State sales tax collections are a strong indicator of whether a state is going into a recession or not. This is useful information for lenders since loan default rates are known to correlate with recessions. After my last post on this, Calculated Risk …

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Continue reading → More On State Sales Tax Collections

I had picked on a few states before, but, according to Yahoo, it looks like a majority of the states are now facing budget shortfalls, a likely indicator for a recession and higher default rates than projected by current Prosper statistics

By mid-Apri…

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Continue reading → Many States Looking At Recession

A while back, I had written to encourage Prosper lenders to truly diversify their loans. It’s not enough to spread your loans across different credit grades if they’re all in California, for example. Such a lender will still be vulnerable to local econ…

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Continue reading → More On Prosper Loan Diversification

Yeah, it’s a double-post day. I just spotted this on Calculated Risk. The AP is reporting that the FDIC is staffing up for an anticipated rush of bank failures.

The Federal Deposit Insurance Corp. wants to add 140 workers to bring staff levels to 360 …

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Continue reading → FDIC Thinks Bank Failures Coming

As I had previously observed, Prosper seems to have more lenders chasing loans than there are borrowers to take the money for some classes of loans. One such class encompasses just about anything that’s inside one of Prosper’s standard portfolios. If a…

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Continue reading → Simple Receipe For 100% Funded Prosper Loan

From Calculated Risk, another good reason why Georgia should be on your danger list (with California, Florida, New Mexico, and Arizona)

For the most part, Atlanta didn’t participate in the price boom. This graph compares the Case-Shiller house price i…

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Continue reading → Now Georgia’s On The Danger List

If you’re just waking up and checking the TV, radio, or internet, you may have noticed that the Fed just dropped interest rates 0.75%, the stock market is down 3%, depending on the index you look at and when you check, and it’s not a good day for corpo…

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Continue reading → Mr. Toad’s Wild, Prosperous Ride

The articles on US’s bipolar relationship with debt will continue to appear at regular intervals. This is just the latest.

JPMorgan Chase & Co. and Wells Fargo & Co., two of the nation’s largest banks, on Wednesday joined a growing chorus warning that…

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Continue reading → Americans In Debt, Lend Conservatively

It looks like the American borrower is getting further behind. Ain’t that a kick in the shins.

Americans are falling further behind on consumer loans, with late payments rising to the highest level since the nation’s last recession in 2001, data relea…

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Continue reading → US Consumer Loan Issues

This was a guest post on Prosper’s new blog.

When Prosper created their portfolio plans, they added a tool to help new lenders enter the marketplace. It assembles a portfolio of loans whose only objective is to track the average loan return in the spe…

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Continue reading → Digging For Gold Around Prosper’s Portfolios

I keep watching the housing market and sub-prime mess because it’s an indicator of states that will be distressed and have higher odds default for loan issued to homeowners in those markets (and folks employed in home-related industries). If you’re not…

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Continue reading → Subprime Meltdown Heatmap

Prosper has unveiled their new estimated loss calculation for loans. Notice those disclaimers down along the bottom. Yeah, me neither. Well, there’s an interesting note.

If you get out the magnifying glass, you’ll read:
1Estimated average annualized…

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Continue reading → Disclaimer On Prosper’s Estimated Default Rate

While doing a regular update on my personal lending tables (interest rates to charge versus various credit criteria), I noticed that the distress rate penalty for high dollar loans (>= $10k) has increased dramatically in the last two months. Distres…

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Continue reading → Distress Rate Widens For High Dollar Loans

Back in August I observed that the borrower’s income seems to weigh heavily on distress rates (late or worse). With two more months of statistics under Prosper’s belt, I felt it was time to revisit this topic and see how the loans were fairing.

Income…

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Continue reading → How’s That Income Doing

I’m starting to feel like Chicken Little. It looks like reports of slowing sales tax receipts from California and Georgia were the tip of the ice berg. The San Diego Union Tribune is reporting that half of the states (unlisted) are showing slowing coll…

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Continue reading → More Slowing State Economies

First California sales tax receipts were dropping, and now Georgia has reported a similar problem. From the Atlanta Journal-Constitution (hat tip to Calculated Risk):

Collections in Georgia were down $2.3 million in September, compared to the same per…

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Continue reading → Georgia Sales Slowing Down Too - Tighten Those Lending Standards

I had previous considered California as high-risker risk lending terrain due to housing conditions there. Calculated Risk has highlighted another reason to be careful:

Based on sales tax revenue, it now appears that the California economy is in recess…

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Continue reading → California Sliding Into Recession?