not at all, its the "interest only 2 year arm at 100% to the 580 borrower" that is no working... in fact, its been completely removed from the market.
Investors, during the housing boom, were buying SOOOOO deep into the market that persons who probably should not have been buying a house with zero equity, where able to. 100% loans are not a problem and are still being bought on a regular basis to borrowers who have a much stronger credit profile.
Interest rates dont really have an effect on portfolio performance. the ratio's used for approvals still hold fast and are the true qualfier for potential buyers.
100% loans arent made for short term... you need to spend sometime on the home to build equity.
The only loans that can "screw over" a buyer are the ones that shady financial consultants "suggest" to people who are clearly not in a position to afford, or benefit from a particular program. Its no different than having a used car salesman sell you a lemon. You should know or trust who you work with or take the chance. Thats why its not a bad idea to work with folks who have been referred to you by a friend, family member...or maybe a message board