April 9th, 2008 — Lending Club
UPDATE: After a second reading I think my assumption about the secondary market is incorrect… (My own hopes for such a market might have clouded my vision.) It looks like LC is just registering for a license that they think they need to continue working with “lenders”: http://www.techcrunch.com/2008/04/08/lending-club-puts-moratorium-on-lending-activity/
I am leaving hte rest of my original post unchanged: http://www.rateladder.com/2008/04/08/big-lending-news/
Related Articles Related StoresApril 8th, 2008 — News, Prosper.com
Here is the March 2008 Prosper People-to-People Lending Market Survey…
I thought the commentary was particularly interesting this time…
Market Commentary By Prosper Co-founder and Chief Executive Officer, Chris Larsen
As we have previously reported, Prosper’s mix of “well priced” loans – loans with an attractive risk-return tradeoff – has dramatically changed from the same period last year with approximately a 200% increase in the percentage of “well priced” loans and a six-fold decrease in “low priced” loans – loans with an unattractive risk-return tradeoff. Part of this positive trend is attributable to the introduction of portfolio plans and performance guidance from the Prosper Marketplace – changes introduced last October. These changes continue to drive better overall performance of the market.
In March we saw further evidence of this with portfolio plan performance improving. For example, the Conservative portfolio plan – one of four model portfolio plans Prosper has provided as templates that can be used by lenders – consists of five credit slices. Looking at all the credit slices across all four plans, 18 of 21 slices improved or remained constant. This is quite positive considering the continuing credit crunch occurring in so many traditional financial markets and should lead to both better rates for borrowers and better performance for lenders.
We are also seeing a healthy start of custom portfolio plans, which lenders can create from scratch or modify from an existing Prosper model plan. These plans can be easily shared with friends or family. In March, approximately 1,800 custom plans were created that spawned over 18,000 bids.
The Prosper Portfolio Plans and the Prosper Select index are tied together. The portfolio plans slices are effectively the prosper select interest… And while bidding guidance has caused Prosper Interest Rates On the Rise in the lower credit grades they have caused interest rates within the index to fall.
Related ArticlesApril 8th, 2008 — Lending Club, News
UPDATE: After a second reading I think my assumption about the secondary market is incorrect… (My own hopes for such a market might have clouded my vision.) It looks like LC is just registering for a license that they think they need to continue working with “lenders”: http://www.techcrunch.com/2008/04/08/lending-club-puts-moratorium-on-lending-activity/
I am leaving hte rest of my original post unchanged.
I received the following email from Lending Club…
Lending Club has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. We will continue to service all previously funded loans during this period, and lenders will be able to access their accounts, monitor their portfolios, and withdraw available funds without changes.
The borrowing side of our site will remain generally unaffected by this registration process; borrowers can continue to apply for loans and new loans posted after April 7, 2008, will be funded and held only by Lending Club.
Until the registration process is completed, the company will undergo a quiet period and will not be able to respond to press and other inquiries about Lending Club or the registration process during that time.
Q&A:
Q1. What about money I have begun moving, but is still in transit to Lending Club?
A1.1. If you are in the process of verifying your bank account, you will be able to complete that verification but will not be able to add new funds
A1.2 If you have initiated a transfer, the funds will be displayed in your Lending Club account balance as soon as those funds are available.
A1.3 If you have uncommitted funds, you may request that Lending Club return those funds via the same method used to load the funds. For example,
• If you have initiated an ACH to add funds, these funds will be transferred into your Lending Club account but you will not be able to lend these funds out. You can go into your Lending Club account once the ACH transfer has been completed and withdraw funds back into your linked bank account..
• If you’ve wired funds into your Lending Club account and have not yet committed these funds into loans, you can send a request to support@lendingclub.com for us to wire these funds back to you at no charge.
• If you’ve sent funds by check, and have not yet committed these funds into loans, you can send a request to support@lendingclub.com for us to send you a check by mail for the same amount at no charge.Q2. What about referrals?
A2.1 The current referral program is terminated. If you have referred someone who has already signed up as a lender or a borrower, or if you have been referred by someone and have already signed up as a lender or a borrower, you will be receiving your referral payment within the next few days.Sincerely,
Patrick Gannon
Senior Vice President
Lending Club
440 N Wolfe Road
Sunnyvale CA 94085
www.lendingclub.com
You can also read about it at their blog: Lending Club Goes Quiet…
Wow! So the lenders are no longer going to fund the loans.. Any approved borrower will be funded via LendingClub itself. And my least favorite part… the referral program was terminated.
How long will this take? My best wild ass guess 7 months to 1.5 years.
I guess I will be withdrawing my funds from Lending Club until this quiet period ends… Doesn’t look like I have much choice… First transfer initiated this morning: $45 some odd dollars.
Related Articles Related StoresApril 7th, 2008 — Lending Club, News
Lending Club was featured on the ABC Nightly News… P2P Lending is certainly starting to raise it’s profile…
Social Lending Networks, New Alternative to Banks
I enjoyed this portion of the article… There is a video if you follow the link above.
Related Articles Related StoresLending Club actually started as a Facebook application, and LaPlance says online lending was the next natural step for social networking sites such as My Space and Facebook.
“Up until now, you haven’t seen people really using those connections, in the social networks, to in effect transact or do business with each other,” LaPlance said.
“We are definitely using a combination of e-commerce, banking infrastructure, and social networks to discover connections between people,” he added.
Murphy, for one, said he feels a personal connection with his online lenders.
“I want to be faithful to paying this loan back, just because those people had faith in me,” he said.
And now that he has paying customers, those banks that wouldn’t give him a loan are coming to him asking for his business. His reply?
“No thanks.”
April 3rd, 2008 — Prosper.com, Statistics
It is time for my monthly update of the amount late vintage curves… The y axis is the percent of $$ 30 more more days late… the x axis is days from origination. The curves stop when there are less than 250 loans in the bucket.
There are ways to cut the lat percentage shown in these graphs in half and even in half again (6 month inquires and current delinquencies to start with), but I would look at these graphs as a cautionary tale to avoid the lower credit grades and pay attention to the extended credit…
Use the Prosper performance tool to better understand the risk…
April 2nd, 2008 — Prosper.com, Statistics, Strategy, Tools
Compared to last month with the initiation of the lawsuits… This was a quiet month. My worst number Model IRR degraded and my best number Default IRR improved. I will update quicken as soon as the lender statement become available.
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