Peer-to-Peer & Private Lending (P2PL) Risk Mitigation Standards & Benefits

P2PL Standards

What are the standards? The P2PL Standards are not available to the general public; the benefits however, are (see below). The P2PL standards are available to all members of PEMI®.

Peer-to-Peer & Private Lending (P2PL) transactions, when not managed correctly, may lead to risky situations for some or all involved parties. Examples of P2PL risk is found here: Peer-to-Peer Lending (P2PL) and Non-Authenticated Private Lender Risk

Benefits of the P2PL Standards Direct Beneficiaries

Benefits for Applicants and Borrowers

Are you a Borrower dealing through government licensed Mortgage Brokers?

If you are dealing with a person who advertises themselves as a specialist in peer-to-peer or private lending, you need to be sure of the following:

Benefits for Borrowers and Brokers

Are you a Borrower or a Mortgage Broker dealing directly with a Private Lender or Private Equity Mortgage Investor-LenderTM?

If you are dealing with a person who advertises themselves to be a private lender, the first question you need to know ask the person is "are you really a private lender?".

Who knows? What if the person is not a lender and has no money to lend? What if the person is only a fraudster looking to obtain your mortgage application in order to use your sensitive credit file data in order to steal your identity? Or worse?

PEMI® determines if a private investor (individual or corporate) meets standards to qualify as an Accredited-Class® Private Equity Mortgage Investor-LenderTM (APL).

An Accredited-Class® Private Equity Mortgage Investor-LenderTM (APL) is certified to have the financial strength to act as creditors by meeting eligibility criteria identified in the New PEMI® Investor-Lender Membership-Accreditation Notice section we know that the private lender has the networth, financial capability and experience to hold themselves out to be an Accredited-Class® Private Equity Mortgage Investor-Lender.

Additionally, APL's are required to adhere to the PEMI® principles of credit delivery, namely:

1 - good faith lending

2 - honoring commitments

3 - working with borrowers when times get tough

Individuals or companies that meet the accreditation standards are conferred the Accredited-Class® Private Equity Mortgage Investor-Lender (APL)TM designation and are also referred to as Accredited-Class® (www.accreditedclass.com) investor-lenders.

APL's deal with the general public exclusively through Mortgage Brokerages with the P2PL Source Identifier Trademark.

True Private Lenders, True Private Lending®

Benefit for Investors and Lenders

Are you an Investor or Lender?

If you are an individual interested in participating in the lucrative "private lending" business as an investor-lender and you are interested in dealing with a Government Licensed Mortgage Broker, one who advertises themselves as a "specialist" in peer-to-peer or "private lending", you need to be sure of the following:

1 - In Canada, less than 1% (Source) of mortgage lending transactions are defined as "private lending" [non-bank, non-institutional, non-syndicated, non-regulated or regulatory exempt, free trading securities and related financial instruments; also known as Peer-to-Peer (P2P)/Private/Crypto/Secret/Shadow lending]; does my Mortgage Broker have sufficient knowledge, experience and proficiency in the subject of non-bank, non-institutional, non-syndicated, non-regulated or regulatory exempt, free trading securities and related financial instruments; also known as Peer-to-Peer (P2P)/Private/Crypto/Secret/Shadow mortgage transactions beyond the minimum standard of competency required for Mortgage Brokers who trade in 95% of mortgage lending transactions, namely, bank and institutional mortgage lending transactions, to advise me at a standard that satisfies his or her Mortgage Brokers':

1.1 Professional Liability Insurance standard of conduct requirements for trading in peer-to-peer or "private lending" transactions?

1.2 Regulatory standard of conduct requirements for Mortgage Brokers who trade in peer-to-peer or "private lending" transactions?

2 - has the Mortgage Broker passed the regulatory requirements of his or her jurisdiction; and if there is a history of discipline, what does this history look like?

3 - is the Mortgage Broker authorized to trade in the jurisdiction within which you reside, or the location of the real estate, or are they regulatory exempt?

