private lender PPI?(payment protection insurance)

[Paul Chae]

Hello BP! 
I am an aspiring investor in NY. My main focus is BRRRR stratety and I am doing the third R on my first rental. Unfortunately, it's not been easy at all, not to mention the pandemic that we are facing. Rehab was on hold for about 4 months.
My home was purchased at 45k in early February,
put in about 18k of work,
So initial investment was 63k all in cash.
Targeted ARV was 82k-90k

Anyway, I have been trying to find a lender to refinance on the home, but has not been successful until this point for some reasons.(I couldn't find the 'right' one)
Anyway here's what happened two days ago.
I spoke with a private lender via linekedin, I contacted him first, I sent all the documents requested. I also sent a breakdown to show him the analysis on the deal. He offered pretty good rate and he said he could close on the loan within 3-10days time frame. First he asked for Loan commitment deposit which was $1200 ish, and then yesterday he said the "boards of the company" decided to charge 5% of loan amount for 'payment protection insurance(PPI they call, but they also called it mortgage insurance)' which I couldn't find much about on my research. The reason they are charging PPI is,

He said fund was already wired on Wednesday(He sent me the copy of payment slip) but if I do not make the payment for PPI today, I wouldn't be credited by Friday. And so far I have not made the payment yet. But I sent the commitment deposit.

Is this a complete scammer that I have to run away from or are there some private lender that might charge fees like this?
I'd greatly appreciate your advice from the past experiences!

Happy investing,
Hoyoon Chae