[rajuabju]

So I have AQI setup with specific parameters, etc, for investing in loans.

Today I noticed one of my loans went late on Prosper. Fine, normally not a big issue.

But I looked into the loan details further, and noticed that several of the parameters in this loan do NOT fall within my AQI criteria!

Is this possible, that AQI messed up? Has anyone else had this issue come up?

I've emailed Prosper about to find out of its something I could have done on my end somehow (unlikely), or if its possible that AQI could have messed up? (also unlikely?)

Loan in question is: Loan #78220 | Note #78220-17

[TRPeterson]

I had a similar, yet different situation in early 2012 when using AQI's to get my IRA invested.    Since you can set the sort order within a Saved Search, and AQIs are based on Saved Search results, I assumed the AQI would invest in the loans near the 'top' of my sort first.  I started with very broad Saved Search critera, sorted for highest credit score (1st sort) and lowest inquiries (2nd sort) with few other criteria.  I ended up stuck with MANY loans I would not have invested in with low credit scores and high inquiries... many of which have just recently been charged-off.  These loans were within my Saved Search results, but near the bottom of the list.

The developer I spoke with at Prosper found it to be an "interesting idea" that AQI's should consider the sort order and said he'd put it on the list of considerations for a code release.  I never followed up to hear if it actually made it into production code.  It seemed like an obvious system design to me, but was new hat to him.  Granted, no where doea the Prosper site claime that AQI's consider (or do not consider) the sort order.

In the end, the developer and I had good conversation and he was very open to ideas.  ...but... I was still surprised some of my 'ideas' were not already baked into the system design.  At that point I decided to no longer rely on AQIs and began venturing into building NumberWhale and a stats program to analyze and invest without 'blindly trusting' Prosper's system.  I thought I would make them availalble for public use, but in the end decided to have them as personal use tools.

...didn't mean to go on a tangent... but I'd be curious to hear what Prosper says in response.  It would be nice if they provided a code release blog so we investors knew across time when and what features are implemented.  I might even begin using AQIs again if they did that.

[TravelingPennies]

Prosper did respond (quickly, actually, which I def. appreciate) and has opened an internal inquiry in this.

I keep looking at my AQI Settings, and this particular note... I just dont see how AQI could have picked this particular note to invest it; it clearly doesnt fall within my selected criteria. Prosper is also looking into whether I may have manually selected the note somehow (which I'm 99.9% sure I didnt).

The whole thing is very very strange to me. I'll report back when I hear from Prosper again.

[graceful]

This happened to me, though not recently. When Prosper determined it was an error on their end, they bought the note back from me. I'm satisfied with that.

Now I do look at AQI notes just to be sure. But lately I'm not catching a single note in my AQI filters.

Graceful

[Xenon481]

If two people here have had this issue where Prosper misapplied the AQIs, then that indicates that the problem is much more wide-spread and there are potentially thousands of Borrower Dependent Notes that were generated as parts of misfired AQIs.

Prosper not only should have notified lenders of the fact that it was aware of misfired AQIs, it also should have proactively searched for all instances of misfired AQIs and refunded ALL lenders, not just the one(s) that noticed and complained.

It appears however, that Prosper has not done so.

[TravelingPennies]

Just a quick update on my issue-

I received another email from Prosper that they are still looking into, and a call today to follow up. Certainly appreciate the efforts on Prosper to investigate.

Over the phone, I was indeed told that the AQI feature is a "macro" of some kind, and that it does, from time to time (but not with any level of regularity) mess up. I was also told that Prosper intends to overhaul the AQI feature in the near feature to be a lot more robust and reliable, and essentially a new mechanism to prevent erroneous auto investing.

[TravelingPennies]

Actually, Prosper has been scanning the system and checking for notes to buy back. I had several that were  bought back, and it looks like a couple were removed from funding that were picked by my AQI and later funded, but my AQI picked wrong, and my investment cancelled.

If my filters had stood the test of time, I'd be agitating to get the new code up so I could continue to use AQI. But in my case, the two "iron-clad" "sure-thing" filters stopped finding loans to invest in. Maybe those loans are being swooped up by the API investors, or more likely, the underwriters at Prosper recognized the underwriting mistake they were making. In other words, borrowers were being offered higher interest rates than IMHO they should have. I was happy to have a piece of these loans, but now those lenders are being offered much better rates, so I don't get to see them anymore.

I love using the filters, but leaving a filter to run on it's own, means I have to be satisfied with every loan it captures. I haven't come up with a good combination yet.

Graceful

[dontvote]

from: rajuabju on February 13, 2013, 06:49:55 PM

[TravelingPennies]

My final update on this...

Prosper bought back the loan (or reimbursed me $25, however you want to look at it).

I didnt get a final written confirmation from them, but i believe they did determine I was correct, in that AQI invested in a loan that did not meet my criteria.

So I'm happy again... and now I monitor AQI a lot more closely.