Has anyone lost money on PeerStreet crowdfunding website?
Member since 2018 · 10 posts · 2 votes
Has anyone lost money on PeerStreet crowdfunding website?
Most Popular Reply
Investor · Portsmouth, VA · Member since 2015 · 2 posts · 3 votes
6yI started investing in peerstreet back in 2017. I used "auto investing" to pick 10 notes at $2000 each. Half of the notes defaulted. It takes 6-12 months to get your money back from a default. My money has been tied up with one note for almost 2 years. (see below) Although I haven't "lost money" I could have earned more in a savings account. I do not recommend.
January 23, 2020On 01/07/20, the Order of Reference was received. PeerStreet to file the Affidavit of Amounts due for the referee's package in February 2020.
December 16, 2019PeerStreet is waiting for the Order of Reference so a referee can be appointed and then can proceed with final judgment.
November 12, 2019On 11/01/19, PeerStreet submitted an Ex Parte application and is now waiting for the Court to enter an Order or Reference so a referee can be appointed in order to proceed with final judgment.
October 11, 2019In September 2019, PeerStreet called and asked the Court to expedite its ruling on its Motion for Default Judgment and the Appointment of a Referee. PeerStreet continues to wait for the Court's ruling.
September 10, 2019PeerStreet continues to wait for the Court's Order of Default Judgment and the Appointment of a Referee. PeerStreet will continue to follow up with the Court every month.
August 07, 2019PeerStreet is negotiating repurchase terms with the originating lender. The repurchase is expected to close in September 2019.
July 09, 2019The foreclosure process continues. PeerStreet continues to try to get the loan paid off.
June 04, 2019Foreclosure counsel is waiting on the court to enter the judgment so the referee can be appointed to calculate amounts due and owing.
May 07, 2019PeerStreet continues to push to have a judge assigned and the case heard. We have been told the foreclosure courts are backed up 6-9 months. PeerStreet continues to request for an expedited hearing.
April 04, 2019PeerStreet continues to attempt to expedite the court order.
March 08, 2019The County Clerks are backlogged and have yet to set a judge for the case. PeerStreet is requesting to expedite the process.
February 14, 2019PeerStreet is waiting for the court to appoint a judge. Once a judge has been appointed the Motion for Judgement will be filed.
December 03, 2018The time to answer has expired and foreclosure counsel has filed the motion for summary judgement. The foreclosure judge will be assigned, which generally takes 4-6 weeks.
November 01, 2018The complaint has been filed and service to the borrower has been completed. Once the period for the borrower to respond expires, counsel can move for judgment.
October 01, 2018The complaint of foreclosure is drafting and will be filed in order to move the legal proceedings forward.
September 04, 2018The Notice of Intent to foreclose expires in September and the borrower has continued to be nonresponsive.
August 01, 2018The borrower has been non-responsive and the foreclosure process is moving forward.
July 02, 2018The originating lender said that the borrower is looking for a six-month extension. The request is currently being reviewed.
June 05, 2018The borrower has been non-responsive and a demand letter has been sent to start the foreclosure process.
May 04, 2018The originator is contacting the borrower regarding the late payment.
March 01, 2018The borrower has agreed to a 3-month extension.
February 12, 2018The borrower has listed the collateral for sale. The list price is $779,000. The borrower will be requesting additional time to continue marketing the property for sale.
August 21, 2017The borrower made their July 1 payment. The lender is continuing to work with the borrower to make their August 1 payment.
July 06, 2017The lender is working with the borrower to cure the loan.
30 Replies
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
I suspect there is not a lender on the planet that has not had a loss at sometime in their business cycle. if your looking to invest and think you can find something that is 100% safe then real estate is not the vehicle..
- Member since 2018 · 10 posts · 2 votes7y
Thanks for your reply. I am just looking for people's experience with the Peer Street platform.
