I'm signing up for Fynanz and this is part of the lender registration agreement:
Borrowers and co-signers are identified by a Fynanz user name but are not allowed to disclose their identity or contact information to Lenders. You may contact Fynanz to request any such additional information concerning the borrower or cosigner as you reasonably believe would assist you in making your decision to lend. Fynanz will evaluate such requests on a case-by-case basis and will provide any additional requested information in its sole discretion after it has received the borrower’s approval to release information.Interesting.
A little further down they talk about pledge bids. Seems they have the same difficulties as Prosper (and the other sites) in paying lenders interest on deposited funds, so their way around it is to allow a lender to pledge a bid:
Fynanz, in its sole discretion, may allow you to place a bid even if you do not have sufficient funds to meet the bid in the Fynanz Funding Account (a “Pledge Bid”). You must transfer funds from your deposit account to the Fynanz Funding Account to cover the amount of the Pledge Bid within five days of placing the bid but no later than the close of the auction in which your bid is a winning bid. Fynanz reserves the right to cancel Pledge Bids at any time.Also interesting.
As I'm reading through, I keep finding interesting nuggets. Fynanz will also create loans if the listings has not been full funded. Seems 50% is the cut-off:
If a listing gets a bid or bids in an amount totaling at least half the amount of the borrower's requested loan, the bids that are winning bids at the time the listing expires are matched with the listing, and Fynanz will arrange for a loan to be made in the amount totaling the winning bids to the borrower who posted the listing, ...
This is different. I can see how even a partial loan can help a student, whereas in other situations it might not be so useful.
Who will bear the cost of collections?
Fynanz pays certain collection costs out of the guarantee fund, depending on the Loan’s stage of collection. Before a Borrower has missed the fifth consecutive loan payment (the “Cure Period”), Fynanz pays collection costs out of the guarantee fund and returns 100% of any proceeds from debt collection to the Lender. Following the Cure Period, Fynanz returns proceeds of collection efforts to Lenders net of (1) collection costs, (2) accrued servicing fees, (3) accrued guaranty fees, and (4) amounts previously paid from the Guarantee Fund in respect of the defaulted loan. Collection efforts may include settlement offers to borrowers to repay delinquent loans for less than the outstanding balance.Oh dear, they might make settlement offers to defaulting borrowers? Not sure I like this.
I also don't get this:
Voluntary Repurchases. From time to time Fynanz may, in its sole discretion, invite you to offer your Notes evidencing non-delinquent loans to Fynanz for repurchase from you at a slight discount from face value. Any discount rate will be based on the holding period, the interest rate or margin, borrower payment history, the current status of the loan and the proprietary credit grade assigned by Fynanz to the loan. Your offer to Fynanz is entirely voluntary. If you make such an offer, Fynanz may accept by buying back the Notes within a 90 day evaluation in its sole discretion. When deciding to accept your offer, Fynanz will consider whether the borrower has defaulted on the loan, made any late payment under the Note, and whether the loan status or expected status has changed, including entering any deferment or forbearance within the 90 day period.I really don't know if this is just an "in case" safeguarding clause they stick in there.
Now here it gets interesting. They seem to have the ability for lenders to transfer notes to other lenders:
Transfer Notice. If at any time you propose to transfer (including any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, or other transfer or disposition of any kind, collectively, “Transfer”), any Notes, then you shall promptly give Fynanz written notice of your intention to make the Transfer (the “Transfer Notice”). The Transfer Notice shall include (i) a description of the Notes to be transferred (the “Offered Notes”), (ii) the name(s) and address(es) of the prospective transferee(s) and (iii) the consideration and (iv) the material terms and conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that you have received a firm offer from the prospective transferee(s) and in good faith believe a binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. The transferee(s) must have an active Fynanz account(s) and accept the provisions of this Agreement.and
Fynanz’s Right of First Refusal. Fynanz shall have an option for a period of 10 days from receipt of the Transfer Notice to elect to purchase the Offered Notes at the lesser of (x) the same price and subject to the same material terms and conditions as described in the Transfer Notice or (y) the outstanding principal balance of the Notes as of the date of repurchase, plus any accrued but unpaid interest on the principal balance as of the date of repurchase at the interest rate set forth in the Notes. Fynanz may exercise such purchase option and purchase all or any portion of the Offered Notes by notifying you in writing before expiration of the 10 day period as to which Notes it wishes to purchase. If Fynanz notifies you that it desires to purchase any such Notes, then payment for the Offered Notes shall be by remittance into the Fynanz Funding Account.Hmmm, this could get really interesting.