lending strategy

 

Late Charts Update–Oct ‘08

With Prosper in its “quiet period” these charts may not be as useful, but eventually Prosper will emerge so I’ll continue to update monthly. If you haven’t been following these Late Loan Chart updates, you can find a description of my methods here in p…

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Good news! One of your Prosper loans has been paid in full!

That’s what the email from Prosper said and I do consider it good news. I realize that some lenders resent borrowers who prepay their loans, but I’ll never hold it against someone. I’ve never personally carried a loan to term–I’ve always paid them off…

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Late Loan Charts Update–Sept ‘08

It’s time once again for my updated late loan charts. For those who may not have followed these posts in the past, I’m hoping to establish the expected percentage of dollars loaned that one can expect to go late at each month of age. The data are from …

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My first 35% loan (and the lender who made it happen)

Well, it finally happened. I had a portfolio plan set to bid on listings with little chance of funding in an effort to attract attention to this blog and my website, http://www.prosperlinks.bravehost.com/. I funded this plan with $50.03 on June 3rd of …

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Lendingstats Updated!

Lendingstats.com has returned! Currently, data is up-to-date as of 9/19/2008. Eric’s is great, but it’s nice to have them both up and running again.

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Lender/Forum Participant Seeking Loan

Long-time Prosper lender, Mtnchick is an active participant on Prospers.org and now has an active listing. This listing fits my sub-portfolio described in my previous posts: Forum Lenders = Good Borrowers? and Forum Lenders = Good Borrowers? (Update). …

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Forum Lenders = Good Borrowers? (Update)

I posed this question in July in this post. At the time, I promised updates as these loans age and as more loans are included in this sub-portfolio. Since then, I’ve made two more of these loans and the others all remain current with no late payments. …

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Late Loan Charts Update–Aug ‘08

For those who’ve only recently started reading, I’ve been doing my own late loan analysis and posting the results here.A short description of my methodology–I only include loans Non-Autofund loans originated since April 1, 2007 because all of these lo…

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May 2008 Late Loans Revisited

Late last month I reviewed the loans made in May that were already falling behind. One month later, I thought it would be a good time to check on their status.You can see the four late A loans I discussed last month in this post. There is some good new…

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Could it be?

Has Prosper turned the corner and realized that lenders are the key to it’s success? The official Prosper Blog, which for so long seemed dedicated to attracting only borrowers, has focused its last three posts on lenders’ concerns. But that’s not all.O…

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Another Bad Decision…

by Prosper management!Prosper’s CFO has a loan that is less than 15 days late, exposed by a lender on the loan in this thread on Prospers.org. Today, the lender let everyone know that daggers appeared on the loan.Though Bamalucky blogged about this yes…

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Platform Changes in 8/13 Update

Now that I’m home from work, let’s take a closer look at the changes Prosper made last night.The first (and most obvious) is something some lenders have been clamoring for, sort of. By showing all 4+ month lates as charged off, lenders should be able t…

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Portfolio Plans at Work!

Trusting Portfolio Plans to do your bidding may minimize the time you invest, but they can’t see the danger in listings like this: Trying to start my Life in Los Angeles.If the title isn’t enough to scare you away from this listing, take a look at the …

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Late Charts Update

This post is the monthly update on my Late Charts. Last month the charts seemed to show that lenders may be doing a better job choosing loans. Each month newer loans will be added to each month of loan age and averaged in with the previous loans. If th…

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What’s Not in the Extended Credit Data?

How many times have you heard the cry, “Why is this an (insert low credit grade here)?” I’ve seen it posted on the forums from borrowers and lenders many times. Many times the conclusion drawn is that Scorex sucks and is terribly flawed. Don’t be to…

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May 2008 Late Loans Continued–D Loans

This will be the final post in this series as we take a look at the D loans originating in May that are already late.Loan #1: 1 Month Late $1,000 D @ 29.11%http://www.prosper.com/lend/listing.aspx?listingID=334932The title tells me to stay away, move o…

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May 2008 Late Loans Continued–C Loans

Today, we’ll examine the 6 C’s that originated in May and are already late.Loan #1: Late $5,000 C @ 35% AFhttp://www.prosper.com/lend/listing.aspx?listingID=324710Autofund has been shown to drastically increase the rate of default. Why anyone still b…

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May 2008 Late Loans Continued–C Loans

Today, we’ll examine the 6 C’s that originated in May and are already late.Loan #1: Late $5,000 C @ 35% AFhttp://www.prosper.com/lend/listing.aspx?listingID=324710Autofund has been shown to drastically increase the rate of default. Why anyone still b…

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May 2008 Late Loans Continued–B Loans

As promised, we’ll take a closer look at the B late loans from May 2008 today. I’m not going to bother with the E and HR loans, because their elevated risk is a red flag in itself. These loans usually contain other red flags, but most new lenders shoul…

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May 2008 (already) Late Loans

Lending on Prosper, you’ll hear a lot of people say “You just can’t tell who will and who won’t repay!” If that’s the case, then I’ve just been lucky so far. Since I tend to believe that we make our own luck for the most part, I just can’t concede tha…

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Minister Late After Only 2 Payments

I found this loan while investigating a blender’s request–going through her late loans. After blogging on pious borrowers the other day, this seemed to follow quite nicely.http://www.prosper.com/lend/listing.aspx?listingID=296216Quote from listing tex…

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My Lates on Fantasy Prosper

As promised yesterday, I’ll examine the 3 lates in my Fantasy Prosper account. These made it through the filters on my pp’s and saved searches, so I’d like to check to see if they’d also have passed my “smell test.”http://www.prosper.com/lend/listing.a…

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Lesson Learned Using Fantasy Prosper

I started lending slow and conservative on Prosper. My plan was to continue for a year, then decide whether I wanted to continue and/or increase my investment.Things were going well in that first year, but I couldn’t convince myself there were enough g…

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Pious Borrowers & Prosper Lending

We’ve all seen it, I’m sure. The borrower quoting scripture or using his supposed piety to convince lenders their bids are safe.This discussion came up the other day on the Loans2U group discussion forum and led to some interesting research.Lendingstat…

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Prosper Borrower Finally Funds on 57th Try!

