In this episode of The Cut, Simon speaks with Samantha Parsons of Parsons & Partners about the rapidly growing private credit and non-bank lending sector. They discuss mortgage fraud, identity verification, digital signing, AI, lender due diligence, changing case law and the importance of properly structured loan documents.
Samantha shares practical insights from her experience working with private lenders, including the red flags lenders should look for, why robust verification processes are essential and how the increasing speed of private lending needs to be supported by strong systems and procedures.
Key Points
1. Fraud prevention needs more than digital signatures
Samantha explains why identity fraud is a significant concern in mortgage lending and why additional verification, including video signing and separate legal advice for vulnerable or third-party security providers, can be important.
2. Due diligence is just as important as the loan documents
A lender’s responsibility doesn’t end with documenting the loan. Samantha highlights the importance of assessing valuations, the source of the deal, the exit strategy, how the loan will be serviced and how the money will ultimately be repaid.
3. Speed needs to be supported by robust systems
Private credit can move extremely quickly, sometimes requiring transactions to be completed within 24 hours. That speed makes established systems, procedures and verification processes even more important.
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