Risk, Regulatory Compliance, Accreditation & Education

  • Accredited Class® Private Lender Designation
  • Canada Mortgage Industry Government Regulators
    • Alberta (AB) - RECA
    • British Columbia (BC) - FICOM
    • Manitoba (MB) - MSC
      • Advertising on the Internet - Policies and Directives
      • Mortgage Broker Referral Fees NOT Allowed
      • Mortgage Broker's Act
    • Ontario (ON) - FSCO
  • Canadian Securities Regulatory Notice for Mortgage Investment
  • Peer-to-Peer & Private Lending Risk
  • Risk Reduction through Compliance & Simplicity
  • Risk Reduction through Quality Standards: PEM Institute
  • APLUS® Underwriting Standard (GAMUS.org)
  • Appraisers & Appraisals
  • Mortgage Default & Enforcement
  • Defense to Foreclosure

Accredited Class® Private Lender Designation

Get Accredited! The benefits of accreditation help investors, brokers and borrowers.

If you are an active private investor and would like to become recognized as an Accredited-Class® Private Lender (APL)TM , please read below:

PrivateLender.org

PrivateLender.org is an accreditation body which certifies Accredited-Class® Private Lenders (APL)TM and information portal designed as a member's only online community comprised of accredited investors, who actively lend money to others - see our Regulatory Notice - See below.

Membership

The is a members only network.

Full Membership is open to Accredited-Class® Private Lenders (APL)TM or accredited investors who have prior experience lending money .

New Membership Notice/Accreditation Requirements:

If you have not lent money on a private basis but are interested in the world of private lending, please take a moment to read through our website and learn about the business. If, after learning about the private lending business you would like to try and invest in your first deal, please contact info[at]privatelender.org.

Please understand that private lending is an activity based upon trust. All prospective Accredited-Class® Private Lenders (APL)TM must demonstrate the following:

  • (1) Accredited Investor: that you are a qualified accredited investors as defined by the Canadian National Instrument 45-106 Prospectus and Registration Exemptions - or equivalent thereof, in your country of origin.

(Alberta - Part 1, 1.1 - Page 5)

(British Columbia)

  • (2) that you have an existing relationship with a lawyer/law firm who has the ability to represent you in all phases of the lending transaction.
  • (3) You must have successfully completed the Theory and Practice in the Private Lender Industry course which includes:
    • understanding private mortgage origination
    • recognizing private mortgage transactions
    • adhering to regulatory compliance requirements; namely: borrower disclosure and interest rate compliance
    • understanding the regulatory requirements for documentation within a jurisdiction

Exemption Exception Notice

If you are not an accredited investor or do not have an existing relationship with a lawyer/law firm and have an interest in investing in mortgages, feel free to contact the company, in order to see if you qualify for an "Accreditation by Exception".

As an Accredited-Class® Private Lender (APL), you become a part of the Accredited-Class®.

Canada Mortgage Industry Government Regulators

In Canada, a True Private Lender® (see PEMI® Definition) is not subject to direct oversight by government. Oversight is directed primarily to Mortgage Brokers, their agents, employees, management (both licensed and non-licensed); and certain classes of lenders and administrators are subject to such oversight.

Country-wide regulatory oversight is managed by jurisdictional units called provincial regulators. Some of whom are listed below:

Canada Provincial Mortgage Industry ‎(Broker & Select Lender, Administrator Classes)‎ Regulators

Alberta (AB) - RECA

Mortgage brokerage activity is regulated by the Real Estate Council of Alberta.

British Columbia (BC) - FICOM

Mortgage brokerage activity is regulated by the Financial Institutions Commission.

Manitoba (MB) - MSC

Mortgage brokerage activity is regulated by the Manitoba Securities Commission.

Ontario (ON) - FSCO

Mortgage brokerage activity is regulated by the Financial Services Commission.