- San Diego, CA · Member since 2018 · 31 posts · 25 votes7y
I have been investing with PeerStreet since July 2018 and have yet to lose any money. I've had 2 of my ~30 investments go into default. One is still in the foreclosure process and the other had the note repurchased by the originator (and they paid all the delinquent interest as well). I believe PeerStreet still claims to have never lost an investor's principal, but that streak will eventually come to an end. I go into it knowing that some of my investments will not work out and I'll at the very least lose some of the expected interest and I adjust my expectations accordingly. I also recommend spreading the risk as much as possible by investing smaller amounts in more properties which in my opinion is one of PeerStreet's biggest strengths. That's what I do and it has worked well for me. As an added bonus, every month or two I have at least one property pay off and I can decide whether I want to re-invest or pull that capital out to deploy elsewhere.
- Member since 2018 · 10 posts · 2 votes7y
Thanks Steve for your reply. What you are saying makes a lot of sense. Do you recommend investing say $5K at a time or do you invest more or less per investment? Thanks for your insight. Heidi
- Investor · Campbell, CA · Member since 2016 · 78 posts · 33 votes7y
@Steve O'Keefe When your loans when into default, did Peerstreet communicate with you via email (regarding the originator repurchasing the loan, etc). I have some loans that are late, however I noticed in the past most of the borrowers eventually pay them off even when late.
- San Diego, CA · Member since 2018 · 31 posts · 25 votes7y
Originally posted by @Heidi Often:
Thanks Steve for your reply. What you are saying makes a lot of sense. Do you recommend investing say $5K at a time or do you invest more or less per investment? Thanks for your insight. Heidi
Hi Heidi,
Sorry, I just saw your question. I personally would stick to closer to the $1k minimums for several reasons. I suppose it ultimately depends on how much money you want to bring into PeerStreet, but there is not much to micro-manage so there is little difference between having thirty $1,000 loans and six $5,000 loans outside of whatever level of due diligence you want to apply prior to investing in each loan. In addition to that, you gain these benefits:
- Increased diversification of locations, asset types, and length of loans
- As loans are paid off, you can decide to reinvest or pull out funds (similar to laddering CDs but with much better rates)
- Less impacted by non-performing loans
- If adding funds monthly, allows you to put that money to work quicker
- Feeling like a boss when you can say you're invested in 30+ real estate deals
- San Diego, CA · Member since 2018 · 31 posts · 25 votes7y
Originally posted by @Amir Navabpour:
@Steve O'Keefe When your loans when into default, did Peerstreet communicate with you via email (regarding the originator repurchasing the loan, etc). I have some loans that are late, however I noticed in the past most of the borrowers eventually pay them off even when late.
Hi Amir,
In your Dashboard (under Positions) they will post periodic updates, but I have not received an email from them. You will only see them if you log in and look. Of my 24 current investments, only 1 is in default and here is the Notes section on it:
As you can see, they post updates about once a month. Keep in mind that each state has its own laws about how defaults are handled so some may take longer than others to be addressed.
- Member since 2019 · 1 post · 1 vote7y
I have been with PeerStreet for 15 months. 8 of those loans have been fully paid off at rates of 7-9%. Per the table below of the 5 remaining 3 are in default and going through the foreclosure process. I chose these based on the originator not having any previous defaults & the borrower with a high credit rating, so it is extremely disappointing not to have ongoing payments. Since the first default I have not put any new money into PeerStreet and do not intend to at this point.
- San Diego, CA · Member since 2016 · 6 posts · 1 vote7y
I’ve only been using them for a couple of months but so far so good. I am really liking the platform. They also seem to have new investment opportunities daily. So even thought they are a relatively new player they are definitely active!
If you decide to give them a shot feel free to use this link, we both get a 1% bump in returns: PeerStreet
- Gilbert, AZ · Member since 2016 · 14 posts · 8 votes7y
I have been investing with PeerStreet for 2-3 years now. They are well funded and a solid platform. The returns seem to be going down over time with many investment opportunities in the 7-7.5% range and the 8% to 10% are much more difficult to get into since they go within seconds mostly. Overall I would give them a thumbs up since the investments are backed by the first lien position.
