Major changes at Prosper

Yesterday Prosper announced major improvements to the site and the customer service. Biggest news is that Prosper will manage customer support inhouse starting end of February (so far it was outsourced to a provider in the philippines). Credit and employment data on borrowers for new listings is now much more detailed. Due to bad experiences borrowers with a HR credit score below 520 and NC borrowers can no longer use Prosper.

Prosper raised fees for new listings and increased group leader rewards for AA to D loans while eliminating group leader rewards for E and HR loans.

Lenders will be glad to hear that Prosper now offers a Identity Theft Guarantee on all funded loans.

Read about the changes in detail (quoted from a Prosper announcement):

Prosper’s First Anniversary

First of all, let’s take a moment to celebrate. On Feb 5, Prosper turned one year old. In our first year, exactly 7048 loans with a value of $35,166,711 were made on the Prosper marketplace. If you’re coming from the perspective of a massive bank, $35M might not seem like a lot. Considering that all of that money came out of actual people’s pockets, it’s quite amazing.

Customer Support Improvements

We are in the process of significantly improving the support we provide our community. We have not met your standards, or our own, for customer support. While our service levels will not be transformed overnight, our hope is that you have already seen an improvement in our response time.

The biggest change is our plan to manage customer support ourselves rather than rely on an overseas provider. By the end of February, all customer support will be handled in our San Francisco office. Concurrently, we are making changes that will allow us to speed up key processes, such as identity verification and the loan review many borrowers go through once their loan is funded.

As a result you will experience speedier and more professional answers to your inquiries.

Friends and Endorsements

Back in August, we started allowing group leaders to write an endorsement for their group members. Since then, a group of Stanford MBA students did a regression analysis of lender bidding, and found that a group leader endorsement was the single biggest contributor to increased bidding on a borrower’s listing. A GL endorsement turned out to be twice as valuable as improving by one credit grade. Said another way, a GL endorsement is worth two credit grades.

To encourage and expand this kind of activity, we’re introducing the concept of Prosper “friends”, who can leave an endorsement, just like a group leader. So very soon you’ll start seeing borrowers have multiple endorsements, from GLs and also from their friends. Also, importantly, if a friend places a bid on that borrower’s listing, we’ll highlight that bid as the truly strong endorsement that it is.

In addition to helping borrowers get funded, a borrower’s friends will also be notified if the borrower goes 15d late. We hope that this virtuous cycle of endorsement and accountability will improve delinquency rates among borrowers.

Invite your friends to Prosper now:…te_friends.aspx

Additional Credit and Employment Data

In response to requests from lenders, we are making more Experian credit data available. Now lenders will have six additional credit data fields and four new self-reported employment status fields to review. This new data will help lenders further evaluate a borrower’s loan request.

New credit fields:

  • Amount delinquent: Total past due amounts owed by the borrower. This includes any charge-offs or other unpaid derogatory balances. This includes amounts included in Chapter 13 bankruptcies, but excludes all other bankruptcies.
  • Public records in last 12m: The number of negative public records on the borrower’s credit report over the last 12 months. Negative public records include, among other things, bankruptcies, liens, and judgments.
  • Current credit lines: The number of credit lines presently current that have been reported within the last 6 months. These lines can be open or closed.
  • Open credit lines: The number of credit lines presently open that have been reported within the last 6 months.
  • Revolving credit balance: Sum of outstanding balance on all open revolving credit lines reported within the last 6 months.
  • Bankcard utilization: Overall balance/limit ratio on open bankcards reported within the last 6 months. Calculation: (sum of total balances) / (sum of total limits)

New employment fields:

  • Employment status: The borrower’s employment status. Options include: full-time, part-time, self-employed, retired, and not employed.
  • Length of status: The number of months and years that the borrower has had the stated employment status. If employed or self-employed, since when has the borrower held their current job or owned their current business? If retired or not employed, since when have they had this status?
  • Occupation: The borrower’s current occupation.
  • Income range: The borrower’s current income range, in $25,000 increments, or over $100,000. A borrower may also decline to state their income range, in which case “Not displayed” will be shown.

Also, (and this is my favorite feature), you won’t have to keep clicking that little “plus” button next to the credit grade to expand the additional credit data. If you like it expanded, it will always be expanded. If you like it collapsed, it will do that, too.

Learn more about credit data:…yment_data.aspx

Questions & Answers

Are you tired of going to RML to see if anyone has asked a borrower substantive questions about his or her listing? Now you can ask a borrower a question directly from the listing page, and if the borrower chooses to answer it, they can also choose to publish it on the listing page so that everyone can see it.

