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Re: Risky New Investment Venue
Old 10-02-2006, 11:38 AM   #21
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Re: Risky New Investment Venue

Quote:
Originally Posted by Dry Socks
Is this investment supposed to fall under the "good deeds" category ?
More like "charitable contribution" without the possibility of a tax deduction...
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Re: Risky New Investment Venue
Old 10-02-2006, 11:50 AM   #22
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Re: Risky New Investment Venue

Quote:
Originally Posted by Dry Socks
Maybe this is a stupid comment...
You could break down the borrowers into 3 groups:

1) Bad credit rating willing to pay a high interest rate.
Do I really want to lend to someone who thinks paying me 18% is a good idea ? This seems very risky.

2) Good credit, low interest rate.
What's the point for me ? I take risk and get a low rate.

3) Middle ground, reasonable credit rating, medium interest rate.
Maybe ok. But, am I supposed to research each one ? If I put a small amount of money to a lot of borrowers, that's a lot of research work for me. If a put a larger amount of money to a few borrowers, that's more risk for me.

Is this investment supposed to fall under the "good deeds" category ?
I'm reminded of the old expression "no good deed goes unpunished!"
The question I posed to myself is: Would I put $10-20K in loans on here to make some money, and do I accept the risk involved? The answer was, and still is, no...........

I don't see doing $500-1000 in loans total on here...........not enough return for the headache...........
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Re: Risky New Investment Venue
Old 10-02-2006, 12:38 PM   #23
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Re: Risky New Investment Venue

Quote:
Let's see how they are doing a year or two from now.
ditto. i checked this out a while ago and concluded that the return did not sufficiently compensate for the (perceived) risk ... and i think the risk is considerable. the idea of skipping the middle-man (and associated fee) is attractive, but, as with many things, the middle-man serves a purpose and (at least partially) earns that fee. if this turns out to be a good idea in practice, i can join-in sometime in the future ... i don't want to be on the leading edge of this one.
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Re: Risky New Investment Venue
Old 10-02-2006, 12:57 PM   #24
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Re: Risky New Investment Venue

Great responses, it was exactly what I had hoped for. To run an
investment idea accrossed a bunch of investors and let them eek
out any bad vibes they have.

Personally, I agree with most that was said here about the risk as
well as time spent doing it.

I do find that it has a useful purpose though. Using standing orders
one can filter out all the bs listings and lend money to the semi
secure individuals. A standing order can be set up to bid only on
listings where the borrower has a clean credit history that is 5 years
old or older with a reasonable DTI and low ammount of inquiries.

Of course they can be tweeked even more to tighten the criteria in
anyway the lender wants.

But even if you can automatically pick and choose the good listings
without spending alot of time searching through them, the other
inherit problems with the site still cause significant reason for
concern.
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Re: Risky New Investment Venue
Old 10-02-2006, 01:07 PM   #25
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Re: Risky New Investment Venue

Quote:
Originally Posted by scrubradio
.

I do find that it has a useful purpose though. Using standing orders
one can filter out all the bs listings and lend money to the semi
secure individuals. A standing order can be set up to bid only on
listings where the borrower has a clean credit history that is 5 years
old or older with a reasonable DTI and low ammount of inquiries.
One issue with this strategy is the shortage of good credit worthy borrowers. The rate will probably be bid down by competing lenders to a rate that doesn't justify the trouble and the risk.
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Re: Risky New Investment Venue
Old 10-02-2006, 01:13 PM   #26
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Re: Risky New Investment Venue

Quote:
Originally Posted by Martha
One issue with this strategy is the shortage of good credit worthy borrowers. The rate will probably be bid down by competing lenders to a rate that doesn't justify the trouble and the risk.
Yes that could be a problem. When prosper finally sets up the accounts
to where the lender can earn a decent interest rate on money just sitting
in the account it would be less of a problem though. My money wouldn't
go out in a loan unless I could recieve a high enough rate to satisfy my
risk.
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Re: Risky New Investment Venue
Old 10-02-2006, 01:15 PM   #27
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Re: Risky New Investment Venue

