Isn’t this the type of thing that helped bring on the 2008 financial crisis in the US?
2008 financial crisis was waiting to happen. Bank lending to sub-prime borrowers was the main reason. That caused house prices to inflate for many years. Eventually the prices reached unaffordable levels. The big Wall street banks were selling bonds with home mortgages as collateral. When housing bubble burst, those mortgage backed securities (MBS) prices collapsed. That reduced balance sheets of many banks to negative. Then they could not give out any loans because banks are required to have 10% positive assets to make loans. That essentially was the financial crisis.