New Loan Funded — Re-List:Lower Dollar Amount, Higher Rate — $14,500 at 17.75% — B Credit — DTI 30%

A new loan funded (Re-List:Lower Dollar Amount, Higher Rate— $14,500 at 17.75%). I participated via 2 new standing orders and a manual bid (irrational exurbance from Prosper Days?): Low Amt — High DTI — AF, Low Amt — Extreme DTI — AF. Which is this loan was funded as a low amount requested (<$15,000), High debt to income ratio (<40%), and an Extreme debt to income ratio (<60%), and was an auto-funding loan. The borrow had B credit and 30% DTI. As a reminder my standing orders only find loans with 0 current delinquencies, 10 or less delinquencies in the last 7 years, and 2 or less public records in the last 10.

With this loan I have $3,850 in principal across 60 loans ($64.17 per loan) with an weighted average interest rate of 16.54% and an account value of $3,930.57. Each loan on average is 1.6% of my portfolio with a maximum in any one loan being 3.8%.

Here is the listing:

For the readers that believe in reading the actual description without modification:

First, Thanks to all the lenders who bid on my last loan structure. Good news for you as I have upped the interest rate! It does not make economic sense for me to go any higher than this, so this will be my last listing. Please email me with any questions. Thanks again.
NOTE: Additional income not shown in DTI ($35,000)

Hello everyone, thanks for taking a look at this loan request. It is actually a refinancing of existing debt. As can be seen, I have never been delinquent and I take my credit score very seriously. I try to live somewhat frugally, which my cash outlays below will show. My fiance and I currently share bills so while my debt to income ratio does not include her income ($35,000), the cash flow line items below do.
Additionally, I am a lender with prosper and have 65 current loans outstanding. From a lending perspective, I understand the risks taken with providing me this unsecured loan. At the same time I have maintained a clean credit record to show that I am financially responsible and that the risk of default is low.

Line Item Monthly Expenses

Income $5,000 (net after 401k, health and taxes)

House $-1600
Food $-600
Cell phone $-100
Student loans $-350

AmExpress $-500

Private Loan $-795 (Balance of $8,745 refinanced with Prosper)
BofA Card $-325 (Balance of $5,550 refinanced with Prosper)

Free Cash Flow after Refinancing approx: $1900
Please notice that there is no car payment and no cable. The Private Loan was from a family member for the last two quarters of school and would like to return their money asap. The credit card monthly payments shown above are not the minimum amounts due, as I was trying to accelerate repayment of these. Also, I plan on repaying within two years.
Thanks again for Bidding!!!

Here is a graph of all loans on Prosper with B credit and a DTI of < 40% and Loan Amount $14,500 +/-$5,000 funded in the last 100 days:

Number of Loans	Average Amount Borrowed	Weighted Average	Standard Deviation
60	$12,620.48	13.93%	2.65%

The weighted average plus 1 standard deviation is 16.58%. The weighted average plus 2 standard deviations is 19.23%. This loan is between 1 and 2 standard deviations better than the weighted average for the last 100 days. This is a great loan rate!!!! BUT I wish I had just let my standing orders fire and saved the manual bid money. I love standing orders.

What do you think?

No Comments | February 28, 2007 | Filed Under Loan Review, Prosper.com | Leave a Comment

My Lowest Interest Rate Loan is a Payoff in Progress

I have to laugh… Early in my use of standing orders I had my best rate for low amt, low DTI, AA borrowers set at 9.40%. (I didn’t have any rhyme or reason for 9.4% it just seemed “right”.) Sure enough, the very first loan found by my standing order closed at exactly 9.4%. This one loan was my genesis for starting this blog. Why 9.4%? Was this a good rate? Should I have done better? The conclusion I came to… I needed to be more rigorous because that interest rate is WAY too low and the seed of RateLadder.com was born.

It turns out, that this loan is now a payoff in progress. Sweet. I will have made 9.4% on $50 while it was in the loan. Not to shabby… ~4.4% better than I would have made leaving my money in the bank.

Flash forward, I will never have another loan at a rate this low. My bare minimum interest rate is currently 15% for this and similarly attractive listing candidates. Sure, I will have more defaults, but with a portfolio in place that is aging nicely hopefully I can weather any storm with a positive IRR.

I will remember this loan fondly as the seed of RateLadder.com, but particularly because the borrower repaid the loan. Thank You!

Happy Lending!

No Comments | February 27, 2007 | Filed Under Loan Review, Prosper.com | Leave a Comment

Please Close Major Loophole for Deadbeat Lender/Group Leaders

There has been a minor uproar on the forums over deadbeat lenders/group leaders. That is to say, Prosper.com members that are lenders and borrowers with late payments on the loan given to them. The consensus seems to be that Prosper should be impounding the loan payments they are receiving in order to cover their Prosper.com loan. I completely agree.

I thought I would look into just how many of these deadbeats exist…

There are 2,492 loans to Prosper members that have roles of Lender or Group Leader. Of these, 133 are currently late. 133 / 2,492 = 5.3%. Without breaking this down into credit grades it is hard to say if this is above or below the mean.

Regardless, these lenders should not be receiving the benefits of their lending until they are current as a borrower.

I have a policy about not outing deadbeats for my own protection. In this case, if someone else publishes a list I will stand and applaud.

8 Comments | February 26, 2007 | Filed Under Prosper.com, Statistics | 8 Comments

Thank you Akismet

I woke up this morning to 70 spam comments for every vice you have heard of, mostly sex and drugs. I don’t have any idea what a blogger did before Akismet. What a great plugin!!!

No Comments | February 26, 2007 | Filed Under Site Statistics | Leave a Comment