This is not about the asset class, it's about the business model of selling X, packaging loans for X, and the reselling the loans for securitization.
X can be anything. When the income stream for the financial product becomes large in comparison to the income stream for underlying purchase, it doesn't bode well.
Enron (energy), GE (rails, aerospace, industrial), cars (GM/GMAC), homes (Countrywide, IndyMac), home loans (Lehmans Bros, Bear Stearns, AIG and others that repackaged the loans in addition to CDO and other derivative instruments), ad nauseum. The pattern is there. When you get out of the business of selling widgets to people and getting into the business of selling widget loans that you are originating to investors, that inextricably changes the type of company you are. You are going to optimize for the inevitably higher ROE business line of securitization, and you are going to eventually make bad widget selling decisions to prioritize widget loan sales.
I have commented more than enough, so just going to tack this on, but people may forget that loan ownership and "zombie debt" was a big problem in 2008. It is not a great sign that Carvana was banned from selling cars in a mid-market due to title delivery issues: https://www.cbs17.com/news/local-news/wake-county-news/ncdmv...
Banned from selling cars at one of their locations. That seems like the rough equivalent of one fast food franchise location getting shut down by the health department.
X can be anything. When the income stream for the financial product becomes large in comparison to the income stream for underlying purchase, it doesn't bode well.