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#2
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woah thats crazy. lend me $50,000.
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#3
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Future news report:
"Prosper.com is being sued in a class-action law suit after claiming it is not responsible for the 700million plus lost in agreements and loans made through its sight. Prosper.com was not available for comment." |
#4
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From NYTimes article:
"We looked at eBay and said, 'Why can't we do this for money?' " said Chris Larsen, Prosper's chief executive. Mr. Larsen, who founded and led E-Loan, an online lender that was bought last year for $300 million by Popular Inc., says Prosper could save borrowers and lenders money because it was a leaner operation than traditional financial institutions. He noted that consumers make, at most, about 4 percent on their savings accounts, which banks then lend to credit card customers at 14 percent or more. "That's just a huge spread," Mr. Larsen said. "We think if you allow people to participate directly, it's a more efficient marketplace. People can make a better return on their deposits, which then become the source of credit to others." On Prosper.com, prospective borrowers register with the site and allow the company to review their credit history. Then borrowers post a loan request of up to $25,000, along with an upper limit for the amount of interest they are willing to pay. Loans are not secured by collateral and are paid off over three years at a fixed rate, with no prepayment penalty. Huh. -Al |
#5
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Never heard of it - looks cool though.
Very risky though. Yeah, you're making 4% in a bank and could make 8% loaning money to a couple of these people, but if any of them default then you are SOL. |
#6
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wow, I can't believe diebitter got this up and running so fast
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#7
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From the Prosper.com website:
Is anyone guaranteeing these loans? No one guarantees the loans at Prosper. This is real life, and in real life, sometimes people default on their loans. If a borrower is more than one month late on a payment, Prosper engages a collection agency on the lender's behalf. Huh. -Al |
#8
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When you consider the risk factors associated with the average borrower coming to the site (I'm thinking higher than average), Prosper management seems to have an unrealistic view on their potential default rates, and what impact that will have on their services.
Business Week Article on Prosper.com -Al |
#9
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[ QUOTE ]
From the Prosper.com website: Is anyone guaranteeing these loans? No one guarantees the loans at Prosper. This is real life, and in real life, sometimes people default on their loans. If a borrower is more than one month late on a payment, Prosper will sell your debt to the collection agency owned by my brother-in-law for pennies on the dollar Huh. -Al [/ QUOTE ] This is not a good deal. You can do much better than 8% if you're willing to take that kind of risk. Inflation-protected treasury bonds, the safest possible investment, are paying like 6.5% right now. |
#10
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wow, I can't believe diebitter got this up and running so fast [/ QUOTE ] Shhhh! |
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