(part 18 of my Prosper Lending Presentation)

If you have followed along to at least this point, then it should be obvious to you that you need to set your own bidding rates to accommodate the risk you’re taking on with each Prosper loan. duh! Don’t chase a rate down too far just because you were outbid and have to be on the loan. There is always a point to let a loan go free without your bid.

• Ball Point Pens Pens Writing Instruments Collectibles

• Cross Ball Point Pens Pens Writing Instruments Collectibles

Continue reading → Observations on Prosper Interest Rates

(part 17 of my Prosper Lending Presentation)

As absolutely nifty as Prosper’s new Bidding Guidance and Portfolio Plans are, they just do not have the capability to capture the amount of detail that the manual bidder can.

Let’s consider the Borrower’s description. The way a borrower presents themselves can offer insight into their financial situation. A lot of borrowers these days include a

• Credit, Charge Cards Trading Cards Collectibles

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

Continue reading → Beyond the Credit Grade

(part 16 of my Prosper Lending Presentation)

Just because someone is an AA doesn’t mean they should get a 25k Prosper loan! Based on their income and DTI, they might only be considered an AA for a 1k loan.

Credit Grade is not the only thing the Prosper lender should be looking at. Actually, in my opinion, Credit Grade is quickly becoming a thing of the past.

When Prosper was first launched,

• Credit, Charge Cards Trading Cards Collectibles

• Swamp Thing Superhero Modern Age 1980-Now Comics Collectibles

Continue reading → Assessing Borrower Risk

(part 15 of my Prosper Lending Presentation)

One of the most important things one should consider when looking for listings on Prosper is to find borrowers that are requesting reasonable loan amounts within their capacity to pay you back.

Of course, the income claimed is self reported (although some are verified by Prosper), but that’s all we have, so we have to rely on it (with a healthy dose

• Back of Book Canada Stamps

• Back of Book United States Stamps

Continue reading → The Borrower’s Ability to Pay You Back

Quote from Chris Larsen in the Town Hall video:In some ways what you’ve seen out there is maybe buyers and sellers too far apart [talking about the current credit crisis - Ed.]. …So I think what Prosper brings to the table, well really kind of macro,…

• Credit, Charge Cards Trading Cards Collectibles

• Talking Heads T Rock, Pop Music Memorabilia Entertainment Memorabilia

Continue reading → Priceless

Something strange is going on with Prosper’s Credit Segment default projections and the Bidding Guidance which utilizes them.

Prosper clearly defines that estimated losses are created from very specific data:

“Estimated average annualized loss rate based on the historical performance of Prosper loans for borrowers with similar characteristics, originated between Jun-01-2006 and Jan-31-2008,

• Home-Based Businesses Businesses for Sale Opportunities

• Credit, Charge Cards Trading Cards Collectibles

Continue reading → Discrepancies Between Bidding Guidance and Performance Page

Quick Chimp Tip for the New Lender # 12
(part 14 of my Prosper Lending Presentation)

Diving head first into Prosper Lending without doing your own due diligence is like cliff diving without checking out the water below first. Prosper is, after all, only two years old. The data is young. The data is thin.

Relying on a numbers only approach could be dangerous if you don’t know what you’re doing

• Diving Helmets Maritime Antiques

• Diving Other Sports Fan Apparel Souvenirs Sports Collectibles

Continue reading → Success is possible.

Quick Chimp Tip for the New Lender # 11
(part 13 of my Prosper Lending Presentation)

Instead of getting upset over late loans, the best thing you can do is analyze the late loan and learn how to avoid similar loans in the future.

Sure, you can always go to Eric’s cool website to look up late loans and learn from those, but when you’re on a loan that goes late and have real money at stake, the

• Real Estate Opportunities

• Swamp Thing Superhero Modern Age 1980-Now Comics Collectibles

Continue reading → Learn From Your Mistakes

Quick Chimp Tip for the New Lender # 10
(part 12 of my Prosper Lending Presentation)

Instead of getting upset over late loans, just sit back, take a deep breath, and relax.
Remember, there isn’t anything you can do about it anyway. Don’t let a late loan spoil your day…

• Deep Space Nine Star Trek Science Fiction Collectibles

• Back of Book Canada Stamps

Continue reading → Instead, Take a Deep Breath

Quick Chimp Tip for the New Lender # 9
(part 11 of my Prosper Lending Presentation)

When your loans start going late, don’t get mad. There’s really not much you can do about it anyway.

