Standing Order Technique for Prosper Non Autofunding Loans
As regular readers know, the non auto funding loans are the bane of my greedy standing order algorithms. I have been experimenting with the advanced search sent out by Prosper in the recent overlooked listings email campaign (I have gotten 2 how about you?)…
The advanced search that was sent with the email has reasonable rates (relative to site averages) and fairly tight extended credit. Here is a link (you must be a lender) for reference: Prosper Overlooked Listings Advanced Search
I found the list to be interesting and started thinking…. (play jeopardy sounds)… maybe the less than 80% criteria combined with a greater than 20% criteria can keep me out of listings that launched to 100% funded only to have my SO outbid, but still find listings that fund.
So I took the Prosper Search, tightened the credit to my requirements and increased the rates to 1 sigma over site averages. This reduced the listings from ~70 down to ~2-8. This new list had loans that will fund most of the time, but were not the bid down darlings of the lender community… Contrarian… Time to Zig while others are Zagging… I like it…
I created a standing order out of this advanced search and gave it $350 to invest. I will keep you up to date as to what happens…
Here is my advanced search: RateLadder Overlooked Listings Advanced Search
Group Leader Tools
As I am new to being a Group Leader I have only just begun considering the possibilities for improving and enhancing the experience, adding value to both lenders and borrowers. One of my main value add points to my group’s borrowers is my ability to market their listings.
Most of my ideas at this point are around marketing of my group to borrowers and marketing my group’s listings to lenders. In fact, most of my good ideas are the latter.
I plan on creating an RSS feed of my groups listings and hosting it on ProProsper and RateLadder. Would other GLs be interested in something similar? I am thinking 2 different versions. One version which is free would contain links to ProProsper and ads as the ProProsper RSS feeds do currently. One version which costs $10 per month would contain links directly to Prosper and thus be ad free.
The cool thing about an RSS feed is that you can publish them all over the place and subscribers can subscribe from whatever reader they prefer. They can be published at ProProsper, RateLadder, any other website, email subscription, readers can subscribe with RSS readers, my yahoo, my Google, etc.etc.etc. So by creating an RSS feed for your group it is another marketing tool for your listings.
If any GL is interested in the an ad free group specific RSS feed with hosting at ProProsper for $10 a month or an ad free RSS feed with hosting at ProProsper and RateLadder (more locations equals better Google search results) for $15 a month please contact me at kevin (at) proprosper [dot] com. I can have your feed up and running in a couple of days. The subscription also includes instructions for republishing and promoting your feed to other locations. In addition to hosting the feed, you will also be given a page on which your RSS feed will be displayed and you can add static editorial content and links to other sites.
Not included above, but a onetime post on RateLadder announcing and republishing your feed can also be arranged.
RateLadder Lauches Prosper Group Focussed on Borrower Success
As a dedicated and fanatical lender I have been trying to climb up the RateLadder. Put my experience to work for you, allowing you to climb down the RateLadder and obtain the best possible loan rate for your listing.
Membership and Listing Requirements
How dedicated? How fanatical?
- I have been a lender since July 2006. I move money into Prosper to lend 5 times a week. I am an active forums member at both Prosper and Prospers.org.
- In December 2006, I started my Prosper Lender Blog: RateLadder.com — Prosper.com Lender Blog, Lending Strategy, Rate Analysis and Personal Finance. My blog is dedicated to my Prosper journey. It is widely read amongst the lender community. I will use the power of my blog to attract Lenders to your listing.
- I was one of 3 speakers at Prosper Days 2007 (the annual Prosper users conference) in the third party tools showcase. Here is a link to the presentation: Third Party Application Showcase.
- In Feb 2007, I started ProProsper — Professional Tools for Prosper Lenders. ProProsper makes the publicly available data accessible to all with a focus on being the tool to find the solution not the answer… Listings in my group will also be made available via RSS at ProProsper.
Why am I qualified as a Group Leader?
As a lender, my focus is benefiting via higher rates from mistakes made by borrowers. I am trying to obtain the best quality listing for the highest interest rate. I have studied and analyzed Prosper rate arbitrage and site dynamics. I know why listings fund and I know why they fund at higher or lower rates than average. As your Group Leader, I will not let you make mistakes. I will work with you to make the best listing possible and hence the lowest possible rate. From a borrower’s perspective, a Group Leader is your mentor and expert. A Group Leader’s number one priority should be the success of the borrowers in obtaining the loan, obtaining the best possible interest rate, and repaying the loan.
What I will do!
