Owner: Prosperous Land URL:http://prosperousland.blogspot.com Join Date: Thu, 23 Aug 2007 11:42:28 -0500 Rating:0 Site Description: Keeping an eye on Prosper and peer to peer lending. Site statistics:Click here
Ben Stein Editorial 2007-08-22 22:31:00 The NY Times had an editorial by Ben "Bueller" Stein
on the irrational behavior of lenders. Even though it was originally published in March, I think it's relevant for Prosper lenders.
But wait a minute. What is a junk bond if not a loan to a subprime borrower? Why do lenders think that those bonds are called “below investment grade?” It’s not just a formality or a quaint term. Over long periods
Sub-prime Mess And Prosper 2007-08-21 23:34:00 This blog post got me up and thinking on the sub-prime
mess and how it interacts with Prosper. Since I'm sure there will be lots of articles to follow, I wanted to stake out my positions before the posts are flying fast and furious. I've been following this slow-motion train wreck for about a year and 1/2 on Calculated Risk's blog (and, as an aside, you can see that CR did great diligence going
Linkfest 2007-08-20 15:56:00 A bit of linkage to start into the week.
On the Prosper Upgrades
Major Prosper Upgrade: "There is a major Prosper Upgrade tonight… I apologize for not trying any other these features, but I am on vacation an thus here is a reprint of the announcement from Prosper Andrew…"Prosper improves lending and borrowing experience: "Prosper just announced some significant site and policy updates. Loan
Prosper Lender-side Dynamics 2007-08-17 16:46:00 There have been some shifting dynamics going on that I've noticed as, at best, some anecdotal experiences. They've altered the lending game a little bit, but are mostly signs of a more complex financial ecosystem.
First, cloud9, the group leader for Have Money - Will Bid, has taken to putting up large some of cash for listings about 2 days before they're due to expire. For example, this one,
Read more:Lender
, Dynamics
Lending Efficiency 2007-08-15 14:19:00 Since I'm still having procrastination problems with writing about default models, I started thinking about what my time spent working on Prosper loans is worth. That got me looking at the revenue generated from Prosper loans and how my time was invested in getting that revenue. Lets start by looking at the interest income over 3 years for a bid of $50 (the Prosper minimum).
Interest Rate
Read more:Lending
, Efficiency
Zipcodes With High Defaults 2007-08-14 15:26:00 I got really frustrated with Prosper when they removed the cities from the borrower's listings. This is why:
A study for CNNMoney.com by RealtyTrac, an online marketer of foreclosure properties, showed that 139 of California's ZIP codes fell within the top 500 for total foreclosure filings in the United States. The next highest count for any state is less than half that at 72 and is in another
Read more:Defaults
LendingStat Is Back 2007-08-13 17:47:00 LendingStat, a Prosper statistics site, is back after a long period without database updates:
We’re back after a longer than expected hiatus. We apologize for the delay between updates. There’s a saying that things happen in threes, well, in a perfect storm of sorts, our web programmer needed to take a leave of absence last month. Between that, the Prosper data changes, and our backend changes/
It's All About The Income 2007-08-11 09:54:00 I've been playing around with Prosper's Marketplace Performance tool to overcome the limitations present in the exported Prosper data (no detailed credit information). While playing around with some initial queries (if you're trying to figure out how to change things, look for the not-so-easy-to-find "Edit Criteria" link), I stumbled onto some statistical confirmation of something that I've
Read more:Income
Finding Default Information 2007-08-07 10:26:00 RateLadder has been collecting default sale information from various lenders (pensioner and L5 come to mind) to get a picture of the default recovery for lenders. This is a bit labor intensive and requires the cooperation of other lenders. I've recently spotted a quicker way to collect default statistics.
The Prosper Marketplace Performance page provides all the necessary information. After
Read more:Default
Rapid Transfer Details 2007-08-03 18:13:00 While trolling through the Prosper forums a while ago, there was some commentary on express transfers for Prosper lenders (also from RateLadder). It caused money transfers from banks to post immediately to the lender's Prosper account instead of the usual 4 business days.
