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—Borrowers seen as high-risk: Loans that were available before the crisis at premium rates are not available today at any rates. These borrowers are shut out of the market altogether.

One useful way to see these dynamics at work is to look at mortgage insurance premiums, which are entirely based on judgments of default risk. Before the crisis, insurers based their premiums on the ratio of loan amount to property value, type of mortgage, and term.

An entire premium structure could be displayed on one page, which I did on my website, http://www.mtgprofessor.com/, in September 2005. I haven’t tried to update it because the premiums today are derived from complicated algorithms that defy easy summarization.

According to data from my website, the annual premium rate in 2005 on a 30-year fixed-rate mortgage with a loan-to-value ratio of 95 percent was 0.78 percent. Today, the premium is 0.59 percent, but only on transactions that meet a bunch of other conditions that did not exist in 2005. To qualify for the premium of 0.59 percent, the borrower must have a credit score of 760. If the score is 620, the premium goes up to 1.20 percent. If the borrower with a score of 620 is buying a manufactured house, the premium is 1.70 percent.

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