Comments on: Prosper Groups Put the Social in Social Lending /peer_lending/prosper-groups-put-the-social-in-social-lending/ Your guide to peer to peer lending Mon, 16 Jan 2012 03:03:59 +0000 hourly 1 http://wordpress.org/?v=3.2 By: Peter Renton /peer_lending/prosper-groups-put-the-social-in-social-lending/comment-page-1/#comment-3514 Peter Renton Wed, 21 Dec 2011 04:28:49 +0000 /&p=3742#comment-3514 @Dan, This may be part of the reason that Prosper groups are not being emphasized any more. Their really are very few active groups these days but when you go back in the Wayback archive and look at Prosper's site circa 2006 groups are front and center. The reason I chose these two groups is that they are the top two in terms of ROI for groups with at least 25 loans issued in Prosper 2.0: http://bit.ly/tpOuAA. @Dan, This may be part of the reason that Prosper groups are not being emphasized any more. Their really are very few active groups these days but when you go back in the Wayback archive and look at Prosper’s site circa 2006 groups are front and center. The reason I chose these two groups is that they are the top two in terms of ROI for groups with at least 25 loans issued in Prosper 2.0: http://bit.ly/tpOuAA.

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By: Dan B /peer_lending/prosper-groups-put-the-social-in-social-lending/comment-page-1/#comment-3513 Dan B Wed, 21 Dec 2011 00:31:08 +0000 /&p=3742#comment-3513 The whole line of thinking that this guy Jason employs makes little sense to me, And that is another reason why I suggested that it wasn't the best idea to highlight him. Aside from privacy issues & aside from a gut feeling, I also see no reason why he should "like" borrowers who also have an investor account. Unless the borrower is borrowing to invest in loans, I see no logical reason why they would be a better or worse risk. Then he goes on & says that he sometimes reaches out to people who pick the same loans as he does. That is also illogical. What I would imagine a person would want to do is get other individuals who consistently pick different loans than yourself & yet perform well................thereby strengthening the group as a whole. What's the point in getting clones of yourself? Then the comment on frequent & active investors, which is great in theory but obviously not the motto of a group that barely invests. None of it makes much sense to me................but maybe I miss whatever point there is. The whole line of thinking that this guy Jason employs makes little sense to me, And that is another reason why I suggested that it wasn’t the best idea to highlight him. Aside from privacy issues & aside from a gut feeling, I also see no reason why he should “like” borrowers who also have an investor account. Unless the borrower is borrowing to invest in loans, I see no logical reason why they would be a better or worse risk.

Then he goes on & says that he sometimes reaches out to people who pick the same loans as he does. That is also illogical. What I would imagine a person would want to do is get other individuals who consistently pick different loans than yourself & yet perform well…………….thereby strengthening the group as a whole. What’s the point in getting clones of yourself? Then the comment on frequent & active investors, which is great in theory but obviously not the motto of a group that barely invests. None of it makes much sense to me…………….but maybe I miss whatever point there is.

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By: Peter Renton /peer_lending/prosper-groups-put-the-social-in-social-lending/comment-page-1/#comment-3512 Peter Renton Tue, 20 Dec 2011 23:02:42 +0000 /&p=3742#comment-3512 @Boss Hogg, That is an interesting question because a group leader could be accused of discrimination. The idea behind groups is that these are people who already have a connection so maybe that is what is going on here. Keep in mind being a member of a group is entirely voluntary so if you don't like it you can always leave the group. People want to join active groups because it helps their loan get funded. @Boss Hogg, That is an interesting question because a group leader could be accused of discrimination. The idea behind groups is that these are people who already have a connection so maybe that is what is going on here. Keep in mind being a member of a group is entirely voluntary so if you don’t like it you can always leave the group. People want to join active groups because it helps their loan get funded.

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By: Boss Hogg /peer_lending/prosper-groups-put-the-social-in-social-lending/comment-page-1/#comment-3505 Boss Hogg Tue, 20 Dec 2011 16:32:32 +0000 /&p=3742#comment-3505 How can Prosper allow this to happen and still maintain individual privacy? As a borrower, I would not want the lender to reach out to me for a collections call, nor should they have the ability to pre-screen me over the phone before investing in a loan. I find these comments disturbing. "Jason: I like to talk with borrowers on the phone to get a feel for whether they can afford the loan. I like borrowers to also have an investor account and will only approve loans as a group listing if I am very confident in the borrower." "Jason: If I see a lender investing in the same kinds of loans that I invest in I will sometimes reach out to them. But these investors need to be active and frequent investors." How can Prosper allow this to happen and still maintain individual privacy? As a borrower, I would not want the lender to reach out to me for a collections call, nor should they have the ability to pre-screen me over the phone before investing in a loan. I find these comments disturbing.

