Loan diversity

I've long come to the conclusion that my biggest risk is credit concentration and not being diversified over enough loans, particularly a problem when first deploying funds as it takes time to build-up a portfolio.  This was is initially compounded by trying to be too selective in the loans I invest in.  After reviewing my investment decision in respect of the few loans that went bad,  I concluded the level of DD one can undertake remotely is fairly limited.  I now invest in every loan that meet my risk/return target by default, and only exclude those that are to obvious lemons (losses and negative equity tend to be a give away!).  My loan portfolio has now grown to 500+ over 6 platforms, although two thirds of my investment are on FC and RebS. 

I'm weary of platform risk.   I have been stung in the past when I had funds at MF Global, the now defunct equity broker.  Unfortunately for me, whilst I had liquidated all my investments, my final instruction to transfer funds back to me wasn't acted on and were still held by them in a client account when they went bust.  Despite MFG being FSA regulated and being obligated to hold client funds in a segregated account, they hadn't been doing this properly in realtime and thus there was a shortfall in client funds and many, including myself, were treated as unsecured creditors.  My exposure was significantly greater than the FSCS limit so didn't try to claim compensation early on as I would have had to novate my creditor claim to FSCS and wait years for a final settlement.  Instead, I sold my claim to a bank for 95% of claim value 2 years after the original failure (I believe all client money was eventually fully settled).  This experience enlightened me to how messy things can get when a company goes into administration and the time it can take an administrator/liquidator to sort things out even when there wasn't a final deficit in client funds.  Obviously MF Global was a massive insolvency on the scale of a mid sized bank, but I believe that were a P2P platform to go bust, we would have the following exposures:
1. Liquidity issues - the new administrator is unlikely, at least initially, to operate any existing SM.  It is quite likely that funds would likely be tied up for the term of the loans.
2. Likely higher default rates - at least some borrowers are likely to try gain advantage from the demise of the platform and ensuing chaos and try their luck to late pay or not pay at all (often happens to companies that go into administration - rarely is the full value of the debtor book realised
3. Higher charges payable to the new operator/administrator

Fortunately the number of reasonably established P2P platforms is growing so it easier to spread investments over 4/5 platforms to help manage this risk, but a residual risk will always remain.