“I expect that in the future we are going to see more and more MICs get larger and possibly consolidate due to tighter regulatory requirements and scrutiny,” says Tiffany Pedersen, the assistant vice president of business development for Capital West. “Rates have been declining for several years, and with the use of leverage on the part of larger MICs, and increased competition from institutional lenders and other private sources, it appears that rates may continue this trend.”
The popularity of the alternative lending space has risen significantly in the the past decade, concurrent with investors looking to earn more compared to other vehicles.
“The number of private lenders that are quasi-institutional such as Mortgage Investment Corporations (MIC) has increased over the past 10 years,” says Pedersen. “In addition, many more private individuals have turned to private mortgage lending as a way to earn more on their investment portfolio than they can in traditional GICs and riskier stocks.”
Just recently, former Equity Financial Trust
CEO Nick Kyprianou
announced the establishment of RiverRock Mortgage Investment Corporation, telling MortgageBrokerNews
that he sees a “tremendous opportunity to work with mortgage brokers” to secure financing for self-employed, soft or poor credit and new immigrant clients.
“There are more opportunities for private lenders to help brokers,” says Kyprianou. “Lenders are saying no to a large number of deals and there are opportunities for other lenders to fill the need.”
One industry player expects Mortgage Investment Corporations to go the consolidation route in the face of increased regulatory oversight.