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Posted
5 hours ago, Captainant said:

What the fuck are you talking about? Healthcare and prisons are massive fucking profit centers for private equity, and regulations have been slashed for literal decades leaving us with an "anything goes" flavor of capitalism where companies can spill tons of dangerous chemicals over a neighborhood and face zero repercussions for their decision makers that chose to not mitigate known risks. 

We absolutely do not have a well regulated and moderated version of capitalism in America. It's for the shareholders, by the shareholders, and of the shareholders. Customers and employees can go get bent.

Today's capitalism is solely about making line go up, and there is ZERO idea of social good involved as you do your Pollyanna impression

 

5 hours ago, Wally Fairway said:

so owning rental property should be illegal?
from my experience almost all the homes around a campus, are student rentals
I know several individuals who own rental homes, almost all are through an LLC; some as a side business, a couple as their main job
 

 

Wow. I stepped away from this thread because I was expecting idiotic responses, but y'all disappointed me even more than I thought was possible. Look at you two! Attacking claims I never made! Completely failing to understand basics! You shame the fine educational institution we attended.

Yes, @Captainant, I was talking about how things should be, not how they are. That said, your grasp of how things are is ... incredibly ignorant.

No, @Wally Fairway, corporate ownership and private ownership for rentals are two completely different things. A private owner can choose to live in their rental property; a corporate owner cannot, because it is not a person (no matter what SCOTUS said).

 

Posted
1 hour ago, tx 3 putt said:


Are they renting out these homes or bnb’s ?

 

Both. What they are NOT doing is offering them for sale for people to own.

 

3 minutes ago, We’reTexas said:

Maybe we should building more housing so it isn’t such an attractive asset class for investment. 

Oh, the China approach. Let's ... NOT do that.

Let me count the ways this can and will fail:

  1. First off, real estate is, and always has been, and always will be, an investment, whether it's your own home or otherwise.
    1. Corollary: This is why HOAs become such shit storms of petty politics. ask me how I know
  2. Trying to build more homes means building homes further and further away from where people want to be.
    1. Corollary: In places where people want to be, increasing capacity is a political nightmare. ask me how I know
  3. Even when you succeed in building new homes, corporations/investors will out-bid actual homebuyers. Your problem is no longer solved.

100% of the housing crisis in America is attributable to this. You get rid of the institutional investors -- force them all to sell at market rates -- and suddenly, Millennials and Z's can afford homes.

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Posted
Just now, Rex Kramer said:

It is almost certainly because people know how to build wealth. 

How would that explain the change in percentage of corporate owned single family houses? Are you suggesting that the segment of the population that knows how to build wealth has decreased over the last 50 years? 

Posted
Just now, Rex Kramer said:

Because people comprise corporations. And LLCs are “corporate” in your weird definition (and the articles). Tightly held husband/wife owned companies. I don’t understand what point you think it is you’re trying to make. 

The legal form of the entity that owns the home is irrelevant. The point is to distinguish between investor owned vs resident owned. The trend line is about a diminishing portion of single family homes being owned by the residents. Unless we're assuming these homes are vacant, it has to mean that a smaller percentage of the population is able to purchase a single family home. That trend line matches up pretty well with lack of real wage growth over the last 50 years. 

Basically, a small segment of the population has captured an increasingly larger portion of the countries wealth and has redeployed a portion of that wealth to purchase the single family homes that are increasingly out of reach for the majority. 

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Posted
19 minutes ago, Rimbo said:

 

Both. What they are NOT doing is offering them for sale for people to own.

 

Oh, the China approach. Let's ... NOT do that.

Let me count the ways this can and will fail:

  1. First off, real estate is, and always has been, and always will be, an investment, whether it's your own home or otherwise.
    1. Corollary: This is why HOAs become such shit storms of petty politics. ask me how I know
  2. Trying to build more homes means building homes further and further away from where people want to be.
    1. Corollary: In places where people want to be, increasing capacity is a political nightmare. ask me how I know
  3. Even when you succeed in building new homes, corporations/investors will out-bid actual homebuyers. Your problem is no longer solved.

100% of the housing crisis in America is attributable to this. You get rid of the institutional investors -- force them all to sell at market rates -- and suddenly, Millennials and Z's can afford homes.

