Prosper | Personal Loan Portfolio

One Year Review: My Prosper Lending Experience

January 13, 2009 By Personal Loan Portfolio 21 Comments

Prosper Update January 2009 from http://www.ericscc.com

It has been some time since I have opened my Prosper account. Finally, I logged on a few minutes ago to transfer out money again because I want keep my account free of cash since the SEC cease and desist order against Propser and the quiet period have increased the possibility that Prosper could fold. I have been worried about the default rate since that order. The SEC actions combined with all the talk on the internet of how many loans on Prosper go into default probably trigger some people to feel stupid for actually paying on their Prosper loans despite the obligation and the impact to the credit score.

So how are my Prosper Marketplace P2P loans fairing? My loans’ average loan credit grade is an A minus so I have not been chasing 30%+ low-credit-score loans. Currently, I have three late loans out of 16 loans, so 18% of my Prosper loans are late.

Update: See the bottom of this post for an update. From the time I drafted this post until a few days later, another loan is now late.

According to [Read more...]

Filed Under: Performance, Prosper Tagged With: Prosper

Prosper: Cease and Desist or Cease to Exist?

November 26, 2008 By Personal Loan Portfolio 15 Comments

I was expecting Prosper’s Quiet Period to go similar to Lending Club’s — Quiet for a few months and then come back out better than ever. Therefore, I am amazed at what I just read…

Prosper Receives a Cease and Desist Order from the SEC

Considering that Prosper was already in a quiet period and no longer talking bids on loans, this seems like an unnecessary step by the SEC, but they may have felt it was necessary to make a point. I also wonder if they had not received complaints because of their misleading marketing — including quotes in the media on horribly misleading default statistics. Or maybe it was their complete failure in collections as Prosper continued to focus on origination and not on operations.

I have transferred out all the money in my account possible and am glad that I stopped lending with Prosper some time ago.

Quotes from the Cease and Desist Letter
There were some interesting points to the cease and desist letter that I would like to highlight (any emphasis added is mine).
[Read more...]

Filed Under: Prosper Tagged With: P2P Lending News, Prosper, Risk, sec

Prosper Referral Program Closes

October 21, 2008 By Personal Loan Portfolio 5 Comments

the lending club referral program is dead

Prosper Marketplace has just announced that their affiliate program has shut down and has requested that sites “take down any reference to Prosper immediately.” It seems ridiculous to remove all references to Prosper especially since this would take a long time to remove all mentions of Prosper in a P2P lending blog. However, I will remove the advertisements that are currently being displayed here offering the Prosper account sign up bonus.

It does not surprise me that the closure of the Prosper referral program follows the announcement of the Prosper quiet period. This is the same pattern that Lending Club followed — except Lending Club announced the quiet period at the exact same time they closed the referral program. I hope that Lending Club’s referral program returns soon now that they have exited their quiet period and returned to P2P lending.

Here is the note from Prosper announcing the end of the referral program that I received tonight: [Read more...]

Filed Under: Prosper Tagged With: affiliate programs, Prosper, quiet period

Prosper Marketplace Enters Quiet Period

October 15, 2008 By Personal Loan Portfolio 7 Comments

Prosper announced that they are entering a quiet period and will not be accepting new commitments from lenders. This follows on Lending Club’s announcement yesterday that it is coming out of their quiet period. It seems Prosper is interested in having the same form of loans that can be resold which Lending Club announced yesterday.

Update: Prosper Received a Cease and Desist Order from the SEC.

Overall, both announcements are likely to be a good thing for the P2P lending marketplace. Although, with the current credit crunch and market downturn, Prosper’s timing is not ideal. Many people will be seeking alternative forms of credit and investments over the coming months.

Prosper mentions that they will work to ensure that borrowers can still receive funding so that the platform does not completely dry up during the registration process, but it looks like that funding is not secure yet.

Didn’t a Prosper manager boast around the time of the Lending Club quiet period announcement that the registration could be done without a quiet period if it was done correctly?

The note from Prosper Marketplace about the quiet period: [Read more...]

