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Messages - dagilbe

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Investors - P / Prosper's new legal form
« on: February 01, 2013, 08:42:09 AM »
Includes a mandatory arbitration clause and a class action waiver at the bottom.  If Prosper does something slimy, good luck going after them. 

In Prosper's defense, many companies include these clauses in their contracts, i.e. Comcast.   

Investors - P / Re: Math Problem
« on: January 16, 2013, 09:03:28 AM »
For what it's worth, Prosper's response:

ank you for contacting Prosper loans are personal unsecured loans which are fully amortized over the term of the loan. The yield percentage on each series of Notes is equal to the interest rate on the related borrower loan, minus Prosperís servicing fee, which is currently set at 1%. Payments are in an amount sufficient to amortize the Note amount over the term of the Note at the interest rate set forth in the Note.The interest rate on a Note is the yield percentage that corresponds to the interest rate determined by Prosper for the related borrower loan. Prosper sets the interest rates for borrower loans based on Prosper Ratings, as well as additional factors, such as estimated loss rates, loan terms, group affiliations, the general economic environment and competitive conditions. Remember, amortized interest is different than simple interest. It is easy to use a loan amortization calculator to see the total you will receive.

The interest rate calculation is:
Interest rate/ 365 = daily interest rate
Daily interest rate X remaining principal = Daily interest amount

Daily interest rate X remaining principal = Interest for day 1
Daily interest rate X remaining principal = Interest for day 2
Daily interest rate X remaining principal = Interest for day 3

This is calculated each day for 30 days.
Once the payment is made, the remaining principal will drop for the next month.

Investors - P / Re: Math Problem
« on: January 12, 2013, 09:31:57 PM »
Thank you for the responses.  I guess it makes sense that the interest and principal return could have been invested in other notes.  Looking at the big picture, I am not so sure that I would invest in 1 year notes again as the reward simply isn't worth the risk i.e. earning $3.49 on a $25.00 investment, if everything goes right. 

Investors - P / Math Problem
« on: January 12, 2013, 12:02:22 PM »
Please explain the following:

My note #58482-23 has been paid in full as scheduled.  The original note was for one year with a lender yield of 24.75%  My original investment was $25.00.  The net proceeds I recieved from the note is $28.49.  By my calculation, I had a real return of
13.96%.  Why is this value drastically different than the lender yield of 24.76%?

Note Summary
Title:    Reduce Debt
Loan #58482 | Note #58482-23 | View listing
Original loan:    $4,000 @ 25.76%
12 month loan
Origination date:   Jan-05-2012
Note share:   $25.00   Principal balance:   $0.00
Payment status:   Paid   Next payment:    due
Paid in full:   Jan-05-2013
Note Purchase History
Date   Buyer   Balance   
Price @
Net rec'd
Jan-05-2012       $25.00   
$25.00 @

Payment History   View: Borrower payments | Lender accounting
number   Transaction effective date   Account effective date   Type   Status   Total
paid   Prosper
fees   Late fees   Interest   Principal   Principal
3557821    Jan-05-2013    Jan-05-2013    Automatic    Paid   $2.39    -    -   $0.05   $2.34    $0.00
3469822    Dec-05-2012    Dec-05-2012    Automatic    Paid   $2.39    -    -   $0.10   $2.29   $2.34
3397707    Nov-05-2012    Nov-05-2012    Automatic    Paid   $2.39    -    -   $0.15   $2.24   $4.62
3328399    Oct-05-2012    Oct-05-2012    Automatic    Paid   $2.39    -    -   $0.19   $2.19   $6.86
3260640    Sep-05-2012    Sep-05-2012    Automatic    Paid   $2.39    -    -   $0.24   $2.14   $9.05
3196049    Aug-05-2012    Aug-05-2012    Automatic    Paid   $2.39    -    -   $0.29   $2.09   $11.19
3134769    Jul-05-2012    Jul-05-2012    Automatic    Paid   $2.39    -    -   $0.32   $2.06   $13.29
3076327    Jun-05-2012    Jun-05-2012    Automatic    Paid   $2.39    -    -   $0.38   $2.01   $15.35
3020945    May-05-2012    May-05-2012    Automatic    Paid   $2.39    -    -   $0.41   $1.98   $17.35
2967928    Apr-05-2012    Apr-05-2012    Automatic    Paid   $2.39    -    -   $0.46   $1.92    $19.33
2917287    Mar-05-2012    Mar-05-2012    Automatic    Paid   $2.39    -    -   $0.47   $1.91   $21.25
2869352    Feb-05-2012    Feb-05-2012    Automatic    Paid   $2.39    -    -   $0.55   $1.84   $23.16
12 payments

Investors - P / Re: Occupation
« on: November 27, 2012, 10:52:58 AM »
That's scary.  It appears that LC requires paystubs in order to identify employer and income.  i can't believe Prosper would not request the same information.

