Prosper is Quiet Again

May 9th, 2009 - 1 comment - Filed Under - by Matthew Paulson

Prosper logo Just two weeks after opening to California lenders, Prosper has shut down again, citing a renewed desire to complete their SEC registration. With their recent relaunch, Prosper had only been cleared by California state regulators.

I think Wiseclerk put it best when he wrote “What a mess.” It was disappointing enough that Prosper re-launched without SEC approval, but to now shut down so suddenly after re-opening raises serious concerns about the company’s viability. And now that Prosper is back in a quiet period, it’s impossible to tell what is really happening, and how soon (if at all) the company will be back.

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Mastjmw

Let me first say I think that P2P lending is the future of banking and I am a big fan of the concept. but here is the big old hairy BUT,

After reviewing the SEC cease and desist order, http://www.sec.gov/litigation/admin/2008/33-8984.pdf , it is understandable as to why Proper.com has been shutdown. Lenders are entirely without recourse if thier loan portfolio’s go south, lender don’t know who they are lending to, or if Proper.com ceases to exsist. These barriers are not insurmountable but must be addressed for P2P lending to become a legit enterprise.

I think that a solution would be to have the loan servicers seperated from the marketplace.

Just a thought.