You could yell and scream like the loan chimp you are, but that doesn’t result in anything but a broken monitor and high blood pressure…

• Pressure Washers Outdoor Power Equipment Yard, Garden Outdoor Living

• Computers, High Tech Advertising Collectibles

Continue reading → Don’t get Mad

Quick Chimp Tip for the New Lender # 8
(part 10 of my Prosper Lending Presentation)

So you’re relatively new to Prosper and have been happily bidding away. You’ve been careful about the loans you’ve selected, and you’re quietly cheering on each one of your borrowers; like that nice family with the cute baby, the pretty girl that is about to graduate from college, and that guy that wants to

• Family Guy Animation Characters Animation Art, Characters Collectibles

• Pretty as a Picture Enesco Decorative Collectible Brands Decorative Collectibles Collectibles

Continue reading → Loans Really do go Late

(part 9 of my Prosper Lending Presentation)

#6 – Ask Questions…

Many times, there are some holes in the information we receive about a listing. Sometimes, what the borrower states in the Listing Description isn’t entirely clear and needs clarification. Also, while we’re given quite a bit of credit detail about the borrower, it’s still not a full blown credit report. Sometimes the numbers just

• Credit, Charge Cards Trading Cards Collectibles

• Tee Times Green Fees Golf

Continue reading → Quick Chimp Tip for the New Lender – 6 & 7

(part 8 of my Prosper Lending Presentation)

#5 – Read Between the Lines

One of the most fascinating aspects of Prosper lending is the Listing Description. This is the chance for the borrower to explain why they need the loan. Often, borrowers use it to try to convince you that they’re not as bad of a risk as the credit details might suggest.

There are many similarities between Prosper Listing

• Credit, Charge Cards Trading Cards Collectibles

• Lines, Leaders Tippets Fly Fishing Fishing

Continue reading → Quick Chimp Tip for the New Lender – 5

(part 7 of my Prosper Lending Presentation)

#4 – Consider Each Listing Carefully

The Prosper lender is given a good deal of credit information about each borrower. Often I catch myself only focusing on a few pieces of the data, overlooking the rest. It’s all important!

On top of the credit data, we are also provided (directly by the borrower) the listing description, pictures, question answers

• Credit, Charge Cards Trading Cards Collectibles

• Serving Pieces Flatware Tableware Housewares Kitchenware Collectibles

Continue reading → Quick Chimp Tip for the New Lender – 4

(part 6 of my Prosper Lending Presentation)

#3 - Don’t Gamble with your Bids

Have you ever found yourself unsure about a listing but hopelessly drawn to that high and juicy interest rate? If you’re unsure about a borrowers ability to pay you back, chances are they probably can’t.

All it takes is one bad loan on a relatively small number of loans to really kill your ROI. J9359 recently had a

• Plate Number Coils United States Stamps

• Juicy Couture Women Discount Fragrances Store

Continue reading → Quick Chimp Tip for the New Lender – 3

(part 6 of my Prosper Lending Presentation)

#3 - Don’t Gamble with your Bids

Have you ever found yourself unsure about a listing but hopelessly drawn to that high and juicy interest rate? If you’re unsure about a borrowers ability to pay you back, chances are they probably can’t.

All it takes is one bad loan on a relatively small number of loans to really kill your ROI. J9359 recently had a

• Plate Number Coils United States Stamps

• Juicy Couture Women Discount Fragrances Store

Continue reading → Quick Chimp Tip for the New Lender – 3

(part 5 of my Prosper Lending Presentation)

#2 - Prosper Loans are not Handouts

As a Prosper lender, you’re going to read all kinds of sob stories and hard luck cases presented by potential borrowers. Some of the stories might be true, but there is also a high likelihood that most stories are highly embellished tales meant to tug at your heartstrings – and your cash.

Avoid sob stories and

• Cash Registers Banks, Registers Vending Collectibles

• Strange Tales Superhero Silver Age 1956-69 Comics Collectibles

Continue reading → Quick Chimp Tip for the New Lender - 2

(part 5 of my Prosper Lending Presentation)

#2 - Prosper Loans are not Handouts

As a Prosper lender, you’re going to read all kinds of sob stories and hard luck cases presented by potential borrowers. Some of the stories might be true, but there is also a high likelihood that most stories are highly embellished tales meant to tug at your heartstrings – and your cash.

