I think I can get to the root of this.
There are some lenders who will specifically focus on or target borrowers that have less appealing credit histories. They might work in a marketplace where they will offer a higher standard mortgage interest rate because the risk of default for those clients is different. They are also generally privately funded, though, so that is a separate category of lender, if you will, within our membership.
There's not an awful lot of difference most of the time between the large balance sheet lenders' desired clientele and some of the smaller...I'll call them “residential specialist lenders” within our association.
Each of the large and the small will use the securitization program to a degree. Each of them occasionally will be finding additional sources of capital, whether it's their own balance sheet or through other mechanisms within the marketplace. The big difference between the two and what will cause a reduction in competition in the marketplace is that, because the smaller lenders are relying more upon the securitization mechanism, once that's removed or there's significant reduction of the risks that are eligible for that, the origination of mortgages for those folks is almost impossible without having to find alternate sources of capital, which are more expensive.
Very simply here, when you bundle mortgages into an investment mechanism that's a bond, if it's insured, then the risk for you in the market is quite small. If it's uninsured, the investors require a higher risk premium and, of course, the mortgage holder is ultimately paying for that with the interest rate that they're charged.