State regulations a persistent challenge to private lending growth
The space made $8 billion in securitizations last year, with $12 billion targeted for 2025, according to Hornik. “We’re looking for an up year, both DSCR and RTL, and the real thing we’re going to focus on is regulation in certain states and what states to [lend] in,” he said.
“Some states are passing laws to prohibit liquidity, prohibit transactional activity or stop foreclosures from happening because they think it’s benefiting the borrower- and there are other states that allow more free business to operate. Those are the economies that are going to thrive.”
State regulation remains the most important consideration for private lenders, with very few federal rules impacting that space – but those state laws can prove controversial, recently highlighted by Maryland’s Office of Financial Regulation requiring statutory trusts to be licensed as originators to buy closed loans. That interpretation of case law, Hornik said, is leading some prominent multistate originators to shut their doors in Maryland.
Held three times a year, NPLA’s next conference will take place from March 16-18 at Lowes Miami Beach Hotel and welcome banks and capital providers, lenders, investors and borrowers, brokers, developers, asset managers, owners and operators, legal service providers, title companies, rating agencies, real estate agents and more for an immersive event aimed at facilitating dealmaking and business growth.
“It brings every aspect of private lending together in a coordinated manner for allowing people to talk and do business together,” Hornik said. “It’s private lenders, borrowers, brokers, service providers, those who give analytics on the private lending space and everything in between.”
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