Fred93's blog

Here's the october 15th, 2008 update to to my Prosper.com late loan statistics charts.

These charts show statistics for the performance of all prosper.com loans. Each curve represents the set of loans that were created in one calendar month. The vertical axis is the fraction of those loans that have "gone bad", in other words are 1 month late or worse (up to and including default). The horizontal axis is the observation date. All data comes from Prosper.com's performance web page.

A larger, more readable version of that chart can be found here

Here's a chart of the same data in which each curve has been slid to the left to a common origin. The horizontal axis is now days since loan origination month.

Explanation of methodology can be found in my prior postings in this blog.

These curves show loans that are >1 month late, however, you can read them as "default curves" because almost all Prosper.com loans that go 1 month late move on to default.  See my discussion of Prosper's collections performance in earlier blog entries.

We continue to see horribly misleading newspaper and magazine articles saying that the default rate on Prosper loans is 3% or 4% or something like that.  Investors can only make reasonable investment decisions after understanding the default behavior of Prosper.com loans.  Prosper loans default at about 20% per year.  You can clearly see this from the charts.  Pick your favorite month.  Look how high the curve has gone after the first year.  About 20%, eh?  Prosper loans default at about 20% per year, on the average, considering all Prosper loans.  There is considerable variation from month to month.  Look at the final chart, where the curves are slid to a common origin.  Just look at the vertical line labelled 390 days.  (That's 30 days after 360 days, because loan payments can't be 1 month late until you wait 30 days after.)  You will see curves cross that line anywhere from 18% to 26%.  (Some of the more recent months look like they will come in a little lower.)  That's how many loans went bad in the first year.  Pretty simple really.  Journalists seem to get it wrong time after time.  Somebody must be feedin' them bad info, eh?  Perhaps they just copy bad data from each other.

At the time of this writing, prosper.com has shut down due to some not fully specified regulatory problem.  Meanwhile, the ongoing loans still evolve, and the data is still available, so I will continue to update this charts.

PS: The best discussion among Prosper.com lenders can be found at http://prospers.org/

In early 2008, $735,000 of late prosper loans disappeared from lender's statements.  On 01/15/08, prosper promised monthly "supplementary statements" to lenders covering these loans.  Hasn't happened.  No statements have been produced.  By my count, Prosper.com is now 7 months late on delivery of these statements to lenders, on the status of OUR loans.

This is simply one example of a much larger problem.  Prosper management refuses to accept their responsibility to lenders.  Once loans go late, they don't lift a finger.  In this case, that includes not even telling lenders the status of collection efforts on these loans.

Shame.  Over and over again.  Shame.

For a more detailed explanation, see http://www.prospers.org/blogs/Fred93/2008/08/03/prosper_com_lender_statements_6_months_l

Prosper told us they would take legal action against the 68 late borrowers in this "legal test" group of loans.  Today, eight months after they started the "legal test", many of the defendants have not even been served (with legal papers initiating a suit).  We can tell that by observing the county court web sites, some of which display this information.  Judging from the filings we can observe, it looks like about half of the suits haven't been served yet, eight months after the program began.  You could never tell this by looking at statements provided by prosper, of course, because there are no statements, even tho they promised them!  There aren't even excuses!

Shame.   What a way to run a company.

Where do they get the chutzpah to act this way?

PS: The best discussion among Prosper.com lenders can be found at http://prospers.org

Here's the August 1st update to to my Prosper.com late loan statistics charts.

These charts show statistics for the performance of all prosper.com loans. Each curve represents the set of loans that were created in one calendar month. The vertical axis is the fraction of those loans that have "gone bad", in other words are 1 month late or worse (up to and including default). The horizontal axis is the observation date. All data comes from Prosper.com's performance web page.

A larger, more readable version of that chart can be found here

Here's a chart of the same data in which each curve has been slid to the left to a common origin. The horizontal axis is now days since loan origination month.

Explanation of methodology can be found in my prior postings in this blog.

These curves show loans that are >1 month late, however, you can read them as "default curves" because almost all Prosper.com loans that go 1 month late move on to default.  See my discussion of Prosper's collections performance in earlier blog entries.

PS: The best discussion among Prosper.com lenders can be found at http://prospers.org/

Here's the July 1st update to to my late loan statistics charts.

These charts show statistics for the performance of all prosper.com loans. Each curve represents the set of loans that were created in one calendar month. The vertical axis is the fraction of those loans that have "gone bad", in other words are 1 month late or worse (up to and including default). The horizontal axis is the observation date. All data comes from Prosper.com's performance web page.

A larger, more readable version of that chart can be found here

Here's a chart of the same data in which each curve has been slid to the left to a common origin. The horizontal axis is now days since loan origination month.

Explanation of methodology can be found in my prior postings in this blog.

An important factor in prosper.com loan results is how well Prosper collects the payments due on these loans once have become late. Please see my prior writings on that subject, including:

Written 05/06/07: Collections is broken
Written 05/04/08: Collections is not improving

PS: The best discussion among Prosper.com lenders can be found at http://prospers.org/

Here's the mid-June update to to my late loan statistics charts.

These charts show statistics for the performance of all prosper.com loans. Each curve represents the set of loans that were created in one calendar month. The vertical axis is the fraction of those loans that have "gone bad", in other words are 1 month late or worse (up to and including default). The horizontal axis is the observation date. All data comes from Prosper.com's performance web page.

A larger, more readable version of that chart can be found here

Here's a chart of the same data in which each curve has been slid to the left to a common origin. The horizontal axis is now days since loan origination month.

Explanation of methodology can be found in my prior postings in this blog .

An important factor in prosper.com loan results is how well Prosper collects the payments due on these loans. Please see my prior writings on that subject, including:

Written 05/06/07: Collections is broken

Written 05/04/08: Collections is not improving

PS: The best discussion among Prosper.com lenders can be found at http://prospers.org/