The methodolgy or the sql for obtaining the data these curves from the private data export have already been explained in detail, but briefly…

• The Y axis is the percentage of all loans orginated of a given age that are currently 1 month late or worse…
• The X axis is the days loan origination.
• The curves stop when there is less than 250 loans in the “bucket.”
• These curves are for all loans of a given Credit Grade. One would get different curves (flatter slopes=better); for exmaple, if you were to choose loans with 2 or less inquires and 5 years of credit history you would see flatter slopes.

The range is 7-8% for AA all the way to ~55% for HR.

(Click Graph for Larger Version)

Prosper Vintage Curves

• Prosper Vintage Curves From Private Data You may have seen my Prosper vintage curves...  While they were hard to make since the data had to be pulled off the Prosper Loan Performance page. With the new private lender data these vintage curves can be pulled with sql and excel greatly expediting the process. Check out the......
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• Pensioner Debt Sale Results Pensioner the former #1 lender on Prosper by amount invested (over $750K at peak) has been generous enough to share his debt sale results with RateLadder and my readers.  Thank you Pensioner. This is important information for the community at large. All of Persioner's loans that have been sold were done......
• 1 Month Late or Worse Curves by Credit Grade I have pulled the public data on the performance tab by hand in order to produce a spreadsheet of loan performance. This spreadsheet was then pivoted and aggregated in order to produce 1 month late curves by credit grade and Markov Chains which can be used (when 42 months of data is......
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The methodolgy or the sql for obtaining the data these curves from the private data export have already been explained in detail, but briefly…

• The Y axis is the percentage of all loans orginated of a given age that are currently 1 month late or worse…
• The X axis is the days loan origination. 
• The curves stop when there is less than 250 loans in the “bucket.”
• These curves are for all loans of a given Credit Grade.  One would get different curves (flatter slopes=better); for exmaple, if you were to choose loans with 2 or less inquires and 5 years of credit history you would see flatter slopes.

The range is 7-8% for AA all the way to ~55% for HR.  

(Click Graph for Larger Version)

Prosper Vintage Curves

• 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......
• Vintage Curves 04 2008 -- Amount Late By Credit Grade from Origination 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......
• Prosper's People-to-People Lending Market Survey SAN FRANCISCO--(BUSINESS WIRE)--Prosper (www.prosper.com), America's largest people-to-people lending marketplace, today introduced its first monthly People-to-People Lending Market Survey. Prosper's People-to-People Lending Market Survey will survey the marketplace each month to provide key statistics including: membership and loan volume statistics; marketplace returns; borrower rates; mix of prime, near prime and sub-prime......
• A Worthy E Credit Loan -- Please Comment and Decide I recently had the pleasure of interacting with a borrower seeking a loan on Prosper. The borrower as E credit and 15% debt to income ratio and is a homeowner...  He has 4 endorsements (3 from bidders including the group leader). However, he has an E credit grade.  But I......
• Loan Rate Ananlyzer Strategy Update With some of the loans that I analyze there aren't enough matching loans to analyze the interest rates.  I have been thinking of ways to increase the pool of loans without changing the match characteristics.  To that end from what I can tell DTI seems to be the least correlated......

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Another month another update…  The picture is rather muddled right now between the accrued interest showing up in my account balance even on loans that are technically “charged off”and lending stats changing their algorithm… All I can do is continue to track and hope fore some clarity…  On a positive note I have had no loans in the 1 month late category for most of the last month…  (There are 2 in that category now, but for most of June they were not there…)

I am often asked what is the biggest thing I would do different if I could go back and do it again?  I would follow advice very similar to Rich Credit Debt Loan in the post Making Extra Money With P2P Lending. I have learned a lot about credit risks and the like, but I would have much rather been more successful in my lending endeavours… My single biggest mistake in my lending was to ignore inquires.

