The news that two UK bridging lenders, Market Financial Solutions and Century Capital, have filed for administration in the past month has shocked this corner of the residential mortgage market.
A bridging loan bridges the gap for homeowners who need short term capital, whether for light renovations like redesigning a bathroom, heavy renovations like a loft or basement conversion, or buying a new home before the borrower has had time to sell their current home.
Such loans are often provided in the UK by specialist lenders, who raise money from banks and asset managers through private, secured facilities. Securitization is seen as a likely future stage in the market's development.
After these two failures, one of which has been widely covered in media and prompted the CEO to deny fraud, the financial firms that have been funding the industry are likely to tighten their underwriting standards.
That could make life difficult, especially for newer lenders.
But assuming the top lenders can retain the confidence of their financial backers, this opens up opportunities for them to make acquisitions and consolidate the sector.
That is long overdue. The Bridging & Development Lenders' Association, a UK industry body, has 55 members with around £13bn of loans between them.
While a diverse bridging market is good as different lenders can carve out niches, the market being stretched so thin makes funding less efficient and more expensive.
By one estimate, only about half a dozen lenders originate more than £300m of loans a year, the size at which a public residential mortgage securitization typically becomes worthwhile.
The jury is still out on whether a public deal is the most efficient way to finance bridging, because these loans have short maturities of around a year or less, while investors often want a three or five year life for an RMBS.
But scaling up would make the fixed costs of arranging a financing easier to afford.
Recently, credit funds in particular have been bidding bridging lenders' cost of financing tighter because of their enthusiasm for the yield.
If the latest disasters trigger a rethink, survival of the fittest may be necessary for the sector's long term sustainability.