Credit Report Attorney: The mortgage market is now dominated by non-bank lenders

The entire ecosystem of the mortgage markets is fragile, says Burns, which has a chilling effect on the economy.

“The lack of access to credit not only hurts consumers, but it hurts builders and therefore contributes to the lack of affordable housing,” Burns says. “That, in turn, has an impact on the broader economy, because housing construction impacts a lot of segments such as banking, construction workers, home-improvement businesses and more.”

The pullback in lending from banks contributes to the overall decline in homeownership, says Burns, because people with a slightly risky credit profile are underserved.

“The expansion of non-banks in response is a good thing, but we’re still missing a million or more homeowners, in part because many millennials are still not able to get credit through traditional means,” Wachter says. “For good or bad, consumers with marginal credit scores and unverifiable income are out of the market now.”