Hi everyone,

Tonight we made a number of significant changes to the site, many based on your feedback. Changes include...



Improved bidding guidance for lenders

As the Prosper portfolio has grown and matured, we finally have a volume of loan payment activity that has allowed us to replace the Experian historical default data with Prosper's own estimated default data.

We have also performed some analysis on the differences between borrowers within the same credit grade, and segmented the borrower population into 54 unique segments (one segment, for example, is C-grade borrowers with no automatic funding, 0 now delinquent accounts, and 2 or more inquiries). Based on which segment the borrower belongs to, we will display the estimated loss (due to default), rate adjustment (uncollected interest and fees), and annual servicing fee, and come up with an estimated return for loans to borrowers of that type.

Here's an example of the new bid input for the example borrower:

(IMG:http://i232.photobucket.com/albums/ee307/amartinezfonts/bid.png)

Search listings now >




Portfolio plans introduced

Along with the new bidding guidance format (where return is calculated from actual Prosper performance), we are happy to introduce a new feature called "Portfolio Plans". Portfolio plans are currently 4 model plans which you can think of as bundled standing orders. Each plan has 3 or 4 standing orders behind it, bidding on listings with predictable returns and specific risk levels.

Here's the screen where you choose portfolio plans:

(IMG:http://i232.photobucket.com/albums/ee307/amartinezfonts/portfolioplans.png)

As listings that meet the plans' standing orders pop up, bids will be placed. In the future, you'll be able to build your own plans based on your standing orders. In the meantime, you can still create standing orders (which effectively do the same thing).

Get into portfolio plans now >




Standing orders can now avoid listings you've bid on

You've asked for this for a long time, and we've finally added it. Now when you create a standing order, you can choose to exclude "Listings I've bid on", and avoid putting double bid amounts against the same listings.

(IMG:http://i232.photobucket.com/albums/ee307/amartinezfonts/standingorder.png)

Create a standing order now >




Second loans for borrowers

Borrowers who already have a Prosper loan can now take a second loan on Prosper if they meet certain criteria:

• It has been at least 6 months since their most recent loan origination
• The active loan must be current
• The last two monthly payments must have been paid on time
• Must have enough capacity in the $25,000 Prosper loan limit to take a loan which is at least big enough to meet your state's minimum loan amount requirements

Borrowers seeking a second loan will have their active loan information described along with their credit report data.

(IMG:http://i232.photobucket.com/albums/ee307/amartinezfonts/multi.png)

Learn more about second loans >




Lender servicing fee changes

Lender annual servicing fees for AA credit grade borrowers change to 0%, and servicing fees for A credit grade borrowers change to 1%.




Interest rate cap changes from 30% to 36%

Prosper's maximum borrower interest rate changes from 30% to 36%, subject to state laws in the borrower's state of residence.

Now that we have historical default guidance on bidding pages, we feel comfortable allowing borrowers to create listings up to 36% interest (effectively 35% after potential bank draft charges).




Prosper Facebook application

Prosper members who use Facebook can now share their Prosper loans, bids, and watched listings with their friends on Facebook. I've been using it among my fellow Prosper employees, and it has been fascinating to keep track of what others are bidding on or watching. Try it out with your friends.

(IMG:http://i232.photobucket.com/albums/ee307/amartinezfonts/facebook.png)

Add the Facebook application now >




Ended listings hidden

In an ongoing effort to balance the privacy and transparency of our customers, we have changed the visibility of ended listings to only be visible to those who are involved with the listing or resulting loan (if any).

Requests for credit are considered sensitive documents in the world of consumer credit. This change is a proactive move on Prosper's part for greater consumer privacy, and the same level of transparency that you have come to expect from Prosper, but only on an as-needed basis.

Unless the borrower has an active listing, ended listings will no longer be available for viewing, except by lenders who are involved in resulting loans. If a borrower has an active listing, and has also created listings in the past, those ended listings will be available for view to registered lenders.




Collection agency performance metrics

Collection agency performance metrics now break out agency performance by credit grade. Here are the numbers for Penncro as of tonight:

(IMG:http://i232.photobucket.com/albums/ee307/amartinezfonts/penncro.png)

See collection agency performance metrics >




Authenticated API

API users can now sign in via the API, and access listing extended credit data and lenders' basic loan holdings via web services.

Learn more about Prosper's API >


And, as usual, many other small changes that are hopefully improvements to your experience on the site. Your feedback, as usual, is welcome.

