Lending Club Partners With Alumni Associations

The Lending Club blog has posted news that the alumni associations of Michigan, Kansas State and Georgia Tech have partnered with Lending Club to use the LC platform to make or take loans.

I think this is a great idea. I would gladly make loans to alumni of my alma matter and for that matter I would absolutely pay them off.

Here are some highlights…

Lending Club is available today to Kansas State and Georgia Tech alumni. It will be available in about a month from now to the 420,000 alumni of the University of Michigan. We chose to make this announcement during the homecoming season, which traditionally has marked the return of millions of alumni looking to reconnect and give back to their alma maters across the country.

Person-to-person lending grows faster when a level of trust exists between borrowers and lenders. Adding in whole communities of alumni with that trust built in dramatically increases our ability to extend great opportunities to everyone on the platform.

Potential lenders feel closer to their fellow alumni than they do to the general public: they feel both a desire to help and a stronger sense of trust due to their shared connection. If you can make a 12% return (which is the current average of all lenders’ portfolios on Lending Club), and at the same time help fellow alumni, it becomes a no-brainer for lenders.

Borrowers also feel more compelled to make payments on time because they know that their lenders are fellow alumni who are counting on these payments. This keeps defaults minimal and, in turn, reinforces trust on the lenders’ side. You can expect more announcements on this blog shortly as new online communities join the Lending Club ecosystem every week.

No Comments | October 31, 2007 | Filed Under Lending Club | Leave a Comment

Authenticated API

I think the authenticated API is big news. It signals additional development in an area that will benefit the entire community… I hope that there is much more to come.

Here I will quickly run down various things I have done with the API since the inception…

First of all ProProsper — Professional Tool For Prosper Lenders… While the application does a few interesting things, the biggest, best, most useful feature of ProProsper is direct SQL access of the public Prosper data and some schema enhancements. I built ProProsper using a rapid application development toolkit on top of struts and tomcat. SQL Server 2000 database using DTS packages to import and post process the data.

Second I built a Prosper Listing Widget using Adobe Flex Builder 2 and the webservice API (I have updated the listing widget to use the new https version of the API). I also did 2 variations on the widget ProProsper RSS Feed Listing Widget Rotator and Group Listing Widget Rotator.

Yesterday I downloaded the sample c# app provided by Prosper and adjusted it to work with the new API (https instead of http). The sample app is pretty basic, but here is what I did to make it work…

1. changed line 12 of app.config to:
https://services.prosper.com/ProsperAPI/ProsperAPI.asmx

2. removed ProsperAPIService web reference

3. created a new WebReference with url:

https://services.prosper.com/ProsperAPI/ProsperAPI.asmx?WSDL

4. named the new WebReference “ProsperAPIService”

5. rebuilt sample app

Also I have begun playing around with the API with WSDL2Java… Nothing really interesting yet. But apparently the ssl cert being used is not compatible out of the box with java and you need to use this… http://blogs.sun.com/andreas/entry/no_more_unable_to_find

2 Comments | October 31, 2007 | Filed Under Features, Prosper.com, Tools | 2 Comments

Prosper Files S1 With SEC

Here is a link to the Prosper S1 SEC Filing

S1 From Wikipedia (here):

Form S-1 is an SEC filing used by public companies to register their securities with the U.S. Securities and Exchange Commission (SEC). The S-1 contains the basic business and financial information on an issuer with respect to a specific securities offering. Investors may use the prospectus to consider the merits of an offering and make educated investment decisions. A prospectus is one of the main documents used by an investor to research a company prior to an initial public offering (IPO). Other less detailed registration forms, such as Form S-3 may be used for certain registrations.

This morning I found this: http://biz.yahoo.com/bw/071031/20071031005280.html?.v=1

Following effectiveness of the registration statement, Prosper intends to establish and maintain a secondary trading market online auction platform, or Resale Platform, pursuant to which lenders may seek to transfer borrower notes to other Prosper registered lenders.

The registration statement relates to the Prosper Marketplace Lender Participant Rights, which represent Prosper’s obligations to seek to establish and maintain the Resale Platform and to provide various administrative, clerical, recordkeeping, identity verification, payment processing, collection and other services, associated with $500,000,000 in aggregate principal amount of Prosper Marketplace Borrower Non-Recourse Notes originated and to be originated on the Platform from time to time after the registration statement is declared effective by the SEC.

All of the securities to be sold in this offering will be sold by Prosper through the operation of the Platform

Bring on the secondary market!!!

