Adjustable-rate mortgages (ARMs) are back, especially in the higher price brackets around $453,000 and above. And as loan rates climb, as they are expected to do throughout the year, they probably will become more popular.

But wait: Weren’t ARMs responsible, at least in part, for the 2008 housing crash and subsequent mortgage market meltdown? Are homebuyers setting themselves up for another fall?

Well, no, ARMs weren’t responsible for the crash. Actually, the loan product itself is quite sound. After a set number of years, the rate you pay adjusts to market conditions at that time. The rate could go up -- by as much as 2 percentage points a year, usually, to a maximum of 6 points over the life of the loan -- or it could go down.

No, what got borrowers and lenders into trouble wasn’t ARM loans; it was the loose standards underwriting them. At the time, the joke was that if you could fog a mirror, you qualified for a mortgage.

The dicey variations of ARMs, though, were no joke. These included loans in which only interest was collected for a set period; “pay option” ARMs, in which you decided when to pay and how much; and negative amortization ARMs, in which the loan balance actually went up, not down. Some lenders approved these and other loans with little or no documentation to prove borrowers were employed, or that they earned enough to make their payments.

“The underwriting standards used to approve borrowers for those loans by some lenders were abysmal,” says Quicken Loans Chief Economist Bob Walters.

Today’s ARMs, however, are “very different” from the pre-crash versions, according to Archana Pradhan, an economist for analytics firm CoreLogic. According to CoreLogic, 3 out of every 5 ARMs originated in 2007 were either low- or no-documentation loans. In 2005, 3 out of 10 ARM borrowers had credit scores below 640.

Today, says Pradhan, almost all adjustable loans are full-documentation, fully amortizing loans made to borrowers with credit scores above 640. Also pretty much gone are the so-called teaser rates -- rates that started as much as 3 percentage points below the true starting rate -- that were offered to entice borrowers.

Based on the four major underwriting variables -- credit score, loan-to-value ratio, debt-to-income ratio and documentation -- ARMs are of “better quality” than even fixed-rate loans, Pradhan reports. As of last year’s first quarter, for example, the average credit score among ARM borrowers was 765, versus 753 for those taking out fixed-rate loans. And the typical LTV was 67 percent on adjustables, versus 74 percent for fixed loans.

But the real proof of how well these loans are underwritten now is that they are performing admirably. While their borrowers still become seriously delinquent more often than fixed rate borrowers, according to CoreLogic’s figures, the rate at which ARMs become major problem loans is significantly lower than they used to. And the bulk of today’s super-late loans -- those that are 90 or more days overdue -- were originated between 2003 and 2009.

No wonder, then, that borrowers are heeding the new call to ARMs. (Sorry, I just had to.)

Uncle Sam no longer counts the number of adjustable loans and fixed mortgages, but several private sources show how great a comeback ARMs have made recently.

According to the Inside Mortgage Finance trade publication, ARM originations leaped 40.5 percent in last year’s second quarter. And Black Knight, another mortgage information and analytics firm, says that ARMs now represent 9.5 percent of all active loans.

However, the story with ARMs today is a tale of two markets: one below the conforming loan limit of $453,000, and the other above it. The conforming limit is the ceiling placed on the size of the loans Fannie Mae and Freddie Mac can purchase from lenders on the secondary market. Anything above that is considered a “jumbo” loan.

According to the Mortgage Bankers Association, as of October, just 3.2 percent of all conforming loans were ARMs. On the flip side, the ARM share of jumbo loans was over 35 percent (as of December 2013). And more recently, jumbo ARMs have consistently been responsible for a 20- to 25-percent share of the entire mortgage market.

This makes perfect sense to MBA economist Joel Kan, who says higher-end borrowers have the income and credit necessary to “absorb the interest rate risk” that comes with adjustable rate mortgages.

Of course, ARMs are not for everyone. Far from it. “There is never a one-size-fits-all” loan product, says Quicken’s Walters, who uses an ARM on his own residence. “But they are not the villains they are sometimes portrayed to be.”

Because ARMs come with lower starting rates than fixed-rate loans, the ideal candidate is someone who can peg a major life event to the first adjustment period. For example, if you expect to upgrade or downsize within a certain timeframe, or you don’t plan to be in the house you’re buying very long, you should take a serious look at that option.

The great minds of the mortgage market continue to work overtime, coming up with fresh ideas in an effort to reach more would-be homebuyers.

Pilot programs like these don’t always prove worthwhile; in fact, some never make it beyond the testing stage. But they show the lengths to which lenders are willing to go for new buyers.