- Help with your listing through review. I have seen many many listings and I know what lenders want. I will review your listing to help ensure a top quality mistake free listing. I will not let you make a listing mistake.
- I will use all the resources at my disposal to help market your listing. These include: RateLadder, ProProsper, Prosper forum, Prospers.org forum, and personal contacts with lenders.
- I will work with you regardless of your credit or other secondary factors as long as you are sincere and truthful in your lending request and meet Prosper’s minimum requirements.
- If your credit meets my lending requirements I will bid on your listing at 1% below site average. My lending requirements are 0 current dq, 0-10 dq in last seven years, 0-2 public records in last 10 years, and less than 75% bank card utilization. Even if you don’t meet my requirements, I will still work with you.
- Every listing in my group will receive an endorsement.
- I will inquire about any missed payments. We are a community that relies on honest borrowers paying back their loans. Circumstances happen, but my lenders will be kept in the loop as to what these circumstances are.
What I won’t do!
- I won’t require any additional vetting or documentation other than existing Prosper requirements.
- I won’t approve a listing with known inaccuracies.
Ready to get started? Let’s climb down the rate ladder together!!!
By adding a group many may notice that the numbers of ads is being reduced. I am continuing to prune ads in response to my readers suggestions. Please note that the ads pay for hosting and that donations are always welcome.
Accounting for Prosper in Quicken Strategy Update?
Yesterday I received a comment from a reader:
Question: would the principal repayment be considered a “return of capital?” as opposed to a sale? What are the implications of using one category over the other? I’ve taken a look at the irs (a search on the phrase returned numerous results) and wikipedia (http://en.wikipedia.org/wiki/Return_of_capital)websites on the topic, but I’m still a little hazy.
I could only find the IRS applying the phrase to stocks and mutual funds.
I’ve tried both in Quicken. Recording principal payments as sales resulted in my cost basis increasing when that payment was reinvested, but with return of capital used the cost basis did not increase. (Well, technically it did with the purchase, but it declined by an equal amount when the payment was recorded.)
I tried the suggestion and it keeps my cost basis at my original dollar moved into Prosper amount. I like this very much, but when I make this change Quicken thinks my ROI YTD in the account 50%. Clearly, something is not right.
Looking a little deeper, if I use return of capital the cash balance increases but the assets stay the same. This is a problem. The assets (prosper loans) need to decrease in value by the amount of capital returned.
Sale is the right choice.
A Look At the Graphs and Charts from Quicken in My Prosper.com Account
Last week I merged RateLadder’s Quicken solution with a Solution from Adam Nash, then I followed up with a post on How Easy The Solution is to Implement and My ROI According to Quicken. Having looked a little into deeper Quicken I have found a graph I want to show: Cash vs Loans.
Cash vs Loans:
This chart show my Prosper.com account in Quicken. The cost basis is the account value; however, the interesting thing is the break down between cash and prosper loans. Check it out…
Not to get on a soapbox, but it would be nice to earn interest on the dark portion of this graph.
Using Prosper’s New Scheduled Transfers to Obtain Money Distribution
Prosper just released a scheduled transfers feature. Prior to this release you had a choice of starting a transfer manually at any time… 4 business days later the money was available for bidding…
RateLadder, like many ended up with most of my transfers finishing on Thursday. Why Thursday? Any transfer initiated after the morning cutoff on Friday through the morning cutoff on Money results in transferred money being available on Thursday.
The manual process increased the effort required to Prosper… Now with Scheduled Transfers and Standing Orders you can Prosper on autopilot.
I have decided to use the following schedule…
| Transfer Start | Money Available | Amount | Period |
|---|---|---|---|
| Apr-20-2007 | Apr-25-2007 | $50.00 | Weekly (no end) |
| Apr-18-2007 | Apr-23-2007 | $50.00 | Weekly (no end) |
| Apr-17-2007 | Apr-20-2007 | $100.00 | Weekly (no end) |
Basically, it is $50 arriving Monday, $50 arriving Wednesday, $100 arriving Friday.
So I had to schedule transfers starting $50 on Friday, $50 on Wednesday, and $100 on Tuesday. 4 business days before I wanted the money to arrive.
If I really wanted to ramp up money entry and obtain the most even distribution possible, I would use a similar scheme but make 1 transfer for Monday through Thursday and 3 transfers for Friday… The minimum amount required for this pattern is $350 per week if each transfer is the minimum bid.
What is your money movement pattern?