Filed Under: Prosper Tagged With: Prosper, sec

Zopa Closes: More Negative P2P Lending News

October 10, 2008 By Personal Loan Portfolio 4 Comments

I planned to blog in commiseration with Tom about being denied for a loan. Tom was denied for a Zopa loan and I was rejected for a GE Money Bank credit card through Amazon. GE Money Bank took 10 days to tell me that they could not verify my identity despite the promise on Amazon.com of a 30 second approval process. I have a 800 credit score and provided all information including a phone number and they could not verify my identity. They did not bother calling to verify and customer service told me the process is computer automated. Ten days for a computer program to return results? I doubt it…

Sorry /Rant Off
I’ll skip the remainder of my planned rant about Amazon’s relationship with GE Money Bank [Read more...]

Filed Under: Risk, The Economy, Zopa Tagged With: Lending Club, P2P Lending News, Prosper, Zopa

Prosper Fee Updates: Separating alignment from lenders

September 29, 2008 By Personal Loan Portfolio 2 Comments

Prosper Marketplace’s recent fee changes on P2P loans are further separating P2P lenders’ interests from those of Prosper. Prosper is loading up more fees at the front of the loan so they will be earning a far greater percentage of their income from loan origination. Lenders, on the other hand, earn all their money from loan payments being made. There has long been concern that Prosper creates and packages loans and moves on to originate the next loan while forgetting about collections. Collection (or even loan fraud) becomes someone else’s problem, but unfortunately the lenders are not allowed to attempt collection leaving them with no recourse other than complaining via the internet.

The fee changes detailed in the Prosper September newsletter: [Read more...]

Filed Under: Prosper Tagged With: fees, Prosper, Risk

11 Reasons my Prosper Experiment is on Hold: Withdrawing Cash

August 21, 2008 By Personal Loan Portfolio 6 Comments

Pulling the Plug on My Prosper Investment

Question: What is the difference between my Prosper Marketplace remaining cash and a wide-angle lens for my DSLR camera?

Answer: In a week, they will be one in the same so there will be no difference.

I had $250 in cash in my Prosper account waiting to be loaned out to borrowers, but today I initiated a transfer of my cash back into my checking account. I decided that the only thing guaranteed to be around three years from now – and thus my best overall investment – is a new camera lens. I’ll need to add a little more cash to buy a good lens, but it will be much more useful and enjoyable than watching P2P loans.

Why am I pulling the plug on my Prosper Investment by removing my remaining cash?

Several reasons: [Read more...]

Filed Under: Prosper, Risk Tagged With: Prosper

Prosper Marketplace Update Targeted at “Lazy Man and Money”?

August 16, 2008 By Personal Loan Portfolio Leave a Comment

I received a Prosper Marketplace update via email. There were several interesting items, but it the last item stood out:

Legal Agreement Revisions
A minor change has been made to the following legal agreements, to clarify that selling or buying a recommendation or endorsement is not allowed. Please refer to the links below to view these changes.
Borrower Registration Agreement [PDF]
Lender Registration Agreement [PDF]
Group Leader Registration Agreement [PDF]

This portion of the update seems to directly target [Read more...]

Filed Under: Prosper Tagged With: blogs, P2P Lending News, Prosper

The Penny Saved Answers My Prosper Loan Questions

June 20, 2008 By Personal Loan Portfolio 2 Comments

A Penny Saved answered my questions about his Prosper Marketplace loan.

My major concerns were about home ownership terms and conditions and how quickly the loan would be paid back.

The question:

It says you are a home owner. Can you give the details of your loan (rate, term etc) and your current estimated equity situation in the home? Secondly, how soon do you plan to pay back the loan considering it is only for credit building?

The answer: [Read more...]

Filed Under: Prosper, Uncategorized Tagged With: blogs, lending strategy, Prosper

Loan Money on Prosper to “The Penny Saved”?

June 20, 2008 By Personal Loan Portfolio Leave a Comment

Blogger "A Penny Saved" P2P Loan on Prosper.com

Rate Ladder is promoting a P2P loan from the blogger “The Penny Saved.”

See the loan request.

$Blogger \"A Penny Saved\" P2P Loan on Prosper.com$ Honestly, the interest rate of 16% is rather poor considering that the Prosper lending guidance is a negative 18% due to the C credit rating.

Normally, I won’t even consider anything with a lending [Read more...]

Filed Under: Prosper, Selecting Loans Tagged With: blogs, interest rate, Prosper