We didn't have to worry about ID theft and the borrower had a good payment record.  Boy...what a mistake!  My portfolio has become inundated with late second loans...and now many first loans are late as well.
Examples:
http://www.prosper.com/lend/listing.aspx?listingID=264553 (This borrower actually told her GL she was broke, and asked him for more $$$)
http://www.prosper.com/lend/listing.aspx?listingID=236142

4. Talking about these "good borrowers"...let's examine the typical Prosper borrower.  People who cannot get loans elsewhere.  Desperate and destitute people. Just think of it....the situation someone is in to post their picture and bad financial situation/history on the internet for the entire world to see. And then to have people bidding on them.  I don't think this is something to be proud of.
I'm not saying every borrower is "bad"...and most actually do pay.  But there is no way to differentiate those who will pay, and those who won't.  If someone is on the brink of getting by, and an emergency comes up like a root canal, their whole financial world could be thrown into chaos.  And again, because of Prosper's inability to do anything....well, there goes another loan.

5. I previously posted a list of all things I would avoid...which eliminated just about everyone.  The only group left was "people on the way up" which were mostly young people starting out.  I've eliminated this group now too.  These people have parents. If the parent doesn't have confidence in his/her precious offspring , why should I? Or should I say, maybe there is a reason their parents won't lend/give them $$$.
Example:
http://www.prosper.com/lend/listing.aspx?listingID=266958

6. Talking about these listings I brought to light and subsequently funded.....I feel terribly guilty.  My sincere apologies to all who bid.  And by apologizing, I've done more that those GLs who are now no where to be found. (Hey Rick etc. ...several of your members are late.  Why haven't YOU responded to my messages.)

7. Business loans.  Most people are incapable of establishing and maintaining a successful business.  They see owners making money and think they can too. But they lack the ability and skills.
Example:
(I won't flame...but......you are supposed to ask questions and settle matters BEFORE you buy the business)
http://www.prosper.com/lend/listing.aspx?listingID=220440
http://www.prospers.org/forum/truevikes_prosper_loan-t8574.0.html

8. I don't want to get "emotionally involved" with prospective borrowers.  One makes emotional bids, and one makes excuses for non-payment.  You know, we all have problems.  The economy is affecting everyone.  I don't tell the borrowers my problems...I don't want to hear their stories.
I won't give examples.....

If you give a hungry person a fish, you will be giving him fish for the rest of his life.  If you teach a hungry person to fish, he will be able to get his own food for the rest of his life.

I thought of Prosper as a place where we could teach people to fish. We could help them clear up their debts, we could help them start a business.  We could cover some tuition payments to the person/children could continue their education.

I never thought of this as an investment of my money...to me it was an investment in people.  However, too many of them have disappointed me.

And that's why I'm not bidding anymore.

There is a sad part...I'm posting a note a borrower sent me after he funded.  Good people will miss out...

"Dear Ms Kats,
I'm so sorry I didn't get to answer your question, I was working the over night shift for UPS and I don't have computer access in the loading bay.
Did you do all this?! All these people that bid? are these on your recommendation?! Well, regardless, you are a woman of your word and it was funded.
The solar panel will work, I'm a minimalist with power usage now. and for some reason if it, lets say the sun stops raising, I can still afford the loan payment.
Either way, you have a build-a-bear with your name on it.
Thank you so, so, so much.
-A"

My message to new lenders:
Enter Prosper as you would a casino.  You go in hoping to make money.  Consider yourself lucky if you come out with what you had when you went in.   But don't be surprised if your money disappears. 

+++++++++++1 Excellent post

[mothandrust]

Any tweaking would lead to more information for lenders,which would lead to less loans funded.

We all know they don't want that.

What they want is for the maximum number of listings up, rather than tiers where some listings are obviously bad or downright fradulent while others are reasonable. 

They got rid of City, they got rid of vetting (few will do quality work for free), they won't verify income, they discourage borrowers to use PII, they limit communication on their forums by censorship and slow moderation.

Instead of cracking down on the frauds, they are cracking down on the quality listings, trying to bring them down to the same level of homogenous mediocrity.

Imagine a grocery store doing this--instead of removing the rotten produce, they take away the fresh organic vegetables thinking that customers will not see such a wide difference in quality and that they'll sell more produce that way.

[MsTabbyKats]

Just bumping this so it's easy to find.
As a result of my listing people have asked why I'm not bidding anymore.
Instead of writing "a thesis"....I'm directing the traffic here.