interesting business model, plus an update on my stalker

[rmd]

prosper.com seems to have an interesting business model. it's like dutch auctions meet consumer lending.

lenders team up to collectively fund a given borrower's loan at some interest rate, so for a $1000 loan you might have 10 people funding it for $50 and 5 covering the rest at $100 each. prosper tacks a bit of interest on and handles income and payments. i've signed up as a lender to look around but haven't given them back info yet. so far it looks on the up and up. i figure i may hook them up with the same bank account i use for paypal and other online cruft (which never has very much money in it) and try funding a few small loan amounts. (i think the minimum amount you can fund a given loan is $50.)

meanwhile, in boring stalker info, the cat is back. (it went away for a few days)

i think it's female, because it's got that droopy belly i associate with neutered female cats. she's definitely not feral -- she was nuzzling my hand yesterday and purring. she's old and kind of bony but not starving, and she's got some nicks on her ears, so she's definitely done some fighting over the years. she's got some congestion, coughing and sneezing, maybe with a hint of a shiver.

being my mother's daughter, i finally gave in and put a bit of food out to see how she'd react -- she was hungry but not starving, i'd guess, since she immediately ate a bit but didn't wolf the whole thing right away. also, since it was damp and the porch floor isn't comfortable by any means, i put some rags in a box and put it out for her to lay on. she's hanging out there this morning.

i'm still not convinced she's a stray rather than just an opportunist. and there's no way i can bring her inside (it took years for the foundling cat i do have (she's the one in the userpic for this entry) to really fully become part of the previous pack-of-two). at least it's summer so i don't have to think "oh, what if it freezes to death!!"

Comments

[rmd.livejournal.com]

i don't know whether it's changed since you look, but now they've got credit ratings listed which are apparently based on fico scoring. (AA, A, etc thru HR (high risk))

also, there's DTI ratios, although it's self-reported.

[sierra-nevada.livejournal.com]

Wow, they have changed. Their scoring is based on an Experian-only product, not the FICO score, and they report just to Experian. They only report which of a number of score bands you're in, rather than permitting finer discrimination.

I didn't see any tools for comparing interest rates against scores, but I was fascinated by the groups thing - that's directly from Grameen Bank. They also promise to be able to sell loan portfolios "soon."

I wonder when the groups will run afoul of the Equal Credit Opportunity Act (prohibits discrimination in lending based on the standard protected groups: race, gender, religion, national origin, etc.) by being analogs for the protected criteria? More interesting is the possibility that some of those groups may petition to have their criterion removed from ECOA based on the fact that the discrimination of their group from the whole of the population results in lower interest rates...

The data collected from this would be fascinating to both economists and B-school students.

[rmd.livejournal.com]

yeah, it's clearly an evolving market niche.

i'm incredibly amused by the people who advertise the fact that they want to borrow money to lend it out to other people on prosper.

[sierra-nevada.livejournal.com]

Classic arbitrage. I wonder what they believe their margin can be.

[rmd.livejournal.com]

yeah, given that the second generation loans will have 2x the prosper margin tacked on, they'll presumably have to be making much higher risk loans to have any margin of their own. it'll be +EV for prosper, tho. :-)

[koshmom.livejournal.com]

Hey! I didn't know you had a Livejournal! Great to see you! (Now you just have to figure out who I am...hint: I used to live in CA and worked at LLNL and Cisco and took over eliot's place in that mansion with that guy originally from Rutgers who plays the piano - and we were both part of a few ski trips, specifically a group of about 10 of us in Utah a few years back - where someone in our group broke both his wrists on a snowboard...)