“Jason: I like to talk with borrowers on the phone to get a feel for whether they can afford the loan. I like borrowers to also have an investor account and will only approve loans as a group listing if I am very confident in the borrower.”

“Jason: If I see a lender investing in the same kinds of loans that I invest in I will sometimes reach out to them. But these investors need to be active and frequent investors.”

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By: Peter Renton /peer_lending/prosper-groups-put-the-social-in-social-lending/comment-page-1/#comment-3475 Peter Renton Sat, 17 Dec 2011 03:32:34 +0000 /&p=3742#comment-3475 @Dan, Totally agree these groups do not put through many loans but they are two of the more active groups when it comes to investors. I don't think we can read too much into their returns because they have so few loans but even with the small sample size they are doing far better than I would have expected. I remember the Tesla/Lending Club event and I was in the Bay area I would have been all over that. I had no idea about the Prosper meetup - that does sound kind of strange. Thanks for sharing. @Dan, Totally agree these groups do not put through many loans but they are two of the more active groups when it comes to investors. I don’t think we can read too much into their returns because they have so few loans but even with the small sample size they are doing far better than I would have expected.

I remember the Tesla/Lending Club event and I was in the Bay area I would have been all over that. I had no idea about the Prosper meetup – that does sound kind of strange. Thanks for sharing.

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By: Dan B /peer_lending/prosper-groups-put-the-social-in-social-lending/comment-page-1/#comment-3471 Dan B Fri, 16 Dec 2011 23:38:50 +0000 /&p=3742#comment-3471 You're talking about 2 groups who have both been around for 3-3 1/2 years & yet have only invested in 103 & 43 loans in their entire history. That's 1 to 3 notes PER MONTH. Hey, I'm all for being "selective" but wow, these are not exactly active investors. That in itself doesn't bother me in the least but I'm not sure I'd go around highlighting the performance of a group like SGP that has only invested in 43 loans in 3 years & has only 21 loans currently invested in ! I mean what type of conclusion do you really want to draw from that portfolio size? Do you have any idea what just 1 default would do to the annualized return of a portfolio of 21 active notes? No, I don't either, but it won't be pretty. Now as for the general idea of "groups", who knows if it's good bad or whatever. I found it interesting that one of the group leaders mentioned something about talking to borrowers on the phone. I didn't know that was still permitted. Most people don't remember that there were other "social" type attempts by both Prosper & Lending Club back in the not too distant past. Around 2 years ago Lending Club had a get together social for lenders at Tesla Motors (electric sportscars) showroom in San Mateo. I was planning on going, mostly because I like cars & figured I'd get a test drive while I was there but something came up so I ended up missing that. Back in 2007 someone at Prosper came up with the brilliantly half-assed idea to have lender/borrower get together/socials. I wasn't a p2p investor back then (thank God) but I did help a friend do the paperwork for a Prosper loan. Believe me when I say that my help was completely unnecessary. Anyway she showed me the info about the "event" & was as perplexed as I was. She had no desire to meet lenders that she'd be likely defaulting on but the real deal breaker for her was that there was no mention of an open bar. Needless to say, I have no idea who went to those nor how they turned out. You’re talking about 2 groups who have both been around for 3-3 1/2 years & yet have only invested in 103 & 43 loans in their entire history. That’s 1 to 3 notes PER MONTH. Hey, I’m all for being “selective” but wow, these are not exactly active investors. That in itself doesn’t bother me in the least but I’m not sure I’d go around highlighting the performance of a group like SGP that has only invested in 43 loans in 3 years & has only 21 loans currently invested in !
I mean what type of conclusion do you really want to draw from that portfolio size? Do you have any idea what just 1 default would do to the annualized return of a portfolio of 21 active notes? No, I don’t either, but it won’t be pretty.

Now as for the general idea of “groups”, who knows if it’s good bad or whatever. I found it interesting that one of the group leaders mentioned something about talking to borrowers on the phone. I didn’t know that was still permitted.

Most people don’t remember that there were other “social” type attempts by both Prosper & Lending Club back in the not too distant past. Around 2 years ago Lending Club had a get together social for lenders at Tesla Motors (electric sportscars) showroom in San Mateo. I was planning on going, mostly because I like cars & figured I’d get a test drive while I was there but something came up so I ended up missing that.

Back in 2007 someone at Prosper came up with the brilliantly half-assed idea to have lender/borrower get together/socials. I wasn’t a p2p investor back then (thank God) but I did help a friend do the paperwork for a Prosper loan. Believe me when I say that my help was completely unnecessary. Anyway she showed me the info about the “event” & was as perplexed as I was. She had no desire to meet lenders that she’d be likely defaulting on but the real deal breaker for her was that there was no mention of an open bar. Needless to say, I have no idea who went to those nor how they turned out.

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