Rate Ladder

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

• 1 Month Late or Worse Curves by Credit Grade

• 1 Month Late or Worse Curves by Credit Grade (July 1 Update)

• 1 Month Late or Worse Curves by Credit Grade (September 1, 07 Update)

• 1 Month Late or Worse Curves by Credit Grade (August 1, 07 Update)

• 1 Month Late or Worse Curves Clearly High for E/HR

• Private Aviation Transportation Collectibles

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Finishing Detail Sanders Sanders Accessories Power Tools Tools Home Improvement

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…

• RateLadder IRR/ROI 6/08 Update — 0.57% to 16.64%

• RateLadder IRR/ROI Update April 2008 — (2.6%) to 14.37%

• RateLadder IRR/ROI 5/08 Update — (1.35%) to 15.3%

• RateLadder IRR/ROI Update Feb 1 2008 — (1.27%) to 15.52%

• RateLadder IRR/ROI Update — (1.07%) to 14.18%

• New Balance Womens Shoes

• July 4th Holiday, Seasonal Collectibles

• Track Field Other Sports Fan Apparel Souvenirs Sports Collectibles

• Picture Frames Cat-Domestic Animals Collectibles

• Picture Frames Horse Animals Collectibles

There was a Prosper update last night.   Nothing that was completely unexpected… The one thing that struck me as interesting was that borrower’s are now required to sign the promissory notes themselves…  Before the process had been that Prosper was authorized to sign on their behalf…  The part that struck me as interesting was the final paragraph…

Although this new process may add some additional time before loan funding, we expect that this change will reduce immediate loan payoffs and enhance the legal enforceability of Prosper promissory notes.

The bold part caught my attention (I added the bold for emphasis) as I am on the loans that are part of the legal test.  Related or just coincidental use of the root legal?  More info please.  Update: Ed Giedgowd Chief Compliance Officer and General Consul of Prosper provided an update on borrower sign loans.

Here the highlights from blog post:

• Portfolio Plan Bids can now be adjust as an average of all the bids in the plan
• Self employed and non verifiable income borrowers will now have DTI displayed as Not Calculated
• Income Range changed to Stated Income and now show regardless of whether it is verifiable or not
• More bankruptcy data is now being shown including chapter and filing date
• There is a messaging change for those lenders that wish to bid on negative ROI listings.

• Doug Fuller Update Legal Test

• Prosper is Going To Sue Deadbeat Borrowers

• Lending Club Files S1 with SEC

• Lending Club Liquidity and Capital Resources

• Prosper Site Update — Nationwide 36% Except Texas and South Dakota

• Federal Reserve Notes Large Size Notes Paper Money US Coins Paper Money

• Federal Reserve Notes Small Size Notes Paper Money US Coins Paper Money

• United States Notes Small Size Notes Paper Money US Coins Paper Money

• Large Size Notes Paper Money US Coins Paper Money

• Small Size Notes Paper Money US Coins Paper Money

Welcome to the 9th addition of the Carnival of Peer to Peer Lending…

Editor’s Picks:
P2P-Loans.com presents P2P Lending Grows in Popularity as Banks Slow Lending (Are Individual Lenders Suckers or Savvy?) posted at P2P-Loans.com.

Pinyo presents Why Borrowers With Bad Credit Pay A Higher Interest Rates posted at Moolanomy.

LazyMan presents I Borrowed Money On Zopa. Here’s Why… posted at Lazy Man and Money.

Good Information:
Doug Fuller presents Prosper Debt Sale Update posted at Official Prosper Blog.

Wiseclerk presents MyC4 with new look - currency risk now to be covered by lender posted at P2P-Banking.com.

Rate Ladder presents How Lending Club Deals With 121+ Days Late posted at P2P Lending.

• Calling for Articles for Next Carnival of Peer to Peer Lending

• RateLadder.com in First Carnival — Carnival of Investing Super Bowl Edition

• Carnival of Personal Finance #87

• The Carnival of P2P Lending #4

• 74th Carnival of Debt Reduction

• Circus, Carnival Historical Memorabilia Collectibles

• Circus Art Circus, Carnival Historical Memorabilia Collectibles

• Souvenirs Circus, Carnival Historical Memorabilia Collectibles

• Programs, Posters Circus, Carnival Historical Memorabilia Collectibles

• Credit, Charge Cards Trading Cards Collectibles

(sql to produce statistics at the end of post) 

In May, Prosper originated more loan volume than in any previous month roughly 9.6M loans the vast majority were credit grades AA-C.  This is great news for Prosper on 2 fronts: total volume and loan quality. Here is the breakdown…

All in all it looks like a very positive step… Can Prosper keep the momentum… stay tuned for next month?

