If you follow
Prosper stuff, you should have already heard by now that May 08 became Prosper’s largest month for loan originations. Over $9.5 million in loans originated last month, besting April 07, which was the previous high.
It took Prosper over a year to set a new originations record. Not exactly stellar (nor consistent) growth, but there’s more going on in the background. Let’s take a look…
While April 07 was the previous high month, only about 1/3 of April 07’s loan originations fell within Prosper’s “Select Index”. (The Select Index is a set of loans defined by Prosper which fall within the credit grades AA-E, have 0 current delinquencies, 0-3 recent inquiries, and 40% or less DTI.)
You can see from the graph that since Oct. / Nov. 07 the Select Index’s share of total originations has increased substantially. This is most likely due to Prosper’s Portfolio Plans.
Nearly 2/3 of all originations in May 08 fell within Prosper’s “Select Index”. Wow. So not only was May 08 a record month in total originations, but it also set a record in the Select Index’s share of that pie. That means more quality loans have been funding, and that’s pretty good news.
Now let’s look at the origination growth of Select Index loans:
Comparing the amount of Select Index loans funded in May 08 and April 07, you can see that the volume has more than doubled. Again, a very positive sign, and another record.
One last graph. Fred93 likes to show a graph of the month-by-month late loan fraction,
which you can find here. Instead of looking at all loans, let’s see how those Select Index loans have been performing (on the same scale):
While not perfect, the late loan rate of Select Index loans isn’t nearly as bad as the performance of all loans together. I can’t imagine what a graph of non-Select Index loans would look like…yikes.
*** I should note the performance graph above does not include repurchased loans, many of which (about 60) are part of Prosper’s Suit Test. Of the 60 repurchased loans, at the moment 28 have been identified by listing number. Of these 28, only 5 fall within Prosper’s Select Index. So, while these repurchased loans are missing from the data, the impact from these loans is not very high.***
