Saturday, March 25, 2006

My third realistic prosper loan... 3751

EDIT, 5/5/2006:This is one of the loans I've been happiest and most confident about funding -- in fact, this loan transitioned into my befriending the borrower, and employing him for a bit of programming on the side as well. I guess this switches up the social circle model a bit -- gain social contacts because of lending, rather than lend because of social contacts...

Loan 3751 is one of my (few) group listings. Guy was incredibly straight up and prepared – had no problem w/ providing paystubs, hosting them on the web here and didn't make any excuses about bad college debt practices, etc. Spoke w/him over the phone as well as IM. Was responsive to every suggestion I gave him/probing question I asked.

UMass computer science/math grad (I called the alumni office -- someone with his name graduated in 04), he works as a web programmer for a real company w/a real web presence – – I successfully called to confirm w/his boss and/or HR that there was somebody named Marek Karbarz working there, and that he made 51k a year, and that he was in fact applying for a loan (so not ID theft). Also emailed him, got a response at his personal company email address (anyone can fake a return address). (He doesn't have a voicemail box, but the secretary at the main number on the company website knew who I was talking about, offered to have him paged, and mentioned that he typically works away from the office. Plus, the employees I spoke w/about him all had company boxes.) When I nonexplicitly asked him about some minimally difficult compsci/web stuff, he seemed to answer ok. :)

Thinks he'll repay 2-3 k immediately as well, but mass min is 6000. Willing to take hi interest so he can pay back friends/family now that they need it, which I think is admirable.

E rated, 23% DTI, 21.5% rate (set to max for MA).

I'm putting in a big slug, but prefer to do so on thursday after 8 PM eastern time. If people feel antsy about that, contact me and I'll put in sooner.

I could even see him becoming a lender after he pays back his debt -- seemed to be the archetypical came to America, not from a super-rich family, but went to school here, and wants to realize the American (financial) dream type. Don’t worry though – he’s got dual citizenship, so you don’t need to worry about unjustified deportation risk :) Even has money in his 401k (though he admits just 500 or so) despite working only a few months at the new company. Made numerous comments that he really wished he had the money to invest after seeing the rates available :)

Obviously if you go to enough trouble, some of this stuff can still be faked -- it is remotely possible after looking at the whois of his domain, that:
Record expires on 20-Oct-2011
Record created on 20-Oct-2003
someone created kdsaconsulting in 2003 and bought it out to 2011 as an elaborate ripoff of lenders in 2006 from prosper...right.

Or, less implausibly, but still mad unlikelily[sic], some guy got a friend of his who's a secretary at KDSACONSULTING to lie, and also snagged an email address from kdsa as well...

If this one defaults, I'll...I'll...take any coinvestor in NYC out to dinner...the $350 kind. (That's a reference to a bizarrely ridiculous prior borrower claim, not an indication of my extravagance or desire to do so:)) Unless, of course, that offer violates usury laws…


At 1:58 PM, Blogger cellardoor said...

OK, I guess it looked too sketchy that I wasn't payin' to play -- I threw down part of my nut, cuz money talks but b.s. walks, put my money where my mouth is, choked on the Cambridge International Dictionary of Idioms...dang, I understand, but hate the ACH delays. All I gotta say is, Thursday at 8 PM, EST, ya better watch out!

At 5:51 AM, Anonymous Anonymous said...

What is this bizarrely ridiculous "prior borrower claim"? I can always use a $350 dinner, and given recent events, I'm reasonably able to track down virtually anyone :)

At 8:42 PM, Blogger cellardoor said...

Ah -- w/o disclosing who this was, and making minor modifications from the actual example to fudge up exact numbers:

Troubling factors:
-refused to provide any, and I mean, any anonymized credit info -- claimed that as a former
collections agent, he knew how much you could do w/just the last 4
digits of a credit card, etc, and that he put enough info out there. This seemed like a bad sign -- you can clearly cross out ALL the acct info, and just go to the section w/negatives, which he still didn't want to do. If he hadn't claimed to be knowledgeable about the credit industry, I could understand someon more naive being scared to give me info...
-claimed that he didn't really need the loan, as his wife alone made over 250,000 every year.
-claimed that his cash flow issues (despite the wife) would clear up
as business picks up in the spring, which is plausible.
-claimed that 30%+ interest was no big deal, that (on a 10k loan),
he'd spend $350 on a single dinner. Bad signal on several levels. I
mean, yeah, spoiled wall street brokers spend far more than that per
person, but in the area where he came from, doing what he claims to do? Furthermore, was he miscalculating 35% on 10k as $350 vs $3500 -- bad sign -- or should I have given him the benefit of the doubt, and assumed that he meant the ~$350 a month payments?
-claimed that all of the damage was caused by nasty divorce (ex-wife used joint debts in his name w/o authorization that he promptly paid off since he had lots of spare cash).
-However, BK court documents (publicly available to all, he chose to disclose his real name) don't
seem consistent with this -- his Chapter 13 bankruptcy terminated in
1998, w/o wife being involved, and his new Chapter 7 bankruptcy
terminated in 2003. His explanation of his score to me excluded bankruptcy, just that his ex racked up debts which were very late, and
then he immediately paid them off not knowing they'd continue to hurt
his credit score.

The thing is, I suspect he'd be a decent risk -- he really has a
business (which I independently verified), etc, chap 7 causes 4 years to be needed before chap 13, and 8 years before another chap 7.

EDIT: Or maybe not -- looks like the 2nd bankruptcy was linked to a $600,000 case of tax stamp fraud and wire fraud...

At 3:35 PM, Anonymous Anonymous said...

At this point, it looks like many of the screening and post loan screens have improved dramatically. My hat is off to those of you who pioneered the way. Prosper has done a reasonable job figuring out how to do something new. If you have not been around the Internet commerce space, and especially finance, what they have done is remarkeable. As of right now, I am pretty sure there has not been a default since December. They have obviously stepped it up. What an exciting way to help others and get a reasonable return. I use small loan increments when loaning. I have been an investor for a long time and learned the truth about spreading out risk. I have also matured enough to know that someone will stick it to me. But, it is no different than having a stock tank in my portfolio. It happens every year. It seems some people think Prosper is Las Vegas or the stock market. Yes, there is reasonable risk, but calculated. It is about setting reasonable expectations and committing to a compounding strategy with every interest amount you get.

At 11:18 PM, Anonymous Anonymous said...

Thanks for the information, will include in my website on getting loans from Prosper


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