The difficulty of funding loans in the private-label securitization market may have discouraged lenders from originating loans to some borrowers who may be creditworthy but may not exactly fit the criteria of the GSEs or the Federal Housing Administration (FHA). Potential first-time homebuyers have been disproportionately affected by the very tight conditions in mortgage markets.
Lending to potential first-time homebuyers has dropped precipitously, even in parts of the country where unemployment rates and housing conditions are better than the national average.