New Loan Funded — At wit’s END — $15,000 at 18.5% — B Credit — DTI 72%
A new loan funded (At wit’s END – $15,000 at 18.5%). I participated via a manual bid the loan was Autofunding. The borrower had B credit, a 72% DTI, and is a homeowner. As a reminder my standing orders (and manual bids) 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 $4,747.15 in principal across 74 loans ($64.15 per loan) with an weighted average interest rate of 17.66% and an account value of $5,190.26. Each loan on average is 1.2% 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:
Purpose of loan:
Get out of debt for once & all - only want ONE payment!!
My financial situation:
I’m a very hardworking - working two jobs right now to get ahead and I think I’m getting farther in. I’ve been at my main job for almost 5 years and my part-time job for almost 1. I’m very stable and just want to get my head above water - I don’t want to rob Peter to pay Paul.My monthly budget:
Mortgage/rent: $1200.00
Insurance: $150.00
Car expenses: $400.00
Utilities: $300.00
Phone, cable, internet: $75.00
Food, entertainment: $
Clothing, household expenses $
Credit cards and other loan payments: $450.00
Other expenses: $300.00
—————————————
Total monthly expenses: $2875.00
Here is a graph of all loans on Prosper with B credit and a DTI of < 72% and Loan Amount $15,000 +/-$5,000 funded in the last 100 days:
| Number of Loans | Average Amount Borrowed | Weighted Average | Standard Deviation |
|---|---|---|---|
| 103 | $14,071.44 | 14.5% | 3.01% |
The weighted average plus 1 sigma is 17.51%. The weighted average plus 2 sigma is 20.52%. This loan is between the 1 sigma and 2 sigma higher than the mean.
What do you think?
New Loan Funded — Finance for an ESTABLISHED Business — $25,000 at 24% — B Credit — DTI 1392557%
A new loan funded (Finance for an ESTABLISHED Business – $25,000 at 24%). I participated via a manual bid the loan was Autofunding. The borrower had B credit and a 1392557% DTI (unverifiable income). As a reminder my standing orders (and manual bids) 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 $4,747.15 in principal across 74 loans ($64.15 per loan) with an weighted average interest rate of 17.66% and an account value of $5,190.26. Each loan on average is 1.2% 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:
Purpose of loan:
My monthly budget:
I am requesting this loan to help finance a business aquisition. I have arrangements made for financing of the majority of the business (about 70%) and am looking for the remaining amount that is needed (20% of which is coming from this loan and the other 10% which I will pull from other areas, once I have this loan in place). As for type of business, I am most likely going to buy a business services company, providing consulting, accounting, and tax preparation. I have had experience in all three areas. However, whatever type of business I decide upon, there would be a cash flow of about $5,000 a month, which would easily cover my prosper payment and my monthly expenses below.
My financial situation:
The business I would be purchasing would be a well established business ( 3 years+) with a great return on investment, which would allow me to repay this loan quickly and on time. As it goes currently, the only reason I have less than perfect credit is I have been making a number of inquiries as far as looking around to get the financing I require. I most recently have worked as a mortgage broker for 2 years, and I know about all there is to know about credit scoring. As such, I would not even dream of making a late payment on this or any loan, for my credit score is probably the best tool I have right now to help me pursue my business dreams by getting me the capital to get up and running. I feel that I am a good candidate for the above reasons, and because I have an insatiable appetite for learning about finances and, as such, have read and continue to read books by Kiyosaki, Gerber, and the like, as well as all sorts of management and finance books. I go to meetings regularly to stay on top of economic trends, cutting edge advertising techniques, and business organization and planning meetings, and I meet at least once a month with a business consultant and I meet frequently with my accountant and lawyer as well, to learn all I can.
Thank you for your time and your interest.
Mortgage/rent: $0/ living with friends
Insurance: $100
Car expenses: $200
Utilities: $0
Phone, cable, internet: $50
Food, entertainment: $150
Clothing, household expenses $100
Credit cards and other loan payments: $300
Other expenses: $300
—————————————
Total monthly expenses: $1200Mortgage/rent: $0/ living with friendsInsurance: $100Car expenses: $200Utilities: $0Phone, cable, internet: $50Food, entertainment: $150Clothing, household expenses $100Credit cards and other loan payments: $300Other expenses: $300—————————————Total monthly expenses: $1200
Here is a graph of all loans on Prosper with B credit and a Any DTI and Loan Amount $20,000 +/-$5,000 funded in the last 100 days:
| Number of Loans | Average Amount Borrowed | Weighted Average | Standard Deviation |
|---|---|---|---|
| 97 | $20,173.16 | 15.98% | 3.55% |
The weighted average plus 1 sigma is 19.54%. The weighted average plus 2 sigma is 23.09%. The weighted average plus 3 sigma is 26.64%. This loan is between the 2 sigma and 3 sigma higher than the mean.