Here is my current tracking chart…

• Lending Club Update I am continuing to struggle with the time and effort it takes to invest in Lending Club loans.  (I do not like manual bidding in the first place and you have to search the extended credit by hand.)  I have been assured that my concerns have been noted and that they......
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• Use Prosper.com to Repair Your Credit This blog is mostly dedicated to Prosper.com lending.  However, I think about all aspects of the process at Prosper.  Lately there have been a number of postings that list repairing credit as an ancillary benefit of borrowing on Prosper.com.  Repairing damaged credit is a critical step in reducing debt since better......
• Lending Club Loan Volume Misquoted in National Newspaper I encourage all reporters to check facts. In the p2p lending space, both major US p2p lending companies provide data and this data can usually corroborate or debunk basic marketplace claims.  I was reading a recent Pittsburgh Post-Gazette article on p2p lending: The credit crunch: How did it happen and where......
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Brief Explanation: These curves show the entire set of prosper loan broken down by credit grade and lined up along the x axis on their origination date…  As a loan goes late (1 month or worse) it is counted (either by amount or by count) as late against the population…  The curves stop when the loan population falls below 250 (ie there are 249 or less loans that age or older)…

Recently a study from the University of Maryland claimed a peak default date around month 10 of a Prosper loan.  This would translate into the largest delta  in this graph over a month period.  Does this graph confirm or deny that statement?  Is it conclusive?  Please leave a comment.

Here is the vintage curves by count (click graph for larger version)…

Here is the vintage curves by amount (larger loan go late at a higher rate and therefore on a percentage basis you would expect an increase), (click graph for larger version)…

Here is the SQL that I used to pull the underlying data out of the public and private data downloads…

DECLARE @DTD int
SET @DTD=30
SELECT
cast(aday-originationdate as int) as 'PIT',
l.creditgrade,
sum(PrincipalBalance+NetDefaults) as 'Amount',
count(l.[key]) as 'Count',
sum(case WHEN (mld.DPD!=0 and
       (mld.DPD+(aday-observationdate))>@DTD) THEN
            PrincipalBalance+NetDefaults ELSE 0 END) as 'AmountLate',
sum(case WHEN (mld.DPD!=0 and
       (mld.DPD+(aday-observationdate))>@DTD) THEN
           PrincipalBalance+NetDefaults ELSE 0 END)/
           sum(PrincipalBalance+NetDefaults) as AmountLatePercentage,
sum(case WHEN (mld.DPD!=0 and
     (mld.DPD+(aday-observationdate))>@DTD) THEN
        1 ELSE 0 END) as 'CountLate',
sum(case WHEN (mld.DPD!=0 and
       (mld.DPD+(aday-observationdate))>@DTD) THEN
       1.0 ELSE 0.0 END)/count(l.[key]) as 'CountLatePercentage'
FROM
loan l
inner join creditprofile cp on cp.listingkey=l.listingkey
inner join LoanPerformance mld on l.[key]=mld.loankey cross join alldays
where
mld.observationdate = ( select top 1 observationdate
from LoanPerformance sub
where sub.observationdate < aday
and sub.loankey=mld.loankey order by sub.observationdate DESC )
and aday < getDate()
and aday >= '02/01/2006'
and l.creditgrade!='NC'
group by
cast(aday-originationdate as int),
l.creditgrade
having
count(l.[key])>250 and
sum(PrincipalBalance+NetDefaults)>0
order by
'PIT'

• Prosper Debt Sale Percentages With the release of the new private data I thought I would write most of my posts this week on nuggets on information that can be pulled out of the data... This first post is on the debt sale amount as a percentage of principal balance at the time of......
• Prosper 1 Month Late or Worse Curves The methodolgy or the sql for obtaining the data these curves from the private data export have already been explained in detail, but briefly... The Y axis is the percentage of all loans orginated of a given age that are currently 1 month late or worse... The X axis is......
• Prosper Vintage Curves From Private Data You may have seen my Prosper vintage curves...  While they were hard to make since the data had to be pulled off the Prosper Loan Performance page. With the new private lender data these vintage curves can be pulled with sql and excel greatly expediting the process. Check out the......
• Prosper Vintage Curve Update -- 1/1/2008 Continuing the theme of tracking the late or worse vintage curves.  Each curve lasts only as long as there are 250 loans in the bucket.  The curves progress in time from the loan origination date.  The measurement is the percentage of money late or worse.  After a debt is defaulted......
• Vintage Curves 04 2008 -- Amount Late By Credit Grade from Origination 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......