Canadian Securities Regulatory Notice for Mortgage Investment

To the global reader:

Every country has rules of some kind. The content and principles discussed in this website are applicable to you, no matter where you live or choose to invest. In some examples and checklists, the security described is real estate, however you can apply the general principles to any other type of asset class. Seek counsel from your local business or legal advisor if you don't have experience in private lending.

To readers who are based in, or do business in Canada:

Calgary, Alberta, Canada:

A memo to the reader regarding securities regulation and its affect on mortgage investment. In Canada, if you are an individual and seek to invest some of your networth into an investment, you must be aware of what you are doing. Part of establishing awareness, is to educate yourself in the subject of investments or gain the counsel of a financial advisor, business advisor and/or legal advisor.

This website is designed to educate the general public about mortgage private equity mortgage investment and lending solutions. Some individuals may wonder if MortgageQuote.ca is regulated under a federal or provincial Securities Act, because this public website discusses the concept of investing. The answer is yes and no. Yes, as a mortgage broker. No as a mortgage lender.

If, however, upon becoming a PEMI® Certified (PEM Institute) Accredited Class® private equity mortgage investor-lender, if you seek to invest in specific mortgage transactions, then you have the option to work with a PEMI® Certified Private Equity Mortgage Broker, who can originate transactions for you. You may find a list of mortgage agents here.

All PEMI® Certified Private Equity Mortgage Broker adhere to quality management principals based upon the ISO 9001 Family of Quality Management Standards and all are licensed to trade in mortgages within their respective provinces. PEMI® Certified Private Equity Mortgage Brokers are not regulated by a Securities Act, since licensed mortgage brokers are exempt (see Table 1.1 below) from same. Moreover, PEMI® Certified Private Equity Mortgage Brokers work with Accredited Class® private equity mortgage investor-lenders who do not "syndicate" mortgage investment opportunities. That means, two or more persons or companies are not participating, directly or indirectly, as lenders in a debt obligation secured by a mortgage. Private mortgage investors are typically APLsTM (individuals or corporations) who are the sole investor in a mortgage investment.

All PEMI® Certified Private Equity Mortgage Broker are licensed to trade as Mortgage Brokers in their respective mortgages under their provincial legislation. For example, in the Province of Alberta and British Columbia under the Real Estate Act (Alberta) and Mortgage Brokers Act (British Columbia), respectively. Further, all PEMI® Certified Private Equity Mortgage Broker are registered with their provincial regulators; for example: the Real Estate Council of Alberta (www.reca.ca) or the Financial Services Commission of BC (www.ficom.gov.bc.ca) or the Financial Services Commission of Ontario (www.fsco.gov.on.ca)

Regulatory Notice: Private Equity Mortgage Investing-Lending

Peer-to-Peer & Private Lending Risk

Private Mortgage Lender's Checklist

All investments carry a risk. It took a long time to save the hard-earned money you want to invest, so it is wise to carefully review your investment decisions. This checklist is intended for people considering investing in mortgages, real estate, tax shelters or similar schemes.

No matter how good an investment looks, there is always a possibility something can go wrong: that is what risk means. Before you invest, ask the following questions to assess the risk involved. Then decide if that level of risk is acceptable to you.