What do you think?
New Loan Funded — Financially responsible Individual seeking funds — $12,000 at 15% — A Credit — DTI 25%
A new loan funded (Financially responsible Individual seeking funds – $12,000 at 15%). I participated via a my standing order Low Amt (<15K)-- Mid DTI (<25%) -- AF (the loan was Autofunding). The borrower had A credit and a 25% DTI. As a reminder my standing orders (and manual bids) 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 $4,747.15 in principal across 74 loans ($64.15 per loan) with an weighted average interest rate of 17.66% and an account value of $5,190.26. Each loan on average is 1.2% 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:
Purpose of loan:
The loan is going to be used to payoff a credit card. We will also be using it for working capital for a startup business. This is the second listing. This time for less money, in hopes of being fully funded this time.
My financial situation:
Good for paying back this loan because I have been working for the same hospital for 8 years and am starting a new business in which I am already making around $300 in supplemental income a month. I will use the money to payoff a credit card and for some working capital for my business. My goal is withing two years to have no credit card debt. This will be my start toward that goal. I am very financially responsible, make payments on time, and plan on continuing that record.My monthly budget:
Mortgage/rent: $Insurance: $
Car expenses: $286.00
Utilities: $70
Phone, cable, internet: $69
Food, entertainment: $150
Clothing, household expenses $200
Credit cards and other loan payments: $300
Other expenses: $—————————————
Total monthly expenses: $1075
Here is a graph of all loans on Prosper with A credit and a DTI of < 25% and Loan Amount $12,000 +/-$5,000 funded in the last 100 days:
| Number of Loans | Average Amount Borrowed | Weighted Average | Standard Deviation |
|---|---|---|---|
| 76 | $10,719.36 | 11.13% | 2.15% |
The weighted average plus 1 sigma is 13.28%. The weighted average plus 2 sigma is 15.43%. This loan is between the 1 sigma and 2 sigma higher than the mean. I love standing orders!
What do you think?
New Loan Funded — Relocating, Need Quick Cash to Payoff Home Equity Loan — $25,000 at 22% — C Credit — DTI 28%
A new loan funded (Relocating, Need Quick Cash to Payoff Home Equity Loan – $25,000 at 22%). I participated via a manual bid the loan was Autofunding. The borrower had C credit, 28% DTI. and is a homeowner. As a reminder my standing orders (and manual bids) 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 $4,597.15 in principal across 71 loans ($64.75 per loan) with an weighted average interest rate of 17.55% and an account value of $4,984.42. Each loan on average is 1.3% of my portfolio with a maximum in any one loan being 4.0%.
Here is the listing:
For the readers that believe in reading the actual description without modification:
Background Information:
I hold BS & MS degrees in Accounting & Finance respectively & work in a financial institution. I do appreciate the importance of financial credibility & I never delay in meeting my financial obligations. I have 2 homes, a residential & investment property. I was recently transferred from Michigan to Texas and needed to sell the residential home. My Employers will be buying the residential home but I must payoff $25,000 outstanding on the Home Equity Line. (HELOC). The HELOC was originally obtained for investment purposes and was partly used to finance the rental property and a vending business. Purpose of Loan:
To payoff $25,000 owed on HELOC. Income Analysis:
Monthly Net Salary $3,000, Rental Income $775, Vending $200, Total = $3,975Expenses:
1st Mortg. on home $1,338, Equity loan $400 ($1,738)
Mortg. on rental property 334
Insurance 180
Elec., Water, Heat, phone 320
Fuel 120
Credit Card + Student loan 258
Church 410
Total 3,360 Net Cashflow (Surplus) $615After relocating to Texas my net salary will increase by $700 while I’ll save $1,738 on my mortgages (Total = $2,438). I will be renting an apartment for $800 in Texas and my new surplus cash will be $2,253 from which I will repay prosper loan.
Conclusion
I am available to answer any question and I appreciate your favorable consideration of this loan request.
Here is a graph of all loans on Prosper with C credit and a DTI of < 28% and Loan Amount $20,000 +/-$5,000 funded in the last 100 days:
| Number of Loans | Average Amount Borrowed | Weighted Average | Standard Deviation |
|---|---|---|---|
| 62 | $19,757.08 | 18.84% | 3.62% |
The weighted average plus 1 sigma is 22.46%. This loan is between the weighted average and 1 sigma higher, 3.16% higher than the mean.
What do you think?
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