- Member since 2018 · 10 posts · 2 votes7y
HI Eric: Thanks for responding. I see more in the 7% range as well. We have too look on the brighter side I guess since it is better than bank interest. :)
- San Diego, CA · Member since 2018 · 31 posts · 25 votes6y
Originally posted by @Serdar C.:
I am only being able to invest in the 5% short term loans. I can't get into higher interest loans despite signing up for automated investments since they are always oversubscribed. How can you guys invest? What is the trick?Sometimes you just need to wait a bit. I will occasionally see 4 or 5 deals go by that meet my automated investment standards that I don't get into. I would suggest double-checking your automated investments to ensure they are on and wait a week or two. I notice the deals are especially full around the 1st and 16th when interest is paid out. Failing that, contact their customer service. I've contacted them via phone before and they were very helpful.
- Member since 2020 · 7 posts · 3 votes6y
Is PeerStreet mismanaging borrower delinquencies? I have a few examples, but here are details on one of them. PeerStreet titled the position "Newark, NJ Refinance #49" and it had Original Loan Term: 12 Months from November 14, 2018 and Maturity Date: December 1, 2019.
This was probably a bad investment form the start, but not judging that here and instead discussing handling of a bad situation. The first three payments due were not made, and then the PeerStreet action notes began to accumulate:
February 05, 2019 - The originating lender has reached out to the borrower and the borrower has been unresponsive. A demand letter will be sent to the borrower if the loan is not paid in full.
March 29, 2019 - The originating lender is contacting the borrower regarding the late payment.
May 03, 2019 - A notice of default ("NOD") was filed on April 25th, 2019.
June 04, 2019 - The foreclosure complaint has been sent out for service.
July 10, 2019 - The loan has been reinstated. A distribution will be made soon.
July 16, 2019 - The loan has been brought current.
August 02, 2019 - The originating lender is contacting the borrower regarding the late payment.
September 03, 2019 - The originating lender has reached out to the borrower regarding their late payment. A demand letter will be sent to the borrower if the loan is not brought current or paid in full.
October 11, 2019 - PeerStreet engaged counsel to file a judicial foreclosure. A demand letter will be sent in October 2019.
November 11, 2019 - PeerStreet will file its foreclosure complaint in November 2019.
December 13, 2019 - PeerStreet is acquiring the necessary documents to file the foreclosure complaint.
I believe that only two payments, February and July 2019, were ever made, both to make the loan current at those times. Nothing has been paid since July 2019. All of the above, together that this was a $248 cash out of $263K loan situation would convince most observers that the borrow doesn't--and probably didn't--plan to pay.
But the real points here are these:
1. What has PeerStreet really accomplished on this one since August 2019?
2. Why could a notice of default and foreclosure complaint get sent out reasonably quickly after the March 2019 delinquency but now neither of those things have gotten done since August 2019?
3. Does PeerStreet have a robust, aggressive process and are they making good decisions in managing bad borrower situations?
4. When PeerStreet investors get paid, at best, past principal and missed planned interest, and PeerStreet themselves keep any late fees and interest on delinquent principal and interest, are PeerStreet interests really aligned with PeerStreet investor interests so long as there appears to be some remaining equity in the property?
What have others' experiences been with delinquent PeerStreet positions? Has PeerStreet managed them poorly or well?
- Investor · Portsmouth, VA · Member since 2015 · 2 posts · 3 votes6y
I started investing in peerstreet back in 2017. I used "auto investing" to pick 10 notes at $2000 each. Half of the notes defaulted. It takes 6-12 months to get your money back from a default. My money has been tied up with one note for almost 2 years. (see below) Although I haven't "lost money" I could have earned more in a savings account. I do not recommend.
January 23, 2020On 01/07/20, the Order of Reference was received. PeerStreet to file the Affidavit of Amounts due for the referee's package in February 2020.
December 16, 2019PeerStreet is waiting for the Order of Reference so a referee can be appointed and then can proceed with final judgment.
November 12, 2019On 11/01/19, PeerStreet submitted an Ex Parte application and is now waiting for the Court to enter an Order or Reference so a referee can be appointed in order to proceed with final judgment.
