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[pioneer11]

Once again we are asked to believe what Prosper claims without any evidence that it is true.  In my case, I have received not one red cent as a result of collections on any of my 4+ loans.

Of course there have been plenty of double dagger payday pulls, each of which failed or was back charged by the deadbeat.

[Mtnchick]

The P-----r cheerleaders will tell you it's our fault for making bad choices when we picked out loans. Apparently it's our fault that P----r didn't honor the Lending Agreement and sell them to the JDB when they became 120 days late and even now are admitting that months later they are only getting 2/3 of the highest offer made. And it's our fault that we don't seem to be getting the Chapter 13 payments. And it's our fault they lied in court too.

We really are bad people

[mothandrust]

Last one is loan 14742. This one started making bi-weekly (more or less) payments at the end of May (Net 4 bucks). Six have cleared, latest one still has a dagger (and it's the first that pays down a bit of principal.)  This was a StaciM loan that some of you might remember: http://www.prosper.com/lend/listing.aspx?listingID=130718

Could you tell us how much in collection fees (% of each payment) are being taken out?

I'm especially curious if Prosper is taking out 15% or 17% or what even though the loan is no longer being serviced by a collections agency.

[ira01]

Once again we are asked to believe what Prosper claims without any evidence that it is true.  In my case, I have received not one red cent as a result of collections on any of my 4+ loans.

That is truly the crux of the matter.  Prosper has already been caught in so many "mistakes," half-truths, evasions, and/or flat out lies, that frankly if Prosper told me that the sky was blue I wouldn't believe it unless I went outside to see.  If Prosper's super-secret "post-charge off collections techniques" (which Prosper flatly refuses to tell us what they are, who is doing them, etc.) are actually performing as "well" as Doug says, then put up the evidence.  Mark these loans with a separate status flag, instead of lumping them in with other "charged off" loans, and let us see exactly how many loans there are and for how much money, and how many (and which ones) have made payments and how much. 

[mothandrust]

Well that's your own stupid fault for not diversifying better.  If you were on 100 loans that went 4+ late instead of just a few, you'd be a lot more likely to get your share of 2/3 of 3.5 cents on the dollar.

ETA: Was 1.5 cents/dollar; corrected using HO's estimate.

[Capital_Finance_Group]

I have not seen a single penny from Post-Charge-Off-Collections-Techniques.

+1 and I have 14 account that are 4++++++ months late which are in neither collections nor BK which I'm ASSuming are the "we would have put these in the JDB sale if we'd had one" category.

I as well have not seen any proof (based on my portfolio experience) that such collections ever occur.

[Elmslice]

It's hard to know for sure about changes in status, because I could have had a 4+ late pay while another went 4+ and I wouldn't have noticed the swap.  I don't track every loan separately and I look at my Prosper account detail only about once a week, and I don't care enough about individual loans to go digging through 3rd party sites.  What I do know is that my portfolio is deteriorating and that old loans sit, seemingly forever. 

I know that I'll never see even 5 cents on the dollar for these old loans.  My main gripe is that Prosper
1) didn't live up to their agreement with me, which said that they would sell the loans. 
2) continues to accrue interest on these dead loans and add the interest to my account value.

Prosper's blog response on this subject has another flaw, IMO.  If they had just sold off old loans on a set schedule, they would have gone through maybe 3 additional quarterly sales at this point.  Who knows if all three would have faced the same market conditions as the one they cancelled?  Who knows if the JDB's might have had better than expected success and bid slightly higher in subsequent sales?   Prosper acts as if they know all of the ramifications of their action but they don't and can't.

I view as preposterous their claim that collecting 2/3 of the amount of the JDB bid (so far) proves that they made the right decision.   Right now, the net result is negative for lenders and also for Prosper (without even factoring in the time spent internally to collect).   This seems indisputable, since it's a number that Propser provided.  If I were inside Prosper, I would not think this little experiment successful until I had collected a MULTIPLE of the JDB offer, since the alternative would have been sell 'em and forget 'em.
 

[Shenandoah]

I view as preposterous their claim that collecting 2/3 of the amount of the JDB bid (so far) proves that they made the right decision.

The problem I have with their claim is that hindsight is 20/20.  It's easy to say now that it worked out for what they believe is better.  But the real question is, what information did they have at the time they made the decision that made them believe they would be able to collect enough to make it in lenders' best interest?  And why did they feel they could go against their agreement with lenders?