Most borrowers would have long ago given up, but mvbrothers2 never gave up. On her 57th listing, she finally funded her $1050 listing at a borrower rate of 37.45%.Her path to success on Prosper began with this listing in February, 2007 as an HR borrowe…

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Too bad if you missed this autofund AA, $25K @ 29.97%

http://www.prosper.com/lend/listing.aspx?listingID=372036Or is it?Really, why would someone with excellent credit be willing to pay such outrageous interest? And, why are lenders willing to bid on these listings?Michael Douglas, in the movie Wall Stree…

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Listings You Don’t Want to Bid On

This morning, I decided to create a Portfolio Plan to find listings with an estimated loss, even with a 35% lender rate. This plan is shared on my Prosper profile.As of this writing, 672 of the 2279 listings on Prosper are picked up by this plan–~30% …

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My First “Late” Loan

Today I see my first official “Late” loan in my account summary. Click to view larger image.However, I haven’t lost hope for this one yet.The borrower seems to be trying to make it right. One day after the daggers for the 10-day pull showed in my accou…

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Lenders’ Loan-Picking Skills Improving?

Fred93 has been keeping track of Late Loan Stats in the Prosper loan portfolio for some time now. While these charts make lending on Prosper appear about as profitable as playing Russian Roulette, I’m finding a much rosier picture by examining a subs…

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Forum Lenders = Good Borrowers?

New lenders can learn a lot from the various discussion forums dedicated to borrowing and lending on Prosper, but participation in these communities offers another benefit as well.Spending time reading the forums, one gets a lot of insight into minds o…

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Loan Amount and Delinquency

When I first began to lend on Prosper, I thought the safest loans would also be the smallest. It seemed many other lenders felt the same, because these listings were bid down to really low rates. It makes sense doesn’t it? Small loans have lower paym…

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Lender Rate and Late/Default Rates

It’s easy to be attracted to the listings with really high rates, but I have always considered most borrowers higher risks who are willing to borrow money at exorbitant rates. Eric’s site offers us the ability to examine the late/default rates for …

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Portfolio Plans, Part II

Yesterday I showed you some listings filtered by some pretty restrictive criteria in my pp’s that I would never consider bidding on based solely on the listing. Today, I’ll show you some others that also showed up on my pp search and passed my “Title T…

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Portfolio Plans, Part I

I would never advise new lenders to use portfolio plans (pp’s) to place bids. Prosper has a steep learning curve and there are many red flags that pp’s just can’t pick up. I do have one active pp that picks up borrowers with a previous Prosper loan, 18…

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Lenders Helping Borrowers

I think we all fall into this trap when we begin lending. Perhaps we’re convinced that we can help someone turn their life around or maybe we really like a listing (for whatever reason) but no one else is bidding, so we offer tips to make the listing…

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Bid with Your Head, Not with Your Heart

As I’ve stated in previous posts, Prosper is not a charity. There’s no doubt that some borrowers list on the site with no intention of ever repaying their loan, but lenders have also done their share to draw borrowers seeking a gift instead of a lo…

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The Penny Saved Answers My Prosper Loan Questions

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 [...]

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4 tips for Prosper lenders

Amy Hoak, who wrote 4 tips for Prosper borrowers for the Wall Street Journal, now has 4 tips for Prosper lenders. Here are Amy’s four tips with my comments.Understand the model - Which one - Prosper, Lending Club, Zopa, or Virgin Money?Listen to the s…

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P2P Lending Review: Best of 2007

The p2p lending market has changed significantly in 2007. One year ago the only p2p lending story was Prosper. Time named Prosper the top website of 2006. BusinessWeek predicted that Prosper would be one of the Top Eight Tech Companies to Watch in 2007…

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Are non-homeowners a safer lending risk in a declining house market?

With all the recent troubles in the housing market, some lenders are starting to ask whether homeowners are a higher risk than non-homeowners when lending on Prosper. In the housing market the biggest problem homeowners are facing is when ARM or adjus…

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Borrowing money to lend on Prosper: Wise or Foolish?

Frequently you will see listings on Prosper where someone is taking out a loan for the purpose of reinvesting the money back into Prosper at a higher interest rate. The idea is that you borrow money at a low interest rate and then reinvest it at a high…

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Most Prosper lenders do not diversify their portfolio

Diversifying your Propser loans allows you to lower the overall impact on your portfolio if one or more of your loans go into default. With 20 loans of equal amount you would have 5% invested in each loan. That means if one of your loans defaults you…

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Are all Prosper loans within a credit grade created equal?

The easiest way to categorize risk is by credit grade. At Prosper you can search and filter loans by credit grade. Many lenders, including me, pay particular attention to higher credit grades while excluding the lowest credit grades completely.Today we…

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Prosper lending - How to avoid bankruptcies

When lending money to someone on Prosper the worst case scenario is to have someone go bankrupt. At least with other types of defaults you will see a small amount of money returned when the loan is sold to debt collectors. This post is on how to spot a…

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