Friday, April 21, 2006

Strong criticism of Christian Second Chances Group

I'm not particularly upset that I have a late loan given my bidding risk profiles (in which some % of my bids are non-qualitative, mathily modelled only, w/some sanity checks. I would of course be far less happy if some of my personally vetted loans defaulted though...)

Also, given that I ascribe no signal to membership in this group (and maybe even negative signal), I'm not particularly surprised by the group leader's behavior either.

Let me be clear, I have nothing but respect for the genuinely religious whose acts match up with their professed beliefs. For instance, after confirming that a priest was looking for a loan, and that his identity had not been stolen, I happily put down a roughly $2,000 bid for his loan.

However, in the case of this group leader, his use of 50% shared rewards (and past advertising of this as a "good" thing), made me rather suspicious of his motives. There are plenty of groups where the leaders go to much more trouble, and offer 100% rewards, or at worst, 75% rewards, for far greater service to borrowers and lenders.

Someone who pays lip service to Christian ideals, and does minimal vetting, if any (given the way he was spamming people in the past to join his group), but takes a huge slice and says/said that a 50% slice is a huge favor to borrowers -- that's just unconscionable (but apparently, profitable while the pyramid scheme lasts).

Remember what this means in $'s and cents -- for an E or H borrower, this leader gets 2.5% -- not of the original loan amount, but 2.5% annual interest on the loan over 3 years! That $5000 37.5% loan that s/he "got" funded -- that's a $100 right there if it pays off.

S/he also gets additional match reward $'s up front (in addition to the % rewards) as well.

Some people might say, doesn't the ongoing 2.5% slice align incentives? Well, no -- the far bigger incentive is to line up lots of loans, and hope as many get funded as possible, suck the money from the ones that had basically no added value but were honest and got funded, and ignore the ones that don't. (If s/he were willing to actually do some work, on the other hand, build up reputational capital, that'd be a different story.)

Most of all, I think that the utter lack of concern on the part of the group leader, and failure (to the best of my knowledge, and other lenders' knowledge) of southbay, the group leader to respond to ANY lender communications over THE LAST SIXTEEN DAYS is demonstrative of what I suspected all along. Anyone care to speculate as to whether s/he's been nonetheless continuing to recruit/respond to new borrower requests to join the group? Post here if you've done so in the last 16 days...

In the past, I've been reluctant to privately message borrowers to tell them that they're getting a bum deal w/their group -- no intelligent lender would give extra credence to membership in this or that group, and a 2.5% rate difference in a capped world can be huge for an E or HR borrower (sometimes, w/0% shared, it is a 5%!! difference!). Going forward, it may be a different story, depending on rules about spam. (So far, I've restricted my advice to comments in posts by borrowers in forums on how to get more bids, or those who PM me for advice.)

Until now, I was unwilling to make any public comments about this group, as much as I wanted to, because I did not have definitive public evidence. However, I was personally certain of the sheer crapulence of this group, and would have been perfectly willing to bet 30% of my annual salary that this would be one of the first few groups to have truly late payments), and willing to tell other lenders this in non-public forums (fora?).

Someone wittier than I has already said something like "It doesn't seem very Christian of this group leader to ignore all lender questions, and I won't be giving him any Second Chances, either."

Now that's a T-shirt motto that I'd buy!

I'm offering a $15 paypal payment to the person who comes up w/the best T-shirt motto on the topic of this group's behavior. You can post profane comments if you must, as long as you're witty, but those get automatically disqualified -- I need something actually wearable (and that cafepress will let me buy). If fewer than 15 "real" comments from different posters are posted, I reserve the right to not pay out -- though posters should feel free to submit multiple possibilities for consideration.

Comment below, or email them to me!


At 11:08 AM, Blogger Frank said...

Hi cellardoor,
Really interesting prosper blog you have here. You seem very active in the market as well, from your post of the distributions of loans that you have. I've written about prosper before and I have a suggested formula that I would love to get some feedback from you about. You seem intelligent and I like your writing style. Please take a look at the following posts, I hope you find them interesting:
suggested formula
discussion with someone who doesn't think prosper is worthwhile
risks of prosper (this was an early post about prosper)

I would really appreciate any feedback, criticism, etc. I hope you don't find this comment too long or "spammy".

At 11:08 AM, Blogger Frank said...

Oh, and thanks :)

At 11:40 AM, Anonymous Anonymous said...

Prosper lenders giveth...
X-tian 2 Chances taketh away...

At 12:31 PM, Blogger cellardoor said...

