“In my opinion, what I see here is that there is a heavy demand for private financing. Private funds will continue to cover a niche of the market,” Daniel Vyner of New Haven Mortgage Corporation tells CMP Magazine. “It will continue to be steady, and I’ve seen speculation that interest rates will rise and that could add more momentum to private deals, and that could mean more competition for us.”
According to Vyner, an increase in institutional pricing will make private rates seem more appealing to clients, since the gap between the two will be slightly eroded.
And privates are a lot less reliant on government yields and rates when it comes to setting their own prices.
“With private rates, it’s hard to speculate (where they will go) because there is no formal plan to raise rates,” Vyner says. “As a MIC, all of our money is private based and the same old story: rates must be attractive and yields must be attractive for investors. At the same time obviously providing competitive pricing.”
As for those interested in entering the market as a private lender? Vyner has some advice.
“I think there will be more private lenders entering the market. Everybody should have the opportunity to get into the market,” Vyner says. “But they should be experienced, have a game plan, and know the proper regulations.”
He certainly welcomes the competition – as long as they play by the rules and focus on setting up a shop in accordance with current regulations.
“As long as the market remains competitive, everything will follow suit and it will be another good year in the business. There is always friendly competition and as long as they can add something to the industry, it will be great for everyone,” Vyner says. “Everyone should have the opportunity
to open a MIC as long as they focus on the right things, including compliance.”
Private lending has enjoyed a boon since regulators have battened down the hatches on more traditional lending, and that trend is expected to continue.