Lending Strategy – The Delinquency Blacklist

A lender on Prosper would probably have greater confidence in funding listings with membership in a reputed group. We spent some time this week studying the reputation of high activity groups in terms of delinquency rate [what percentage of a group’s outstanding loan book is delinquent (more than one month late)?].

Our analysis indicates that the groups listed below contribute to 30% of all delinquent loans (by volume) though they make less than 17% of the total loan book. Prospective Lenders might want to keep that in mind when reviewing listing from these groups. With a lending strategy that evaluates listings from these groups carefully, you might save your money from going default.

Rank	Group Name	Delinquency Rate (Volume)	Delinquent Volume of Loans	Total Volume of Loans
1	MustardTree	13.44%	$24,651	$183,460
2	435 Supporting Lenders	10.71%	$256,740	$2,398,297
3	UtopiaLoans.com	10.53%	$107,450	$1,020,670
4	PsychDoc'sGroup	9.76%	$226,336	$2,319,594
5	KoyneLoans.com	5.68%	$49,501	$871,383

• Data is between November 2005 and March1, 2006.
• Only groups with more than ten have been analyzed.
• Delinquent loans refers to loans that are more than one month late.

We would love to hear from you on what you think, and what other analyses you would like to see on this blog.