October 11, 2019In September 2019, PeerStreet called and asked the Court to expedite its ruling on its Motion for Default Judgment and the Appointment of a Referee. PeerStreet continues to wait for the Court's ruling.
September 10, 2019PeerStreet continues to wait for the Court's Order of Default Judgment and the Appointment of a Referee. PeerStreet will continue to follow up with the Court every month.
August 07, 2019PeerStreet is negotiating repurchase terms with the originating lender. The repurchase is expected to close in September 2019.
July 09, 2019The foreclosure process continues. PeerStreet continues to try to get the loan paid off.
June 04, 2019Foreclosure counsel is waiting on the court to enter the judgment so the referee can be appointed to calculate amounts due and owing.
May 07, 2019PeerStreet continues to push to have a judge assigned and the case heard. We have been told the foreclosure courts are backed up 6-9 months. PeerStreet continues to request for an expedited hearing.
April 04, 2019PeerStreet continues to attempt to expedite the court order.
March 08, 2019The County Clerks are backlogged and have yet to set a judge for the case. PeerStreet is requesting to expedite the process.
February 14, 2019PeerStreet is waiting for the court to appoint a judge. Once a judge has been appointed the Motion for Judgement will be filed.
December 03, 2018The time to answer has expired and foreclosure counsel has filed the motion for summary judgement. The foreclosure judge will be assigned, which generally takes 4-6 weeks.
November 01, 2018The complaint has been filed and service to the borrower has been completed. Once the period for the borrower to respond expires, counsel can move for judgment.
October 01, 2018The complaint of foreclosure is drafting and will be filed in order to move the legal proceedings forward.
September 04, 2018The Notice of Intent to foreclose expires in September and the borrower has continued to be nonresponsive.
August 01, 2018The borrower has been non-responsive and the foreclosure process is moving forward.
July 02, 2018The originating lender said that the borrower is looking for a six-month extension. The request is currently being reviewed.
June 05, 2018The borrower has been non-responsive and a demand letter has been sent to start the foreclosure process.
May 04, 2018The originator is contacting the borrower regarding the late payment.
March 01, 2018The borrower has agreed to a 3-month extension.
February 12, 2018The borrower has listed the collateral for sale. The list price is $779,000. The borrower will be requesting additional time to continue marketing the property for sale.
August 21, 2017The borrower made their July 1 payment. The lender is continuing to work with the borrower to make their August 1 payment.
July 06, 2017The lender is working with the borrower to cure the loan.
- Investor · Philadelphia, PA · Member since 2017 · 64 posts · 22 votes6y
@Heidi Often I would like to know there one in Philadelphia called lady Millionaire and I was looking wondering.
- Member since 2023 · 17 posts · 5 votes3y
Peer Street has fled bankruptcy.
They were selling unregistered securities and operating a Ponzi Scheme! They not only used investor money to support their personal lifestyle, but Peer Street also hindered borrowers payoffs to keep charging more fees. Through my investigation of investors and borrowers, I have found that Peer Street would not communicate with either side or try to force foreclosure or, worse, put borrowers in bankruptcy.
Investors must prepare for the 341 meeting of creditors and force the United States Trustees' office to do their job. Under 11 U.S.C. § 1104(a), the United States Trustee may seek the appointment of a Chapter 11 trustee to manage the financial affairs of a Chapter 11 debtor. A trustee must be put in place asap and deny any use of cash collateral.
The appointment of a Chapter 11 trustee is an extraordinary remedy based on a strong presumption in favor of leaving the debtor in possession. Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. The appointment of a Chapter 11 trustee should better serve creditors, shareholders, and the public interest by promoting efficiency, effectiveness, and transparency, traits that may have been lost by current management. A trustee would evaluate and marshal the assets, identify claims, and make sober-minded business decisions about whether the debtors can reorganize. Third, because of the debtors lack the confidence of their secured creditors and the unsecured. Fourth, the benefits of appointing a trustee outweigh the costs.
- Member since 2023 · 17 posts · 5 votes3y
10,000 creditors! WOW!
