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Booming IO Market Sparks Concern.
Washington -- Two years ago, very few residential lenders were funding interest-only mortgages, but today these somewhat controversial loans account for 21% of the entire production market in the U.S., according to exclusive survey figures compiled by this newspaper.
In the first quarter, the nation's lenders funded $141 billion in IO loans out of a total production pie of $663 billion.
Lenders are aggressively marketing IOs, which allow for low initial loan payments sans principal. Hence, the name interest-only mortgages.
According to Mortgage Servicing News, and its affiliate the Alternative Products QDR, the nation's top 25 funders of IO mortgages originated $79.8 billion in these loans in the first quarter - a stunning 312% increase from the same quarter last year.
Many lenders weren't even making IOs a year ago.
Countrywide Home Loans, Calabasas, Calif., ranked first among all IO lenders in the quarter with $13.7 billion, followed by Wells Fargo Home Mortgage, San Francisco ($9 billion), and the Lehman Brothers-owned Aurora Loan Services of Colorado ($8.7 billion).
Countrywide's volume, however, is an estimate based on recent comments made by its CEO Angelo Mozilo that IO mortgages now account for 25% of its total volume. (For Countrywide, MSN assumed a 15% IO rate in the first quarter.)
- IO Loans: Friend or Foe?
- News wire article from: The America's Intelligence Wire July 11, 2005 700+ words
...page when it comes to IO loans. Most of the industry...Greenwich found that subprime IO loans "are performing better...counterparts." However, the Wall Street firm found that delinquencies and losses on subprime IO loans "naturally are beginning...
- Subprime IO loans boost investors.
- News wire article from: The America's Intelligence Wire March 15, 2006 700+ words
...decrease loss severity) and the lack of nonowner-occupied properties. Less than 3% of IO loans are for investor properties, compared to 8% for non-IO loans. Throughout 2004, the average FICO differential between IOs and non-IOs was 44 points...
- Subprime IO loans boost investors.(interest only loans )
- Newspaper article from: Asset Securitization Report McGeer, Bonnie February 27, 2006 700+ words
...decrease loss severity) and the lack of nonowner-occupied properties. Less than 3% of IO loans are for investor properties, compared to 8% for non-IO loans. Throughout 2004, the average FICO differential between IOs and non-IOs was 44 points...
- IO Loans a Commercial Concern.
- News wire article from: The America's Intelligence Wire July 27, 2005 700+ words
...leverage against somewhat speculative value." Tad Philipp, managing director, Moody's Investors Service, also listed IO loans among his concerns. Moody's is also seeing more master leases. "If the borrower is on the hook for the lease, it's...
- 4Q IO Loans Reach $100B.
- Magazine article from: National Mortgage News Muolo, Paul February 28, 2005 700+ words
...president of Lime Financial, Lake Oswego, Ore., told NMN recently that even though "the rating agencies are skeptical about" IO loans, his shop has yet to see any credit problems. About 40% of Lime's purchase money production involves IO mortgages...
- Genworth to Insure 40-Year IO Loans.
- Magazine article from: National Mortgage News October 2, 2006 700+ words
...product and there are several options on how the premium can be paid. In addition, where traditional mortgage insurance for IO loans only allow the loan to have a 95% loan-to-value ratio, with Genworth IO 40, the lender can provide 100% LTV financing...
- NAR Worried About IO Loans, Payment Option ARMs.
- News wire article from: Mortgage Line Muolo, Paul Collins, Brian August 15, 2005 700+ words
Washington -- The National Association of Realtors is concerned about the growing use of interest-only and payment-option ARMs and is planning a consumer outreach effort for later this summer. NAR made the decision last week to move ahead with an educational campaign on these controversial products
- Realtors Concerned About IO Loans and Payment Option ARMs.
- News wire article from: The America's Intelligence Wire July 27, 2005 700+ words
(From National Mortgage News) Byline: Paul Muolo & Brian Collins The National Association of Realtors is concerned about the growing use of interest-only and payment-option ARMs and is planning a consumer outreach effort for later this summer. NAR made the decision last week to move ahead with
- NAR Worried About IO Loans, Payment Option ARMs.(National Association of...
- Magazine article from: Mortgage Servicing News Muolo, Paul Collins, Brian August 1, 2005 700+ words
Washington -- The National Association of Realtors is concerned about the growing use of interest-only and payment-option ARMs and is planning a consumer outreach effort for later this summer. NAR made the decision last week to move ahead with an educational campaign on these controversial products
- OCC Supervisor Concerned About IO Loans.(Comptroller of the Currency, Julie...
- Magazine article from: Origination News April 1, 2005 700+ words
WASHINGTON -- The top national bank supervisor is raising concerns about "hot" mortgage products, such as interest-only loans, at a time when the housing market may be shifting. For borrowers who are pushing the envelope to qualify for a mortgage, interest-only loans are a "risky proposition,"
Source: HighBeam Research, Booming IO Market Sparks Concern.