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Loans delinquent for 4 months will be sold on the open market to a debt buyer...
- After four months of delinquency for any single payment, your loan will be sold to a debt buyer and any proceeds will be distributed to lenders.
- Your delinquency will be reported to Experian, Prosper's credit reporting agency partner, and will appear in your credit history. Your credit score will be negatively impacted.
- Borrowers who have defaulted on a loan at Prosper will not be allowed to borrow again on the Prosper marketplace."
Many people probably don't realize this b/c there are so few loans that are in a delinquency status of 3+ months (81 loans, 2.35% of all funded loans).
This policy may be good for lenders and Prosper. I wonder whether or not this will be highlighted under the loan summary section. Or, will Prosper simply allow these delinquent loans to disappear from the loan summary section? Chances are that the delinquent account may just disappear and the lender may have to figure it out for themselves. If the lender is not astute, they may think that the delinquent account is now current. LENDER BEWARE!
Plea to Lenders: Don't let Prosper allow to mask these loan sales. If it's not specifically addressed in your loan summary, complain to Prosper. Have them highlight this in the loan summary section. They should include a section stating: "# Loans Sold."
1 comment:
Disclaimer: I just got off the phone w/ Prosper.
Prosper has not yet sold any non-performing loans. While the rep didn't admit it, I suspect their exact policy for communicating this may not yet be official.
The rep did state that the news would be emailed to the affected lenders and be noted on their online accounts. However, he did not specifically state how it will be noted in online accounts.
Lenders shouldn't be passive and ignore emails from Prosper. You may receive one some day highlighting the sale of bad debt and not realize it.
I suspect Prosper will not hide this. You will likely get a message on your account too. However, I question whether or not it will remain permanently in your loan summary section.
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