A shady financial tool from the housing-bubble era is making a comeback

America’s gummed-up housing market is a $45 trillion mess — a big old knot of economic forces smashing into a century’s worth of cultural conditioning about the value of homeownership.

America’s gummed-up housing market is a $45 trillion mess — a big old knot of economic forces smashing into a century’s worth of cultural conditioning about the value of homeownership. There are some obvious, urgent needs: We need more housing, full stop. And that housing needs to be affordable. And we should probably stop letting Wall Street firms become landlords for the sole purpose of extracting capital from renters who could otherwise build equity. Point is, policymakers aren’t running out of puzzles to solve when it comes to housing. Perhaps the last thing the market needs is another shady financial product that pushes low-income Americans into homes they can’t afford, under terms that could bankrupt them. And yet, here we are. The zero-down mortgage is making a comeback, my colleague Matt Egan reports. Two weeks ago, one of the nation’s largest mortgage lenders rolled out a “new” program (I put new in quotation marks because, well, we’ve seen this movie before) that allow first-time homebuyers to secure their purchase with no money down. Let’s briefly get into how it works, and then we can talk about why it’s a huge red flag for anyone with passing understanding of the 2008 financial crisis.