Below are some of the latest offerings from the mortgage world.

-- Mortgage giant Fannie Mae is looking at a way to help people build their own homes. In what’s known as construction-to-permanent (C2P) financing, buyers get a construction loan to build a house, and when the place is complete, the loan converts to a permanent mortgage. But Fannie Mae doesn’t purchase C2P loans from lenders until they convert to permanent status, and some lenders won’t make them because they have to keep them on their books until they change status.

Under the pilot, which still needs to be approved by federal regulators, the company would buy the loan on Day 1 of construction.

-- San Diego’s Guild Mortgage is looking at a 1-percent-down mortgage in which the lender provides a 2 percent grant and the buyer puts up the other 1 percent. Guild is also trying to develop a shared equity program with both Fannie Mae and Freddie Mac, Fannie’s chief secondary market competitor.

-- New Penn Financial of Pennsylvania has joined with Home Partners of America (HP) to offer financing to purchasers participating in Home Partner’s lease-purchase program. It is the first time HP has worked with a lender to back renters who want to buy their houses.

-- Eagle Home Mortgage, the lending arm of national home builder Lennar, went to Fannie Mae with an idea for helping would-be new homebuyers deal with their student debt. Now, Fannie has expanded the pilot to nine other lenders. Under Eagle’s plan, Lennar contributes up to 3 percent of the purchase price to pay down school loans incurred while attending universities, community colleges, trade schools and other certificate-granting programs. However, buyers whose parents took out loans to finance their educations don’t qualify.

-- Some states are passing laws that allow aspiring homeowners to create down payment savings accounts similar to the popular 529 college savings plans. Montana, Virginia, Colorado, Mississippi, Iowa and Minnesota now allow would-be buyers to open tax-free savings accounts. And Pennsylvania, New York, Oregon, Oklahoma, Maryland, Utah and Louisiana are moving to do the same.

Each program has its own subtleties and limits, but according to National Association of Realtors’ (NAR) figures, the Mississippi law could encourage 7,000 first-time buyers to enter the market over the next five years. NAR’s Oregon affiliate says if the bill passes there, 3,200 renters could become owners over the next five years.

-- Michigan’s Flagstar Bank recently rolled out a zero-down-payment program in which the company will gift the required 3 percent down payment, plus up to $3,500 toward closing costs. There is no obligation to repay the down payment money, but borrowers will have to qualify under income guidelines and buy homes in qualifying geographical areas.

-- Angel Oak Mortgage of Atlanta recently rolled out a new program for “just-missed” borrowers: those who don’t quite qualify under Fannie’s and Freddie’s guidelines. The Platinum Program features rates starting around 4 percent. Loan amounts can range from $150,000 to $3 million, with a credit score of at least 660.

-- Citadel Servicing Co. in California has come up with a loan for which buyers qualify with just a verification-of-employment document. Applicants need two years of continuous employment, plus a voice verification of employment on the day the loan closes. They must also confirm they have enough money on hand for at least a 25 percent down payment, though no other proof of income is necessary. The program is open to borrowers with a minimum 650 credit score and is good for loan amounts between $250,000 and $3 million.

-- Guaranteed Rate just launched the “Flex Power” product for loans up to $3 million ($2 million for condos). It requires as little as 10 percent down, with no private mortgage insurance, and interest-only payments are an option if the borrower boosts the down payment to 15 percent.

-- San Diego’s Credit Data Solutions has a new web-based tool called PreQual, which uses only a would-be borrower’s name and address to pull a single-bureau credit score and report. PreQual is considered soft research, meaning it won’t impact your credit score. But it cannot be used for an application for credit; your eventual lender will need to order a full-blown “hard-inquiry” credit score and report. Warning, though: Once you make a PreQual request, the lender is notified and you will receive a follow-up call, especially if you make the grade.

-- Value Insured’s down payment protection policy, now being offered by several lenders, reimburses borrowers for the full amount of their down payments -- up to 20 percent of the purchase price -- should they have to sell their homes because the market turns south. It is a lender-paid service, which may add dollars to your loan amount and result in a higher monthly payment.

“Churning” is a four-letter word in the mortgage business.

The term refers to aggressive lending practices. The most common churning scenario: Soon after a buyer closes on a home, rival lenders offer to refinance the mortgage. The poachers offer the unsuspecting borrower a lower interest rate, but they have to pay closing costs all over again, and perhaps some additional fees -- so there is little or no real savings. In some cases, the new loan could even be more costly than the old one, even with the lower rate.