Sql:

Select creditgrade, count([key]), sum(amountborrowed)
from loan
where originationdate>=’5/1/2008′ and originationdate<’6/1/2008′
group by creditgrade


• Loan Origination Up in August 07

• Vintage Curves 04 2008 — Amount Late By Credit Grade from Origination

• The Marketplace Survey for April — More and Better Listing Volume

• Checked in on My Prosper Account… another $50 to bid on a loan

• Why My Emergency Fund is Not in Prosper.com Loans

• Total Gym Home Gyms Strength Training Gym, Workout Yoga Exercise Fitness

• Total Trainer Gyms Home Gyms Strength Training Gym, Workout Yoga Exercise Fitness

• Credit, Charge Cards Trading Cards Collectibles

• Mark Martin Racing-NASCAR Fan Apparel Souvenirs Sports Collectibles

• Scar Stretch Mark Reducers Bath Body Store

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…

• RateLadder IRR/ROI Update April 2008 — (2.6%) to 14.37%

• Update of IRR/ROI Values July 2008

• RateLadder IRR/ROI 5/08 Update — (1.35%) to 15.3%

• RateLadder IRR/ROI 3/08 Update — (2.11%) to 13.06%

• RateLadder IRR/ROI Update — (1.07%) to 14.18%

• New Balance Womens Shoes

• Retail General Stores Businesses for Sale Opportunities

• Swamp Thing Superhero Modern Age 1980-Now Comics Collectibles

• General Mills Cereal Food Restaurant Advertising Collectibles

• Tools Home Improvement

Doug Fuller on Friday announced that the debt sale has been called off and that Prosper was going to “apply post charge off collection techniques” to the loans in the sale…

The reason given for the cancellation of the sale is that highest bid without “unacceptable contract conditions” was only 1.5%, as opposed to the roughly 3 cents originally estimated.

When researching what these techniques might be I ran across this old (originally published in 1918) how to manual on collecting debt… I wonder if Prosper is going to employ The Sweating Process or The Awkward Call…

The Awkward Call

This is an unpleasant but frequently effective method of collecting bad accounts. A festivity is perhaps in progress at the debtor’s house. The collector, having ascertained this fact, calls, inquires for the debtor, and, if he can secure an entry, presents his account and insists on payment. The debtor naturally demurs. The col-lector insists more urgently and more loudly; the attention of the guests is attracted; and the debtor naturally finds the situation very embarrassing. If he be strong of mind and muscle he will occasionally make it embarrassing for the collector, and add to his friends’ entertainment by a number not scheduled on the original program. Barring such unhappy incidents, however, the final result of the call depends entirely upon the ability of the collector and the financial resources of the debtor. If the collector is persistent, and refuses to be daunted by threats or cajoled by promises, the money, in whole or in part, is very apt to be forthcoming.

The collector may vary this proceeding in several ways. He may present his bill when the victim is attending an entertainment in the house of a friend, or he may interrupt him in the middle of an important business interview. If the debtor is an employee, the presentation of the bill at his place of employment may be resorted to, but, as this might result in the employee’s discharge and thus incapacitate him from paying the debt, a threat of resorting to this measure may be more effective than its actual fulfilment.

The Sweating Process

This is another variation of the awkward call, and requires a collector of good conversational powers, considerable nerve, and, preferably, some physical ability. He calls with the overdue account at the debtor’s house, and simply stays there until he gets his money, or becomes convinced that no money is to be had. As may be imagined, the process is a disagreeable one for both col-lector and debtor. Argument, persuasion, threats, and discussion are all used according to the conditions, until either collector or debtor becomes exhausted and gives up.

This method, of course, requires some judgment in its use, and is available only with a certain class of accounts; but with these it is very effective.

• How Lending Club Deals With 121+ Days Late

• Another Default Debt Sale

• Prosper Delinquent Debt Sale In Progress

• Default Debt Sale Effect on my IRR Calculation (+4.16%)

• Debt Sale Accounting via Quicken

• Credit, Charge Cards Trading Cards Collectibles

• Post-1950 Beds Furniture Antiques

• Post-1950 Bookcases Furniture Antiques

• Post-1950 Chairs Furniture Antiques

• Post-1950 Desks Furniture Antiques