I got contacted by a Prosper Lending Services Manager. I suspect the call was because I've been doing lots of transfers to
Read more:Rapid
Tip To Borrowers - Lenders Can Do Math! 2007-08-02 13:25:00 I don't make a habit of picking on specific borrowers, but after writing a few tips for borrowers, I wanted to highlight what not to do. In this listing, the potential borrower wants a loan of $8000 and claimed a gross income of ~$16600 and listed expenses of ~$5000.
MY INCOME and EXPENSES:I make about $200,000 per year and my husband stays home with the kids. My expenses Mortgage ($2,500/mo),
Read more:Borrowers
, Lenders
RGF Rocks! 2007-07-27 10:53:00 I stumbled onto RGF via RateLadder's two posts on him. RGF is a Prosper lender who identifies himself as an underwriting manager at a bank with 15 years experience in collections. I'm putting all his posts on my required reading list as he's got all good material. A sampling is below:
On Bankcard Utilization:
I don't really worry about credit card utilization so long as total unsecured is under
Read more:Rocks
Tips For Borrowers 2007-07-17 14:07:00 In my effort to fund a few more Prosper loans, I've been looking at tons of listing descriptions. I've developed a set of criteria I look for and I want to pass it on to those borrowers who are interested in writing better listings.
Let me begin by saying that if I'm seriously looking at your listing description, I'm prepared to fund it. I use custom searches that pick interest rate and borrower
Read more:Borrowers
Prosper's July Feature Additions 2007-07-09 17:12:00 Over on the Prosper forums, the Announcement category had the new features added in July. The lender relevant changes are listed below, but, for the most part, I'm underwhelmed:
Updated marketplace performance page
We've improved the marketplace performance page by bringing the "Estimated ROI" table to the top of the page, and by setting some default loan criteria (0 current delinquencies and 0-
Defaults Have Higher Interest Rates 2007-07-08 23:35:00 Matt over at Prosper Lending Review posted an article on how loan interest rates vary within a credit grade. One of his conclusions is that defaulted loans have a higher average interest rate than current loans.
So, what do these numbers tell us? Well, if we look at loans in the B through HR categories, the loans that defaulted had a 1.7% through 2.6% higher interest on average than other loans
Read more:Defaults
, Higher
, Interest
, Rates
Modeling the Value of Loans 2007-07-03 17:36:00 A lot of highly debated topics in the Prosper forums (default sales for example) get heated, but the discussions often degrade into "Prosper sucks for doing this". Very rarely do the discussions attempt to model the financial consequence of the current (or poorly implemented) policy - they only discuss anecdotal impacts on one or two loans in their portfolio. That is why it is critical to have a
Read more:Modeling
, Value
, Loans
Interesting Disclaimer For E & HR Loan 2007-07-03 13:11:00 I was writing up another post and clicked to bid on a random loan and discovered an interesting treat. Prosper has added disclaimers for E and HR loans to the bidding page. We have previously highlighted the default risk present in auto funded loans. Prosper expands on this and provides interesting statistics that include the effects of prior delinquent accounts.
First, the E graded loans:
What Is Factoring? 2007-07-03 09:32:00 I've seen factoring referred to several times in listings for business related loans. Most recently in this one (full disclosure: I've bid on it)
... Usually it takes about 45 to 60 days to get your invoice processed; this is how transportation industry works. I could have factored my invoices but I am better off with prosper loan than factoring, for those of you that know about trucking
Prosper Around The Web 2007-06-28 11:46:00 Time for some serious blog spam a linkfest :)
An article on Prosper from NuWire Investor:
It is common knowledge that banks make huge profits on the margin between the interest rates they charge borrowers and the rates they offer to savings account holders.The sheer size of these institutions allows them to easily diversify among a huge pool of borrowers and account holders, and they have
We Have A Prosper Down 2007-06-24 17:39:00 I went over to Prosper to see if some loans have finally gone through and funded and saw the following message:
Prosper Under MaintenanceWe are currently working on a system failure as of 2:20:00 PM Pacific, June 24, 2007. We are working to bring the system back online as soon as possible. Thank you for your patience.Best regards, Prosper
Wonder what's going on...