5 Comments | October 30, 2007 | Filed Under Features, Prosper.com | 5 Comments

Big Prosper Changes — 2nd Loans, Authenticated API, 0% on AA, 36% Max Rate, and Portfolio Plans

Big changes for Prosper today in new release…

Borrowers can now have second loans
Authenticated API for access to extended credit and a lender’s loans for lenders
0% servicing fee on AA credit
In states where rates aren’t capped the new maximum is 36%
Portfolio Plans might be the biggest change of all.
Bidding guidance based on Prosper default rates (see picture).

Here is the note from Prosper Andrew (here is the forum thread)…

Hi everyone,

Tonight we made a number of significant changes to the site, many based on your feedback. Changes include…

Improved bidding guidance for lenders

As the Prosper portfolio has grown and matured, we finally have a volume of loan payment activity that has allowed us to replace the Experian historical default data with Prosper’s own estimated default data.

We have also performed some analysis on the differences between borrowers within the same credit grade, and segmented the borrower population into 54 unique segments (one segment, for example, is C-grade borrowers with no automatic funding, 0 now delinquent accounts, and 2 or more inquiries). Based on which segment the borrower belongs to, we will display the estimated loss (due to default), rate adjustment (uncollected interest and fees), and annual servicing fee, and come up with an estimated return for loans to borrowers of that type.

Here’s an example of the new bid input for the example borrower:

Search listings now >

Portfolio plans introduced

Along with the new bidding guidance format (where return is calculated from actual Prosper performance), we are happy to introduce a new feature called “Portfolio Plans”. Portfolio plans are currently 4 model plans which you can think of as bundled standing orders. Each plan has 3 or 4 standing orders behind it, bidding on listings with predictable returns and specific risk levels.

Here’s the screen where you choose portfolio plans:

As listings that meet the plans’ standing orders pop up, bids will be placed. In the future, you’ll be able to build your own plans based on your standing orders. In the meantime, you can still create standing orders (which effectively do the same thing).

Get into portfolio plans now >

Standing orders can now avoid listings you’ve bid on

You’ve asked for this for a long time, and we’ve finally added it. Now when you create a standing order, you can choose to exclude “Listings I’ve bid on”, and avoid putting double bid amounts against the same listings.

Create a standing order now >

Second loans for borrowers

Borrowers who already have a Prosper loan can now take a second loan on Prosper if they meet certain criteria::

It has been at least 6 months since their most recent loan origination

The active loan must be current

The last two monthly payments must have been paid on time

Must have enough capacity in the $25,000 Prosper loan limit to take a loan which is at least big enough to meet your state’s minimum loan amount requirements

Borrowers seeking a second loan will have their active loan information described along with their credit report data.

Learn more about second loans >

Lender servicing fee changes

Lender annual servicing fees for AA credit grade borrowers change to 0%, and servicing fees for A credit grade borrowers change to 1%.

Interest rate cap changes from 30% to 36%

Prosper’s maximum borrower interest rate changes from 30% to 36%, subject to state laws in the borrower’s state of residence.

Now that we have historical default guidance on bidding pages, we feel comfortable allowing borrowers to create listings up to 36% interest (effectively 35% after potential bank draft charges).

Prosper Facebook application

Prosper members who use Facebook can now share their Prosper loans, bids, and watched listings with their friends on Facebook. I’ve been using it among my fellow Prosper employees, and it has been fascinating to keep track of what others are bidding on or watching. Try it out with your friends.

Add the Facebook application now >

Ended listings hidden

In an ongoing effort to balance the privacy and transparency of our customers, we have changed the visibility of ended listings to only be visible to those who are involved with the listing or resulting loan (if any).

Requests for credit are considered sensitive documents in the world of consumer credit. This change is a proactive move on Prosper’s part for greater consumer privacy, and the same level of transparency that you have come to expect from Prosper, but only on an as-needed basis.

Unless the borrower has an active listing, ended listings will no longer be available for viewing, except by lenders who are involved in resulting loans. If a borrower has an active listing, and has also created listings in the past, those ended listings will be available for view to registered lenders.

Collection agency performance metrics

Collection agency performance metrics now break out agency performance by credit grade. Here are the new numbers:

See collection agency performance metrics >

Authenticated API

API users can now sign in via the API, and access listing extended credit data and lenders’ basic loan holdings via web services.

Learn more about Prosper’s API >

And, as usual, many other small changes that are hopefully improvements to your experience on the site. Your feedback, as usual, is welcome.

Best regards,
Andrew