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[HollowOak]

Erratum: My initial assumption on the rate of recovery was incorrect. Ira01 correctly pointed out that that the number I wrote about is the fraction of the total loan originations. The correct rate for recoveries are 2.55%, which is much more in line with the last prices offered by the JDBs.

Does anyone recall that Prosper somewhere in a blog post mentioned that their recovery actions were working out favorably vis-a-vis the performance expectations of selling the old debt to the JDBs?

Well, I just went looking (I don't much do stuff on Prosper anymore) at the Marketplace Performance tab.

They're listing their recoveries on charged off-debt there. On $19,072,769 of debt, they have recovered  $486,493. That's a whopping
0.28% recovery rate. (Their calculation, not mine).
We can't add in the Pre-charge-off payments, those were payments made before the loans defaulted.

I have a feeling we'd have been much (about 12 times if I remember my prior calculations?) better off with the JDB prices.

[NewHorizon]

Does anyone recall that Prosper somewhere in a blog post mentioned that their recovery actions were working out favorably vis-a-vis the performance expectations of selling the old debt to the JDBs?

I'm recalling:

Finally in looking at AmSher’s performance, I remain very pleased with their efforts. One of the key metrics that I look at is what portion of accounts placed with them do they obtain a “right party connect” (meaning that they actually spoke to the debtor) within the first six weeks of placement. AmSher is successfully contacting more than 40% of the debtors. This is extremely good. July was the first month in which dollars collected per account decreased. During my July trip, I reviewed the results across all of AmSher’s portfolios, the decline is happening across the board. This is clearly the sign of a deteriorating economy.

http://blog.prosper.com/2008/08/25/collections-update-2/

"One of the key metrics..."  There's only ONE key metric, imo, and "right party connect" aint' it.

"July was the first month in which dollars collected per account decreased. ... This is clearly the sign of a deteriorating economy."  The economy started deteriorating last year.  And by last January, folks were wondering aloud if we weren't already in a recession.  ( linky )  So I don't think I'd be so quick to connect July's decrease in collections to the deterioration already nearly a year old.  And I would certainly be loathe to blame the 0.28% recovery rate on the economy.  I hope Prosper doesn't try to go there.

[Xenon481]

Here was Prosper Blog's response regarding how much they have collected so far:

In response to mothandrust and cardinalflyer’s comments:

There is a “rule of thumb” in debt buying that you know you didn’t pay too much for a portfolio if you receive back you purchase price in the first year. In the case of the accounts that comprised the “cancelled” debt sale bid file, they have already collected more than 2/3 of the total amount of the best bid. We remain confident that NOT selling the file was/is in the best interests of the lenders.

Having said that, one of the challenges in working with Prosper collections is the fact that while there is interest in how the whole portfolio is performing, lenders quite rightfully only really care about what is happening on their loans. A lender that is on one of the loans that came current is probably very happy with the decision — a lender on a loan that declared bankruptcy or does not pay anything, would obviously rather had the debt sale price.

This is one of the key reasons for diversification in the loans you own.

0.28% does not look anything like 2/3rds of the total amount offered for the debt sale.

[bamalucky]

0.28% does not look anything like 2/3rds of the total amount offered for the debt sale.

It could..they never did get pinned down to what the offer was exactly.

[ira01]

Does anyone recall that Prosper somewhere in a blog post mentioned that their recovery actions were working out favorably vis-a-vis the performance expectations of selling the old debt to the JDBs?

Well, I just went looking (I don't much do stuff on Prosper anymore) at the Marketplace Performance tab.

They're listing their recoveries on charged off-debt there. On $19,072,769 of debt, they have recovered  $486,493. That's a whopping
0.28% recovery rate. (Their calculation, not mine).
We can't add in the Pre-charge-off payments, those were payments made before the loans defaulted.

I have a feeling we'd have been much (about 12 times if I remember my prior calculations?) better off with the JDB prices.

If I understand Prosper's new reporting system, charge-offs includes the old defaults (i.e., the loans sold to the JDBs).  And the recovery on charge-offs would include the JDB sales prices.  I don't have time now to compare this to your spreadsheet showing the JDB recoveries. 

Also, that 0.28% is apparently the percentage that the net recovery ($486,493) represents of Prosper's entire loan originations ($174M), NOT the percentage of charge-offs.  That latter percentage would be 2.6%.

