Is this the new way mortgage companys are screwing people?

No the mortgage company is not cheating, they are simply protecting themselves. The problem is the 100% financing you mention. That's a sub-prime mortgage and many of them are now in default. Banks are getting stuck with foreclosed properties because with higher interest rates, borrowers could not repay their loans. So the rules have been tightened and the amounts banks will lend to a borrower are now much smaller.