Quote:
Originally Posted by d
ditto. i checked this out a while ago and concluded that the return did not sufficiently compensate for the (perceived) risk ... and i think the risk is considerable. the idea of skipping the middle-man (and associated fee) is attractive, but, as with many things, the middle-man serves a purpose and (at least partially) earns that fee. if this turns out to be a good idea in practice, i can join-in sometime in the future ... i don't want to be on the leading edge of this one.
And you are not skipping the middleman. The middleman is Prosper, who is making pretty darn good fees. It gets a 1% origination fee from the borrower when the loan is made. It takes a .5% to 1% servicing fee. When you deposit money with Prosper to lend in the future, you don't get interest on that money.
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Re: Risky New Investment Venue
Old 10-02-2006, 02:15 PM   #28
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Re: Risky New Investment Venue

Quote:
Originally Posted by Martha
And you are not skipping the middleman. The middleman is Prosper, who is making pretty darn good fees. It gets a 1% origination fee from the borrower when the loan is made. It takes a .5% to 1% servicing fee. When you deposit money with Prosper to lend in the future, you don't get interest on that money.
More reasons to pass.............TINSTAAFL (There Is No Such Thing As A Free Lunch)
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Re: Risky New Investment Venue
Old 10-02-2006, 02:32 PM   #29
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Re: Risky New Investment Venue

Quote:
The middleman is Prosper
true! but one who takes none (?) of the risk
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Re: Risky New Investment Venue
Old 10-02-2006, 09:25 PM   #30
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Re: Risky New Investment Venue

I wouldn't touch prosper with Nords' money! Well, maybe I would, but not with mine

Personally, while the lure of 20% is great, the risk with this site is just too high right now. And 20% ROI on only 3% of my portfolio (modest as it may be) just isn't worth my time with risks like that.
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Re: Risky New Investment Venue
Old 03-03-2007, 06:53 PM   #31
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Re: Risky New Investment Venue

Quote:
Originally Posted by scrubradio
Using standing orders one can filter out all the bs listings and lend money to the semi secure individuals. A standing order can be set up to bid only on listings where the borrower has a clean credit history that is 5 years old or older with a reasonable DTI and low ammount of inquiries.

Of course they can be tweeked even more to tighten the criteria in anyway the lender wants.
I only use standing orders that have tight search criteria to find the appropriate listings to bid on so that my loan portfolio is created with robotic discipline. I have to keep my emotions out of the lending process.
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Re: Risky New Investment Venue
Old 03-03-2007, 07:08 PM   #32
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Re: Risky New Investment Venue

If these people cannot get the loan through conventional means... why would I underwrite the loan. Sounds like a good way to lose money. High risk loans with little or no collateral. Plus how am I going to check if they are credit worthy. Plus the paper is not liquid.

My take... If you want fixed debt in your portfolio... buy bonds or mortgage backed securities...
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Re: Risky New Investment Venue
Old 03-04-2007, 02:10 PM   #33
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Re: Risky New Investment Venue

i agree with chinaco's logic. if the bank won't lend the money should i be the sucker who does
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Re: Risky New Investment Venue
Old 03-04-2007, 05:37 PM   #34
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Re: Risky New Investment Venue

After having been there for 9 months investing, I have to say it is a very
scary proposition indeed. Thinking that everyone applying for a loan at
prosper cannot get a loan from a bank is wrong though. I have been
getting a 19% return on investment without any defaults at this point and
am very happy with that. I plan to continue to grow my portfolio as long
as that continues
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Re: Risky New Investment Venue
Old 03-04-2007, 05:41 PM   #35
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Re: Risky New Investment Venue

Yes I have been doing it for about a year and have been getting 20+% even with the 2 defaults. I have about $2500 invested.
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