We’ve got a couple updates on the social lending front this morning. First, Prosper has entered a quiet period which they note, "Prosper has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future."

During this time Prosper will not accept any new loans but will continue to service the loans that have already been completed. Lending Club just completed this process which took about six months to complete.

I’ve also received some loan numbers from Lending Club on the 10-day period since the quiet period completion. They have signed up 1.072 new lenders and in total have provided just under $2 million in loans. These numbers are higher than before the quiet period began earlier this year.

If you are new to social lending, our three-part social lending series will get you up-to-speed.

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According to an internal AOL email that was forwarded to us, the blog had 14 million page views from 1.3 million unique visitors on Tuesday, when Apple made new Macbook announcements. 6.4 million of those page views were served in one hour. This was the highest traffic day ever for the site.

The full email:Source:TechCrunch

Prosper and other peer-to-peer lenders like Zopa and Lending Club may turn out to be collateral damage from the credit crisis. Yesterday, Prosper suspended new lending in order to register with the S.E.C to create a secondary marketplace for the loans on its site. As recently as Monday, Prosper didn’t think it would have to register as a seller of securities. But the new climate of heightened regulatory oversight in light of the current financial meltdown has changed all of that.

Lending Club previously had to do the same thing and suspend new lending last April . (The S.E.C just gave it the green light to start lending again on Tuesday). Zopa shut down it’s P2P lending site in the U.S. last week.

Even before the increased regulatory scrutiny, P2P lending took a massive hit along with the rest of the financial industry.

We’ve written about social lending several times before including our 3-part series looking at Zopa, Prosper and LendingClub. Jim Bruene at NetBanker has put together a good financial analysis of the social lending scene for the first quarter of 2008. LendingClub and Prosper share their loan information while Zopa does not.

From Jim’s analysis, "In Q1, Prosper and Lending Club combined for more than $30 million in originations, up $10.7 million (55%) compared to about $20 million in Q1 2007." Jim goes on to note that for the lower risk loans, LendingClub actually passed Prosper in total volume.

If the economy continues to sour, my guess is that loan applications at Zopa, Prosper and LendingClub will increase dramatically.

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Zopa, the social finance lender, has spoken for months about their U.S. launch. Today I received additional information on the launch. They say that the launch will be in just a "few days". Perfect timing for the holiday season.

Here are the features they claim will be different than the U.K. version:

Looks familiar, right? Lots of real people taking money out and putting money in. But Zopa in the USA will be very different, too. Here are just some of the ways we’ll be different from the sites that exist today:
 

• No risk for investors.
  Your funds will be federally insured. No more worrying about whether your borrowers will pay your loan back.
• Pick who you want to help.
  Investors will choose exactly who they want to help.
• Set your rate.
  Investors will choose how much they want to earn, up to a ceiling.
• No waiting.
  Borrowers will get their loans immediately upon approval.
• Lower your monthly payment.
  Borrowers can actually reduce their loan payments after they’ve borrowed. They’ll do that using rich profiles…

How will we do all this? By using some very cool technology and a terrific partnership with leading credit unions.

I’ve highlighted the option that could be "game-changing" for the social finance and social lending movement. From what I gather, neither competitor Prosper nor Lending Club provide any sort of federal insurance for the loans created on the respective site. Isn’t a loan all about risk? I have no further details at this point but I do have a mail into Zopa to try to learn more.

We’ve written extensively on social finance and social lending. Our 3-part series on social lending is a great place to start if you are new to the area. I remain confident that social lending will continue to grow in 2008.

When I was a little kid growing up on the mean streets of Brooklyn, the corner candy store had a big sign with photos of anyone who stole from them. Then as I grew up, the video store had a sign with the bad checks they received with the name of the person in large type for all of the customers to see. And we all remember the Seinfeld episode all about a bad check to a grocer.

So what happens today when a person gets stiffed on a social finance site such as Prosper, Zopa or Lending Club? You guessed it - they blog about it! And if the blog is popular, it will be worse than a bad check posted on a wall. (of course if the person is a scammer, they won’t care)

Yesterday Andy Swan posted about just such a deadbeat. He notes:

I loaned the guy $500 through Prosper. Apparently he is involved in some type of credit crunch situation. Probably some type of adjustable rate mortgage that just rolled over to 24% APR on his delinquent ass.

Now he’s stiffing me and everyone else on Prosper that fell for his enthusiasm and sparkling smile. I just hope he’s driving around in a sweet ride with a hot girl and the money’s not rotting away in some casino coffers right now.

In hindsight, the “endorsements” from his friends should have been a tip off.

You can click over to the profile and photo of the man called "Slim123". I am confident we will see more of public humiliation payment tactics as social finance and social lending explodes.

For more information about social lending and social finance, check out our 3-part series.