You want to stop the transfer of wealth to the 1%? Get rid of the loans. Ratchet back the maximum duration of a loan to 15, then 7 years, and make it harder to roll over balances from end of one loan to the start of another. Cap the interest rate so the percentage that's paid to interest over the life of the loan can't exceed 25% or 33%. Yes this will make it harder to buy a house or get an education - that has to happen if you want the price of those things to drop. People will have to learn to save first, buy later; instead of buy now, pay for it later. If you want to assist low-income people trying to buy a home or go to college, do it with supply-side subsidies. Build more government-funded or government-sponsored housing to increase the supply of housing. Create more public universities with capped tuitions to increase the supply of education. Don't do it with things like loans which create more demand.
Why are (selling) mortgages only the domain of the 1%?
What's to stop an ordinary person from short-selling UST futures? Note: futures are far less regulated that stocks, you can sell what you don't own fairly easily.
Take the cash you earned from short-selling your treasury futures and sell mortgages so people can buy their houses. Futures are marked to market, so you'll have to do a daily cash settlement on your short position (giving OR receiving money, depending on the price movement of the treasury futures). You can fund the payments with the profits from your mortgage.
Now you are essentially a bank... at some point you should be able to borrow money at the federal funds rate. Fractional reserve banking says you don't have to keep a lot of cash on hand to do this, and you can use the mortgage payments you're expecting as even more collateral. Or sell some more treasury futures to fund more mortgages.
Note I've never looked into actually doing this, perhaps one of these steps isn't as trivial as it seems. But for someone with the ambition to understand how all this works (should be mostly free using the library), I don't see why there isn't a potential for a rags-to-riches story.
On the flipside... say you're a 0.0001% with money coming out your ears. If it's "so easy" to keep making money, why not just sell loans/mortgages? Two factors: credit risk and interest rate competition. In general, people (or institutions) with bad credit get worse rates. So as the seller of a loan, you're always trading risk for reward. But you're also competing with other (presumably wealthy) people who want to make a return on their investment. Just like a lot of people bidding on the same thing drives the buy price up, several people trying to sell a loan drives the interest rate down. I'm not a rich person apologist by any means, but they are held to the same supply and demand forces as everyone else. So if you're super rich, say you've got $10mm. Do you really want to sell 30-year fixed mortgages at 4%? Sure, that 4% is $400k/year... but what about inflation? We're in a historically low-inflation period right now, but do you think that will hold for the next 30 years? What will $400k/year be really worth in 2046? I guess you're somewhat protected from defaults through federal programs, but what about early payoffs? It's better than losing your money of course, but that 4% you could once count on is now gone.
Here's another lending business a person of more modest means can get into: tax lien loans. I've never done this, but read about people who do it as a side business. The idea works like this: some family can't pay their property taxes, so the local government will auction off loans to pay their taxes. You compete with other investors for the interest rate (how low are you willing to go?) Say you're the winning bid: you're allowed to pay that family's property tax as a loan to the family, backed by a lien on their property. Different states have different rules for the specifics of this, but that's the general idea. Since you're paying property taxes, the loan amounts you're making can be pretty much anything, depending on the location (a few hundred bucks to tens of thousands or more). So someone with say $10k could easily get into this business and with proper care, planning and research, could possibly make maybe 5 to 10 percent or more per year on that. If you can manage 8%, your money will double every decade. If you enjoy this kind of work and are really good at it, it shouldn't be too hard to get some people to invest in your business... say you raise $1mm to scale this into a full-time job. If you can maintain 4% after paying your investors, you're still making $40k/year. In much of the Midwest that's not affluent, but enough for a comfortable living.