I'm not necessarily opposed to Prosper modifying loan terms if it truly is in the lenders' interest, but based on their record, I don't trust Prosper to make any decisions regarding my loans anymore.Collections – Hardship Arrangement are Benefiting Lenders Now, after so many screw-ups, not many are willing to give Prosper an inch because there is no trust left. It's been said before, but we'd all probably give Prosper the benefit of the doubt if they were doing this 2-3 years ago. Thus, this most certainly IS a "legally relevant modification." As Prosper itself has stated, it offers borrowers "a short term reduced payment." If Prosper tried to sue the borrower for the late payments (as it would be perfectly within its rights to do) soon after agreeing to such an arrangement, it would lose, due to the new payment agreement.
Since Prosper's actions have no affect whatsover on the lender's or borrower's respective rights in the event of a lawsuit, there's been no legally relevant modification to the agreement of any kind. What Prosper promised was not to do the latter, not the former. Quote from: havastat on November 15, 2009, 09:56:06 am -There's an enormous difference between temporarily holding off heavy-handed collections actions if the borrower is willing to cough up some cash, and doing something that would affect the lender's rights in court in the event of a lawsuit. Prosper would be breeching the contract's fiduciary duty if it made the lender lose money for the benefit of the general public or its own or some commentator's ideas of altruism when not required by law to do so. It might be "nice" if Prosper took the money and gave it all to charity instead of to the lender, but it wouldn't be legal. Prosper has a duty to look out for the the lender's interest, not the interest of other people who aren't parties to the contract. But the lending agreement actually forbids such an approach. Same here.Īdditional comment Some commentators have said that Prosper ought to look out for the interests of future lenders rather than considering only what will maximimize the chances of some payment occurring in the immediate situation.
A contract with a lawyer that gave the lawyer that little discretion would be really unusual, and a nonlawyer who interpreted standard boilerplate as prohibiting routine behavior would simply be being naive, nothing more. With all due respect, it just doesn't work that way. This whole argument is a bit like claiming that a lawyer hired to pursue a lawsuit has committed malpractice if he or she agreed to a continuance or listened to a settlement proposal, or even issued a demand letter prior to immediately filing suit.
There's an enormous difference between temporarily holding off heavy-handed collections actions if the borrower is willing to cough up some cash, and doing something that would affect the lender's rights in court in the event of a lawsuit. If routine collecting behavior were a violation of the contract, all the provisions about collecting would be nullities. Collecting is attemping to drum up some money when the full amount hasn't been paid as agreed. But if Prosper's sole duty is to turn loans over to a collection agency, that provision also has no meaning. The contract speaks of Prosper attempt to collect. And one doesn't interpret contracts in a way that turns lots of their provisions into nonsense. They simply make no sense if the duties involved were rigidly automatic. This language is the sort used when experts agree to perform duties requiring expertise and discretion on behalf of clients. The contract uses several phrases here, such as best efforts language, duty of care, and fiduciary duty, that simply have no meaning unless there is discretion.
Nope I should have completely followed the old adage, neither a borrower nor a lender be. You still sound like a Prosper borrower trying to explain away the contractual agreements. Quote from: wftrust on November 14, 2009, 12:25:57 pm -I will try to explain my position a little differently. Collections – Hardship Arrangement are Benefiting Lenders