The best thing that could happen to us is if Virgin Finance swoops in and buys up Prosper in total and continues the site under new management.
They would also have the money and panache to open a secondary market where we can sell off our loans or buy them and take them outside Prosper Marketplace to hold them outright---which would be great. You could build your own neighborhood storefront lending business by buying a cache of good loans and then vet your own new loans and originations through the "New Prosper" or your own lending store... so you could have P2P and use buyouts to convert them to P2B.
I'd rather have affiliate stores vetting their listings prior to them going on the auction site rather than Prosper--which doesn't vet anything prior to the listing going up. Stores performance is also easily trackable so bad and dirty stores will die off quickly as lenders dry up.
A mixed model would work better than the anonymous P2P model of Prosper, IMO. Storefronts have a responsibility to their communities, subject to regulation, BBB, etc. Borrowers meet their "listing agents" in person, submit documents in person, get interviewed in person, while loan customers compete for rates through the online marketplace. And instead of SCOREX, as part of the royalty for operating a store... the online marketplace can afford to do complete pulls of credit histories on borrowers and provide a richer detail to loan bidders.
Storefronts would also be partially responsible for collections, mailing letters, paying in-person visits to the borrower's home and then after that switch to a cornucopia of collections agencies who are graded on performance by geographic location. The storefront owners are also then free to sue deadbeats for default judgments at will---which PMI is so reluctant to do.
After personal vetting, the storefront puts up the listing and standardized and scanned vetting documents... the borrowers PII is replaced with a control number, but the full identity of the originating storefront is disclosed along with the store owner. The storefront owner can buy all or part of the loan by placing a starting bid at or below the interest rate the borrower lists for.
Think of it as like State Farm. Anybody on the street can sell State Farm's policies, but the underwriting is regulated and the operations follow a Policy & Procedure manual. A "New Prosper" model could operate like this, carry a national E&O insurance policy, look and feel like a storefront bank, but the back end remains mostly the same.
The result is better listings and more profit shared by the lenders who choose to operate storefront affiliates (premium lenders) while individual lenders also get it on the action.
Definitely beats the Group Leader idea.
