Author Topic: Same Borrowers on LC/Prosper?  (Read 2548 times)

dontvote

  • Full Member
  • ***
  • Posts: 226
    • View Profile
    • Email
Same Borrowers on LC/Prosper?
« on: April 12, 2013, 02:56:27 PM »
Juicy title I know but maybe clearer heads than mine can help think on ways to determine to what extent borrowers crossover/duplicate loans on LC and Prosper. I've got a black heart so I would definitely apply to both sites simultaneously (obviously to have twice as nice of a vacation). I know the loan will show up on your credit report so it will be more difficult to get consecutive loans from  these sites, but what about simultaneous? Nothing is reported until funding and once funding happens, isn't it to late for LC or Prosper to pull back a loan?

dontvote
dontvote

Interest Radar IRR: 46.11%
NSR ROI: 41.22%
Average Loan Age: Your Moms

ee1x

  • Full Member
  • ***
  • Posts: 124
    • View Profile
    • Email
Re: Same Borrowers on LC/Prosper?
« Reply #1 on: April 12, 2013, 04:36:39 PM »
Confession: I have done this.

I don't think there's any way to really know when a borrower is doing such a thing, because of the credit bureau reporting lag. I'm far more of an investor than a borrower and so I would not be opposed to either 1) an industry-wide overhaul of the standard bureau reporting process or 2) some sort of cross-reporting agreement between Prosper and Lending Club to notify investors on the other platform of these "simultaneous borrowers". Otherwise I don't think there is really any way to identify situations like this.

Although now that you have me thinking about it, it probably wouldn't be too difficult to design a mechanism that checks for listings with similar credit profiles on the opposite platform. I'll look into doing this if it's something people would find useful...

Also as far as I know, once the money hits the borrower's bank account, as long as there is no fraud or other legal question surrounding the loan, it can't be reversed.
Investing since March 2012

rawraw

  • Hero Member
  • *****
  • Posts: 2781
    • View Profile
Re: Same Borrowers on LC/Prosper?
« Reply #2 on: April 12, 2013, 05:54:07 PM »
May be one reason they take so long to confirm notes once 100% funded.

Fred

  • Hero Member
  • *****
  • Posts: 1421
    • View Profile
Re: Same Borrowers on LC/Prosper?
« Reply #3 on: April 12, 2013, 06:07:15 PM »
I think there is an inherent conflict of interest for LC/Prosper to do this.  Because of the origination and servicing fees that they can earn, they want the borrowers.

Besides, in the credit card industry, I don't think Issuer A checks whether Issuer B will also extend credit card to the same borrower at the same time, do they?

 

rawraw

  • Hero Member
  • *****
  • Posts: 2781
    • View Profile
Re: Same Borrowers on LC/Prosper?
« Reply #4 on: April 12, 2013, 10:00:48 PM »
I think there is an inherent conflict of interest for LC/Prosper to do this.  Because of the origination and servicing fees that they can earn, they want the borrowers.

Besides, in the credit card industry, I don't think Issuer A checks whether Issuer B will also extend credit card to the same borrower at the same time, do they?
Depends.  Some cards have in the terms they monitor your inquiries for X period of time and can revoke your approval if deemed risky