IT WASN’T that long ago that brokers and lenders couldn’t keep up with the number of refinancing requests coming across their desks. It’s no secret that highly favorable interest rates fueled the race for many to change the conditions on their mortgages. That was then, and this is now. The number of refinances has fallen off the mortgage cliff as Federal Reserve announcements have edged interest rates northward. Although a possible setback for agency-based lenders, the air deflating out of the refinancing bubble has been a further boon for the already-burgeoning private lending sector.

While many lenders have been faced with additional COVID-19-related challenges during the pandemic, the past 18 months have been lucrative for non-QM lenders. Federal crackdowns on the borrowing criteria parameters for traditional loans, as well as the introduction of new financing rules, have also played squarely in favor of lenders in the private lending niche. “Freddie, Fannie, and the Treasury made changes to their guidelines,” says Keith Lind, executive chairman and president of Acra Lending. “They [the Treasury] said they were going to limit the number of investment properties that people can deliver to Fannie and Freddie, or the number of second homes, and they may tighten their belts again.” As the Treasury tightens its credit belt, the opportunities for Acra Lending and other big players in the private sector have continued to expand.