As for Zopa.com, I do not expect they will have the same success. Prosper caters to those with (almost) all credit ratings (520+, I think), with understandable rewards from investing in ‘more risky’ loans.

Investors/Lenders may prefer the security of Zopa.com but the rewards will be more limited, since Zopa.com only offers loans to individuals with 640+ credit score.

I’m glad there is now competition in the U.S. market though, and look forward to other contenders and perhaps even a lowering of Zopa.com’s borrower requirements!

Rex

haha be amusing to see how long this lasts

this is just hitting replay on SIVs…where a bunch of garbage debt is rolled into something that is otherwise legit, and then is sent off looking for dumb investor capital to swallow the pill

so the NCUSIF has somehow agreed to tie its insurance fund to a pool of borrowers that can’t even get a loan at countrywide? they should be rehearsing their comments for the senate hearing now.

hasn’t this summer taught anyone that there is NO SAFE WAY to make crappy loans look viable?

legit CDs yield under 5%

no one can tell me a 17% yield lies in the same asset class. no, i’m sorry, someone is either not showing the fine print or just flat-out lying

Why would you lend at 8.5% when you could lend at 16% with zero risk? The article mentions some minimum requirements for borrowers, and there’s probably more small print to come.

From the WSJ:

“But unlike Prosper and others that don’t guarantee lenders will get their money back, Zopa lenders should get their principal back since their deposits are insured for as much as $100,000 per credit-union member. Borrowers and lenders don’t pay any fees, although borrowers — who will need a minimum FICO credit score of 640 — could be subject to late fees. Zopa, for its part, shares in the interest-rate spread that the credit unions earn between the loans and deposits.

In order to participate in Zopa’s system, consumers must sign up with one of the six credit unions participating with Zopa. For their part, the participating credit unions hope to expand their membership and stand out from the crowd.”

http://tinyurl.com/3yuswn

The Dutch Uncle

http://www.mitc...sp?eventID=1365

The event is on December 5th (next Wednesday) in Palo Alto. Event starts at 6:30.

Here’s the registration link:

https://alum.mi...amp;groupID=154

I have no idea how they shall do that

You deposit your money into a federally insured certificate of deposit (CD). Insurance is probably through National Credit Union Share Insurance Fund (NCUSIF) administered by the NCUA. Your money is insured up to $100,000 (U.S.).

This is a smart move – there are something like 8,000 CUs in the U.S., with over 1200 that have assets of $100m or more and having ~ 60,000,000 members with $656b in assets total and $382b in loans (2006 numbers).

Prosper may be viral, but consumers will likely trust their member-owned CU before some crazy outfit that is focused on marrying the worst borrowers with vulture lenders. I bet that Zopa blows past Prosper in 2007 and never looks back…

http://breaking...c0iWh4sCQ2pmfWv

100% impossible. If they did make that claim, big mistake.