What opinions do you guys have on how the sub-prime mortgage meltdown will affect peer to peer lending?  I’ll confess I’m still spooked at the moment and working to draw down my balance at Prosper.  From things I’ve been reading, it would appear that the worst is still yet to come, what with a large chunk of ARM borrowers set to reset between now and mid 2008.  What do you guys think?  Will p2p lending suffer when a lot of these people default?

This was posted by Jimmy211 at the P2P No Bank Forum…  here is a link: Sub-Prime Mortgage Meltdown

RateLadder responded with

I have read 2 schools of thought.  1 is that it will as you are saying.  The other is that people do everything possible to cut a deal with their mortgage provider and protect their consumer credit.  

As an unsecured loan we are last in line in bankruptcy and that is why loan rates are higher on unsecured loans.

Personally I have always been chasing the highest rates.  But I have recently be focusing on the cleanest of the clean credit (flight to quality.)

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