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I received a promotional email from GlobeFunder today. What amazes me is that they seem to be targeting hedge fund qualified investors, but the email says that they have only originated $100,000 loans since January 1st, 2008. That is a slow start in volume and one that is not likely to entice many major institutions to invest. It is not worth the paperwork to invest such small sums from a large portfolio — it simply will not move the ROI needle. Dwarfing that number Prosper has pushed out $117 million in loan volume. The same article mentions that January 2008 alone was $7.2 million in loans.

Here is the text of the GlobeFunder email:

When the media is absorbed in (some would say paralyzed by) the global credit crisis and market downturn, it’s hard to bring attention to a global event closer to home: GlobeFunder is shaking-up the traditional lending world. But we’re being noticed by the likes of Forbes and others Read the rest of this entry »

Browsing some Prosper lending statistics at LendingStats.com, I noticed that Pennsylvania loans are exceptionally late. 23% of the loans by dollar volume have already defaulted — despite the low rate cap of 6%. The low rate cap presumably should keep higher risk borrowers from receiving a loan. See Pennsylvania Loans Sorted By Origination Date. Other lower end rate cap states like Read the rest of this entry »

I looked up the Prosper Book on Amazon and noticed a link to the P2P lending site DUCK9. The author of the book, Roger Steciak, states in his blog on Amazon:

I was interviewed recently by the SocialLendingWatch.com blog and realized there are now seven sites in the United States offering or planning to offer for-profit people-to-people lending. Duck9, LendingClub, and Prosper are up and running now, while GlobeFunder, Loanio, Microplace, and Zopa have announced their intentions of launching at some point.

Since it mentions Zopa is due to launch, we know the post is out of date because Zopa launched several months ago.  However, I was surprised that I had never heard of Duck9 since it merited a mention from “The Prosper Book” author. I searched for reviews of DUCK9 but found little information. I browsed over to the site DUCK9.com. It seems like a small niche lending site for students, even smaller than Fynaz will be. The DUCK9 site also has some information on auto loans.

The name is odd but Read the rest of this entry »

While browsing for articles for an academic project, I decided to browse academic journals for articles on Prosper Marketplace and related interest rates. I thought someone must have published in a peer reviewed journal something on Prosper, but I did not find any existing articles outside of newspaper fluff pieces on P2P lending.

I broadened the search for other industries and the impact that the internet has made on rates. I found an article with empirical proof that the internet lowered Read the rest of this entry »

Eric, of Eric’s Credit Community, today announced on his site the launch of LendingClubStats.com.

There are currently a few different chart categories including:

• Loan growth rate shows great growth in the loans extended on Lending Club.
• Loans by Current or Late Status. Eric points out that this chart is currently useless because of the average age of the loans. I mentioned the same thing about the loan late rates posted on Lending Club’s site.
• Also posted are Read the rest of this entry »

As I promised, I have extended some loans with Prosper (although I am not quite up to $500 yet). Since everyone can see Prosper loans and which ones I bid on — see my loans at Lending Stats — I decided to have some fun with it by holding a review contest of my loans.

If you provide constructive and specific criticism/advice on 4 or more of the loans I selected (or bid on), I will enter you in a drawing for a finance book. Also, in an attempt to find more advice, if you mention my request for advice and link to this article in your blog, you can receive a second chance to win. All details at the end of the post.

Let’s move on to the the Prosper loans selected and funded each at $50. I stayed with Grades C or higher, no current delinquencies, a low number of recent inquiries, and a low total dollar amount, and DTI ratios of lower than 45%.

• $5,000 for a honeymoon trip to Europe. I don’t like that they could not save up for the trip since that is what I have done for my world travels, but the loan is small the numbers good. It funded at 10.9%.
• Grade C trying to cut down debt with a $6,000 loan. 24% DTI. Read the rest of this entry »

I noticed that Lending Club is denying most loans. Since that time, Lending Club has started posting the rejected loan profiles on the statistics page. Scroll to the bottom of that page for the file. The data is missing several fields that you would use to evaluate a loan, but it is still interesting. For example, 285 applications of 6672 rejected loans had no FICO score. The highest Debt to Income ratio listed was 3626400%. That is not a typo — 3626400%.

Of course I am missing some key data, but one looked like a potentially good loan which was rejected for being over the 30% DTI.
$25,000.00 1/7/2008 family loan FICO: 815 DTI: 33.60% memphis TN

Lending Club may be passing up good money by rejecting loans like this one. In cases like this, it might be better to let lenders decide if they want to take the risk. However, on others I was glad to see the loans rejected because there was an amazing amount of complete junk Read the rest of this entry »

Lending Club updated their interface today with some great improvements. They announced a few days ago in their blog that these changes were coming along with a reminder of the Lending Club 5% bonus program. Also mentioned was the number of lenders on Lending Club doubled in the last month!

But I am writing today about the changes to the Lending Club interface. (Before and after screen shots below.) Many of the improvements are items that I requested in my initial Lending Club review. My suggestions included Read the rest of this entry »

Are you a current P2P lender? If so, which of the following services are you using? If you are not a current P2P lender, are you considering it? If you select another P2P lending site, please mention in the comments which one. Thanks for voting.

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If you are considering P2P lending, sign up with Lending Club or Prosper for traditional P2P lending, Zopa for risk free CDs, or Kiva for philanthropic mico-loans.

My funds arrived to Prosper Marketplace a few days ago. I planned to jump into Prosper and start carefully selecting loans for funding. I browsed a few loans, but I have cold feet.

So I opened my blog to reflect…. Why am I nervous about bidding? I had no problem lending on Lending Club for a total of about $1,000 to date. So why is Prosper Marketplace different?

My trouble in starting to bid seems to come down to the openness of the market. That same openness is great for transparency. As I have read on other blogs, browsing P2P lending is voyeurism. I think it is a bit of Voyeurism and Exhibitionism.

Peer-to-Peer lending feels voyeuristic for several reasons:

• Many loans provide interesting, entertaining, or just odd stories.
• After browsing loans, you cannot help but to feel more secure in your own financial future because you had to read so many poor quality loans.
• It can be fun to pass judgment on others occasionally and with Prosper or Lending Club, you can decide who receives funding and who does not.
• Peer-to-Peer lending allows you to feel superior to others who are not as financially savvy. That is why most of them need the money.

Peer-to-Peer lending is great fun to view the financial lives of others. I like that part of the openness.

So what about the exhibitionism? Read the rest of this entry »