No, the vast majority of America’s housing crisis is due to local zoning regulations that have prohibited supply from keeping up with demand over the past few decades. This isn’t even remotely controversial. I don’t dispute that institutional investment in housing is a problem in certain markets, but national it’s quite irrelevant (~3% of single family homes). “Blackrock” et al have become convenient bogeyman to direct focus from the real problem  

Oh, and why is institutional money flowing into housing?

 

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Posted
7 hours ago, crash_davis said:

American dream is disappearing for the younger generation.

 

https://amp.star-telegram.com/news/local/fort-worth/article288911228.html

Roughly one out of every four single family homes in Fort Worth are owned by an investor, company or corporation, according to a city analysis of data from the Tarrant Appraisal District.

The city’s report is just an estimate, because data from the appraisal district doesn’t specify if a home is owned by a company or individual. However, the city was able to make an approximation using information about tax exemptions, owner names and addresses.

The city classified owner-occupied homes as those with a homestead exemption, homes where the owner’s address matched the property address, and the owner’s name didn’t include terms like LLC, LTD, Inc., or trust.

Commercially owned properties were defined as those without a homestead exemption, owner names containing the previously mentioned terms, and those where the owner’s address didn’t match the property address.

Using those classifications, the city found that 64,372 of the 247,485 single family homes, or 26%, in Fort Worth were owned by a corporation or company.

 

 

That is incredibly misleading if not downright lying. They don’t distinguish between mom/pop owner of a second home/investment property and big bad corporations like Black Rock

Spoiler alert. Lots of people own second homes and investment proprieties. 

Want to stop it? Tax non owner occupied at higher tax rates 

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Posted

Thing is, there's no shortage of homes if you include the places people don't want to live. Houses, fixer-uppers, granted, are sitting empty in swaths of the country. How to make people want to move back to Buffalo Dick or Malaria Bayou? Well the French Foreign Legion sends bordellos when their men have to go someplace shitty.

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Posted

Let’s get down to the basics. Who here is willing to take a big hit on the value of their own homes in order to further regulate and restrict institutional housing ownership? Because that will happen. 

 

IMG_1577.gif

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Posted
1 minute ago, Rex Kramer said:

Oh I understand what the problem is. I don’t know why you’re stating the obvious. You had some academic explanation for it, and I responded, because it’s bullshit. The reason for investors owning homes is for them to build wealth, period. 

I'm stating the obvious and it is bullshit? You're not making any sense. 

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Posted (edited)
11 minutes ago, Neonmoon said:

Want to stop it? Tax non owner occupied at higher tax rates 

Newsflash:  we already do.  It's called the homestead exemption.

Yes, the startlegram article has a flawed methodology in terms of "companies" and implying something insidious.

But, it is indicative that a whole hell of a lot of SFD in Fort Fun are rental properties, and that's kind of ominous.

It may be somewhat FW peculiar, but the far-ish west side (Ridglea, Ridgmar, etc.) comprised a lot of mid-century ranch type houses that sort of epitomize middle-class living:  nice, nice hoods, not too fancy though.  But after GD and Carswell downsized in the late 80s, early 90s, the vacancy rate skyrocketed and the hoods deteriorated fast.  Wouldn't surprise me if that became a lot of rental stock and remains so even today.

Edited by TwiceHorn
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Posted

It doesn't take much work to tell who is involved in residential development and/or sunk all their retirement eggs into their home.   

A bunch of asshats (myself very much included) who have obtained ill-gotten net worth through stupid home value increases at the expense of our children, and the future of this nation are likely to be in for a rude awakening when the youngsters finally have enough of it.   I, for one, will try not to complain when shipped off to the Soviet gulag-style retirement barracks that we're all forced into at some point.

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Posted

Shit is about to get worse. Blackrock has been investing in companies in the rental council for a long time. They pulled at that recently and are starting their own rental company. I don’t like that I work for one of these companies but they pay damn well. 

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Posted
10 minutes ago, Rex Kramer said:

What you explained to me like I’m your wife is obvious. 

This is some impressive casual boomer misogyny, really back on your old form Rex 

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Posted (edited)
27 minutes ago, Rex Kramer said:

You’re being obtuse. The academic reason you gave for the problem is bullshit. What you explained to me like I’m your wife is obvious. 

Why is it bullshit? 

You have to remember, this all started with me responding to the suggest that near zero interest rates are what caused the trend. I pointed out that made no sense since the trend existed prior to near zero interest rates. I then posited an alternative explanation that appeared to align better with the data. 