  1. The Promoter:
    1. Is the promoter providing appropriate information?
    2. Does the investment comply with the applicable laws and regulations of the provincial regulating commission? Contact them to find out.
    3. The commission's mandate is to protect investors. If a promoter suggests that a deal has been structured to avoid the scrutiny of regulators, ask why.
    4. Have the promoters advised you of their education and experience?
    5. Is the promoter's background relevant to the proposed investment?
    6. Have the promoters confirmed that they have no conflict of interest (such as obtaining fees from borrowers and investors, or having an interest in the investment)?
  2. If the answer to any of these questions is NO, the investment risk may be increased.
  3. Inducements:
    1. Has the promoter given additional inducements for you to make the investment?
    2. Has the promoter implied the investment is a "sure thing"?
    3. Has the promoter given a personal "guarantee" for the investment?
    4. Has the promoter emphasized that the investment is a great "tax-shelter"?
  4. If the answer to any of the above is YES, investment risk may be increased.
  5. Information Quality:
    1. Does the quality of information and materials relating to the investment seem adequate for the significant investment you may be considering?
    2. Are the financial statements audited by a professional accountant?
    3. If there are future projections, do you know what assumptions they're based on? Are these assumptions realistic?
    4. Have you actually seen or inspected the proposed investment?
  6. If the answer to any of these questions is NO, your investment risk may be increased.
  7. Investment Features:
    1. Are you satisfied the features of the investment provide an adequate level of safety?
    2. Is this your only investment, or one which represents more than 10 per cent of your savings? Diversification is an important safety feature.
    3. Does the promoter's family or any other related party stand to benefit from the funds being raised?
  8. If the answer to any of these questions is YES, then investment risk may be increased.
    1. Has the proposed investment been available for at least two years with a successful track record?
    2. Can the investment be re-sold quickly if you need the money urgently?
    3. If a guarantee is offered, would you make the investment without the guarantee?
    4. Are these satisfactory assurances that the money will be used as promised?
  9. If the answer to any of the above questions is NO, your investment risk may be increased.
  10. Residential Mortgages:
  11. Some standards for lower risk investing in mortgages:
    1. Is the property classed as residential, fully built, and occupied by its owner?
    2. Is the total amount of the mortgage less than 75 per cent of the value of the real estate?
    3. Is the current value of the real estate supported by an appraisal performed by an accredited residential real estate appraiser, and completed or updated within the last six months?
    4. Has the borrower provided evidence of ability to pay back the loan?
  12. If the answer to any of the above question is NO, your investment risk may be increased.
  13. Other Mortgages:
  14. Mortgages placed upon real estate which is not owner-occupied residential property should be examined more carefully. If you're promised an interest rate higher than that of a financial institution, ask why the borrower is willing to pay more than a financial institution would charge.
    1. Has a building been fully erected on the property? (i.e. not raw land)
    2. Is the property fully serviced?
    3. If the mortgage funds will be used for construction.
    4. Does the builder have a successful track record?
    5. Is there protection for a cost over-run? (e.g. line of credit, bond)
    6. If the property will be rented, are these signed leases with tenants who are not related to the promoter or builder?
    7. If the property is valued as if the building were complete, is there a certified appraisal to support the value based upon current market values?
    8. Has the promoter provided evidence that money for each state of construction will be advanced to the contractor only when an engineer or architect certifies that the previous stage has been completed?
  15. If the answer to any of the above question is NO, investment risk may be increased.
  16. Cooling Off Period
    1. Before you sign up for an investment, are you sure you are making a sound investment decision?
    2. If the above checklist indicates you may be taking increased investment risks, do you understand risking your money for marginally higher return could mean you could lose everything?
    3. Have you taken the time to "cool-off", to review the legal and accounting aspects of the proposed investment with your lawyer and accountant?
    4. Have you examined the investment on its own without being overwhelmed by any favourable tax implications promised?
    5. Have you given a financial institution (bank, trust company, credit union or caisse populaire) which provides investments guaranteed by deposit insurance, a chance to compare their savings investments with the investment you are considering?
  17. If you answer NO, to any of the above, you may be demonstrating significant vulnerability to losses.

Source: FSCO - Government of Ontario, Canada

Risk Reduction through Compliance & Simplicity

Yes, compliance helps reduce risk!

What is Peer-to-Peer & Private Lending (P2PL) compliance?

Visit PEMI® to learn more

What does Peer-to-Peer & Private Lending compliance do for you?

Visit PEMI® to learn more

Are you dealing with a credible Finance Broker or Private Lender?

Visit PEMI® to learn more

What is Peer-to-Peer & Private Lending (P2PL) trademark source identifier?

This is an initiative of privatelender.org.

Yes, the P2PL trademark source identifier helps reduce risk!

