Services

Loanio suspends operations

wiseclerk 6 Comments

Asked to comment on the recent developments, Loanio CEO Michael Solomon told P2P-Banking.com:

In light of recent events beyond our control, Loanio, Inc. has suspended its business so that we may begin the process of registering our promissory notes with the appropriate securities authorities and agencies. As a direct result, please be advised that effective immediately Loanio will no longer be accepting registration from lenders or borrowers and/or any new bids on loans or loan requests until further notice.

This message will be posted on the Loanio platform today.

SEC orders Prosper to cease and desist

wiseclerk 12 Comments

In a SEC filing of yesterday, the SEC has ordered Prosper to cease and desist. On page two it states that

The loan notes issued by Prosper pursuant to this platform are securities and Prosper, from approximately January 2006 through October 14, 2008, violated Sections 5(a) and (c) of the Securities Act, which prohibit the offer or sale of securities without an effective registration statement or a valid exemption from registration.

From page six:

In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondent Prosper’s Offer.
Accordingly, it is hereby ORDERED that:
Pursuant to Section 8A of the Securities Act, Respondent Prosper cease and desist from committing or causing any violations and any future violations of Sections 5(a) and (c) of the Securities Act.

So far Prosper has not commented on the situation.

Comunitae gets 2 million Euro funding

wiseclerk 1 Comment

Comunitae gets 2 million Euro funding from Entrinnova to establish itself as a p2p lending service in Spain.

Comunitae will allow loans between 3,000 and 15,000 Euro for loan terms of 1 to 3 years. The amount that lenders can lend will be up to 50,000 Euro (minimum 50 Euro). Only residents of Spain will be able to use the platform.

Founded by José Miguel Rotaeche and Arturo Cervera, both ex-bankers at BBVA, Comunitae aims to launch in mid 2009. The name is derived from “Comuni” for a group of persons and the spanish abbreviation “TAE” for interest rates.

(via Loogic.com)

Prosper refers loan applicants to other companies

wiseclerk 1 Comment

When Prosper.com went in the quiet period the company announced on its blog:

If you’re a borrower seeking a loan, you will still be able to create a new loan listing, which we will endeavor to fulfill through alternative sources.

The way this works is that Prosper refers loan applicants to other lending companies. After answering a few questions, borrowers seeking a loan a channeled to Firstagain, Lendingtree, Freedomfinancialnetwork or Creditkarma (and potentially others – the mentioned ones are the ones I was shown).

Should a borrower use the services of one of the linked companies then Prosper is paid a referral fee.

However apparently not all visitors of the site seem to be redirected. Potentially members or former users with cookies are not shown these options.

Options shown for potential borrowers

Options shown for potential borrowers

Prosper loses several lawsuits against non-payers

wiseclerk 1 Comment

One of the downsides of p2p lending service Prosper.com are high default rates. Results from collection attempts are low.

In an attempt to test alternatives to the existing collection process Prosper in January selected 66 cases of nonpaying borrowers and turned them over to the law firm Hunt & Henriques to pursue these cases in court.

Fred 93, one of the lenders on these loans researched the status of the court cases himself, dissatisfied that Prosper did not inform him on the status, which he says Prosper initially promised to do monthly.

According to Fred93’s findings, Prosper.com so far lost 6 cases and won 1 case.