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My account update for the month shows some general improvement…

One thing to note is that with the loans in the debt sale not sold my IRR calculation is a little out of whack… Hopefully Prosper will create the loan status of “Charged Off” and remove those accounts from my balance which will them cause my IRR to be a clearly representation.

Lending stats changed their ROI algorithm which had a severe effect on my LS ROI… I am not sure the new number is comparable to any previous reading, but I will continue to track it anyway…

Anyway, here is a chart of my updated IRR and ROI values…

• My Prosper Internal Rate of Return Update (End of Feb 07) = 12.86% for an Increase of 0.65% This is a RateLadder only IRR update.  (An IRR lender "game" update is in the works.) Here is my permanent tracking page: http://rateladder.com/my-prosper-irr/ My Prosper IRR is defined as: Monthly cash flows with one extra month using the current account value minus any loans 1 month or more late. Current......
• RateLadder IRR/ROI 3/08 Update -- (2.11%) to 13.06% This month had a major event that I think will make it hard for the various ROI sites to even track accruately anymore... The "New Agency Test" aka Prosper is suing borrowers. For me (I opted into the pool) I had my 6 loans immidiately defaulted at $0 value.  Over......
• Prosper IRR Lender “Game” August 07 Update It is time for the end of August 2007 update of the IRR Lender “Game.” This month saw another debt sale.  Debt sale events typically cause the highest IRR to go down (less absolute potential as loans were sold for a fraction of there worth) and the model IRR to go up (the......
• Prosper Days Day 2 Update The 2nd session was the Big Lender Panel.  It was great.  Worth the price of admission.  The Lenders (with links to their portfolio) were pensioner, L5, and janeybooboo.  They are all manual bidders and from the sound of it they spend quite a bit of time vetting the borrowers.  The biggest thing I......
• Prosper IRR Lender “Game” Jun 07 Update It is time for the June 2007 update of the IRR Lender “Game.” Since the last update there has been a delinquent debt sale.  This is a major event for our IRR game and it remove assumptions about defaulted debt by solidifying losses and increasing the cash position.  This will cause the......

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Any regular reader will know that last week I brought my first group listing to the marketplace. (As an aside, a group leader is no longer paid for successful listings and the haven’t been since September 13, 2007: Email To Group Leaders After Recent Changes. I think this was a good change and said so at the time and continue to say so now.)

While I certainly helped to the best of my ability and resources, the borrower did an excellent job of leveraging his social capital…

What social capital?

• He made it know that he had a job that supplemented his income. For him that amounted to as much as an extra $900 a month. By putting his blog on the listing he was not only putting his anonymous credit information and verifiable income on display, but leveraging his online assets. By adding the reputation of his blog to the listing, I think he added to the quality of listing immeasurably. Any blogger with any significant track record that puts their blog reputation at risk is serious about the reasons behind the loan and paying off the loan. (His blog is Deep Market.)
• He leveraged his interactions with me — a long time lender and p2p blogger. By joining my group and becoming Prosper friends and accepting my endorsement on his listing he was able leverage his interactions with me (email and blog comments for around a year) into additional social capital: my endorsement.
• Additionally, he used his blog to advertise his listing: Prosper Loan Listing Review. By offering links and reviews in exchange for bids and reviews he was offering a non monetary but valuable asset in exchange for buzz and bids.

What was the net result? A $25,000 loan at an interest rate he is very happy with 18.5%… His loan was bid down almost 7% from his starting point of 25.45%.

Deep Market, Congratulations and good luck… please keep us up to date with your progress.