It's easy to look back and pick out the facts that support a past decision.  It's much more difficult to make that decision looking forward.

[onthefence]

But the real question is, what information did they have at the time they made the decision that made them believe they would be able to collect enough to make it in lenders' best interest?  And why did they feel they could go against their agreement with lenders?

I don't think it's a hard bet that they might collect 1% on the bad debts if they did absolutely nothing.

[HollowOak]

There is one more issue that I thought about. If the debt were in fact sold to a JDB, then the lenders would have received free and clear the proceeds from the sale. Now, with Prosper conducting these "post charge-off collection techniques," there is bound to be additional expenses. I am not aware that Prosper has defined a cost structure, nor a recovery mechanism to recover these costs from the proceeds of their activities.

Surely Prosper in its present state cannot afford to incur an apparently endless stream of expenses in attempting to collect without having a mechanism to recover the expenses from the recovery they are in fact making?  Who is fronting the cost for this "post-charge-off collection techniques?"

Also, if these loans are in this state, when, if ever, will lenders be able to write them off as tax losses? Currently Prosper is carrying these loans on their books (and in our accounts) at full face value with accumulated interest and penalties added to the value of the loans. I don't quite see my CPA agreeing to write them off, nor do I have an official declaration that identifies loans that are in this state.

So I don't know if all of my loans are subject to "post-charge-off collections" or if only some of them are.

[Shenandoah]

Also, if these loans are in this state, when, if ever, will lenders be able to write them off as tax losses?

By definition a "charge-off" is when you declare they are unrecoverable and write them off as tax losses.

That's why whatever Prosper is doing makes no sense and really needs to be clarified by someone at Prosper.

[HollowOak]

Also, if these loans are in this state, when, if ever, will lenders be able to write them off as tax losses?

By definition a "charge-off" is when you declare they are unrecoverable and write them off as tax losses.

That's why whatever Prosper is doing makes no sense and really needs to be clarified by someone at Prosper.

So, in the famous words of my cousin, we're "violently agreeing?"

ETA: Clarification. Shenandoah was not being violent, I was just recalling a childhood phrase for when we were fighting and suddenly realized that we didn't have a reason to fight, we were in agreement. So I forgot the obligatory smilies(s). Here they are, take your pick. 

[ira01]

Who is fronting the cost for this "post-charge-off collection techniques?"

Since Prosper has simply refused to provide ANY information about the PCOCT process, who knows?  For all we know, maybe we are.  For example, on the NAT loans, all collection costs are subtracted from any funds collected, and only the net proceeds are distributed to the (participating) lenders.  Maybe Prosper is doing the same thing with the PCOCT loans (which would, IMHO, constitute embezzlement, since Prosper never obtained permission to do this, or even notified lenders that it would).  

Can anyone who has received a payment on one of these PCOCT loans tell us whether the 15%/17% collections fee is being taken out?  Since these loans are no longer "in collections," maybe Prosper is keeping that money to "fund" its efforts.  I think that too would likely be misappropriation, since Prosper has no legal basis to take those fees which are not provided for in the legal agreements.  

And speaking of the NAT loans, if Prosper was so sure that PCOCT would be better than going forward with the 4/08 debt sale at the fire-sale prices, why didn't it give lenders the option whether to opt in or out of the PCOCT, handling it just like the NAT (although without the problematic default choice)?  It could have taken the pool of $6M 4+ lates, let lenders opt in or out, pay the lenders opting out the price offered by the JDB (Prosper would only have had to advance at most about $232K), and then treat all the loans as a pool for the benefit of the opting in lenders, with collection costs and the advanced money paid to opting out lenders repaid first, and then all opting in lenders splitting the net proceeds pro rata.  That would have had the benefit of preventing the feast or famine result of the current PCOCT process for lenders (a few get a windfall, while most get the shaft).

[onthefence]

Since Prosper has simply refused to provide ANY information about the PCOCT process, who knows?

Its entirely possible that the post charge off collection techniques consists of sitting & waiting.

[beerbud1]

Since Prosper has simply refused to provide ANY information about the PCOCT process, who knows?

Its entirely possible that the post charge off collection techniques consists of sitting & waiting.

I agree! ............. Along with some payday pulls eyc..