The National Private Lenders Association held its August Member Meeting on August 6, where members reviewed the results of the July Private Lending Market Sentiment Survey, compared those findings against current market data, and discussed what lenders are seeing firsthand as they navigate today’s lending environment. The meeting concluded with an in-depth panel discussion featuring Jeff Fechter (HouseMax Funding), Eric Abramovich (Roc360), and Kain White (KECO Capital), who shared how the survey results align with activity inside their own portfolios.
The July survey painted a market that remains optimistic overall, even as lenders become increasingly focused on credit quality. Members rated the industry’s outlook at 7.3 out of 10, with 60% giving the market a score of seven or higher and more than one-third rating it a nine or ten. Interestingly, the most common individual response was a five, highlighting that while confidence remains high, many lenders are taking a measured “wait and see” approach as they watch economic conditions evolve.
One of the strongest themes throughout the discussion was the continued strength of the DSCR market. Across every major survey metric—borrower demand, loan volume, and investor appetite—DSCR outperformed residential transition loans (RTL). More than half of respondents reported increasing investor demand for DSCR loans, reinforcing the product’s position as one of the most attractive asset classes for institutional capital today. While many participants believe DSCR will remain the dominant product in the near term, others noted that a gradual shift back toward fix-and-flip and ground-up construction lending could emerge as older refinance opportunities begin to work through the system.
Although industry confidence remains healthy, the survey revealed that members’ greatest concern is no longer interest rates—it’s credit quality. Approximately 43% of open-ended survey responses centered on borrower performance, declining property values, valuation gaps, fraud, extensions, defaults, and underwriting quality. The discussion emphasized that these issues are closely connected, as weakening collateral values can quickly turn marginal credits into realized losses. Participants also highlighted growing concerns around regulatory developments, affordability challenges, and increasing competition from non-QM and institutional lenders entering the DSCR market.
The meeting also compared member sentiment against July market pricing data. The numbers largely confirmed what members are experiencing on the ground. Competition continues to intensify as RTL rates declined while points increased, effectively shifting loan economics from interest rates to upfront costs. Meanwhile, DSCR pricing remained remarkably stable for a fourth consecutive month, reinforcing the strong investor demand reflected in the survey. However, one notable disconnect emerged: while members expressed growing concern about deteriorating credit quality, those concerns have not yet appeared in broader pricing or volume data. The discussion suggested two possibilities—that lenders are identifying credit issues before they become visible in industry-wide data, making the survey an effective early warning indicator, or that participants are proactively preparing for risks they believe are coming later this year.
Another major focus of the meeting was a comparison between the NPLA member survey and the Summer 2026 RCN Capital/CJ Patrick Investor Sentiment Survey. While NPLA members expressed cautious optimism about both current conditions and the industry’s outlook, real estate investors reported their lowest confidence levels since the survey began. Investors identified financing costs as their primary concern, while NPLA members pointed to borrower credit quality as the industry’s greatest risk. The comparison highlighted a notable disconnect between lenders and borrowers, with each group viewing the market through a very different lens.
The panel discussion brought those survey results into real-world perspective.
Eric Abramovich explained that although volumes remain healthy, lenders are increasingly sacrificing margin to remain competitive. He noted that many firms are leveraging operational efficiencies and technology to offset shrinking spreads while continuing to grow production. From his perspective, lenders remain well-capitalized, but profitability is becoming increasingly dependent on operational execution rather than pricing power.
Jeff Fechter agreed that liquidity remains abundant, particularly for DSCR lending, but cautioned that many borrowers are experiencing increasing financial stress. While delinquency numbers have not yet materially increased, lenders are seeing more extension requests, borrowers struggling to exit projects, and greater concern around borrower liquidity. He emphasized that lenders should look beyond minimum underwriting requirements and place greater focus on borrower cash reserves and the ability to withstand a prolonged market slowdown.
Kain White discussed what his team is seeing in the Las Vegas market, noting that many borrowers are holding projects longer than anticipated while waiting for market conditions to improve. He also observed an increasing number of traditional fix-and-flip projects converting into DSCR loans as investors pivot toward rental strategies. While this trend has helped fuel DSCR growth, he cautioned that lenders should remain disciplined when evaluating rental assumptions, underwriting practices, and property valuations as more borrowers transition into long-term rental products.
As additional members joined the conversation, several common themes emerged. Participants discussed margin compression, continued pricing competition, elevated property valuations in certain markets, the growing importance of liquidity, and the need for stronger underwriting as more capital enters the space. While most agreed that lending volumes remain healthy, there was broad consensus that lenders should continue proceeding carefully, particularly as borrower performance and market conditions evolve over the coming quarters.
The discussion reinforced an important takeaway from this month’s survey: confidence in the private lending industry remains strong, but lenders are becoming increasingly disciplined. Capital is available, demand for quality loans remains healthy, and DSCR continues to outperform. At the same time, members are paying closer attention to borrower quality, liquidity, valuation discipline, and the broader economic environment as they position their businesses for the remainder of 2026.
Thank you to everyone who participated and contributed to another valuable member discussion. We look forward to continuing the conversation in next month’s meeting.
Interested in learning more about the NPLA, contact Amy Kame: [email protected]
