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.
The article 1 Ominous Sign of a New Housing Bubble originally appeared on Fool.com.
Fool contributor Dan Caplinger owns warrants on Wells Fargo, JPMorgan Chase, and Bank of America. You can follow Dan on Twitter: @DanCaplinger. Lauren Kuczala has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo and owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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