Churning seems to be on the rise lately. With a continued decline in people applying for home loans, some lenders are tripping over themselves to snatch away other lenders’ clients.

Just last fall, the government took steps to stop lenders from going after veterans and servicemen and women who have used their housing entitlements to purchase homes with loans backed by the Veterans Administration (VA).

According to the San Antonio Express-News, one Air Force veteran hadn’t even finished unpacking in his new Texas home when he received his first call from a lender about refinancing.

The refi schemes have brought howls of foul play from the original lenders, who were counting on the loans being on their books at least long enough to recoup their cost to make the loan and perhaps earn a profit. And it caught the attention of muckraking Sen. Elizabeth Warren, D-Mass., among others. In a September letter to Ginnie Mae, the principal financing arm for government loans, Warren demanded the agency put a stop to lenders “aggressively marketing VA refinance mortgages that benefit them but harm veterans and the American taxpayers.”

In response to the letter, Ginnie Mae -- which packages government loans into securities for sale to investors in much the same way Fannie Mae and Freddie Mac do with conventional loans -- said it had restricted how often a lender is permitted to place a mortgage to the same borrower whose initial mortgage is in a Ginnie Mae loan bond.

The agency also said it would closely track how quickly certain lenders refinance VA borrowers and the rates they charge. If lenders refinance borrowers too quickly, or if they charge rates that are more than 1.5 percentage points above the market, they may face penalties.

But Joseph Murin, who was Ginnie Mae’s president under both Presidents Bush and Obama during the first years of the housing crisis (2008-09), says he doesn’t think the agency has gone far enough to stop the practice. Murin, who is now chairman emeritus of Maryland-based NewDay USA, says the moratorium placed on refinancing should be 12 months, not the current six. Murin claims NewDay is losing some loans as soon as 30 days after they close -- something he says is previously unheard of.

As he sees it, too many lenders are “pilfering” refi loans as a “back-door means to survival” when they could shift their focus to making new loans to new borrowers.

But pressuring VA borrowers into refinancing isn’t the only kind of churning. In some cases, wholesale lenders are stealing customers from mortgage brokers.

Wholesale lenders don’t make loans directly. Rather, they originate loans through a huge network of mortgage brokers, who help borrowers choose a loan they like, fill out all the paperwork and then send the package off to one wholesaler or another. Sometimes, brokers actually close the loan and then deliver it to the wholesaler.

The system works well: Brokers do all the legwork, and borrowers get a lender of their choice. But in some cases, wholesalers jump to refinance the broker’s customers shortly after they close on the original mortgage.

The practice has been going on for years, according to Anthony Casa of Garden State Home Loans in New Jersey. But now, a group calling itself BRAWL -- Brokers Rallying Against Whole-tail Lending -- is calling out the bad guys. (The group coined the term “whole-tail” to refer to shady companies straddling the line between wholesale and retail.)

“Mortgage brokers have known about whole-tailers’ shady tactics for years, but we just didn’t have a voice before,” says Casa, a founding member of BRAWL. “We’re speaking up now.” The Jersey broker says his colleagues are “the ones handing buyers the keys,” but then underhanded wholesalers are “stealing our customers.”

BRAWL seeks to out “lenders who appear to offer both wholesale and retail services, when the truth is that their wholesale divisions exist for one reason only: to feed their retail machines.” In an open letter to the broker community, the group asks members to “pledge to partner only with true wholesale lenders until the whole-tailers put an end to their selfish and greedy ways.”

The third form of churning is called “trigger leads,” which are leads sold by the national credit repositories to lenders on a daily basis.

Every time a would-be borrower’s credit record is pulled by a lender, the credit agencies package the request with others as potential leads and peddle them to other loan originators based on the specific types of consumers that fit their lending parameters.

Then, the would-be borrower is inundated with other loan offers, ostensibly so they can compare the poachers’ products against the original quote. According to the National Credit Reporting Association (NCRA), some lenders who use trigger leads lie about how they know the borrower has applied for a mortgage, and some flaunt the rules by using deceptive practices to persuade the consumer to take a loan with their companies.

Uncle Sam’s official position on the practice is that it’s good for consumers because it promotes competition. But original lenders don’t like it, and sometimes, neither do the borrowers.

Terry Clemans, NCRA’s executive director, says trigger leads are basically pre-screened offers of credit, similar to the “pre-approved” credit card offers that fill your mailbox. “Opting out is the only current way for consumers to avoid being part of the trigger lead program and exercise their rights to cease any type of pre-approved offers,” he says.