The souled out's a groaner, but in a (mostly) good one :)

Giveth and taketh works well, but doesn't have that punny groan factor...

At 1:44 PM, Blogger cellardoor said...

I like the soul/2.5% one -- injokey, but who else but prosperites would appreciate this shirt :)

At 2:35 PM, Anonymous Anonymous said...

"Give and Thou Shall Never Receive"

Christian Second Chances Re-writes the Bible

At 3:41 PM, Blogger ProsperCouple said...

"Christian Second Chances... Why should God get all the tithe?"

"What Would Jesus Pay?" (Jesus with empty wallet)

Picture of Jesus pointing to another man "I swear, Judas set the group share rate!"

Picture of Southbay leaving the Last Supper with a sack of cash. "And you thought Judas was the deceiver"

Just some ideas...:)

At 7:32 PM, Anonymous Anonymous said...

christ died for our lends.

At 10:37 PM, Anonymous Anonymous said...

hy·poc·ri·sy n.
A prosper group whom hides behind religion to scam 2.5%

Also see: Christian Second Chances

At 10:44 PM, Anonymous Anonymous said...

Fund us or Fear us.
Remember; we KNOW God

(x-tian 2nd chances tagline)

We don't care what God you worship, your origin or color as long as your money is green.

At 12:12 AM, Blogger cellardoor said...

So far, my top picks:

We vetted Jesus for our group but his morals just didn't fit - Groupleader Southbay

Christian Groupleader Southbay; Souled out

Front of the shirt)Whats your soul worth?

(on the back) 2.5%

frugal couple:
"Christian Second Chances... Why should God get all the tithe?" (or some variant thereof)

At 3:02 AM, Anonymous Anonymous said...

Psalm 37:21 : what's that?

At 1:06 PM, Anonymous Anonymous said...

Christian Second Chances
Where Je$u$ saves


Jesus walked on water,
but Christian Second Chances
helped me take a bath


Let Christian Second Chances
Wash away your savings


Email is abbreviated b@a.m.e (tech edu). If I win, post and I'll get in touch.

At 9:25 PM, Blogger ProsperCouple said...

Another one from me...

Christian Second Chances... You got nailed!

(picture of a dollar bill crucifix)

At 9:29 PM, Blogger cellardoor said...

ouch! That'!

At 9:30 PM, Blogger cellardoor said...

Hey -- frugal and got2getaway -- what are your personal favorites among the selection so far?

At 7:12 AM, Blogger ProsperCouple said...

There are several good ones, so this will be hard to narrow down. I think of those posted I like these...
"Give and Thou Shall Never Receive"

Christian Second Chances Re-writes the Bible -Gabriele
hy·poc·ri·sy n.
A prosper group whom hides behind religion to scam 2.5%

Also see: Christian Second Chances
Christian Second Chances... He got nailed!

(Jesus with empty pockets)
-frugalcouple (what, you thought I wasn't going to vote for one of my own?;))

At 9:48 AM, Anonymous Anonymous said...

(Picture at the pearly gates) hmmm.. so you say that you don't have x-tian 2nd chances in your book becaus of fraud.... try Christian Opportunities

At 12:44 PM, Anonymous Anonymous said...

Last time I checked, there were no more late loans on the new "Christian Opportunities" group page? Did they pay up?

At 1:14 PM, Blogger cellardoor said...

Posibly, but my guess is no.

Unfortunately, is set up so that each time a late loan is re-debited via ACH transfer, even if there's no money in the account, the loan flips back to current (until the debit bounces yet again, at which point it flips to late again).

At 5:30 AM, Anonymous Anonymous said...

A Christian Second Chances guy got my money, and all I got was this lousy T-shirt.
Christian Second Chances -- We've been waiting 2000 years; you can wait a little longer.
Christan Second Chances -- OK, so we have a little problem with that "covet" thing.

At 10:53 PM, Anonymous Anonymous said...

On 8/30/2006 I searched for the group called "Christian Second Chances" and couldn't find it. Then I looked up the group leader's page (southbay) and discovered he was leading a different group called "Christian Opportunities". Is he still conducting business in the way you found reprehensible back in April? I was looking at the historical listings for potential borrower miabbyally who hasn't been funded in 5 tries, the most recent 4 of which have been as a member of southbay's group.

At 8:59 PM, Blogger cellardoor said...

seems likely, but I'm uncertain -- if you've checked out the forums lately, the bar for bad GL behavior has been set a lot higher by the bad boy GL's of prosper...


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