One major cause of the housing bubble came from lenders that offered loan terms that proved to be too good to be true. Yet even after the difficult lessons of the financial crisis, at least one financial institution has come out with similarly attractive terms that have some worries about the potential ramifications on the recovering housing market.
In the following video, Motley Fool investment-planning editor Lauren Kuczala talks with longtime Fool contributor and financial planner Dan Caplinger about the latest no-money-down mortgage loans. Dan notes that although having no equity in your home does leave you with less incentive to stay current on a mortgage, there are some key differences between these loans and the mortgage products that major banks used during the mid-2000s. Moreover, with the lender in this case keeping the mortgages on its books, the threat to government-sponsored Fannie Mae and Freddie Mac is nonexistent.
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Editor's note: The volume levels in some segments of the video are low. We apologize for the inconvenience.