FEATURE FEATURE
NON-BANK REAL ESTATE LENDING
WHAT DOES THE FUTURE HOLD? By James Bowie, Alta Capital Group
D
ue to the large role that the
also acted as a petri dish for the
regulation. This stark contrast in
housing market played in
expansion of a bourgeoning field
regulation, however, has more to
the 2008 financial crisis,
– nonconventional (or non-bank)
do with the fact that banks have
it only seems natural that banks
lending.
shying
access to deposits that are insured
and traditional lending platforms
away
lending
by the FDIC (which is ultimately
shied away from this asset class
avenues, these non-bank lenders
backed
in the housing bubble’s aftermath.
saw a decade of continuous growth,
Nevertheless,
Both the U.S. government and
a period of growth that continues
capital
regulators
of
to this day. But what will the next
institutions (and correspondingly
dollars into these institutions to
ten years hold for the non-bank
substantial lobbying efforts) may
avoid the complete collapse of
real estate space?
result in a heightened level of
injected
billions
With
from
investors
traditional
by
taxpayer the
behind
dollars.) substantial
large
banking
regulation in the next decade. At
the financial system – banks and elected officials, understandably,
An “unlevel playing field” is a
the same time, however, as the very
pursued only safe and predictable
phrase often heard by politicians
vivid memories of the financial
loans following this period of
and
lobbied
crisis fade, banks may get relief
unprecedented turbulence.
by
traditional
from their own regulators, which
increasingly
would take attention away from
regulators banks
institutions
–
being
these are
anxieties
complaining about this disparity,
financial
stating that non-bank lenders face
sector during this time, this period
a much lower level of scrutiny and
Aside
from
experienced
the by
the
18 Originate Report | November 2019
non-bank real estate lending. The
global
bond
market
is
