I saw Sam Zell, the largest property owner in the country outside the government, being interviewed along with a CEO of a housing developer (KB homes, I think) on TV. He was adamant that a pending problem was that developers, like the CEO across the table, make donations to charities that turn and give the money to otherwise unqualified buyers for their down payment. This essentially allows underqualified buyers to get into homes with no money down. Zell’s point was there is significant potential of default with these buyers and this is a questionable business practice. The CEO said it was 20% of his sales and if we want to see more people own homes this type of arrangement is needed.
Risk doesn’t go away, it only gets transferred. Who is holding this risk? Certainly not the builder. Time will tell the answer to this. I fear it’s us taxpayers.