Online Lender Prosper in Bank-Like Move to Package Soured Loans
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Prosper Marketplace Inc., the second-largest online provider of consumer debt, is washing its hands of its least reliable customers by selling their loans to investors.
The company will pool together loans more than 120 days into default and auction them to a single buyer on a monthly basis, according to a statement posted on its blog Tuesday. The strategy is “aimed at delivering an increased level of return for investors,” Prosper said, as recoveries are expected to beat those of debt collectors.