If you are seeking to borrow or lend money on a non-institutional (peer-to-peer or private) basis, do you really know the credentials and qualifications of the people you are dealing with? In today's era of white-collar crime and fraud, you owe it to yourself to know that the parties you are working with are credible. Whether you are a borrower, lender or investor, you disclose a lot of personal confidential information in your business dealings. Make sure the people who receive your confidential information are credible.

P2PL trademark source identified individuals and companies meet rigorous requirements to ensure that they are credible and understand how to work in the peer-to-peer and private lending sector.

The risk of working with a non-P2PL finance broker or lender can be severe. People have lost their identity, their money or their peace-of-mind, for trusting a party who is not credible. Once you understand the benefit of compliance, you will demand it. The more you know, the better you are.

What does Peer-to-Peer & Private Lending trademark source identifier do for you?

Regardless of whether or not you are a borrower, lender or investor, if you are working with a company or an individual who is Peer-to-Peer or Private Lending which publishes the rademark source identifier, then you know that you are working with credible parties, upfront.

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

Are you dealing with a credible Finance Broker or Private Lender?

Borrowers: Look for the P2PLTM trademark source identifier logo at the offices of your finance broker (loan broker, mortgage broker) whenever you are seeking non-institutional credit. Demand it.

Private Lenders and Investors: Demand that your originators and referral sources qualify for the trademark source identifier -- it makes common sense.

No Offering Memorandum - No Prospectus

KEEP IT SIMPLE!

Pursuant to MortgageQuote's certification requirements as a CPEMB with the Private Equity Mortgage Institute (PEMI)®, Market Regulations; MortgageQuote Investment Opportunities do not require an Offering Memorandum or Prospectus Instrument.

Trademark source identifier Identifier: "No Offering Memorandum - No Prospectus"

No Offering Memorandum - No Prospectus

A trademark source identifier developed by the Private Equity Mortgage Mortgage Institute (PEMI)®.

Tells the general public that the transactions are comparatively simple and therefore not subject to regulatory oversight by government or securities commission.

Visit PEMI® to learn about: Market Regulation

trademark source identifier

Risk Reduction through Quality Standards: PEM Institute

Source: Click Here

MortgageQuote Canada Corp. is proud to have earned its Certified Private Equity Mortgage Broker (CPEMB) designation. The standard for quality in the primary mortgage securities sector.

Private Equity Mortgage Institute PEMI®

Who & Why Are We?

The Private Equity Mortgage Institute PEMITM (www.peminstitute.org) is the operative division of the International Private Equity Mortgage Institute (IPEMI.org,www.ipemi.org), a global professional association of real estate finance professionals including: investors, lenders, mortgage bankers, licensed brokers and licensed agents; who trade in the highly specialized field of PEMI-CertifiedTM Private (Non-Institutional, Non-Syndicated, Non-Regulated) Equity MortgageTM transactions, also known as Certified Private Equity MortgageTM transactions.

Generically, such investor-lenders are referred by the term of art: "private lenders"; and generically, such transactions are referred by the term of art: "private mortgages". Terms of Art are not defined consistently - depending on the subject matter - so have broadly accepted meanings and applications-of-use. Due to inconsistent definitions and applications-of-use of the terms of art: "private lender" or "private mortgage", there is a high degree of confusion within the global marketplace when it comes to distinguishing a credible, non-institutional, non-syndicated, non-regulated, real estate debt industry participant or transaction, from one that is not.

Such confusion has lead many inexperienced mortgage consumers (borrowers) and unsophisticated mortgage investor-lenders to incur significant losses caused by errors, omissions, inexperience or negligence by individuals who claim to be professionals in the domain of non-institutional, non-syndicated, non-regulated, real estate debt transactions when they are not. Or, a real estate debt transaction is represented to be of a non-institutional, non-syndicated, non-regulated nature, when it is not.

Through the establishment of standards, criteria and trademarked terms including: Private Equity Mortgage (PEM)TM, the Private Equity Mortgage Institute provides consumers, investors, government and related parties with distinguishing marks and source identifiers for non-institutional, non-syndicated, non-regulated, real estate debt transaction and related industry professionals.