Best regards,
Andrew

Excellent work. Your team should be proud. I do see one issue, but the ramifications are a lot to digest all at one time.

Some very positive additions for the most part. It will be very interesting to see if the portfolio plans perform as expected. I noticed the "aggressive" plan bids on B/C listings with "1+" current DQs. I find that...interesting, to say the least.

That being said, the portfolio plans will certainly lessen the learning-curve, which will be a good thing for the coming generations of lenders.

Now, about that secondary market... ;)

OK. Many great things to say, but I have to start off with the obvious bad item first.

Ended listings hidden

This is a huge problem from a lender education stand point. About the only thing worthwhile still legal to talk about on the forums were the lending profiles, how people were doing, what they were doing wrong and how to correct their mistakes. Peer-to-Peer lender education like this has probably saved more lenders from running screaming away more so than anything else.

Now the VERY constructive discussion with this guy here:
http://forums.prosper.com/index.php?showtopic=31861
is no longer possible. What do we tell him now? "We have no idea why your portfolio sucks." or maybe "You're too stupid to lend". It's not like we can do the critical "Review my Portfolio/What Did I Do Wrong" anymore.

You might not think any of this Review My Portfolio/What Did I Miss business is even worth while with the new portfolios that are available, but you are very wrong. The default rates on those portfolios are based on an existing core of educated lenders. The Pre-Selected Portfolio Lemenders depend on the other lenders making smart choices so that the bad loans don't fund.

The other end result is the smarter lenders are going to move that information off the prosper site to discuss it. This choice will inadvertently proliferate the spread of this information off of prosper outside of it's control. It's not like this information is useful for much of anything else.

ETA: Corrected 1 typo & 1 grammatical error

This post has been edited by onthefence on Oct-30-2007 05:01 AM

Looks like a new forum TOS went up too?
But is it even safe to mention that this moderator's (Prosper Andrew's) post didn't mention it?

ETA: ... and why is this only about mods and admins? What about the rest of the Prosper staff?

This morning I went to look at some listings on which I had bid, according to my spreadsheet. What I got was the above message.

In the past, when I typed in the number of a listing on which I had recently bid, I was able to do the following things:

1. Verify that I typed the number correctly, when I saw my bid at the top of the screen. I can't do that any more.

2. See why I didn't get in. Could be that I was outbid. Could be that the borrower cancelled. I can't do that any more.

3. See what interest rate the thing ended at. I can't do that any more.

I thought, well maybe there's another way to do this. How about the "bids" page? I went to the bids page, but it doesn't have listing numbers shown, and in fact the listing I was looking for wasn't on the bids page.

I think I understand what you intended to accomplish, but I think your change had some unanticipated consequences.

Perhaps you could consider changing the criteria a little. Here's an idea: Keep the listing visible for a short window after the listing closes. Maybe 2 weeks?

Very strongly with OTF. I like some of the changes (although the one AA I'm bidding on now still shows a .5% service fee) but the loss of historic information is a big problem. It would be great if Prosper would rethink that.

I also had to laugh when I saw that the aggressive portfolio had a predicted return of 11.06%. Based on what my own experience has been (including reviewing portfolios of others), I would expect an aggressive portfolio predicted return of -11.06%.

huh?

But,
What you have done is kill half the threads running right now. Limited any future discussion on the forums and hid your historical information, but only on an as-needed basis. :o

I think I would have just removed the extended credit info if there's a privacy issue.

<_<

"as-needed" ?

What's the purpose, then, in not allowing the borrower to decide what's in their own best interest by, say, adding a check-box which says something like, "Hide listing when ended." (You may then also want to give the borrower the ability to change this setting later.)

I see why you guys have done this, but I think this is not a good move for lenders.

Are you removing the listings from the data download as well?


Is there a specific link on prosper.com that links to a "What's new On Prosper"-type page?

Andrew,
Thanks for the great changes and updates, as always.

But can you please, please look into modifying the above. Looking at past listings that I have been outbid on or that have been withdrawn or canceled is part of how I analyze my own bidding strategy. Would it be possible to make it so anyone that has bid on a listing can see it - even if they did not end up in the resulting loan?

I agree that removing ended listings for non-participants is not helpful for lenders that wish to educate themselves further.

I would like to suggest that ended listings remain, but perhaps "scrubbed", that is, no pictures, no description and no Q&A (with the note that these are hidden), so just the bid history and credit details are available for study...

Some analysis of listing verbiage was presented at PD07.
FWIW, hiding ended listings puts an end to that sorta thing.

