The struggling lender has used FHA taxpayer guarantees to make risky mortgage bets. The risks that investors and regulators aren’t watching are usually the ones that jump up and bite. An example came last week when billionaire Mat Ishbia’s United Wholesale Mortgage (UWM), one of the country’s largest mortgage lenders, required a $2 billion private capital infusion after his interest-rate hedge went south.\n\nThe bigger story is how Mr. Ishbia is getting rich from making risky mortgages backed by taxpayers.

The company’s reliance on FHA guarantees allows it to take outsized risks, with the public bearing the downside. This latest event highlights the hidden dangers in the mortgage market, where private gains are socialized while losses are privatized.\n\nRegulators and investors often overlook these systemic risks until they materialize. UWM’s near-collapse serves as a warning: government-backed lending can encourage reckless behavior, and the canary in the coal mine is singing.