Avoid sob stories and

• Cash Registers Banks, Registers Vending Collectibles

• Strange Tales Superhero Silver Age 1956-69 Comics Collectibles

Continue reading → Quick Chimp Tip for the New Lender - 2

(part 4 of my Prosper Lending Presentation)

#1 – Admit You’re a Noob

If you’re new to lending on Prosper, and you have no experience lending money to strangers over the internet, then your first order of business is to admit and embrace the fact that you have no idea what you’re doing and have a lot to learn.

If you’re new to lending on Prosper but haven’t done your homework first – buckle

• Internet Businesses Websites Businesses for Sale Opportunities

• Paper Money US Coins Paper Money

Continue reading → Quick Chimp Tip for the New Lender – 1

(part 3 of my Prosper Lending Presentation)

Average Interest Rate: 12.3%
Average Risk: B grade

Average Loan Age: 388 days

9.7% ROI on Lendingstats
7.9% ROI on Eric’s CC
~ 7.5 % ROI using Excel XIRR

Briefly, here are more stats on my Prosper Lending Portfolio (again, these are more recent figures than what was shown at Prosper Days 08).

OK, so my ROI isn’t exactly “high”, but it’s not bad

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Heart Rate Monitors Monitors Pedometers Gym, Workout Yoga Exercise Fitness

Continue reading → Inside LC’s Prosper Portfolio

(part 2 of my Prosper Lending Presentation)

Joined February 2006$27k Invested373 Total Loans
95 Paid Loans250 Current Loans
6 less than one month late22 one month late or worse

Here is a brief snapshot of my Prosper lending portfolio (these are the most recent figures).
When I first put this together, the item that stood out the most to me was the number of Paid loans in my portfolio. At the

• Angel Figures Christmas Current 1991-Now Holiday, Seasonal Collectibles

• Reindeer Figures Christmas Current 1991-Now Holiday, Seasonal Collectibles

Continue reading → Inside LC’s Prosper Portfolio

Loan Sharking vs. Loan Chimping

I would like to start by clearing up a slight misconception some people have about Prosper lenders, labeling our lending activity as “Loan Sharking”. Comparing Prosper lenders to loan sharks is a little unfair. Most lenders participate because they believe in the P2P lending concept - removing banks from the money equation which results in more competitive rates

• People Postcards Collectibles

• People Figurines Decorative Collectibles Collectibles

Continue reading → Prosper Lending Presentation - Part 1

As I mentioned in Part 6 of my Prosper Days Recap, I participated in the High ROI Lender Panel for PD08 and gave a short presentation on Prosper Lending.

I had a lot of fun creating the presentation, and since I spent quite a bit of time putting it together, I figured why limit the material only to PD08 when I can easily present it here on my Warm n Fuzzy blog as well?

The nice thing about this

• Mixed Material Thimbles Sewing Collectibles

• Printed Material Bicycles Transportation Collectibles

Continue reading → Lender Panel Presentation - Intro

Prosper Days Disappointments

Disappointed with Improvements

Prosper set the bar pretty high last year when they released a slew of improvements at Prosper Days 07. The improvements outshined the platform that we knew before. Because of the precedent set last year, many of us Prosper lenders were expecting some pretty nice improvements at this year’s Prosper Days 08 as well.

Boy was I

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Current Year, Next Year Calendars Paper Collectibles

Continue reading → Prosper Days 08 Recap - Part 9 of 9

Collections

I know it’s getting well past Prosper Days 2008, so I should really finish this up. One of the last topics I wanted to at least touch on briefly was the collections arena, one which we’ve already heard quite a good deal about already.

Doug Fuller (DoFu) appears to be committed to collecting on late debt however possible - taking in any form of payment, changing the dates of late

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Collections Comics Collectibles

Continue reading → Prosper Days 2008 Recap - Part 8

On Viability

Another thing that came out at Prosper Days 2008 was some more insight on the pace of growth on Prosper and the burn rate of it’s Venture Capital.

The viability of Prosper should be a huge concern for Prosper lenders. If Prosper goes out of business one day, someone needs to service our loans – that is, receive payments, distribute them to the multiple lenders on each loan, collect

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Service Businesses Businesses for Sale Opportunities

Continue reading → Prosper Days 2008 Recap - Part 7

High ROI Lender Panel

In late November 2007 I was invited to participate in Prosper Days 2008’s High ROI Lender Panel moderated by Eric at ericscc.com . I gladly accepted the offer not only because I wanted to be one of the few cool people on a panel, but also because I have never given a presentation to an audience of that size before. What a neat opportunity!

