This is the consensus view. Funny thing is, this is exactly the kind of thing people were yammering on about with respect to "subprime" in 2007. Contained. Don't worry about it. A few weak players will go under, but there is no systemic risk.
Now, maybe that's true this time. Or not. What is certain is that the mortgage industry went through a metamorphosis since the GFC, and most of the players are now not banks.
> “The nonbanks are poorly capitalized,” said Nancy Wallace, chair of the real estate group at Berkeley Haas, the business school at University of California, Berkeley. “When the mortgage market tanks they are in trouble.”
> In 2004, only about a third of the top 20 lenders for refinancings were independent firms. Last year, two-thirds of the top 20 were non-bank lenders, according to LendingPatterns.com, which analyzes the industry for mortgage lenders. Since 2016, banks have seen their share of the market shrink to about a third from about half, according to news and data provider Inside Mortgage Finance.
So what happens when the major source of debt fueling the ongoing housing debacle comes from "poorly capitalized" non-banks? The obvious answer is that the gravy train careens into a ditch. Less capital means fewer loans. Fewer loans mean house prices are no longer supported by debt. Given that they stopped being supported by incomes a long time ago, there's nothing left to prop the thing up.
So it will certainly be different this time around. Every financial crisis is different in its own way.