- Member since 2023 · 17 posts · 5 votes3y
SOLICITATION OF INTEREST FOR SERVING ON AN UNSECURED
CREDITORS' COMMITTEE
- Member since 2023 · 243 posts · 199 votes3y
Quote from @Zane Wright:
Peer Street has fled bankruptcy.
They were selling unregistered securities and operating a Ponzi Scheme! They not only used investor money to support their personal lifestyle, but Peer Street also hindered borrowers payoffs to keep charging more fees. Through my investigation of investors and borrowers, I have found that Peer Street would not communicate with either side or try to force foreclosure or, worse, put borrowers in bankruptcy.
Investors must prepare for the 341 meeting of creditors and force the United States Trustees' office to do their job. Under 11 U.S.C. § 1104(a), the United States Trustee may seek the appointment of a Chapter 11 trustee to manage the financial affairs of a Chapter 11 debtor. A trustee must be put in place asap and deny any use of cash collateral.
The appointment of a Chapter 11 trustee is an extraordinary remedy based on a strong presumption in favor of leaving the debtor in possession. Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. The appointment of a Chapter 11 trustee should better serve creditors, shareholders, and the public interest by promoting efficiency, effectiveness, and transparency, traits that may have been lost by current management. A trustee would evaluate and marshal the assets, identify claims, and make sober-minded business decisions about whether the debtors can reorganize. Third, because of the debtors lack the confidence of their secured creditors and the unsecured. Fourth, the benefits of appointing a trustee outweigh the costs.
Coincidentally, I was just reading this old thread yesterday to learn more about them. The later posts here a few years ago was a red flag.
I just saw this on the news just now.
How did you draw to the conclusion it was a Ponzi scheme?
I ask as no other news company reported it. No court order mentions this as well.
Reports said it was due to low demand and interest rates. Inventory probably played a factor. - Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Todd Jones:
Quote from @Zane Wright:
Peer Street has fled bankruptcy.
They were selling unregistered securities and operating a Ponzi Scheme! They not only used investor money to support their personal lifestyle, but Peer Street also hindered borrowers payoffs to keep charging more fees. Through my investigation of investors and borrowers, I have found that Peer Street would not communicate with either side or try to force foreclosure or, worse, put borrowers in bankruptcy.
Investors must prepare for the 341 meeting of creditors and force the United States Trustees' office to do their job. Under 11 U.S.C. § 1104(a), the United States Trustee may seek the appointment of a Chapter 11 trustee to manage the financial affairs of a Chapter 11 debtor. A trustee must be put in place asap and deny any use of cash collateral.
The appointment of a Chapter 11 trustee is an extraordinary remedy based on a strong presumption in favor of leaving the debtor in possession. Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. The appointment of a Chapter 11 trustee should better serve creditors, shareholders, and the public interest by promoting efficiency, effectiveness, and transparency, traits that may have been lost by current management. A trustee would evaluate and marshal the assets, identify claims, and make sober-minded business decisions about whether the debtors can reorganize. Third, because of the debtors lack the confidence of their secured creditors and the unsecured. Fourth, the benefits of appointing a trustee outweigh the costs.
Coincidentally, I was just reading this old thread yesterday to learn more about them. The later posts here a few years ago was a red flag.
I just saw this on the news just now.
How did you draw to the conclusion it was a Ponzi scheme?
I ask as no other news company reported it. No court order mentions this as well.
Reports said it was due to low demand and interest rates. Inventory probably played a factor.ponzi scheme is very common when investment has multiple serial funds/notes offering but the number of assets do not making sense.
If one has 50% default note and they can survive, it's almost a ponzi. - 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Carlos Ptriawan:
Quote from @Todd Jones:
Quote from @Zane Wright:
Peer Street has fled bankruptcy.
They were selling unregistered securities and operating a Ponzi Scheme! They not only used investor money to support their personal lifestyle, but Peer Street also hindered borrowers payoffs to keep charging more fees. Through my investigation of investors and borrowers, I have found that Peer Street would not communicate with either side or try to force foreclosure or, worse, put borrowers in bankruptcy.
