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A Note from our President, Aaron Vermut, as Prosper Looks to the Future

by Prosper on 03/30/13

It’s been a little over two months since CEO, Steve Vermut and Head of Global Institutional Sales, Ron Suber, joined Prosper’s management team, and this week, I am excited to be joining them full time as President. I wanted to let our community know that we intend to use this blog as a method of communication to continuously inform both our borrowers and lenders of what we are working on here at Prosper, and of what new and exciting things are coming in the near future. It’s important to all of us that our customers understand we are striving to make Prosper a leader in customer service and technology. With valuable feedback from our customers, we are able to deliver products and solutions that will enhance the user experience across the platform.

I want to give everyone an idea of all the exciting things the Prosper team has been working on since bringing on the new management team. In February, we focused on building and launching tools and improvements vital to the platform’s performance. Our new API gives lenders the tools they need to customize their Prosper experience in ways never before possible, and Prosper Funding LLC provides increased security and protection for our lenders. We also extended our customer service hours to provide more one-on-one support for more hours of the day.

As we come to the end of March, we’re excited to report $15.1 million in loan originations, a 60% growth over February and our best month since October. We also project $25 million in new loan listings on the platform this month. In fact, at the time of this post, there are 200 new loans now available to lenders.

We have also been looking at various ways to improve our service and product offerings for our retail and institutional lenders, as well as for our borrowers. Here are some of the priority items that we’re focusing on over the next few months (in no particular order):

•   New Prosper Logo/Identity: Along with the technology enhancements to our product, on April 2nd we are launching a rebranded web experience including a new logo and identity. We have been working on this for a while and are excited about the changes. Let us know what you think.

•   Improved collectionsOver the past several months, we have focused on improving collections by increasing call intensity, and working with our delinquent borrowers to be the payment of choice during tax refund season. As a result of these changes, we have had 3 consecutive record months of collections. Moving forward, we will be adding a new collections agency and will send delinquent accounts to collections at 16 days past due rather than 31 days past due. This will enable us to expand our call coverage and skip tracing capabilities, which will provide better results for our lenders.

•   Washington State (and more)We are currently engaged in communication with the Security Division of Washington’s Department of Finance and hope to reopen the platform to Washington lenders very soon. We apologize for the inconvenience to our Washington customers – the blackout is a result of the implementation of Prosper Funding LLC’s New Note Offering. With this implementation, we have also added West Virginia and Michigan, and plan to have several additional states join the platform in the near future.

•   Whole LoansIn April we are launching a whole loan product in beta for our institutional lenders, which will be separate from our traditional pool of fractional loans. The beta version of this product is in test mode and we will communicate more details as they develop.

•   Additional ImprovementsSome of the many other things we are working on are a new IRA trading option on Foliofn, an increase in the loan cap on the platform to $35,000, enhancements to our Automated Quick Invest tool (AQI), and expansion to both our customer support and technology teams.

Steve, Ron and I are committed to creating a transparent relationship with our borrower and lender communities. This asset class and market place are changing rapidly. We will continue to make ourselves available to answer any questions. Please check back here regularly as I publish new posts with updates as well as gather questions and feedback from our community at large. We welcome any comments and/or questions below.

Thank you,

Aaron Vermut

  • Eric

    That is just unrealistic on all merits. That is why they pay Mr. Vermut and the staff at prosper big money to make this work for everybody. I hate several things they have done, but my experience has not been severely trampled on with the inclusion of institutional investors. They have to work with all income brackets, and various investment strategies and have to please everybody. just let them do their job, they’ll make P2P work.

  • Eric

    Wouldn’t that require a whole new department, and more overpaid workers? The whole idea here is how is prosper going to cut waste, and become profitable. It might be more trouble than its worth, plus the lender yields would mostly not be double digit by being secured. It might be a complete bust.

  • Eric

    That’s a scary note Tek, thanks for the update. I remember reading on this some time ago, and couldn’t quite understand how this business model could take a loss-perhaps its payroll issues as you indicate. Im also glad to see prosper step back from “lender promotions”, which I always didn’t care to see and would rather have a solvent prosper and no promotions.

  • ProsperLoans

    Hi Donald- Thanks for your observations. Aaron stated in this blog that we eliminated one year loans due to a lack of borrower demand. That was and remains true. One year loans, because borrowers are paying off principal and interest every month, have higher monthly payments than three and five year loans. The resulting high payment correlated directly into a very low demand from borrowers versus the three and five year loans. It may seem counter intuitive but one year loan demand is not related to early repayment at all. Borrowers are looking for loans that are manageable on a month to month basis. Sometimes people do pay off early, it’s a great thing for the borrowers to do that but it does represent a risk to investors who then have to go out and find new loans to replace them.

    As for the Whole Loan program, we understand your concerns, but want you to know that there are several controls in place that allow both types of investors to participate equally. Loans that are funneled into the whole loan pool are randomly selected without favoritism. Those randomly selected loans will only remain in the whole loan pool for a brief period of 1 hour before they will funnel directly into the standard loan pool. Additionally, we are lowering the maximum bid in the standard loan pool from 75% to 50% to allow our retail investor population more opportunity to invest. We are very pleased with the success so far of the Whole Loan product, and feel that it will help us successfully maintain balance on the platform.

    Lastly, you asked about the verification process. For each borrower, we conduct a thorough and rigorous verification process internally to validate identity and income and as a result, we have very few cases of fraud. As part of our process, we do our best to provide lenders with insight into the risk each borrower presents. Because there is an element of risk that is present with this (and any) kind of investment, we also advise our investors to diversify as much as possible. For more information about diversification or investment tips please feel free to contact our investment team at investorteam@prosper.com.

posted in Borrowers,Featured,Lenders,Prosper News 54 comments »

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Notice: Blogs and other materials posted on or linked from this page that use the name "Prosper" generally use that name to refer to Prosper Marketplace, Inc. if published before January 31, 2013 and to refer to Prosper Funding LLC if published on or after February 1, 2013.