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The Federal Reserve's Randall Kroszner has encouraged the industry to explore efforts to help large groups of borrowers.
In December 2007, to great fanfare, the Bush Treasury cajoled the mortgage industry into promising a (voluntary) temporary rate-freeze for certain groups of borrowers.
"The sense of community matters," he says.Prosper takes this idea a step further, by allowing customers to form groups of borrowers with similar interests or backgrounds—similar to social networking sites such as MySpace.com or Friendster.
At least, some groups of borrowers are first required to save money that they can put down as collateral; others must outline their business ideas to lenders.
But Gumbinger warns that the new products make sense only to a few specific groups of borrowers, and usually come at a price.
But some groups of borrowers are first required to save money that they can put down as collateral; others must outline their business ideas to lenders.
Similar(49)
The foundation says no group of borrowers has defaulted.
Ms. Pico is one of three in her group of borrowers.
At least one group of borrowers, though, could get a break.
Each group of borrowers had to make repayments until their entire cohort's debts had been repaid.
Investors got assets that yielded more than government bonds and represented claims on a diversified group of borrowers.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com