Investors must prepare for the 341 meeting of creditors and force the United States Trustees' office to do their job. Under 11 U.S.C. § 1104(a), the United States Trustee may seek the appointment of a Chapter 11 trustee to manage the financial affairs of a Chapter 11 debtor. A trustee must be put in place asap and deny any use of cash collateral.
The appointment of a Chapter 11 trustee is an extraordinary remedy based on a strong presumption in favor of leaving the debtor in possession. Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. The appointment of a Chapter 11 trustee should better serve creditors, shareholders, and the public interest by promoting efficiency, effectiveness, and transparency, traits that may have been lost by current management. A trustee would evaluate and marshal the assets, identify claims, and make sober-minded business decisions about whether the debtors can reorganize. Third, because of the debtors lack the confidence of their secured creditors and the unsecured. Fourth, the benefits of appointing a trustee outweigh the costs.
Coincidentally, I was just reading this old thread yesterday to learn more about them. The later posts here a few years ago was a red flag.
I just saw this on the news just now.
How did you draw to the conclusion it was a Ponzi scheme?
I ask as no other news company reported it. No court order mentions this as well.
Reports said it was due to low demand and interest rates. Inventory probably played a factor.ponzi scheme is very common when investment has multiple serial funds/notes offering but the number of assets do not making sense.
If one has 50% default note and they can survive, it's almost a ponzi.
I had personal experience them on a deal that went bad they were very difficult to deal with . I suspect like most companies that relied basically 100% on nation wide Brokers to bring them deals your just going to have some bad loans.. I would get contacted by their business development person quite often about bringing deals on to their platform..
For those that dont know how it worked.
Peer st had relationships with a large number of HML through out the US.. These HML would originate the loans And Peer st would buy the loans usually within 7 days of the loan closing there by giving the original HML their money back. that HML made their points for their profit.. There were some buy back provisions but those dont really go anywhere / or tough to enforce. I just found them bloated and tough to deal with when it came to trying to do a work out. - Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Jay Hinrichs:
Quote from @Carlos Ptriawan:
Quote from @Todd Jones:
Quote from @Zane Wright:
Peer Street has fled bankruptcy.
They were selling unregistered securities and operating a Ponzi Scheme! They not only used investor money to support their personal lifestyle, but Peer Street also hindered borrowers payoffs to keep charging more fees. Through my investigation of investors and borrowers, I have found that Peer Street would not communicate with either side or try to force foreclosure or, worse, put borrowers in bankruptcy.
Investors must prepare for the 341 meeting of creditors and force the United States Trustees' office to do their job. Under 11 U.S.C. § 1104(a), the United States Trustee may seek the appointment of a Chapter 11 trustee to manage the financial affairs of a Chapter 11 debtor. A trustee must be put in place asap and deny any use of cash collateral.
The appointment of a Chapter 11 trustee is an extraordinary remedy based on a strong presumption in favor of leaving the debtor in possession. Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. The appointment of a Chapter 11 trustee should better serve creditors, shareholders, and the public interest by promoting efficiency, effectiveness, and transparency, traits that may have been lost by current management. A trustee would evaluate and marshal the assets, identify claims, and make sober-minded business decisions about whether the debtors can reorganize. Third, because of the debtors lack the confidence of their secured creditors and the unsecured. Fourth, the benefits of appointing a trustee outweigh the costs.
Coincidentally, I was just reading this old thread yesterday to learn more about them. The later posts here a few years ago was a red flag.
I just saw this on the news just now.
How did you draw to the conclusion it was a Ponzi scheme?
I ask as no other news company reported it. No court order mentions this as well.
Reports said it was due to low demand and interest rates. Inventory probably played a factor.ponzi scheme is very common when investment has multiple serial funds/notes offering but the number of assets do not making sense.
If one has 50% default note and they can survive, it's almost a ponzi.
I had personal experience them on a deal that went bad they were very difficult to deal with . I suspect like most companies that relied basically 100% on nation wide Brokers to bring them deals your just going to have some bad loans.. I would get contacted by their business development person quite often about bringing deals on to their platform..
For those that dont know how it worked.