Update: Possibly some
Modeling Default Rates Using Exponential Decay 2007-06-15 20:52:00 This was a guest post over on RateLadder.com. Debate here or in their comments.
RateLadder proposed an exponential decay model for predicting the 3 year default rates on Prosper loans in a post on his site rateladder.com. I was quite skeptical that this was a safe model to use since it baked in a pretty hefty assumption. After a little back in forth, he invited me to respond.
By modeling
Read more:Default
, Rates
, Modeling
, Decay
Handling Defaulted Loans 2007-06-12 12:44:00 There's been rumblings about Prosper's defaulted debt handling. As in, they hadn't been handling it. It's resulted in some vocal criticisms on the Prosper forums. Well, the gates have opened and the defaulted debt has started selling
Yesterday Prosper began a delinquent debt sale. This happens when loans are 4 months or more late and are sold to delinquent debt buyers… Loans
receive different
Read more:Handling
Avoid Real-Estate 2007-06-04 13:16:00 Some Prosper lenders who want to be socially responsible and bid on loans that some might consider risky because it's for a good cause. I'm not one of them. I'm interested in seeing my money come back to me and not disappear into a good cause gone bad. I've been watching the blog Calculated Risk and observing the deteriorating conditions in the mortgage and real-estate market. Just today, they
Read more:Avoid
, Estate
DTI Uproar 2007-05-17 17:36:00 There was some uproar on the lender side when Prosper changed the listings to lump all debt-to-income numbers great than 100% in a >100% category. John Witchel took to his blog to defend the decision.
There is no material difference between 2345235% DTI and 2345236%, agreed? So any variation of the statement "more granularity is always better" is simply false (except in some abstract tautological
Comments On Rate Changes 2007-05-08 17:46:00 Has Prosper been violating Texas law?
It clearly states in Chapter 302 that interest rates for personal loans are limited to a maximum of 10% and rates for business loans are limited to 18%. Chapter 305 addresses penalties and remedies for violations. There are some listed exceptions to the 10% rule but I'm not sure Prosper would fall under any of these.
I think Prosper is worried they have been
Read more:Comments
Prosper Pitching to E-Bay Sellers 2007-08-27 07:20:00 I was ready to call it a week and then I saw a post over at Money Smart Life that had a juicy tid-bid. Prosper hosted a workshops through E-Bay targeted toward small business financing. All the people selling random stuff on E-Bay, and Prosper's lenders are underwriting it
Need a small business loan and not sure where to get it? Or, are you certain a loan is what you need? In this informative
Read more:Sellers
Latest Debt Sale 2007-08-25 09:59:00 The official announcement forum had the results from the latest debt sale:
We completed a debt sale this week which will be evident in participating lender accounts over the next few business days.
When a loan is sold, it is considered to be a default on the Prosper site and in the performance metrics. If one of your loans was sold, you will receive an email notifying you of the default and
Prosper vs S&P 500: Apples To Apples Time 2007-08-24 13:37:00 Prosper sent out a marketing e-mail last night pitching the improved Prosper returns compared to the S&P500. Their blurb is below if you were somehow unlucky enough to miss out on it.
ZCommodore was all over their disclaimers:
First, they are comparing a year of returns on Prosper with 2 years on the S&P 500. The dates are different as well. I don't know what the returns looked like for the most
Read more:Apples
Another Snafu At Prosper 2007-08-23 13:48:00 Prosper seems to be having one thing after another nipping at them. First there was the blast of planned and unplanned outages. Then there was the lender uprising that was contained before the forums were entirely shutdown. The latest is that their ACH clearing house (Wells Fargo) had some problems with transactions:
Our banking partner, Wells Fargo, is experiencing technical difficulties with
Concensus Ratings 2007-08-30 16:09:00 LendingStats' has started rating listings based on who's bid on them.
A few people have inquired about how the “Consensus Rating” is being generated on the Listing Picker page under Lending Strategies. The idea behind the Listing Picker is to identify listings bid on by lenders who have good estimated ROIs. The more lenders with good ROIs the higher the consensus rating becomes.
The formula
Read more:Ratings
Recommend Site To A Friend