You appear to think I'm trying to identify the motivation of investors. Thus, near as I can tell, you're making the obvious and largely irrelevant point that investors purchase single family residences to make money. Of course they do. But that doesn't explain why the percentage of single family homes owned by investors has increased over time. 

Edited by Dahobbs
Posted
8 hours ago, crash_davis said:

American dream is disappearing for the younger generation.

 

https://amp.star-telegram.com/news/local/fort-worth/article288911228.html

Roughly one out of every four single family homes in Fort Worth are owned by an investor, company or corporation, according to a city analysis of data from the Tarrant Appraisal District.

The city’s report is just an estimate, because data from the appraisal district doesn’t specify if a home is owned by a company or individual. However, the city was able to make an approximation using information about tax exemptions, owner names and addresses.

The city classified owner-occupied homes as those with a homestead exemption, homes where the owner’s address matched the property address, and the owner’s name didn’t include terms like LLC, LTD, Inc., or trust.

Commercially owned properties were defined as those without a homestead exemption, owner names containing the previously mentioned terms, and those where the owner’s address didn’t match the property address.

Using those classifications, the city found that 64,372 of the 247,485 single family homes, or 26%, in Fort Worth were owned by a corporation or company.

 

 

A lot of my colleagues own their home via a trust so I'm sure the data isn't as accurate as the FWST would like to think.

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Posted
19 minutes ago, HRSchenker said:

A lot of my colleagues own their home via a trust so I'm sure the data isn't as accurate as the FWST would like to think.

That would be covered by homes with homestead exemption, which presumably your colleagues still take advantage of. I think there is some confusion or ambiguity in the article on the criteria as I don't see any reason why the city would exclude any homes with a homestead exemption from the owner-occupied label. 

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Posted
2 minutes ago, Rex Kramer said:

The real reason is that wealthy entities, be they investor people or true companies, have the capital to buy 2-100 (or more) homes and rent them out.

Yes, that is literally why investors are able to buy homes. But that doesn't explain why that percentage has changed over time. Why are investors now able to buy a larger percentage of homes than they were 30 years ago? Either 1) investors have a greater share of resources now and thus are able to capture a greater share of homes, 2) the motivation of residents to own a home has decreased relative to investors' motivation, 3) a larger percentage of homes are short term vacation rentals, or 4) some combination of the above. 

Quote

If your point is a wealth gap point, it’s misplaced, and would be more apt in a discussion on why “labor” has to live in lower income areas or suburbs.

Why is it misplaced? Again, this is about explaining the trend overtime, not literally "why or how do investors buy homes". If your answer to why the trend exists is that investors now have more money, then you're agreeing with my conclusion that it is due to the wealth gap. 

Quote

 

Oh, and interest rates at or below 3% have certainly exacerbated this issue. 

 

Maybe. But they didn't cause it. As far as I know, cause still has to precede effect. 

Quote

The article, based on my skim, didn’t cover this distinction. It was written by someone looking for a headline that didn’t fully investigate all the facts. 

I just don't think they fully understood the city's criteria. They used "and" suggesting all those elements must be true to be counted as owner occupied when in reality some of those elements were sufficient by themselves. 

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Posted
2 hours ago, Rimbo said:

 

Both. What they are NOT doing is offering them for sale for people to own.

 

Oh, the China approach. Let's ... NOT do that.

Let me count the ways this can and will fail:

  1. First off, real estate is, and always has been, and always will be, an investment, whether it's your own home or otherwise.
    1. Corollary: This is why HOAs become such shit storms of petty politics. ask me how I know
  2. Trying to build more homes means building homes further and further away from where people want to be.
    1. Corollary: In places where people want to be, increasing capacity is a political nightmare. ask me how I know
  3. Even when you succeed in building new homes, corporations/investors will out-bid actual homebuyers. Your problem is no longer solved.

100% of the housing crisis in America is attributable to this. You get rid of the institutional investors -- force them all to sell at market rates -- and suddenly, Millennials and Z's can afford homes.

How do you know 

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Posted
9 minutes ago, Rex Kramer said:

Because lower rates (over the last 30 years that still includes today) have driven prices up to the point that working class people are priced out. That is a much bigger factor. There is no bogeyman conspiring to keep wages down. Smart people with capital are going to exploit their environment. 

If you want to stop this, you go back to 40 years ago with rates in the teens. But nobody wants that. This will continue, because rates aren’t going higher. Younger people will struggle. 

I didn't say there was a boogeyman. But it is an indisputable fact that real wage growth has stagnated. It is a fact that a top percentile controls its largest share of the country's wealth since the robber baron era.

