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Interest Only, Negative-Amortization Loans Not Seen as a 'Systemic Risk'.(Brief Article)

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| August 01, 2005 | COPYRIGHT 2005 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

New York -- The payment shock risk posed by interest-only and negative-amortization loans is a concern, but the percentage of these loans in the overall market is too small to consider them a "systemic risk," a Bear Stearns researcher said in a July 7 teleconference.

Dale Westhoff, head of Bear's mortgage-backed securities research department, said the number of these loans in the market is "significant" but not large enough to be considered to have the potential to jeopardize the market as a whole or cause a severe home price correction.

The risk of these ...

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