• Prosper API Now Has ListingKey On Loan Table A nugget that I missed from the Mid August Prosper Upgrade is that the loan and listing objects in the API are now tied together with a Prosper provided listing key on the loan object.  While I had achieved 99.8% loan to listing matching, I was still missing a few. Leporello......
• Two Millionaires Keep 5 Star Group Rating with Community Payments Groups on Prosper are in theory meant to help borrowers through education and lenders through lower default rates.  I have explored these aspects of groups before: Why Would a Borrower Join a Group? and Why Would a Lender Join a Group?.  In this post we will examine the group Two Millionaires.......
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• Hey, Brother, Can You Spare A Dime? There are many ways to secure loans these days, but due to the sub-prime mortgage crisis, banks and other financial institutions have been much tighter on their guidelines to lend.  It seems you need an almost perfect credit score these days to get a low interest rate.  Now that this......
• 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......

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Well another month down… Nothing major happened that would effect my IRR/ROI (like a debt sale.)  It was a fairly uneventful month for my Prosper p2p lending account, but it was a good month…  My ROI/IRR is higher on 4/5 of my tracking indices (it will be 5/6 when the statements are available and I update Quicken.) And my EricsCC ROI is within 4 basis points of last month’s value.

When going through my late loans this morning to build these statistics I noticed 2 things.  One it is now very easy to tell which loans are in bankruptcy vs which loans are in collections.  (3 of my 29 1+ late or worse loans are in bankruptcy.)  The second is a more positive development many (more than I have ever seen before) of my late loans have collections payment pending.  In fact, 1 of my 4+ month late loans has a collection payment pending, 3 out of 7 of my 2 month late loans have a payment, and 2 out of 3 of my 1 month late loans have a payment.  Maybe things are looking up in the collections area?  Time will tell.

Anyway, here is a chart of my updated IRR and ROI values…

• 1 Month Late or Worse Curves by Credit Grade (July 1 Update) This is an update to my original 1 month late or worse curves. I belive we are starting to see the flattening of the curves. I have pulled the public data on the performance tab by hand in order to produce a spreadsheet of loan performance. This spreadsheet was then......
• DTI and Late Payments Yesterday a reader posted the following comment... You rely a lot on DTI - Is DTI a good predictor of default? For the last year, 100 days, or what? Also, what about very high DTI’s (eg >1000%, usually means the person hasn't been able to verify income) — are they......
• 1 Month Late or Worse Curves by Credit Grade I have pulled the public data on the performance tab by hand in order to produce a spreadsheet of loan performance. This spreadsheet was then pivoted and aggregated in order to produce 1 month late curves by credit grade and Markov Chains which can be used (when 42 months of data is......
• RateLadder Prosper IRR 12/1/2007 = 1.32% I am going to start reporting on this feature a differently... Here is my permanent tracking page: http://rateladder.com/my-prosper-irr/ This month was a normal month.  No major late debt occurrences (no repurchased loans, no debt sales, no bankruptcies).  Also since my model IRR increased rather significantly I am assuming I had......
• Prosper 1 Month Late or Worse Curves The methodolgy or the sql for obtaining the data these curves from the private data export have already been explained in detail, but briefly... The Y axis is the percentage of all loans orginated of a given age that are currently 1 month late or worse... The X axis is......

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(Editor’s Note: This is a serious post and potentially a great opportunity for the right 3rd party.  This offer does NOT involve Loanio.)

Company looks to sell all rights to its proprietary P2P lending technology. The company has been quietly in development for the past year, though has now decided to halt launch plans for undisclosed reasons.

It has developed a complete P2P lending web application that will provide any aspiring P2P company with technology to support rapid deployment in any geographical market. It is based on the popular auction-style bidding format for lenders. Front end is fully branded, and sale can be made to include branding, or packaged as a white-labeled solution.

Terms of sale can be negotiated to include customization, enhancements, and project management / consulting.

This is an extremely rare opportunity to acquire the world’s only out-of-the-box P2P lending system allowing the purchaser to enter the red-hot Person-to-Person Lending space.

All enquiries should be directed through the website at: http://p2ptechforsale.com/

Technical specifications, terms of sale, and all other questions will gladly be discussed under terms of a standard Non-Disclosure Agreement.

Serious enquiries only, please.

