These charts show statistics for the performance of all prosper.com loans. Each curve represents the set of loans that were created in one calendar month. The vertical axis is the fraction of those loans that have "gone bad", in other words are 1 month late or worse (up to and including default). The horizontal axis is the observation date. All data comes from Prosper.com's performance web page.
Here's a chart of the same data in which each curve has been slid to the left to a common origin. The horizontal axis is now days since loan origination month.
Explanation of methodology can be found in my prior postings in this blog, and in forum discussions on the old prosper forum, now archived at www.prosperreport.com
While the press bemoans the credit crisis, there is no such event visible in this data. There's simply nothing special about the last few months. Prosper.com loans continue to go bad at about the same rate as in earlier months. "Credit crisis" is no excuse. These loans simply form a very low quality portfolio, going bad at around 20% per year.
Loans originated after late 2007 look a little better, because Prosper raised the credit score cutoff, chopping off the worst borrowers, and thereby raising the average quality of the portfolio.
Meanwhile, there has been no improvement Prosper.com's collections activities. This appears to be a competely dead area, with no effort being expended on lender's behalf. In fact, Prosper has removed the collection statistics of their main collection agency Amsher from the Prosper web site. Lenders can no longer directly observe how bad collections are.
I'm sorry to notice that Prosper has removed the ROI calculation from their performance stats web page. Unfortunate, because it was the best ROI calculation around for these loans. It actually used the cash flows, instead of doing a hack calculation using "average loan age" as the 3rd party web sites do. My guess is that Prosper's damn lawyers once again advised them to provide even less service to their customer base (of lenders). Its a shame.
The best discussion among prosper.com lenders takes place on prospers.org.