(cue johnny paycheck)


Take this site & shove it


I ain't lendin here no more

In addition, I use the ended listings look-up feature to see if they have started a new loan request. If I was watching the listing but had not yet bid (waiting for money, waiting for it to get closer to funding, etc) and they stopped their loan for a legitimate reason, I may still want to bid on the new listing. Now I won't be able to easily find it. And TOS says that they cannot contact me to let me know about the new listing. But they couldn't have known to contact me anyway if I was just watching at the time.
We need at least a scrubbed version of this back please. I like the 2 week part if this is the way it needs to be.
But like it was mentioned, not being able to help the "new guy" out with his portfolio questions is a major additional downside, as is the post about how it will probably eventually change historical returns.

I like most of the other changes so far.

If the borrower has an active listing, all of the borrower's previous listings are viewable, according to the above announcement.

And I'm done. You've got to be kidding me.

You can see all of the previous listings, but finding that one new particular relisting in the first place can be harder now since you don't know if or when they relisted, or even if they were booted from the system.

It's obviously still possible to find a relist, if there is one, but before you could just put in the last loan # and boom, if there was a new listing you could see it in the listings area. It's a lot more work now and may not be worth it if you have to write down all the search parameters on the loans you were watching vs. just the loan number.

I'm not sure this is intended. I just looked at the criteria for the Standing Orders for the Moderate Risk portfolio.

Standing order 1 bids on C loans with AF only.

Standing order 2 bids on B loans with AF only.

Are you nuts?

Please explain the rationale for excluding such a wide borrowing population when you excllude all the non-AF listings.

What is the point of raising interest rates to 36%? It's just going to attract the HRs, and the lenders who believe them. Not a good idea....... :huh:

The other issue...not being able to see the loan unless you are a lender.....awful idea :huh: :huh:

I am a new lender and I can say that I would not have joined had this policy been in place when I started. The most useful method of learning what listings to bid on and to avoid is to search through old listings and portfolios looking at loans that have gone into default in order to try to recognize common elements in the failed loans so that I can avoid them in the future. By obscuring this information on loans that have already been made, you have made it nearly impossible to do due diligence on the historical trends, which are the only way to attempt to predict your results.

I would urge you to reconsider this change.

It is a shame, because the other changes seem to be an excellent step. Is it possible to see exactly how the 54 unique segments are defined? As you might imagine, some of us have spent considerable effort analyzing past performance data and would be quite interested to understand how you are slicing the past performance data.

I am no longer bidding here since I cannot do research on defaulted loans.

Scrubbing listings is not helpful either. For instance I want to know what is the default rate for those who post a picture of a person.

I was waiting for prosper to provide downloadable extended credit info for number crunching. This is 10000 steps back on that promise.

GOOD BY P------r. :angry:

Perhaps SOs 3 and 4 (which exclude AFs) are intended to balance that out.
Just a guess....

I'd add a meaningful reply (hopefully) here normally, but between the new TOS and Prosper's lack of any response mechanism I know I'll never get an answer.

That said, I sure do miss Andrew.

Is prosper turning into Zopa

Remember the last update when I said I liked the direction Prosper was going and might start bidding again if the collections thing could be fixed. I've actually been playing with SO design in preparation of coming back. Now, I'm backing off again because of the hidden ended listing decision.

I'm a small potato so I know Prosper doesn't really care what I think.

The more I look at it, the crazier the SO criteria for the portfolio selections are:

For the Conservative Portfolio:

There are two SOs to bid on A-grade borrowers:

AF only if the borrower's DTI is <20% (no other criteria)
non-AF if the borrower has 0-1 inquiries (no limit on DTI).

For the Balanced portfolio:

You will only bid on AA borrowers if the are AF.

For the Moderate portfolio:

You will only bid on C borrowers if they are AF.

It makes no sense to exclude good borrowers who may want their listings bid down to current market rates.

It's kind of irrelevant since I'm bailing out of Prosper (partly for reasons related specifically to Prosper and partly for reasons related to P2P lending in general), but as a lender let me add my voice to those are saying that hiding ended listings is a horrible idea. If I hadn't already stopped bidding, I would now.

I haven't looked at the TOS, but assuming it was correctly quoted to say that moderator and administrator actions are now not to be discussed in the forums, that's another horrible idea. If Prosper is trying to emulate the Bush administrating, it's succeeding, and that's not a good thing. :angry:

Wow.

I played around with this a little.

Boy, closing rates sure are going to go up quite a bit... :lol:

This is a terrific tool (for the veteran lender)... ;)

If a borrower was a member of a group when the first loan was taken out, can he change groups before posting a listing for the second loan?

