The only option left for users is Virgin’s most basic social lending product, Handshake Basic, where for the low low price of $99 Virgin Money will pump out a templated promissory note for you and your kindly friend/lender (never mind that promissory note templates are readily available for free online). No longer available is the Handshake Plus product, where Virgin would at least collect payments on the lender’s behalf, avoiding those awkward “hey, could you, uh, pay me back?” moments.

This is the sad winding down of yet another of Richard Branson’s grand visions. From the acquisition of CircleLending in May 2007 and the opulent, history-bending (a British guy preaching revolution in Boston?) launch in Boston’s Copley Square in October 2007 (see video), it’s taken about two years for the Virgin Money empire to collapse in the United States.

The first clue that something was awry at Virgin Money was the awkward resignation of CircleLending’s founder Asheesh Advani. Our post on Advani’s resignation has drawn a lot of comments, including accusations of sexism, racism, and general incompetence. Either Advani’s ouster was an attempt to reinvigorate the company, or just another step towards the grave. In either case, later comments alleged a few more details about the demise of the company:

• The company was no longer offering retail mortgages or reselling its mortgage license. The general manager of the mortgage business had bought Virgin Money’s licenses and started ClearPoint Funding. (ClearPoint’s state licenses page lists Virgin Money’s same licenses in fewer states, but the same pithy headline: “Drivers, dogs, yes, even we need licenses too. Here they are.”)
• Virgin Money has eliminated loan servicing, and transferred loan servicing for previously-issued loans to a third party loan servicer.
• Virgin Money recently laid off 80% of their staff and removed the sign from their “posh” office space (although the view from Google Maps is very mid-80s office park).

All but the last point can be verified, but from the, uh, simplicity of the Virgin Money US site, it’s pretty clear that the friend-to-friend lending experiment that started back in  2001 is coming to a close.

Note to the webmaster at Lending Club: It’s probably time to take Virgin Money’s mortgage products off the Uncrunch America web site that’s languishing on your domain.

Photo credit: Richard Branson in Fortune Small Business

Related posts:

1. Asheesh Advani Steps Out of Virgin Money – Or Was He Pushed Out?
2. Virgin USA acquires CircleLending, enters US banking market
3. Prosper Won’t Stop ’til They Get Enough SEC Filings

As Prosper Lending Review points out, Pertuity Direct has not issued a press release since March (when they announced that they had funded $500,000 in loans), and hasn’t made a blog post since May. P2P Lending News contacted Pertuity Direct requesting an interview in early July, and received no response.

This apparent shutdown comes with no forewarning to Pertuity Direct members. The web site is still active and seems functional, although no new borrower stories have been posted since May 12. Users can still register, but borrowers attempting to sign up from any state (including Pertuity’s home state of Pennsylvania) are told “We currently do not offer loans in your state”.

Investors hoping to sign up through the National Retail Fund’s web site are also roadblocked with the following message:

We’ve reached out to Pertuity Direct for comment on these reports, and will add an update when more information exists.

Related posts:

1. Pertuity Direct Launches Mutual Fund-like P2P Lending
2. Pertuity Direct Lends $500K in First Two Months
3. Lending Club and Pertuity Direct Seek Affiliates

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.

Related posts:

1. Prosper Closes Site, Enters Quiet Period
2. LendingClub Suddenly Halts Lending
3. Prosper Adding States at a Good Clip

The full message posted on Prosper’s Blog was:

Prosper has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future.

The registration filing is a necessary step toward making the secondary lending market available to the community. This is something many of you have been asking for, and we believe the liquidity of a secondary market will make Prosper even more vibrant.

Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. If you’re an existing lender, your current lender agreements will be unaffected; your existing loans will continue to be serviced; you’ll be able to track and monitor your loans; and you’ll be able to withdraw funds from your Prosper account.

If you’re a borrower with an existing loan, you will continue with your current borrower agreement and be unaffected by the registration process. 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.

A successful registration can take several months, but we assure you we will do our best to move forward as quickly as possible. Until this process is complete, we’re required to be in a quiet period and will be unable to respond to press, blogger or other inquiries about Prosper or the registration filing until it becomes effective.

We apologize for any inconvenience this may cause, and want to thank you in advance for your understanding and support.

Related posts:

1. Prosper is Quiet Again
2. LendingClub Suddenly Halts Lending
3. Prosper Files Amended S-1 with SEC

Lending Club has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. We will continue to service all previously funded loans during this period, and lenders will be able to access their accounts, monitor their portfolios, and withdraw available funds without changes.

The borrowing side of our site will remain generally unaffected by this registration process; borrowers can continue to apply for loans and new loans posted after April 7, 2008, will be funded and held only by Lending Club.

Until the registration process is completed, the company will undergo a quiet period and will not be able to respond to press and other inquiries about Lending Club or the registration process during that time.

Borrowers continue to post loan requests, but without lenders, it is hard to imagine that they would be fulfilled. It looks like some loans are being funded by LendingClub themselves, but this doesn’t seem like a sustainable solution.

Although no public complaint has been issued, It is suspected that LendingClub has been asked to shut down by the US Securities and Exchange Commission, and that LendingClub complied for fear of receiving a formal cease and desist, which would hurt its reputation and prevent it from raising further capital.

Related posts:

1. Prosper Closes Site, Enters Quiet Period
2. LendingClub launches social P2P lending site on Facebook
3. LendingClub Proposes New Structure in S-1 Filing

However, only a few days later, on March 3, an official statement from the Autorité des Marches Financiers (AMF), the regulatory body that covers securities in Canada, included the following language:

At the request of the Autorité des marchés financiers (AMF), the Bureau de décision et de révision en valeurs mobilières (BDRVM) issued an order on February 27, 2008 against IOU Central Inc. (“IOU”) to cease any activity, directly, indirectly or by Internet, in respect of a transaction in a form of investment governed by the Securities Act (the “Act”), including any activity as a securities dealer. The BDRVM also ordered Philippe Marleau and all directors, officers, employees, representatives and mandataries of IOU to cease any activity in respect of a transaction in securities in a form of investment governed by the Act for and on behalf of IOU, including any activity as a securities dealer.

Microlending.ca has the full details of the Canadian government’s complaint against IOU Central. The complaint focuses on two facts:

1. The company falls under the jurisdiction of the AMF but did not register with the AMF, file a prospectus with the AMF, or solicit or receive authorization from the AMF to do business.
2. The company’s web site includes many references to “investing”, and “offers no financial guarantee”. These claims seem to subject the site to securities law, which requires AMF authorization.

Colin Henderson, the founder and CEO of the competitor site CommunityLend was quoted by the Toronto Star, saying ”it’s not really a surprise to us”. The regulatory issues that IOU Central has been facing are undoubtedly very familiar to Colin and his team, and explain in large part the continued delay on the launch of CommunityLend.com.

Related posts:

1. Is IOU Central Planning a US Site?
2. IOU Central becomes Canada’s first P2P Lender
3. CommunityLend Launches Licensed Peer-to-Peer Lending in Canada