October 28, 2008

Charge-offs begin today

By Prosper

As described on the September 24 site update, borrowers whose loans were 91 or more days past due on that date (and not in bankruptcy proceedings) received a notice of acceleration. The Notice of Acceleration is a warning that the loan will be accelerated in 30 days, meaning the loan will be due and payable in full. If the borrower doesn’t make a payment by the 30 day deadline, his or her loan will then be charged-off at 121 days past due.

As of today, any loans which are still 121 or more days past due will be accelerated and switched into “charge-off” status. Loans in which the borrower is in a bankruptcy proceeding will not be charged-off.

Lenders with charged-off loans will receive an email when the loan is charged-off. A charge-off loan’s details will still be accessible to lenders in their Prosper account, and any post-charge-off recoveries can be viewed on the loan detail page.

You can learn more about charge-offs on this help page.