While reduction in interest rates does pressure prices higher, it also increases the amount the average household can borrow. Given that, it isn't clear why such a reduction would result in the trend. It also doesn't fit the data since the trend has been consistent whether interest rates were lowered or raised. 

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Posted

15 years ago there was an over supply and a resulting housing bubble.

these things ebb and flow, but they do need to punish corporate ownership via taxation. 

Posted
1 hour ago, Dahobbs said:

Yes, that is literally why investors are able to buy homes. But that doesn't explain why that percentage has changed over time. Why are investors now able to buy a larger percentage of homes than they were 30 years ago? Either 1) investors have a greater share of resources now and thus are able to capture a greater share of homes, 2) the motivation of residents to own a home has decreased relative to investors' motivation, 3) a larger percentage of homes are short term vacation rentals, or 4) some combination of the above. 

Why is it misplaced? Again, this is about explaining the trend overtime, not literally "why or how do investors buy homes". If your answer to why the trend exists is that investors now have more money, then you're agreeing with my conclusion that it is due to the wealth gap. 

Maybe. But they didn't cause it. As far as I know, cause still has to precede effect. 

I just don't think they fully understood the city's criteria. They used "and" suggesting all those elements must be true to be counted as owner occupied when in reality some of those elements were sufficient by themselves. 

They have always been able to buy a disproportionate share, but houses have historically not appreciated fast enough to warrant the investment when better returns were realized elsewhere. From 2020 to 2023, the homes in my neighborhood went up about 50%.  The capital took notice and followed. Now that interest rates have climbed, and prices are falling, they are cash buyers and jumping into the market even more. 

I know of two Ft. Worth area D.R. Horton subdivisions that have been bought by hedge funds before they ever even broke ground. 1500-2000 homes all built as rentals. You get the appreciation, the depreciation, a 10% return on your money, you hold the note to the assets, you get to keep any payments before defaults. A pretty attractive return considering you hold all the cards.

CHIEF

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Posted (edited)

Pulte is the cause of this from my limited view. We partnered with them and have entire rent communities in Charlotte, Orlando and Phoenix 3000 home neighborhoods each and all rentals. Growing every month

Edited by Zepol87
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Posted

Eliminate the standard deduction (everyone itemizes), eliminate the SALT cap when itemizing, increase the use of homestead exemptions in states that don’t use it, reinstate first time home buyer credits, and build in a bigger spread on rates on government backed mortgages versus conventional financing. 

You aren’t putting the horse back in the barn on corporate ownership, but you can increase the incentives to individual ownership. Also, they might want to rethink that whole 21% corporate tax rate. 

These issues aren’t new, but they have been exacerbated by a certain piece of tax legislation in 2017 along with the high inflationary environment of this decade.

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Posted
2 hours ago, Brew said:

Eliminate the standard deduction (everyone itemizes), eliminate the SALT cap when itemizing, increase the use of homestead exemptions in states that don’t use it, reinstate first time home buyer credits, and build in a bigger spread on rates on government backed mortgages versus conventional financing. 

You aren’t putting the horse back in the barn on corporate ownership, but you can increase the incentives to individual ownership. Also, they might want to rethink that whole 21% corporate tax rate. 

These issues aren’t new, but they have been exacerbated by a certain piece of tax legislation in 2017 along with the high inflationary environment of this decade.

I don't think corporate ownership or non-occupier ownership is inherently bad. For a lot of people, renting is the financially better path. But I do think the changing trend tells us something about the wider economy worth paying attention to and could signal a deeper problem. 

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Posted
16 hours ago, troph said:

In response to your comment below and the leftist comment above - first just because I made a quick retort earlier doesn’t mean I’m not in favor of robust discussion and policies that address all sides (not both sides), second, come on man, leftists won’t think it through, man you know I’m thoughtful and so are many of the guys here, so that was not really an accurate thing to say, and third, I’m all for profit I think you know that, it doesn’t mean profit should wreck the market with its own unintended consequences and it is and has, so in addition to what you write below considerations including massive corporate buy ups should be considered just like for example CFIUS can block or restrict m&a deals for national strategic interests or the EPA can regulate clean water (sorta) or congress can regulate agency mortgages to ensure stricter underwriting guidelines so the market doesn’t implode again.

That sentence is pregnant.  I kept waiting for the period that didn't come.