Of course, at the time I was

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Computers, High Tech Advertising Collectibles

Continue reading → Prosper Days 2008 Recap - Part 6

Tapping into Social Capital

I certainly wouldn’t recommend plowing into custom Portfolio Plans set to fire based on bids from friends just yet. There just isn’t enough data.

However, that shouldn’t mean that when reviewing listings manually that bids from friends shouldn’t be taken into consideration. If you personally know the friend bidding, then that should be a pretty good indicator for you

• Friends of the Feather Enesco Decorative Collectible Brands Decorative Collectibles Collectibles

• Friends, Friendship Charming Tails Decorative Collectible Brands Decorative Collectibles Collectibles

Continue reading → Prosper Days 2008 Recap - Part 5

Let’s take a look at Prosper’s data regarding endorsements and bids from friends. Where do I begin?First I thought, ok, lets look at all loans in 2007 that could have endorsements from friends. Since the endorsement feature was introduced in February 07, I began the search on March 1, 07, with an end date of December 31, 07. All of the data presented will be from this date range with an

• Friends of the Feather Enesco Decorative Collectible Brands Decorative Collectibles Collectibles

• Friends, Friendship Charming Tails Decorative Collectible Brands Decorative Collectibles Collectibles

Continue reading → Prosper Days 2008 Recap - Part 4

So how is Prosper trying to harness the power of Social Capital these days?

Well, it comes in the form of a composite - a combination of a little of the old and a little of the new, all wrapped up in a nice, little, warm n fuzzy experiment (we only have had the chance to see a sliver of data yet).

As for the old, it’s the endorsement feature which was introduced exactly one year ago at Prosper

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Combination Sets Power Tools Tools Home Improvement

Continue reading → Prosper Days 2008 Recap - Part 3

One of the reoccurring subjects at this year’s Prosper Days was the use and exchange of “Social Capital” within the Prosper Marketplace. For borrowers that means funded loans and lower interest rates for those with a tight social connection to individuals with some spare cash (or maybe not). For lenders that means potentially higher interest rates for loans (compared to risk free investments)

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Cash Registers Banks, Registers Vending Collectibles

Continue reading → Prosper Days 2008 Recap - Part 2

Part 1 - Introduction

So I’ve finally recovered from Prosper’s Prosper Days 2008 conference held this week in their hometown of San Francisco, California.

(Well, I haven’t completely recovered, but recovered enough to at least type without wearing out my backspace key.)

In short, it was a great time. I had the chance to see some folks I met last year at PD07 and meet some new personalities in

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• San Francisco California US State, Town Views Postcards Collectibles

Continue reading → Prosper Days 2008 Recap - Part 1

I am now fully recovered from Prosper Days 2008 and starting to get back into the normal swing of things, but before I get to far removed I wanted to write a quick blog post with my thoughts and observations. 
First and foremost, it was nice to meet  all of the wonderful and intelligent people that [...]

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Swing Trainers Training Aids Golf

Continue reading → Prosper Days 2008

Prosper Days is the annual Prosper users conference. Last year was a blast (RateLadder Presentation). This year it is being held in San Francisco at the Parc 55 Hotel. Even though it is a users conference, it is open to both the community and interested parties. Here is the official Prosper Days 2008 website.
Stephen [...]

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Current Year, Next Year Calendars Paper Collectibles

Continue reading → Prosper Days 2008 and Freakonomics

I was recently reading NetBanker and I came across an post where he says he will be at Prosper Days 2008 as a panelist of bloggers covering the space. 
After find that tidbit I read the rest of the rest of the article. Lo and behold a picture of RateLadder is on the NetBanker Blog. How cool is that? 
I [...]

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Space Autographs Collectibles

Continue reading → NetBanker at Prosper Days 2008

Stephen Dubner, co-auther of Freakonomics, will be the keynote speaker at Prosper Days this year.
Described as a melding of pop culture and economics with more than 3 million copies sold worldwide. It is a collection of economic articles written by Levitt and then translated into prose meant for a wider audience.
The range [...]

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Worldwide Stamps

Continue reading → Freakonomics at Prosper Days 2008

Prosper Days 2008
February 25-26, 2008
Parc 55 Hotel, San Francisco
Here is the registration page: Prosper Days 2008 Registration
Also new this year…  If you are a member of the press or a blogger you may attend for free: Press Registration
And for nostalgia here is the video of RateLadder at Prosper Days 2007

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

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Continue reading → Prosper Days 2008 Announced