Earlier in the week I wrote a post about the lenders and group leaders on Prosper that were also borrowers AND LATE on their loans: http://rateladder.com/2007/02/26/please-close-major-loophole-for-deadbeat-lendergroup-leaders/

Basically I was calling for the impounding of the lender funds to pay loan.

Well, Prosper has responded via Prosper Andrew:

Hi all,   

We’re looking into this, too. We’ll do what we can.

Andrew

and again here:

Here’s the data on these loans:

( Sorry - had to remove actual data. Point is, the highest ratio of borrower lending activity to amount borrowed was 16%, and the median was 3% )

We have decided to wait and see how these loans turn out. If one of them defaults, we’ll find a way to take the gains from the borrower’s lending portfolio and give it to lenders on their loan.

Best regards,
Andrew

If you want to read the entire forums post here it is: http://forums.prosper.com/index.php?showtopic=20010

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