Propser Vice President of Operations, Doug Fuller, reported today that Prosper will not proceed with their debt sale. This will likely anger many lenders as they hope to get a refund on some of their bad loans. However, Prosper seems to have good reason to not proceed at this time. The highest bid to buy up the defaulted debt was 1.5 cents to the dollar. Consumer credit card debt that is barred by the statue of limitations still gets .5 to .75 cents to the dollar. As it turns out, debt buyers can get a surplus of debt from credit card defaults, leaving Prosper’s “novel” debt assets to be relatively unconsidered. As Prosper waits to find better solutions for Lenders, they are now also creating a new status of “Charged Off.”

Categories: Biz
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