410214, 410517, 410715 (C, D & E) Halted 10/15/08

[FinDoc]

I have bids well below the asking rate on all of these:

http://www.prosper.com/lend/listing.aspx?listingID=410517 halted at shut-down 25% funded
http://www.prosper.com/lend/listing.aspx?listingID=410214 halted at shut-down 20% funded
http://www.prosper.com/lend/listing.aspx?listingID=410715 halted at shut-down 48% funded

« Moderator Edit: topic title, loan data for conformity, by Investar »

[sosocratic]

I was looking at the first one and tried to click to see how Prosper estimated the risk and it would not allow bids - so I think the bidding is dead and this whole discussion is academic. However:

It is an E loan which is always a problem. The baseline default risk for E loans is 32% so even one that looks really good is not likely to be lower than the mid 25%. Incidentally, an HR loan has a baseline risk of about 44% so it has to be significantly better than average just to get below a negative ROI. I have generally stopped looking at E and HR loans at all and ditch D loans quickly if they have any adverse factors such as any DQ's, records, mor ethan 1-2 inquiries, or a high DTI.

In this case I estimate the  risk as about 25% without considering the past record and past DQ, which usually adds 2-3%.    (S)he lists an income of $1900 and expenses of about $1300 but also says (s)he is raising 4 kids. The expenses list things like food and entertainment $100, clothing $100 and other expenses $100. Do we really believe that a family of 5 or 6 feeds and entertains itself on $3 per day?

[sosocratic]

The previous reply concerned the first one (410517)
This is for the second (410214)

The second one I don't think would be bad at a higher rate. I calculate a base risk of 9%. When I look into 7 year DQ's I find they don't have much effect on loans above a B grade but it still makes me nervous. I'm also a little nervous about him claiming no expenses for food, clothing, car etc. I would ask about that and see what response I got back. I don't think I would bid much below the starting rate of 23%.

For this one:
http://www.prosper.com/lend/performance.aspx?af=0&esba=63&gm=0&gr=0%2c1%2c2%2c3%2c4%2c5&hw=0&iba=255&ibid=0&iwatch=0&lc=0%2c1%2c2%2c3%2c4%2c5%2c6%2c7&lq=&maxAmt=8000&maxDTI=0.4&maxFund=1&maxGrpTLC=1000000&maxND=0&maxQ6=1&minA=0&minAA=0&minAmt=4000&minB=0&minC=0&minD=0&minDTI=0&minE=0&minFund=0&minGrpTLC=0&minHR=0&minNC=0&minND=0&minQ6=0&occ=&od=10%2f15%2f2008&oer=01%2f01%2f2008&osr=11%2f01%2f2005&plcgd=&plp=0&sf=10&sh=0&sn=&tg=0

This is for the previous one:
http://www.prosper.com/lend/performance.aspx?af=0&esba=63&gm=0&gr=0%2c1%2c2%2c3%2c4%2c5&hw=0&iba=255&ibid=0&iwatch=0&lc=0%2c1%2c2%2c3%2c4%2c5%2c6%2c7&lq=&maxAmt=5000&maxDTI=1000000&maxFund=1&maxGrpTLC=1000000&maxND=0&maxQ6=2&minA=0&minAA=0&minAmt=1000&minB=0&minC=0&minD=0&minDTI=0.4&minE=0&minFund=0&minGrpTLC=0&minHR=0&minNC=0&minND=0&minQ6=0&occ=&od=10%2f15%2f2008&oer=01%2f01%2f2008&osr=11%2f01%2f2005&plcgd=&plp=0&sf=10&sh=0&sn=&tg=0

[sosocratic]

I really like the third one.

In general, D loans with no DQ's, low Inq's, No PR's have a baseline default risk of about 11%. They must be under $10,000 (the risk skyrickets above this). I find that DTI's below 40% have little effect but above 40% makes the risk creep up a bit and his is 39% so I plugged in a DTI of 20-60% and still got a risk of about 11%.

I am curious about the expense lines that were left blank, food and clothing etc, but suspect that this is due to a spuse covering those expenses and, if anything, may lower the DTi and improve the loan - but I would ask.

Basically, I would ask about the expenses and the effect of the spouse (both income and debts) and if a godo answer was recieved feel very good about bids in the mid-20%'s

For this loan:
http://www.prosper.com/lend/performance.aspx?af=0&esba=63&gm=0&gr=0%2c1%2c2%2c3%2c4%2c5&hw=0&iba=255&ibid=0&iwatch=0&lc=0%2c1%2c2%2c3%2c4%2c5%2c6%2c7&lq=&maxAmt=10000&maxDTI=0.6&maxFund=1&maxGrpTLC=1000000&maxND=0&maxPR10=0&maxQ6=1&minA=0&minAA=0&minAmt=5000&minB=0&minC=0&minD=0&minDTI=0.2&minE=0&minFund=0&minGrpTLC=0&minHR=0&minNC=0&minND=0&minPR10=0&minQ6=0&occ=&od=10%2f15%2f2008&oer=01%2f01%2f2008&osr=11%2f01%2f2005&plcgd=&plp=0&sf=10&sh=0&sn=&tg=0

In contrast - here is an example of how just a few inquiries, with no other adverse factors, would make a B loan significantly higher rirsk than this D loan (about 15%). :

http://www.prosper.com/lend/performance.aspx?af=0&esba=63&gm=0&gr=0%2c1%2c2%2c3%2c4%2c5&hw=0&iba=255&ibid=0&iwatch=0&lc=0%2c1%2c2%2c3%2c4%2c5%2c6%2c7&lq=&maxAmt=10000&maxDTI=1000000&maxFund=1&maxGrpTLC=1000000&maxND=0&maxPR10=0&maxQ6=6&minA=0&minAA=0&minAmt=5000&minB=0&minC=0&minD=0&minDTI=0&minE=0&minFund=0&minGrpTLC=0&minHR=0&minNC=0&minND=0&minPR10=0&minQ6=4&occ=&od=10%2f15%2f2008&oer=01%2f01%2f2008&osr=11%2f01%2f2005&plcgd=&plp=0&sf=10&sh=0&sn=&tg=0

[go4reward]

Too bad, we can't bid on any now.

[Ownerfinance]

Thank you for sharing useful information.We actually just had a similar situation with HSBC Auto Loan and before the loan expired I called and they extended the time to purchase. But she said that I would have to reapply if I didn't find something after the extension and as long as my credit situation had not change since the 1st application they didn't see a problem with approving me again.



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