Learn more about Q&A:…ns_answers.aspx

Estimated ROI

We have built a new tool that will help lenders understand how different characteristics contribute to a portfolio’s ROI (Return On Investment). Located on the Marketplace Performance page, this tool will enable lenders to create projections of expected returns based on the actual performance of loans to-date.

See the marketplace performance page now:

Credit Grade Adjustments

Borrowers with an Experian Scorex PLUS(SM) credit score below 520, and borrowers with an NC (No Credit) rating, will no longer be able to borrow on Prosper given their low appeal to lenders relative to the costs and resources required to process their listings.

The underlying Experian Scorex PLUS credit score range for E and remaining HR (High Risk) borrowers will change slightly to be consistent with the spread for other credit grades. There will be no credit grade changes for borrowers with an AA, A, B, C or D credit grade. The credit grade spectrum is shown below:

AA: 760+
A: 720-759
B: 680-719
C: 640-679
D: 600-639
E: 560-599
HR: 520-559

Borrower & Lender Fee Changes

Not surprisingly, it costs more to list and service loans from borrowers with lower credit grades. To better align our fees with these costs, we are raising the closing fee for E and HR borrowers and the servicing fee for lenders on loans made to B, C, D, E and HR borrowers. The new fee structure will only apply to listings created after February 11, 2007.

New borrower closing fees:
AA – A: 1%
B – D: 1%
E- HR: 2%

New lender servicing fees:
AA – A: 0.5%
B – D: 1.0%
E- HR: 1.0%

Failed payment fees also will change from $5 for each incident to $15 per monthly billing period (subject to state limits).

See the new fee structure:

Group Leader Reward Changes

We’re making a significant increase to the revenue that group leaders can earn. In recognition of the effort they put forth to grow and manage their groups, group leader match rewards will change from a flat $10 or $20 to .5% of a funded AA, A, B, C or D loan from a new borrower to Prosper. There will be no match rewards for loans made to E or HR borrowers.

This match reward change should drive a dramatic increase in new high quality listings. A group leader can now earn four times what they could earn before for an average listing and twelve times their previous return for a $25K loan.

Learn more about group leader rewards:…ps-rewards.aspx

100% Identity Theft Guarantee

Prosper will now offer a “100% Identity Theft Guarantee” on all funded loans. Although we have a stringent process in place to prevent fraudulent persons from using stolen identities to acquire loans, there are still limited times when identity theft occurs. In the future, if a loan goes into default because the borrower is a victim of identity theft, we will repurchase the loan from the lenders for the unpaid principal amount.

Learn more about 100% Identity Theft Guarantee:…_guarantee.aspx

Collection Agency Shuffle

As of today, we are removing NCI as a collection agency, and replacing them with Firstsource, LLC. All lenders who had NCI chosen as their default collection agency will now have Firstsource set as their default agency. Additionally, all loans in collections with NCI have been transferred to Firstsource.

Learn more about Firstsource here:

What’s new on Prosper?

There’s a new page under the “Home” tab called “What’s new?”, where you can see what the biggest changes from each big site update has been, all the way back to the original site launch on Feb 5, 2006.

See what’s new:

Read discussions on the changes at following sources: Forum announcement, Forum post

Incremental data export of prosper data now available

Are you tired of downloading the complete Prosper Data Export of 60 to 100 MB every day, when actually you only want the new data?

At registered users now can download an incremental data export file. This is a xml file that is produced daily and contains only the new data.

This reduces file sizes to only 5 to 10 MB per day. You can download a sample file here (8 MB) – please right click with your mouse on the link and use "save as" to save the file on your computer. scripts reliably run since April 2006 without any major downtimes. Should for any reason a script fail to run on a day, the next produced incremental file will include all data since last run (in this case it would contain data for two days).

Please note that by downloading data you agree to be bound by Prosper's API Terms of Use.
Furthermore please not that data supplied by is provided as is – without any guaranties for correct representation of data. By downloading data from you agree not to make any claims against in the future for whatever reasons (e.g. missing data, wrong data).

Does FYGO have the better p2p-lending concept?

In a recent blogpost James Gardner argues that FYGO  may have an advantage over Prosper in P2P lending because with FYGO, you are either borrowing from someone you know directly, or who they know directly.

While it might be true that at FYGO the defaults will be lower than at Prosper, I do not think you can compare both approaches directly. They have different target audiences and are essentially different markets with very different conditions