Rolling The Dice

With the latest news about Prosper.com being sued by lenders I thought I would play the contrarian and bid on some loans today. There are some pretty good loans in the offing at the moment if you take the time to look, so I transferred (thanks to the instant transfer via the Facebook.com app) $407.73 into my account to bring the balance squarely up to $8,500.00. I will let it ride from here…

Our move is still on at the end of this month, however, it’s not to Charlotte, NC any longer it’s to Addison/Plano, TX (which is just south of Prosper, TX I might add). The good news there is that BOTH of us have jobs awaiting us upon arriving and there won’t be a hiccup in service as far as our lives are concerned. My wife will be submitting a listing next week for the total estimated cost of moving (NewHorizon- The moving costs need to be covered now on a loan vs. later as we don’t have the ready capital and neither company will reimburse until 90 days after our start dates at which we will shovel that money into savings as a parachute if need be for a few months before repaying the loan). I believe that Prosper.com has done much to improve listings and the quality of the final promissory notes with the additional signing of the note by the borrower which gives legal backbone should they attempt to turn sour (Zopa.com does this and has been doing this since day one). So the new loans I am adding to the account are to help build up a mini-retirement fund as it were (thank you Tim Ferriss) so we can do some serious travel and personal growth in the future. This will also work as a buffer with our other P2P accounts to repay our loans should things turn ‘ugly’ in Texas as our first obligation is to those who lend to us and not to creditors. Right now our potential P2P income stream is around $600/month if you factor in Kiva.org, LendingClub.com and Prosper.com combined for one year. This should be more than enough to service our loans should something happen to cut off earned income (bad opportunities, layoffs, etc). I will post the listing details for my wife’s loan once she activates it (once, yes, once).

Thank you for all of the support during this weird time in our lives! Let’s roll the dice and see how Prosper.com has improved things for lenders and borrowers!

P.S. I have NOT added my name to the lawsuit as I don’t believe the overall performance of the market is purely to rest on Prosper and should be placed as much on the shoulder of the lenders who picked crappy loans with horrid credit in the first place. A successful portfolio CAN be obtained at Prosper.com with some patience and due diligence by the lenders. Early adopter syndrome (loans from February 2006-May 2007) will remain until most of the bad loans from 2006/07 drop off the face of the Earth and are sold off!

Finally… Lenders may sleep a little easier knowing lawyers have been sprung. As a lender myself, I have ceased all lending activity as of the past 30 days as I experienced a huge and unforgivable influx of new late loans. Prosper’s lack of response is deafening silence. Personally, I can’t wait for the secondary market, if it ever comes, so I can bail out completely from the lack of full and complete collections. I used to do commercial collections and there is so so much legally Prosper CAN and SHOULD do to wring out the dirty laundry of late loan deadbeats. As a borrower, I actually recommend MORE controls and checks of borrowers before, during and after the listing for the sake of growth and safety of the community as a whole, especially the lenders who carry the weight. Read all about it here…

Legal Action Underway!

Now I wait for Prosper to run to Congress for a bailout! What ever happened to debtor’s prison?! Can we please put some of these idiots into shackles again for ruining our economic prosperity?!

The payoff of my wife’s loan is underway (two part process). So once this is complete, we will apply for another loan under her name and credit (should be an A or B range on the credit) to do the moving loan. Cost of the move, since one of you asked, is going to be around $10,000. This is the amount I’ve mulled over a couple of times even as a worst case scenario amount. There is some cash in our reserve, so I’m still crunching numbers to see what the loan listing will be for. The scheduling of our moving has yet to be finalized, so the farther out it is, the less money we will need. We will know the date of our moving sometime in the next two weeks. The old loan will be paid off during this period of time (her old loan, not my new one to be fair to lenders).

Thank you all again for your help and emails of encouragement during this bizarre period of transition for us.

It would figure that the moment I get the funding for the furniture loan the plans are finalized for an agreement to move to North Carolina for work! Excitement abounds, but now I have to find a plan B for the moving funds. Oh well… Thanks to all of the lenders who helped with the ‘Furniture’ loan as it now helps get us 2,100 miles from this heat to a new type of heat (humidity… what’s that?). Options I’m mulling over for the moving fund…

Cash out my work’s SIMPLE IRA (IRS penalties galore and then some)?

Cash out my wife’s 401k (IRS penalties, but not as bad as above)?

Payoff my wife’s Prosper.com loan in order to obtain a new one for more $$$ (debt with estimated interest of 12.5%)?