Members and Fellows of the Private Equity Mortgage Institute hold the prestigious PEMP(TM) designation.

Mission & What We Do

PEMI's mission is to advance professionalism, ethics, quality, global standards (ISO 9000/GAMUS.org), methodologies, advocacy, compliance, business & operational practices through the professional development of real estate finance commerce, worldwide.

Consumers (borrowers), investors, lenders, mortgage bankers, licensed brokers and licensed agents who participate in Private Equity Mortgage (PEM)TMtransactions in our countries-of-interest (see below), will benefit from the Private Equity Mortgage Institute as follows:

Private Equity Mortgage (PEM)TM Education

Private Equity Mortgage (PEM)TM Standards

Industry Classes - Professional Designation

Compliance (ISO 9001:2015 Certified Quality Management System , Sarbanes-Oxley)

Audit

Industry Advocacy

Borrower Advocacy

Research, White Papers & Policy Reports

Expert Witness

Learn more about what we do

Where Are We? Australia, Canada, United Kingdom, USA

Envisioned in 2003 and initially operating within the Canadian market, the International Private Equity Mortgage Institute has expanded its scope of interest include Australia, United Kingdom and USA. All IPEMI.org Members and Fellows operate in accordance with respective national, regional and local laws.

The regional division of IPEMI.org provides private, regulatory oversight and administers industry professional-, and policy-level education services leading to the qualification, certification and licensure of Certified Private Equity Mortgage Professionals (CPEMP)TM within the core fields of mortgages, technology and quality management. The International Private Equity Mortgage Institute consists of member organizations from the following countries:

Australia

Canada

United Kingdom

USA

Be Wary, Be Warned®: the Risks of a Pooled Mortgage Investment Corporation versus Private Equity Mortgage Investing

Pooled Mortgage Investment Corporation

In Canada, in the 1970's, the government created a special company class designed to enable small to mid-size investors pool their capital and invest in mortgages. See here to learn more.

The entities were called Mortgage Investment Corporations or MIC's. These are risky investments and we do not market these investments to our clients because of many reasons; some of which are as follows:

- MIC's are so risky, they need to be marketed by persons who are specially licensed by a Securities Regulator.

- MIC's are so risk, the licensed sales person must review an "offering memorandum" (OM) document with you, which attempts to describe the risk associated with investing your money into the MIC. There are so many variables of risk when you invest into a company that an OM does not provide absolute validation.

- In a MIC, you don't invest in the real estate, you invest in the company, so you can lose your principal.

- In a MIC, you cannot take out your money at maturity

- You do not have your own lawyer to represent your interests during the operations of the MIC

The Fine Print:

Resale restrictions You will be restricted from selling your securities for an indefinite period

No securities regulatory authority or regulator has assessed the merits of these securities or reviewed this offering memorandum. Any representation to the contrary is an offence. This is a risky investment.

Private Equity Mortgage Investing (PEM(TM) Investing)

- A licensed Mortgage Broker (one who does not own its own mortgage investments) is permitted to market such instruments.

- A company that owns its own mortgage investments is permitted to market its instruments for sale or trade.

- No securities regulatory authority or regulator NEEDS to assess the merit of a direct mortgage investment because the business is simple to understand and carries comparatively less risk of principal loss.

"You don't lose money, you gain real estate".

Generally Accepted Mortgage Underwriting Standards (GAMUS): APLUS® Underwriting Standard

GAMUS.org is an initiative of PrivateLender.org and is designed to help mortgage lenders and mortgage brokers work together in analyzing mortgage transactions for purposes of underwriting.

In a phrase, you could say that we're: "making mortgage applications make sense".

What does GAMUS.org do?

GAMUS.org establishes standards that help mortgage originating companies (mortgage brokers and agents) prepare mortgage applications in accordance with a format that mortgage lenders can rely upon in order to underwrite a mortgage application. Underwriting is the process which enables a lender to determine if a mortgage applicant should be approved or declined for a mortgage request.

Why are standards important for mortgage underwriting?