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Posted
1 hour ago, Guadaloopy said:

That sentence is pregnant.  I kept waiting for the period that didn't come.

lawyers don't use periods until the 17th line has been passed.

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Posted
15 hours ago, Zepol87 said:

and all rentals. Growing every month

I shudder to think of what these neighborhoods will look like in ten years. In general people don’t give a rat’s ass about a rental owned by a big entity.

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Posted

I mean, a big corporate entity (based in CA) had a crew cut down the trees in my front yard that kept my living room cool in the summer as well as destroy a picnic table in the backyard that my friends I used frequently, all in the name of "helping the place sell" ... To another corporation. So why the fuck should I give a shit about the condition of the place?

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Posted
21 hours ago, Willfully Horn said:

Supply hasn’t kept up with demand. One reason is the labor shortage. Another is companies that build fewer houses per acreage seem to outbid companies that build more houses, for available land. Plus, the other reasons being discussed. But, these reasons are important.

https://www.npr.org/2021/12/18/1063205596/housing-cash-offer-home-buyer-seller

27 offers sounds like someone who had bad advice from their agent…

 

20 hours ago, NoRagrets said:

these things ebb and flow, but they do need to punish corporate ownership via taxation

Taxation is one remedy, but I would offer that the real cause is a failure of the modern economy to produce firms worth investing in (I.e., capital is looking for non-traditional investments).  Lots of guilty parties contributing to that, but lots of solutions as well.  

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Posted
1 minute ago, Rex Kramer said:

The trend isn’t “changing” and it doesn’t signal a deeper problem. This is the unintended consequences of lower rates and doesn’t really harm anyone long term. 

Who am I to argue with the say so of the great Rex Kramer? I'll just take your word for it sans any explanation at all. 

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Posted

I've been thinking about renting my home to my grown son and his GF instead of selling it. Now, after reading Surly, I am conflicted. Am I baaad?

Posted (edited)
12 minutes ago, Rex Kramer said:

Well why don’t you start by telling me exactly how this multi-decade trend is changing.

Further, I already explained it to you. At first you didn’t like the explanation and argued with me. Then you didn’t respond and bat signaled your CR buds to call me illiterate because I’ve the audacity to call a spade a spade: the reason is rates. The wealth gap shoehorn doesn’t fit here. 

What on earth are you talking about? You've been speaking gibberish most of this thread. I cant help that others called you out on it. I certainly didn't ask for any help in dealing with the mighty Rex Kramer. 

At any rate, lower, but non-zero, interest rates is a decent enough match for the data. I'm not sure it explains why lowered interest rates would lead to outsized investment by others and not homeowners, but at least the data generally correlates. 

Edited by Dahobbs
Posted

Companies owning entire communities for rental purposes is bad, my company included. Renting is also the only way I grew up in a house. My parents didn’t own a home until I was 25 so yes there is a need for it that gets you out of the shit and apts

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Posted
1 minute ago, Rex Kramer said:

I’ve not been speaking gibberish. I’ve been very clear. 

Sounds like you’ve totally changed your mind on rates. If you don’t know why a 2.75% mortgage rate might lead to outsized investment in that space by those that can afford multiple homes, relative to individuals, I’m not sure you’re capable of having this conversation. 

You'd have to explain why investors are pouring more money into the housing sector rather than other sectors over that period and why the bulk of the population is less willing or able to invest in homeownership over the same period. If homeownership is a good investment, but not necessarily the best investment for those that can save, you'd think it would be prioritized more by those who need a home anyway and less by those who have other options on where to invest. I just don't think low interest rates, acting alone, is a good explanation for the trend we have seen. However, I could see that contributing to the trend in concert with other factors. 

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Posted
36 minutes ago, Bevo said:

I've been thinking about renting my home to my grown son and his GF instead of selling it. Now, after reading Surly, I am conflicted. Am I baaad?

Presumably you are a person that pays taxes and is generally a productive member of society as opposed to some large conglomerate that only exists to suck value out of society.

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Posted
8 minutes ago, Rex Kramer said:

How do you know the “bulk” of the population  is less willing or able to buy a good home?  Last I checked, one home is sufficient for a family. If you’re building a portfolio, you’ll buy more than one home. 

I'm assuming the primary market for single family residences are as primary homes, whether as rentals or owner-occupied. If that is the case, an increase in invested owned homes necessarily means more families being either unwilling or unable to purchase their homes. If the market has shifted such that a greater percentage of homes are vacation homes, then that might explain the trend as well. 

