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Prosper SEC filing, lending paused, borrowers affected.

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mmaverick
novice - founder
23 posts
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You may have noticed that lending is not currently available this morning on Prosper. Prosper is pausing lending activity due to the SEC filing. They are looking to add a secondary market to the loans, this will allow lenders to buy or sell loans after they are funded.

This could allow you to 'cash out' if you want to sell off your loans and get your money out, it will also allow lenders to free up cash for current bidding. Prosper will have more info when the filing process is complete.


If you're a borrower with an existing loan, you still are bound by your borrower agreement and will be unaffected by the process. If you are a borrower seeking funding, you are able to create a new loan listing and Prosper will attempt to fund it through alternative means.

 

See the full Prosper statement here

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17th October 2008 22:54 p.m.
mmaverick
novice - founder
23 posts
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This should give you a basic Idea of how the 'secondary market' will work Click here

Anyone have any predictions or comments?

Personally I feel waht will happen is old lenders will sell risky notes to new lenders who see a chance for high interest loans. Then the old lenders will bid only on AA, A and B loans. New lenders will not have money to bid on listings since they sunk all their money into the secondary market. Prosper still makes 1-3% on every transaction. the number of C-HR loans being originated drop by 85%.

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19th October 2008 04:46 a.m.
mmaverick
novice - founder
23 posts
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Ok Prosper has modified its original statement of
"If you're a borrower seeking a loan, you will still be able to create a new loan listing, which we will endeavor to fulfill through alternative sources."
To that of
"As the appropriate securities authorities may consider a new loan listing to constitute the offer of a security, we are unable to post new loan listings on our site until our registration statement becomes effective."

So not only is lending halted but so is borrowing until the filing is complete.


Now some of you may be seeking lending elsewhere and I will assist in anyway possible.

Lendingclub.com – Had legal issues and a recent audit reveals they are near bankruptcy, but you may be able to find funding, they however do not have the same interaction as prosper and lack in many ways.

Loanio.com – is new and does not yet have many lenders. It’s funding is also done far different and is based on you trying to get your friends and family to buy a portion of your loan.

Globefunder.com – is also fairly new and is not able to lend in many states.

During Prosper's down time you can try FirstAgain.com - For those with C+ credit, borrow $10,000-100,1000 for 24-84 months. (Not P2P)


Anyway if you want to learn the lending side a little while you wait, try http://www.fantasyprosper.com/ a no investment way to learn the lending side. You can learn what things seem to have an effect on the defaults HERE.


If you are not going to seek funding somewhere else and simply want to wait for Prosper here is some information that may help you reorganize your debt.

 

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22nd October 2008 05:56 a.m.
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