How does a lender receive an extra 4% when a person is only paying 1% interest? Or does the borrower pay 4% in addition to the 1% interest?

That still does not really explain why he funded the loans at 1% interest. Couldn’t he fund the loans at 5% or 6% interest rather than 1% and then make up to 10% total return off the loan? Even though they have not defaulted, 10% would have been much better risk to return ratio since those are HR loans.

In fact, I have a loan from that time from Pennsylvania, and it’s not only at the PA ratecap of 5.75% (which was just about the risk-free rate available at that time), it’s also to an NC (No Credit) rated borrower. If thats not astounding enough for you, then I’ll also add that the loan is CURRENT, and has never once been late in any of its 20 months so far. You can see the loan listing here:

http://www.prosper.com/lend/listing.aspx?listingID=13290

Just for background, NC’s were removed from the platform several months later due to their meager aggregate performance and the “difficulty” (read: inability) Prosper had in doing identity verification with NC borrowers.

“Anyone not familiar with 2Mill and his group may become so by reading through the voluminous threads below. Within them, among such other things as falsehood, puffery, sleaziness, snake-oil salesman and huckstering techniques, and much else that is unsavory, you will find the Millionaire threatening to have posters he doesn’t like thrown off Prosper, threatening to call in the FBI, and threatening to unleash his mighty team of corporate lawyers against posters to sue them.”

Here is a another interesting string of posts.

Mule was a piece of work… Here is a choice quote that I found from MuleShoes/HotTout22 in the old forums:

“Wondering if anybody has any information on how to prevent the collection agencies from pursuing delinquent borrowers. I have not had problems yet, but would like help strategizing about skirting such situations. This is geared towards forgiveness rather than any form of vigilanteism.”

I wonder if he still thinks that collection agencies are vigilantes after viewing his bleeding portfolio.

Here are some quotes from borrowers about MuleShoes and Fairplay Lending:
“a borrower’s dream”

“After looking through fellow group members pages, I am floored. He believes in us. He sees the good in us. He understands that good people sometimes hit a rough patch and just need a helping hand….Not a handout.”

Or maybe he does like to give handouts.

In September 2006, one lender referring to a Fairplay loan already said:
“Between the rate, the credit grade, and the GL, I’d rather give my $50 to a bum. At least then there is no illusion that repayment will occur, and someone will get nice and drunk.”

Here are some other great quotes my MuleShoes:
” A weeklong ban for using the word ‘pricks’? Thank you sir, may I have another. Are local egos really that fragile? I will continue to question the predatory ethic of the currently established ‘voices of reason’ on these boards. This is not a quixotic crusade. I will, and have already begun to, put my hard-won bankroll where my mouth is and do whatever possible to drive down currently extortionary interest rates. If that is considered ‘pathology,’ I plead guilty to lunacy. My group is now called Fairplay Lending, keyword ‘fair.’ My new Prosper handle is MuleShoes.”

“Of course I honor my debts, especially those among friends and people that I trust. This does not include credit agencies, large corporations, and blood sucking leeches. This does include any personal contract I have ever made, the most unsavory of which was a 5k loan to my dear friend to save his family moving company from going under. Why was it unsavory? Because it temporarily compromised our friendship, now we are back to being brothers in arms – human limbs, not weapons of any sort, flesh or otherwise. Prosper itself subverts the most distasteful parts of the lending process – legal and otherwise – and that is what makes it such an attractive tool, as I see it. My method of self-expression is opaque due to a profound violation of my physical safety that occured when I was 4 years old. Forgive the psycho-babble and the intensely personal content.”

Unfortunately for him, his losses due to defaults plus the cost of making community payments to artificially inflate his group rating were higher than anticipated, and have probably wiped out most of his group leader fee income.

As Wiseclerk notes, Muleshoes is a whole different story.

Also, the “other bidder” on 58756 is actually BorrowersGL’s wife who once had a group as well. Do a search for TwoMillionaires to read up on that group leader.

Honestly, I’m surprised there aren’t any loans from Pennsylvania made by reguyncali too. He was one of those early lenders who thought bidding on HR borrowers was going to make him a lot of money and help them at the same time. He was warned repeatedly on the old forums but he eventually figured it out.

Wiseclerk