Anyway, last post in response to you.

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Posted
5 minutes ago, Dahobbs said:

I'm assuming the primary market for single family residences are as primary homes, whether as rentals or owner-occupied. If that is the case, an increase in invested owned homes necessarily means more families being either unwilling or unable to purchase their homes. If the market has shifted such that a greater percentage of homes are vacation homes, then that might explain the trend as well. 

Anyway, last post in response to you.

this is how bubbles happen

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Posted
2 hours ago, Rex Kramer said:

I’ve not been speaking gibberish. I’ve been very clear. 

Sounds like you’ve totally changed your mind on rates. If you don’t know why a 2.75% mortgage rate might lead to outsized investment in that space by those that can afford multiple homes, relative to individuals, I’m not sure you’re capable of having this conversation. 

You do realize that people who own multiple homes and those owned within corporate environments aren’t getting 2.75% mortgages, right? You could technically have 10 mortgages, but I can’t say I have ever seen anyone qualify. Usually, once they are past a few then they are dealing with bank side financing, not traditional backed mortgages.

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Posted
3 hours ago, LCHorn said:

Taxation is one remedy, but I would offer that the real cause is a failure of the modern economy to produce firms worth investing in (I.e., capital is looking for non-traditional investments).  Lots of guilty parties contributing to that, but lots of solutions as well.  

I don’t follow your logic here. It sounds like you are saying that institutional investors are having to go outside of typical investments because of lack of opportunity within the traditional space therefore they are chasing non-traditional investments. I don’t see that at all. The numbers on investments being made are up significantly. I would say it is more related to how much money is tied up in institutional investments whether PE, family office, retirement plans, etc that the massive wealth accumulation at that level along with a lot of other circumstances is driving the alternative investments.

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Posted (edited)
4 hours ago, Rex Kramer said:

Now. I get $10k back if I spend a little money to clean up after myself when I move out later this month. 

My dude, I don't even want to tell you how many months of wages that is for me. Kindly fuck off; we live in entirely different worlds 

4 hours ago, Rex Kramer said:

Now. I get $10k back if I spend a little money to clean up after myself when I move out later this month. 

Fucking double post 

Edited by safe sex
Posted
2 hours ago, Brew said:

The numbers on investments being made are up significantly.

If true then I’m sure that’s a factor.  I’m saying that monopolies and cartels in many industries has had the result of limiting the choices managed funds have in equities, and they are looking elsewhere.  If what you’re saying is true then it might not just be a matter of total dollars, it might also be because funds (probably led by newer funds) need to justify themselves and that creates pressure to be creative or look in weird places for investments.  

I’m stealing this from the Hidden Forces podcast, but if we take one industry, let’s say automobile for familiarity, and posit that electric car demand is a huge disrupter that allows new entrants an easier path to market entry than 10 years ago (when they would be competing instead with firms that have up to 100 year head starts), then we should see more new firms than we are.  Instead it’s mostly just Tesla and a smattering of rival firms that are far smaller.  
 

if you’re managing a fund that doesn’t give you a lot of options for that industry, and telling your investors that you put their money in Tesla is something they are perfectly capable of doing on their own.   
 

I’m sure there’s all kinds of other reasons (potential for AI disruption in services, outsourcing, direct state subsidies in foreign markets) that also make equities seem riskier than in previous business cycles.  
 

 

Posted
18 minutes ago, BeardIP said:

Did Twilight just come out? Because it feels like 2008. Loose restrictions on mortgage underwriting programs helped fuel that year’s market crash

That’s a clickbait article and something I’m seeing all too frequently from formerly reliable media sources like CNN and The NY Times.  I suppose even they need outrage to keep the money machine running and there’s only so much space they can devote to Trump.

What UWM is doing isn’t any different than what’s been offered by various down-payment assistance programs for the last 20 years, most of whom are using HUD money for the program funds (the Chenoa fund a notable exception, whose funds come from an Indian tribe).  Those didn’t seem to crash the economy and UWM has lots of federal and state data to show their approximate losses on those 2nd liens.

I don’t know how UWM’s program will work, but the traditional government programs are all very niche, anyway, and have some big downsides (increased cost of borrowing, 2nd lien can’t be resubordinated so borrower can’t refinance until they have enough equity to pay off 2nd lien).  
 

My impression is that UWM rolls these out because they know websites like CNN will talk about them and it gives their brokers something to sell, but they won’t write many mortgages that actually use them (by design).

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