Comments on: Borrowing to lend on Prosper.com http://www.mightybargainhunter.com/2006/06/22/borrowing-to-lend-on-prospercom/ Personal finance, commentary, and spending less the easy way Fri, 19 Mar 2010 14:24:44 -0400 http://wordpress.org/?v=2.8.6 hourly 1 By: John M http://www.mightybargainhunter.com/2006/06/22/borrowing-to-lend-on-prospercom/comment-page-1/#comment-3755 John M Thu, 22 Jun 2006 13:33:55 +0000 http://www.mightybargainhunter.com/2006/06/22/borrowing-to-lend-on-prospercom/#comment-3755 I see two problems with this as a long term investing plan. 1.)If others wanted to do this they could finds cheaper ways to get cash to fund the poor loans. 2.)Sub-prime lending is inherently risky and even when companies properly calculate the risk and diversify their loan portfolio, they still could get burned. Inexperienced lenders are more likely to lose money because it is not only important to go through their credit report, but also involves looking for clues to see whether the credit problems were due to one big mistake or loss; or whether it is due to a pattern of poor behavior. This can be a lot harder than just analyzing the facts. I see two problems with this as a long term investing plan.

1.)If others wanted to do this they could finds cheaper ways to get cash to fund the poor loans.

2.)Sub-prime lending is inherently risky and even when companies properly calculate the risk and diversify their loan portfolio, they still could get burned. Inexperienced lenders are more likely to lose money because it is not only important to go through their credit report, but also involves looking for clues to see whether the credit problems were due to one big mistake or loss; or whether it is due to a pattern of poor behavior. This can be a lot harder than just analyzing the facts.

]]> By: traineeinvestor http://www.mightybargainhunter.com/2006/06/22/borrowing-to-lend-on-prospercom/comment-page-1/#comment-3744 traineeinvestor Thu, 22 Jun 2006 08:22:19 +0000 http://www.mightybargainhunter.com/2006/06/22/borrowing-to-lend-on-prospercom/#comment-3744 Question for the lawyers: is borrowing to lend a business activity and, if so, does it trigger any regulatory isssues? I do not know the answer for the US (I do not live there) but in at least some countries the borrowing part would trigger issues if it is done as part of a business. Question for the lawyers: is borrowing to lend a business activity and, if so, does it trigger any regulatory isssues? I do not know the answer for the US (I do not live there) but in at least some countries the borrowing part would trigger issues if it is done as part of a business.

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