• The Lending Club Offers New Alternative for Consumer Credit Following $600 Million SEC Registration Back in April of this year, the Lending Club announced that it would be going into a quiet period due to the beginning of a registration process involving the SEC, the United States Securities and Exchange Commission. Now the Lending Club is pleased to announce that the process has been......
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With the lender statments taht were released this weekend it is possible to update my Quicken ROI…

Last month being a quiet “normal” month one would expect an increase in the quicken value…  My Quicken ROI increased from 8.11% to 8.99%.

• Prosper.com Lender Game — Retireme99 Initial Update — 10.16% to 14.88% Retireme99 wrote his own intro: I started lending in May 2006... let the money sit for awhile to see how it worked... then got back into it more actively recently.  Looking at my results I have been happy that only two loans have gone 1+ months late.  I have another......
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• RateLadder IRR/ROI 6/08 Update -- 0.57% to 16.64% My account update for the month shows some general improvement... One thing to note is that with the loans in the debt sale not sold my IRR calculation is a little out of whack... Hopefully Prosper will create the loan status of "Charged Off" and remove those accounts from my......
• RateLadder IRR/ROI Update -- (1.07%) to 14.18% This month I am continuing tracking all of my IRR and ROI calculations in one place. I am tracking annualized IRR for model, average and default (permanent tracking page), quicken ROI, Eric's CC ROI, and Lending Stats ROI. Each of these tools uses a different calculation and therefore each has......
• In Defense of Living Off Dividends Living Off Dividends (aka WealthBuildingLessons (WAB) on Prosper) wrote a guest post on the Prosper Blog: Why I Love Prosper.com. The blog post has generated some heated comments due to one aspect of the post. WAB claimed "over 13% annualized returns". When questioned what his calculation actually was he said.........

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WealthBoy, whom I met at Prosper Days, has just released The WealthBoy Strict ROI for Prosper Lenders – an open source, sql based ROI calculation for Prosper Lenders.  His calculation makes use of the public and private data files from Prosper.  He was inspired by his Prosper Blog post: The Rule of 72 on Prosper.

TotalROI = (Total Interest Received – Fees – Losses on Defaults) / (Total Loan Originations – Reinvested Loans) 

For RateLadder that equates to

Screen Name: RateLadder_com
Total Bid Count: 324
Total Reinvested Bids: 115
Total Originations (total amount loaned): $16,296.50
Total Investment (total amount loaned excluding reinvested bids): $10,500.92
Total Income (total principal and interest less fees): $6,067.12
Total Profit (total interest less fees and defaults): $1,138.48
Total ROI: 10.84%
Average Loan Age: 11.81 months
Annualized ROI: 11.02%

For the initial release he made no assumptions about the value of late loans. But… 

It is an open source, sql based ROI calculation for Prosper Lenders…  With the calculation being open source it is clear (assuming you can read through about 250 lines of SQL exactly how the calculation is performed…  As his sounding board during development I can confirm that WealthBoy put a lot of work into this project.  I think this is a great addition to the Prosper tools.

At the moment it takes about 45 seconds to perform the calculation for the largest lenders at ProProsper…  It will only take longer as more payments are made.  This performance issue is the main reason I have yet to implement it at ProProsper as it will take some back-end engineering on my part to calculate the values in an efficient way in terms of server resources. I expect to add it to ProProsper, but currently I am not able to find the time to do so…  Hopefully soon… Or maybe Eric or LendingStats can add it first…

Anyway, I encourage you to check it out.  Well Done WealthBoy!

• Prosper API Developer Email Update From Prosper: Thank you once again for your patience as we worked to resolve the problems with the API. We apologize for any inconvenience this may have caused you. The XML was fixed this weekend and we consider the issues resolved and expect no further updates. We are committed to......
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• Why Would a Lender Want to Join a Group? -- Prosper Group Analysis Part 2 Previously I posed several questions on prosper groups.  Here is the second installment of answers.  Why would a lender join a group?  I think that the answer must be you are getting a higher ROI and/or that you are supporting some ethical, political, collegiate, or ??? value.  Given that I......
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