If the borrower can't change groups, what if the group has ceased operations, and the GL no longer approving new listings?

If the borower can change groups, will the old loan be transferred to the new group?

Or did Prosper not even think about any of this?

Hiding ended listings is a no-no.

:angry:

...Gulp

even for the new lender, the bidding guidance is incredible.

Check this out for a funded listing ending soon:

(IMG:http://i110.photobucket.com/albums/n88/loanchimp/222582.jpg)

:lol:

Thank you prosper for adding this feature!

The "bidding guidance" on my only active bid (rowangray) says that my ROI will be -4.5%.

My only regret about that bid is that it is on Prosper.

Welcome to people-to-numbers lending.

At this point, wouldn't it be easier to just block HR borrowers from listing on Prosper altogether?

trav- Thanks for the mention.

So as a borrower I understood the listing history concern but didn't understand the rest of the impact of these changes. With trav's very depressing news that I am projected as a negative return, I feel a little ill. Yesterday, I funded to 50% within a few hours- now will I even fund to completion?

I hope Prosper will listen to each of its lenders that have spoken here and in other threads- without lenders that have stuck by you all this time, you lose a certain quality. If you focus on borrowers- there will be no one to lend to them. If you focus on lenders- there will be no one to lend to. Please listen to the wisdom of experience that is on these pages; stop moderating to death and start communicating openly- with that, true progress will be made in all directions and isn't progress what a company like Prosper needs?

Increasing the interest rate to 36% is a step in the right direction. The last batch of changes substantially increased the risk to lenders by eliminating vetting and GL PII verification, so this enables the marketplace to adjust accordingly.

Hiding the previous listings is of course a terrible idea and should be reversed.

One step forward, 10 steps backward.

Looks like we are to trust Prosper on their guidance since we are no longer able to do our own research. Bull----!

I wouldn't bid on anyone willing to offer the 36% rate. I tried lending to those people before the cap was put in place. They all went south.

36% is only great if people are going to pay.

Multiple loans with a total cap of $25k is just an invitation to exploit the system.

Prosper has changed the rules repeatedly since I signed up. This latest direction changes the nature of the field too much.

I'm done.

They probably raised the top rate to 36% to keep HRs in the ballgame. Also they can advertise that you can bid up to 35%. <_<

It will be interesting to watch the funding stats the next few months.

I think that must already be in the works.

I looked at fully funded listings, for a total of 49.

2 E's, and 0 HR's

Lenders have already learned to stay away.

Indeed, with the new guidance these will have even less chance of funding. There is no point for Prosper to tie up resources on borrowers that will never fund...

Was just going to post the same thing....except this listing still has 6 days left!

(IMG:http://img228.imageshack.us/img228/741/lolinterestratewo0.th.jpg)

Prosper has always been pro-borrower and anti-lender as far as providing information allowing informed decisions about what listing to bid on.

As somebody (I think Shenandoah) pointed out, however, removing previous listings also hurts borrowers, because they can't come to RML after a failed listing and ask what they should have done differently.

The second-loan idea is a great one. It will allow reputable borrowers to refi, which is great, but the critera (last two payments on time) is WAY too lax. This means that someone could have gone 4+ months late, caught up, and made two on-time payments, and then take out another loan. These are not the kinds of borrowers who should be taking out another loan.

These changes are, overall, a couple decent technological steps forward, but a HUGE step backwards.

This is really really bad news. I'm sorry. Why is it that every time I get even moderately enthusiastic about Prosper, something really unsavory like this happens? On top of all these changes, then the forum TOS become far more draconian. For example, this very post, and most others in this thread, have been calls to action, and should be removed.

Oh no, it's worse than I thought!

I thought just old listings that became loans were unreadable.

But you know those borrowers that have an active listing and they've relisted 10 times with changing budgets and stories and why they need the money--well now those old listings where they put their foot in their mouth are hidden from the view of lenders!

UGH!!!

Edited to Add: My mistake. I wasn't logged in at the time I tried to view them. It's only as bad as I thought, not worse than I thought. :)

You can see all the previous listings in the borrower's profile page, and if they have an active listing, then I think you will be able to see them all.

Not sure where you got that.
From the OP:

are you logged in? I am seeing old listings...

If the borrower has an active listing, old listings will be visible.

Could somebody please explain what these mysterious "other factors" might be?

E.g., if someone is a forum hellraiser, that might be an "other factor"?