Here, a key concern is the potential misallocation of resources away from non-mortgage lending toward mortgage credit – which, in the current economic environment, contributes to the buildup of imbalances in the household sector.9 Another aspect of the securitization of insured mortgages is the increasing role of specialized mortgage-lending institutions.
These institutions are not subject to the same level of scrutiny as banks and in some instances don’t have access to as stable and diversified sources of funding. While their small size suggests that they do not pose systemic risk, they do involve elements of shadow banking risk that call for careful monitoring.