I am very gradually getting out of Peer Street. 5 remaining loans, of which one is current, one late 90+, 3 in default.
1) Peer Street's collection efforts on delinquent loans have been derisory - a note every month saying "efforts are being undertaken to contact the borrower and originator." After 6 months thus, notes that they will entertain the idea of actually sending a demand letter. Extensions of the due date, sometimes as many as 3 or 4, pushing the date out 3 years or so, with no attempts to get make the borrower get current first or to exact a good-faith token payment. More threats of actually sending a real-live demand letter. Some of these loans have not made more than 1 or 2 payments, then nothing for years. This seems to me clearly fraudulent but Peer Street never attempts to contact the local district attorneys. Their whole system could be summed up as saying, "Attention borrowers! Under no circumstances take us seriously. We stand with you, not with the people whose money we gave you."
2) Peer Street's accounting has been great for Peer Street; not so great for the investor. They have overpaid, even double-paid, insisted the payment was correct and confirmed, belatedly discovered their error, and then abstracted any future payments from any performing loan until they made themselves whole. They do not manifest any such solitude or activity against non-performing borrowers.
3) Customer support has been painful. Representatives I have talked to have largely not seemed to understand what business they are in or how they operate. "Was the payment confirmed?" "Yes, the payment was confirmed." "Why are you taking it back if it was confirmed?" "We're not really taking it back, just reversing it." "When I withdrew the funds, I relied on it being confirmed. Should I not rely on confirmation statements from Peer Street?" "No, you can rely on it , if we says it's confirmed, it is confirmed." "Why would you tell me it is confirmed when you are going to..." Lather, rinse. The closest I came to a comprehensible philosophy was when I was told, "Never forget that borrowers have rights," after a borrower had paid one month, suspended payment for 6 or 8, and might - conceivably, just maybe - have to undergo the torment of an actual written demand letter.
4) The only safe approach to this operation is actuarial - you are going to get defaults that don't cure, and some that do but take so long they reduce the time-value of your investment to an asymptotic approach to 0. If you can do enough investments and wait long enough, the real return - while MUCH LOWER than the nominal return, may still be positive. But to select, originate, and especially to track enough loans to obtain a positive value, is not worth your time. At normal individual-investor loan levels, one or two sour loans out of, say, 30, wipes out your positive return. The mental/emotional energy to do 50 or 100 loans, which might end up positive, could be better spent on managing a property you actually own - or on buying an index fund and spending the time catching up on reading Jane Austen novels.