P2P-Banking.com

Prosper will run television ads (preview them online). The TV spots will be aired in test markets starting this week.

Zopa plans to launch a student loan feature in July. Students can already use peer-to-peer lending sites to apply for a personal loan. At Prosper.com, education loans account for less then 2% of its 135 million US$ in loans. (Sources: Smartmoney,  WSJ)

Prosper.com made the videos of the Prosper Days 2008 available. Thanks Prosper!

I will just feature one session here. In "Managing large portfolios" Adam Weyeneth, President of Fair Deal Credit talks about the issues for institutional lenders that want to invest into the asset class of p2p loans.

Link to this video and the related videos of the other sessions.

Announced today Prosper.com has achieved nationwide lending (exceptions South Dakota and Texas) with an interest rate maximum of 36 percent. Previously maximum interest rates varied on a state by state basis depending by the licenses Prosper had acquired.

Prosper chose the same construct to go national as did Lendingclub in December - both partnered with WebBank, Utah.

All loans originated through the Prosper marketplace are made by WebBank, a Utah-chartered Industrial Bank. Prosper provides services to WebBank in connection with the origination of such loans and Prosper services loans made to Prosper borrowers on behalf of registered Prosper lenders who purchase such loans.

This step has good potential to multiply the monthly loan volume originated by Prosper, as chances for obtaining a loan were in the past harmed in some states by low state interest rate caps (especially for lower credit grades).

CBS recently featured Prosper and Lendingclub under the headline "Beating the financial giants at their own game".

P2P Lending service Lendingclub.com, which launched last May, today surpasses 10 million US$ in loans. While the total amount is still much lower then the loan volume of competitor Prosper.com (currently over 120 million US$ loan volume) the growth acceleration of Lendingclub is really impressive.

Rob Garcia, Director Web production at Lending Club, told P2P-Banking.com:

This milestone confirms the validity of our approach to person-to-person lending, but more importantly, our value proposition to our borrowers and lenders.  Borrowers are realizing 20-30% better rates than going through the banks, while our lenders enjoy 12% average returns.  We are working to take this concept to a larger audience, so $10M is just a mile marker in our marathon.

The growth can be seen in this chart. For Prosper loan volume compare chart on this page. So basically in February Lending Club has originiated close to the amount Prosper did, when taking into account only those loans that would fit the minimum criteria of Lending Club's 640 FICO score and <30% DTI.

The statistic information at Lendingclub.com shows that over 1200 loans have been issued. So far few loans are late, but since most of the loans are very young, it is to early to tell which level of defaults will have to be expected. The statistic page also shows that Lendingclub declined over 80 million US$ in loan applications.

If you sign up via this link, you get a 25 US$ bonus by Lending Club (and I am paid a referral fee).

Prosper Days 2008 took place Monday and Tuesday. Judging from the impressions of attending lenders, who blogged about it, it was a well organised event, but for seasoned lenders there were few news announced. No news about the long awaited secondary market. One blogger sees the Bidding via API function as highlight. Further news is that Prosper will start suing borrowers who defaulted on their loans. This could improve results in the collection process, where effiency is low. Explanations of Prosper about which changes were tested in the collection process were appreciated. 
A good improvement will be Prosper's plan to change payment dates. So far the date a payment is due has been dependent on the initiation date of the loan. Soon payment dates will be matched with borrowers pay day. I am sure this will reduce lates, but I do wonder why such an obvious and easy change was not implemented much earlier. Some of the international sites from inception took into consideration at which time of the month the borrowers are likely to be liquid when setting payment dates.

I hope Prosper will publish videos of the session on their website, like they did with the Prosper Days 2007. 

Immediately following up on the previous post on Prosper.com, the list of new features at Prosper is now known. Most notable are:

• Lenders can turn standing orders into portfolio plans. The interesting part is that lenders can share (publish) their portfolio plans on their member page and other lenders can use it for themselves.
• Bidding via API. This allows bidding to be delegated to third party applications. Much like the bid snipers and bidding agents it now becomes possible to entrust third party applications to invest money at Prosper. It remains to be seen how lenders will make use of this
• Referral award for new borrowers raised from 35 US$ to 50 US$. Example button below. If you use that and your loan is funded, I am paid 50 US$.

Effective today Prosper.com has raised the closing fees for borrowers:

…The rationale behind this increase is to enable us to better cover our administrative costs and bring our fees more in line with the market. We have endeavored to continue to keep the fees very straightforward for our borrowers.

The origination fee schedule for borrowers of first and second loans will be as follows:

AA 1.00% (no change)
A 2.00%
B 2.00%
C 3.00%
D 3.00%
E 3.00%
HR 3.00%

…

Origination fees paid by existing borrowers and for listings that have already been created will not be impacted.

The Wikipedia article on Prosper was for months subject to heated editing and deleting. Not much diplomacy. Some edits wanted to get as much criticism in as possible while others removed as much negative tone as possible to get it more neutral. Currently the article is locked.
See the discussion on what should be stated in the article in the future when it will be unlocked again.