On the Prosper.com forums there is a debate as to whether some states or regions tend to be more delinquent than others. Borrowing some statistics from LendingStats.com, it turns out there are some small differences in rates of delinquency by region.
When I divided lending statistics by region, the southern United States had a slightly higher default rate than other regions, the east had the lowest rate of default:
Some states (with more than 50 loans) which had especially problematic delinquent rates are New Mexico, New Hampshire, Texas, Alabama, Idaho, Georgia, California, and Missouri (in that order). New Mexico, New Hampshire, Texas and Alabama’s delinquent rates were all above 20%, a truly terrible rate of delinquency.
You can view the entire list at LendingStats.com here.
Labels: Proser Statistics
- At January 9, 2008 at 8:06 AM Cubbiesnextyr said...
Something to keep in mind is Prosper's history when looking at stats like lates by states.
How long has Prosper been lending in that state? GA was one of the first states that Prosper was allowed to lend in at the max rates, back in the wild west days when all lenders had was a credit grade, DTI, and a story. Prosper was talked about on the radio by Clark Howard, and thus many low rated people from GA flocked to Prosper.
IL didn't allow lending at any meaningful rate (cap was 9% for a while I believe) until later in Prosper's history, after more credit data came viewable and lenders started to learn what to look out for. So their default numbers should be lower.
Some states have rate caps so restrictive, that only AA's can get loans (the northeast tends to have a lot of restrictions like this, "to protect their residents"). This also skews the numbers.
You must always remember Prosper's past when making charts and jumping to conclusions. Perhaps looking at their late rates over time would be a better idea. Is GA's rate of lates in the past 12 months better or worse than Prosper as a whole? Or IL's. Over 6 months?
- At January 13, 2008 at 7:40 AM Mike said...
I have to agree with cubbies - it's no good unless you control for additional factors than state. If I remember right, the average credit grade can swing from a B+ to a D- over all the states. That will have a significant impact.
- At January 13, 2008 at 6:42 PM j9359 said...
IMHO, the state rate caps have a lot to do with this. Nebraska has a rate cap of 16%, average interest rate of 12.57%. Too bad LendingStats doesn't tell us the ROI for a state.
- At February 8, 2010 at 4:31 AM Anonymous said...
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