[nonattender]

while i appreciate that some of the moderators are now "self-anointing" and just posting directly to the lobby, rather than going through the pretense of asking for a "second" - don't let's all break out robert's rules of order at once - i am disappointed at the transparency of the posts.  normally, "lobby worthy" means some wild or obvious initial error isn't spotted ever, or at least, grudgingly, until about page 6.

as it is, this one only managed to get 4 "me too's" until the wool was pulled back.  (i almost do not know what facial expression to make.)

-t

[HollowOak]

while i appreciate that some of the moderators are now "self-anointing" and just posting directly to the lobby, rather than going through the pretense of asking for a "second" - don't let's all break out robert's rules of order at once - i am disappointed at the transparency of the posts.  normally, "lobby worthy" means some wild or obvious initial error isn't spotted ever, or at least, grudgingly, until about page 6.

as it is, this one only managed to get 4 "me too's" until the wool was pulled back.  (i almost do not know what facial expression to make.)

-t

I'll respond somewhere else, out of sigh of the Lobby, if that is alright with you. On second thoughts, perhaps I won't. I'm not inclined to go down another rabbit's hole.

[ira01]

while i appreciate that some of the moderators are now "self-anointing" and just posting directly to the lobby, rather than going through the pretense of asking for a "second"

I don't see a problem with this.  The moderators have been tasked with deciding what is "Lobby worthy," and if they want to use that judgment on their own posts, rather than going through the hollow (no pun intended) exercise of waiting for someone to "second" a thread for the Lobby (which is not part of the Lobby rules anyway), then so be it.  Moreover, this thread's topic is certainly Lobby worthy, even though the OP turned out to be in error.  The rules about what belongs in the Lobby, taken from the pinned thread at the top of the Lobby, are:

The following guidelines should be used when posting in the public boards.
Keep your topic relevant to improve Google indexing.
No spam. Spam is subject to immediate deletion
No fighting. To be able to post here, you have to be registered. As such, take your fight with other members to an inside board. This is not to say that we encourage fighting, but we recognize that some members will have issues that they will want to get off their chests. Note that an alternative consideration is to simply ignore a member of a particular board. You can set various ignore options from your profile.
No personal insults at anyone (including Prosper employees).
Personal data. It is strongly advised that you never post personal data in an online Internet board such as Prospers.org.

HO's post was: relevant; not spam; not fighting; not a personal insult; and not personal data.  Thus, it was appropriate for the Lobby.  Being Lobby worthy never before has been suggested to mean "peer-reviewed to the extent necessary to demonstrate a lack of error," which seems to be the standard you are trying to apply. 

as it is, this one only managed to get 4 "me too's" until the wool was pulled back. 

You seem to have forgotten to thank me for "sticking up" for Prosper by "pulling the wool back."     I wonder why that is?     Despite your constant attempts to categorize me as always criticizing Prosper, in reality, I call them like I see them.  I may criticize Prosper 90% of the time, but that's only because that's about how often Prosper is wrong.  On the rare occasions when Prosper is not wrong, I say so.

[nonattender]

You seem to have forgotten to thank me for "sticking up" for Prosper by "pulling the wool back."     I wonder why that is?   

I mistakenly thought that it would be implicitly impolite to assume that your telling the truth required thanks - but, thank you for correcting me.

-t

[Fred93]

Erratum: My initial assumption on the rate of recovery was incorrect. Ira01 correctly pointed out that that the number I wrote about is the fraction of the total loan originations. The correct rate for recoveries are 2.55%, which is much more in line with the last prices offered by the JDBs.

Well, yes, you now have a better denominator, but I believe you have an additional problem:  Both the numerator and the denominator you now are using include BOTH the loans auctioned off to junk debt buyers and the loans subject to the new (and not yet existant) post-chargeoff collection techniques.

Therefore, be careful about comparing it against some other number.  If I understand this right it needs to be disected first.

[ira01]

Erratum: My initial assumption on the rate of recovery was incorrect. Ira01 correctly pointed out that that the number I wrote about is the fraction of the total loan originations. The correct rate for recoveries are 2.55%, which is much more in line with the last prices offered by the JDBs.

Well, yes, you now have a better denominator, but I believe you have an additional problem:  Both the numerator and the denominator you now are using include BOTH the loans auctioned off to junk debt buyers and the loans subject to the new (and not yet existant) post-chargeoff collection techniques.

Therefore, be careful about comparing it against some other number.  If I understand this right it needs to be disected first.

I think this is right.  Prosper claims to be acting in the interest of "transparency," but in actuality, their new display system appears intended to do just the opposite, by eliminating the distinction between sold off loans and PCOCT loans.  With almost every Prosper change, it becomes harder and harder to figure out exactly what is going on -- exactly the idea, I imagine.