Peer st had relationships with a large number of HML through out the US.. These HML would originate the loans And Peer st would buy the loans usually within 7 days of the loan closing there by giving the original HML their money back. that HML made their points for their profit.. There were some buy back provisions but those dont really go anywhere / or tough to enforce. I just found them bloated and tough to deal with when it came to trying to do a work out.So they're on the same business as MREIT or big player like Blackstone. We can buy MREIT from public and most of MREIT currently is losing tons and tons of money. I guess it's crazy to have MREIT-company in crowdfund space. This area should be open to highly sophisticated investor only, not those with 1k to invest and forget investor type.
- Member since 2023 · 17 posts · 5 votes3y
See the article attached. Colchis Capital Management LP started pulling its funds from Peer Street in 2020, which is when the wheels started falling off. I bet Peer Street paid them millions and should be clawed back by the US Trustee.
This part of the article stuck out to me.
Reuters recently reported that the SEC had increased its scrutiny of private credit funds here given potential manipulation of loan pricing, especially in a negative economic environment. - 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Carlos Ptriawan:
Quote from @Jay Hinrichs:
Quote from @Carlos Ptriawan:
Quote from @Todd Jones:
Quote from @Zane Wright:
Peer Street has fled bankruptcy.
They were selling unregistered securities and operating a Ponzi Scheme! They not only used investor money to support their personal lifestyle, but Peer Street also hindered borrowers payoffs to keep charging more fees. Through my investigation of investors and borrowers, I have found that Peer Street would not communicate with either side or try to force foreclosure or, worse, put borrowers in bankruptcy.
Investors must prepare for the 341 meeting of creditors and force the United States Trustees' office to do their job. Under 11 U.S.C. § 1104(a), the United States Trustee may seek the appointment of a Chapter 11 trustee to manage the financial affairs of a Chapter 11 debtor. A trustee must be put in place asap and deny any use of cash collateral.
The appointment of a Chapter 11 trustee is an extraordinary remedy based on a strong presumption in favor of leaving the debtor in possession. Nevertheless, in an appropriate case, “the appointment of a trustee is a power which is critical for the Court to exercise in order to preserve the integrity of the bankruptcy process and to ensure that the interests of creditors are preserved. The appointment of a Chapter 11 trustee should better serve creditors, shareholders, and the public interest by promoting efficiency, effectiveness, and transparency, traits that may have been lost by current management. A trustee would evaluate and marshal the assets, identify claims, and make sober-minded business decisions about whether the debtors can reorganize. Third, because of the debtors lack the confidence of their secured creditors and the unsecured. Fourth, the benefits of appointing a trustee outweigh the costs.
Coincidentally, I was just reading this old thread yesterday to learn more about them. The later posts here a few years ago was a red flag.
I just saw this on the news just now.
How did you draw to the conclusion it was a Ponzi scheme?
I ask as no other news company reported it. No court order mentions this as well.
Reports said it was due to low demand and interest rates. Inventory probably played a factor.ponzi scheme is very common when investment has multiple serial funds/notes offering but the number of assets do not making sense.
If one has 50% default note and they can survive, it's almost a ponzi.
I had personal experience them on a deal that went bad they were very difficult to deal with . I suspect like most companies that relied basically 100% on nation wide Brokers to bring them deals your just going to have some bad loans.. I would get contacted by their business development person quite often about bringing deals on to their platform..
For those that dont know how it worked.
Peer st had relationships with a large number of HML through out the US.. These HML would originate the loans And Peer st would buy the loans usually within 7 days of the loan closing there by giving the original HML their money back. that HML made their points for their profit.. There were some buy back provisions but those dont really go anywhere / or tough to enforce. I just found them bloated and tough to deal with when it came to trying to do a work out.So they're on the same business as MREIT or big player like Blackstone. We can buy MREIT from public and most of MREIT currently is losing tons and tons of money. I guess it's crazy to have MREIT-company in crowdfund space. This area should be open to highly sophisticated investor only, not those with 1k to invest and forget investor type.
Peer st. bought the whole loans then they did the slice and dice after the loan was purchased and boarded. same thing that Mers did / does.
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