Thoughts?

SEC filing is complete… Wait is hopefully nearing an end?

“Lending Club Files Registration Statement with the SEC

SUNNYVALE, CA - June 20, 2008 – Lending Club announced today that it has filed a registration statement with the Securities and Exchange Commission under the Securities Act of 1933 relating to its social lending platform.

The registration statement seeks to register the offer and sale of up to $600,000,000 in Member Payment Dependent Notes to be issued by Lending Club in a continuous offering following the effective date of the registration statement. The Notes will be issued in series with each series of Notes corresponding to a single consumer loan to a borrower member. Lender members will direct Lending Club to apply the proceeds Lending Club receives from the sale of each series of Notes to fund a particular consumer loan selected by the lender member originated through the Lending Club platform.

A series of Notes will be issued only if and when the corresponding member loan closes and is funded. Lending Club will have an obligation to make payments of principal and interest on the Notes only to the extent that Lending Club receives payments on the corresponding member loan. The terms of the Notes, including interest rate and initial maturity, will correspond to the terms of the corresponding member loans but will reflect a four business day lag on payment dates and maturity to allow the platform to confirm payments received on the corresponding member loan.

Lending Club will offer the Notes only through its website directly to lender members.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but it has not yet become effective. Copies of the Lending Club registration statement can be accessed on the SEC website: http://www.sec.gov/. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state.”

Before the listing for the furniture is to naturally end (no NewHorizon, I’m not canceling it ), I will be pressing the ‘Fund Loan Now’ button at some time long before. So, if you want a great loan at a great rate, you had best get over to my listing ASAP as it may not be there soon! I’m ending it early for two reasons, firstly, so we can have the money to obtain the furniture this weekend (this also serves as a clue for lenders on my timing). Secondly, we need to do the purchase this weekend as we will be out of town for a funeral (another one?!) the following weekend. Instead of sleeping on the floor another week or sitting on a folding chair to read a book (since I have no couch or TV at the moment) I thought I’d pull the trigger now!

Well, I may as well take advantage of Prosper.com for a new urgent need. Thanks to the whole moving scenario being scrapped, we are without furniture (thanks to our fire sale techniques and Craigslist.org ‘free’ page use). So we would like to obtain a loan to purchase the following items back that we sold/gave away…

Couches- $1,500

Bed- $900

Dressers, entertainment rack and other misc.- $400

My frustration level is high right now until I have a bed to sleep in and a couch to sit on.

So we come to find that the move date has been postponed… This is all ‘pending’ now. Sooo irritated right now with the whole process of corporate restructuring and promises. The really unfortunate side is that most of our furniture has been sold off/given away. My apologies to the lenders who’s time and money were put on hold for our sake. There is no date, no news, nothing as of right now that makes me feel any better.

And the award goes to… The LendingClub.com Mimes! Seriously though, good job on the Webby guys!

I had two questions on the listing yesterday about this, so I thought I would also give a thorough breakdown here of the expenses involved for the move. I believe I’ve thought of most everything, but wiggle room is essential in any moving situation.

Breaking apartment Lease on ‘good terms’- $2,200

Travel expenses from AZ to NC with gas, food, mild entertainment and lodging- $1,000+/- (we nixed the idea of taking everything with us, so no moving truck)

Obtaining new apartment in NC with deposits and fees- $1,300+/-

Registering the car in NC and car maint. upon arrival*- $300+/-

Obtaining some modest replacement furniture and other living tools- $3,000+/-

Utility deposits and setup fees- $300+/-

Miscellaneous expenses/unforeseen- $$$?

We have a couple of thousand dollars already saved up for this adventure, but as you can see, it’s not going to be cheap to relocate. Thankfully we both have solid jobs when we land (I got one!) in Charlotte, NC in August, so repaying shouldn’t be an issue over the long term. My new boss will be my current company’s former VP, so I know I’ll have some stability in my career.

We are both excited about the move and hope lenders will invest in our future as I am offering a great rate on the loan to all who participate while keeping repayments reasonable and within budget for us.

Thank you to the 54 current bidders who believe in me so far!

*Car is a very new and reliable Honda Fit Sport with less than 15,000 miles on it. It will be making the journey off of a forthcoming 15k maintenance which will be performed here in AZ. Upon arrival I will need an oil change and perhaps some bug-death removed from the car from the 2,100 mile journey (thorough car wash).