Standards save time and money.

When a person applies for mortgage, they often go to a bank and the banker asks the applicant to fill in a mortgage application and answer a series of questions. The application process is customized for that one bank and if the bank ends up declining the mortgage applicant, the applicant must go to another bank and go through the process of applying for a mortgage with the new lender, as per the new lender's customized criteria. This takes much effort and time.

Often, a better way for the mortgage applicant is to work with a mortgage brokerage firm because the brokerage firm will obtain the needful mortgage application information and then work with a number of lenders in order to obtain a mortgage approval for the applicant. The benefit for the applicant is that they only need to go to "one stop" for their mortgage needs. One common problem that mortgage brokerages face when obtaining mortgage approvals is that not all lenders necessarily want or need the same information from the mortgage applicant when determining if a mortgage is necessary or not. This absence of standardization will often slow the mortgage approval process because the mortgage broker must customize their mortgage applications for each lender that they send a mortgage submission to.

Moreover, mortgage applicant requests from mortgage brokers are often riddled with errors and omissions (which is why most countries require that mortgage brokers obtain errors and omissions insurance in order to practice within their jurisdictions). Erroneous applications waste the time of professional private mortgage lenders and mortgage applicants who might have an excellent application end up being declined simply because the mortgage brokerage firm did not prepare the lender information package in manner that is either current or an accurate reflection of the applicants situation

Additionally, in today's economy, in response to the great credit crisis of the early 2000's, mortgage brokers and mortgage borrowers are finding it more difficult to obtain mortgage funds from traditional, institutional lenders, namely banks and trust companies. With the introduction of more rigorous borrowing criteria, greater numbers of mortgage applicants are being served by the private equity investment sector; namely, through non-bank, private individuals and corporations that loan money against real estate.

Non-bank and private lending organizations are not traditional institutions, they often do not hire business development officers (individuals who are used by banks as a marketing and service conduit to the mortgage broker community). The role of a business development officer is to both market the capital that the lender has available for mortgages and to educate the mortgage origination community on what format and what contents a mortgage application (lender information package) should contain and in what format they should appear.

APLUS® Underwriting Standard: The Accredited Class® Private Lender Underwriting Standard

GAMUS.org provides standards that are generally accepted by mortgage lenders (bank, non-bank or private) throughout the world, so that mortgage brokers who submit mortgage applications to these lenders will have a greater degree of success in obtaining mortgage approvals for their mortgage customers.

Mortgage consumers appreciate it

Mortgage consumers want to know that a mortgage broker has all the tools that they need to ensure that a mortgage application will receive a warm reception by a prospective lender. A poorly prepared mortgage application, or one riddled with errors and omissions places the mortgage applicant in a bad light or at worse, results in applicants being declined when in fact, they might have been approved. With GAMUS.org, mortgage applicants know that their mortgage brokers are working in a manner that is both efficient and effective.

Bank, non-bank and private mortgage lenders demand it

Whether a lender is a bank, non-bank or private mortgage lender, they all want mortgage applicants that fit a defined format. From narrative summary to property valuation, there are hundreds of steps involved when a lender needs to determine if a mortgage application is worth approving or not. Without standards in place, the mortgage lenders would be wasting their time and in the mortgage business, time truly is money.

For more information, visit www.gamus.org.

Appraisers & Appraisals

As a private lender, you might rely upon appraisals in order to determine if a property is worth lending upon.

Appraiser Negligence:

What happens if you lose money due to what you think is a poorly prepared appraisal report?

Canadian Jurisdiction:

Other Jurisdictions:

Kindly search the internet to find out more.

Mortgage Default & Enforcement

Canadian Jurisdiction:

Mortgage Default & Enforcement - Visit PRV Mortgage Investor-Lender Reference page in www.mymortgageinvestments.com.

Other Jurisdictions:

Kindly search the internet to find out more.

Defense to Foreclosure

Canadian Jurisdiction:

Other Jurisdictions:

    • Kindly search the internet to find out more.