Update On Prosper's Collection Effectiveness

As I mentioned in a previous blog post, one way to gauge the effectiveness of collections is to look at how delinquent age. If a loan is one month late, in a month it will either be brought current or it will be two months late. From this, we can get near real-time updates on whether Prosper's attempts to improve collections are working.

And on that note, we now have Nov 1 statistics to add to the table.

Month Initially Late	Initially Late (1 month late)	1 Month Later (2 months late)	2 Months Later (3 months late)	Repair Rate
January 07	95	83	82	13.68%
February 07	101	90	90	10.89%
March 07	108	91	89	17.59%
April 07	130	119	119	8.46%
May 07	193	178	171	11.40%
June 07	203	195	186	8.37%
July 07	224	194	187	16.52%
August 07	250	232	227	9.20%
Sept 07	259	229	234	9.65%
October 07	313	264	?	?
November 07	324	?	?	?

The uptick in defaults in the Sept 07 family (1 month late on Sept 1, 2 months late on Nov 1, 3 months late on Nov 1) is peculiar and may be because October has 31 days (a good question for Prosper staff). The Oct 07 family, however, is noteworthy because the repair rate is already at 15.7%. While this is not outside the statistical spread (March and July were also pretty good), it's better than average (11.4%). A decrease would've been a contrary indicator, so this is a reasonable sign. December's numbers should be enlightening.

I'm transitioning my Collections-O-Meter (TM) from "skeptical" to "cautiously hopeful".