File a complaint with your state agency or their regulatory agency or the FDIC and move on.

Anyone that has ever read or communicated with a city, county or public regulatory authority can attest to the often frustrating and unclear answers that are received (think DMV) but multiply it by twelve when it has to do with sometimes illogical or biased short term rental permissions. 

They didn't account for regulatory changes or market saturation, which could lower prices.

The lender has no duty to the 2nd borrower and vice versa and in fact, the lender may be negligent to regulatory agencies, examiners, investors, the U.S.

Paul, MN, requires an additional county inspection when buying or selling, emphasizing the need for local regulatory knowledge.

Are there any regulatory restrictions preventing sponsors from directly selling theirs DST?

This does help me get a better understanding of the regulatory/financial constraints regarding STR.  

Anyone interested in STR needs to add regulatory acceptance to their due diligence.

Or other regulatory requirements?

Or like I have seen there are a lot of bad actors out there and you will have groups that do this with no intention of every paying on the sellers mortgage and will rip the rents until the houses are lost to foreclosure  when that starts to get acute and brought to main stream something could happen regulatory wise.