4 - does the Mortgage Broker's company have a quality management system in place to ensure the privacy and safety of your personal, top secret personal financial information?

5 - does my Mortgage Brokerage act for me, the investor-lender or the borrower or neither? Some regulatory bodies in certain jurisdictions require Mortgage Brokers who act for "private lenders" to act at a fiduciary standard of care; I would like this same standard for myself, what is the rule in my jurisdiction?

6 - is the Mortgage Broker audited to ensure they meet the Accredited Class® definition of a qualified private equity mortgage lenders see: Peer-to-Peer & Private Lending (P2PL) Audit

1 - In Canada, less than 1% (Source) of mortgage lending transactions are defined as "private lending" [non-bank, non-institutional, non-syndicated, non-regulated or regulatory exempt, free trading securities and related financial instruments; also known as Peer-to-Peer (P2P)/Private/Crypto/Secret/Shadow lending]; does my Mortgage Broker have sufficient knowledge, experience and proficiency in the subject of non-bank, non-institutional, non-syndicated, non-regulated or regulatory exempt, free trading securities and related financial instruments; also known as Peer-to-Peer (P2P)/Private/Crypto/Secret/Shadow mortgage transactions beyond the minimum standard of competency required for Mortgage Brokers who trade in 95% of mortgage lending transactions, namely, bank and institutional mortgage lending transactions?

2 - has the Mortgage Broker passed the regulatory requirements of his or her jurisdiction; and if there is a history of discipline, what does this history look like?

3 - is the Mortgage Broker authorized to trade in the jurisdiction within which you reside, or the location of the real estate, or are they regulatory exempt?

4 - does the Mortgage Broker's company have a quality management system in place to ensure the privacy and safety of your personal, top secret personal financial information, including the "private lenders" that the Mortgage Broker might represent?

5 - Does my Mortgage Broker act for me, the investor-lender or not; and is the standard of care to a fiduciary standard or not?

6 - is the Mortgage Broker able to publicize the P2PL Source Identifier Trademark?

PEMI® Professionals and PEMI® Certified System-Networks have inbuilt controls to address the above issues.

Mortgage Brokers or Mortgage Brokerages that meet the accreditation standards are able to publish the P2PL Source Identifier Trademark logo on their branding material.

WARNING: Accredited-Class® Private LendersTM do not provide direct-to-retail service. If you are a borrower and a person passes themselves off as an Accredited-Class® Private LenderTM and are dealing with you directly (without a P2PLTMSource Identifier Trademark mortgage brokerage) please notify us immediately at info[at]peminstitute.org.

PEMI® evaluates PEMI® Certified government licensed and registered loan & Mortgage Brokerage companies and individuals have a proven, risk-based Quality Management System and has implemented formal quality management protocols to ensure that:

- the potential for applicant mortgage fraud is procedurally reduced. MQCC has developed AFATS™ Active Fraud Avoidance Technology System, designed to enable real time fraud identification through all phases of the mortgage process from origination to funding.

- transactions are quality managed in accordance with the loan or Mortgage Brokerage firm's jurisdictional and regulatory requirements to assure conformity to statutory, regulatory and process requirements.

- a system is in place to assure that Errors & Omissions insurance claims are minimized through the implementation of process-based validation systems.

- applicable "private" loan and mortgage investment opportunities are underwritten in accordance to applicable GAMUS® Generally Accepted Mortgage Underwriting Standards.

PEMI® Professionals and PEMI® Certified System-Networks have inbuilt controls to address the above issues.

Mortgage Brokers or Mortgage Brokerages that meet the accreditation standards are able to publish the P2PL Source Identifier Trademark logo on their branding material.

Benefits of the P2PL Standards InDirect Beneficiaries

  • Regulators
  • Legislators
  • Members of the General Public
  • Professional Errors and Omission Liability companies

Audits Ensure that Standards Work

Peer-to-Peer & Private Lending (P2PL) Audit

Peer-to-Peer & Private Lending (P2PL) Risk P2PL Source Identifier Trademark

Learn more