Investors - P / Re: How Can Prosper Improve for Investors?
« on: November 27, 2012, 10:48:57 AM »
Prosper can Prosper by doing the following:

1.  Enable lenders to search for blender listings. 
2.  Including specific income information like LC; instead of $25k to 50k; or 50k to 75k. 
3.  Including employers name like LC.
4.  Going Public- an IPO would generate much needed cash for Prosper and would bring new interest to P2P. 
5.  Get serious about collection efforts.  Unlike LC, Prosper will not pursue defaulted loans through the court system.  Prosper can even bring this service in-house as another way to generate additional revenue. 
6.  Keep lender promotions and have them more frequently throughout the year. 
7.  Have borrower payments be made on regular intervals instead of sporadically.  I know when new loans are issued, 11 a.m. and 7 p.m. central time on the weekdays, but I never know when borrower payments will hit my account. 
8.  Offer longer term notes. 
9.  Provide other borrower information including assets, equity in home, and net worth.
10.  Provide additional information regarding debts.  If a borrower has a 24% DTI and does not have CC debt, I have no idea what the rest of the debt is. 

Investors - P / Re: Occupation
« on: November 27, 2012, 10:36:09 AM »
Another thing to remember, the occupation is just like the stated income in that it is what ever the borrower wants it to be when they list the loan.

Are you saying Prosper does not verify the borrower's income or their occupation?  I know various documents are submitted to Prosper by borrowers in order to prevent fraud.  I find it hard to believe that borrower's can just make up their occupation and income.  Even if that is true, the above figures reflect the returns based upon occupation including individuals who listed themselves in a particular occupation when they may not even be in that field.

Investors - P / Occupation
« on: November 27, 2012, 07:57:24 AM »
I have found the borrower's occupation to be the single most important investment criteria.  After running some numbers on Prosper-Stats for C, D, E, and HR loans from 1/1/09 to the present for selected occupations, the following occupations have provided the best returns:

Analyst               14.79%
Attorney            15.41%
Clergy               15.40%
Computer Programmer      15.63%
Dentist               19.70%
Doctor               19.15%
Engineer- Chemical         19.56%
Engineer- Mechanical         15.60%
Executive            14.66%
Flight Attendant         18.81%
Judge               29.85%
Military Officer         15.04%
Pilot- Commercial         24.84%
Psychologist            20.02%
Scientist            20.62%
Student- Graduate School      18.67%
Teacher            15.37%
Tradesman- Electrician      15.95%
Tradesman- Mechanic      16.04%

Please note that the sample size in some of these categories is particularly small and that some occupations are more likely to have higher graded notes which results in a lower return. 

I also note the lowest returning occupations on C, D, E, and HR notes since 1/1/09 (Occupations to AVOID):

Homemaker            -23.24%
Laborer            1.42%
Landscaping            -.80%
Nurseís Aid            2.74%
Sales-Commission         5.94%
Skilled Labor            4.97%
College Freshman         -2.68%
College Junior            -4.15%
College Sophomore         -27.16%
Tradesman- Plumber         -1.38%

It's amazing how a College Sophomore has provided a -27.16% return while a college graduate student has provided an 18.67% return.  Is there a more significant search criteria besides occupation?

Investors - P / Re: I need help with Quick Invest!
« on: November 05, 2012, 07:23:36 AM »
Here is my general filter (I realize that not all of the following criteria can be included into a Prosper search filter but I use the criteria when evaluating the funding of a loan):

Prosper rating:
C, D, E, and HR
Now delinquent:
Amount delinquent:
Inquiries last 6m:
First credit line:
Earlier than 2005
Revolving credit balance:
$10,000 or less
Debt/Income ratio:
35% or less
Employment status:
Stated income:
$50,000+ (probably the most important criteria
Major brownie points for doctor, attorney, judge, pilot, scientist, R.N., Computer Programmer, etc.

Also I will usually fund listings that are repeat or blender that fit most, but not all, of the above criteria. 

Good Luck

Investors - P / Re: Can I "roll" my notes into an IRA?
« on: October 21, 2012, 09:39:55 AM »
All new.  I wish we could just rollover funds, but it doesn't work that way. 

Investors - P / Re: Prosper Roth IRA
« on: October 21, 2012, 09:27:14 AM »

I started a Roth IRA on Prosper a few months ago.  I highly recommend going through another self-directed service besides Sterling Trust.  Google Sterling Trust and read the not so stellar reviews of the company.  After contacting Prosper, an IRA specialist recommended starting  the Prosper Roth IRA through American Pension Services.  I started my Roth through American Pension and have been very happy with the decision.  Just like with Sterling Trust, Prosper has paid all fees relating to setting up the Roth account and has agreed to pay all management fees so long as I put another 5k next year for a total of 10k) into my Roth IRA account.  In order to minimize fees, write out a check to the self directed IRA manager (e.g. American Pension) and direct the company to issue a check to Prosper.  I believe there is a $25 charge to wire the funds to American Pension and another $25 fee to wire the funds to Prosper directly and writing the checks and directing American Pension to issue the check to Prosper was free of cost. 

The only real downside of the Roth IRA through Prosper is that you can't buy or sell notes through Folio.  Otherwise, I would highly recommend a Prosper Roth IRA because of the substantial tax advantages. 

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