My own feelings are that groups shouldn’t matter to lenders…  There is a vocal bunch that claim only good groups matter…  I personally think the only place for groups is in borrower generation and education.  Source new borrowers and educate any borrower. And get paid for it.  Personally, I wouldn’t mind having an affiliate account.

That being said… I caused a minor uproar on the forum today by suggesting that I don’t care that a GL is buying a 5 star rating  because it doesn’t affect my lending decision.  The target of the posts was the 2 millionaires. 

I decided to talk straight to the horse.  I have their answers to

“Why do you make community payments?”

and

“Do you care to respond to the allegations (in the Prosper Forums) that your technique (community payments) is a ponzi scheme and can’t succeed monetarily as a long term strategy? As a mega group it will be very difficult to maintain your 5 star rating indefinitely in the onslaught of HR defaults.”

I will be publishing their responses, but I thought I would give the uninitiated a chance to catch up…  I should warn my readers there is bad blood on both sides of the argument and neither holds any punches.  It is fascinating reading.

Here is the forum thread I started today: http://forums.prosper.com/index.php?showtopic=22124.  It has some links to additional background threads.

Check back tomorrow to hear from the 2 millionaires.

p.s.  for a sneak peak check out the comments on my post from this morning (2 millionaires and leporello…  a good summary of both sides: http://rateladder.com/2007/03/26/two-millionaires-keep-5-star-group-rating-with-community-payments/

 

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