An Informed Discussion of Nontraditional Mortgage Products and Other Risks
The Federal Reserve Bank of Chicago, Consumer and Community Affairs Division, held a conference titled, "An Informed Discussion of Nontraditional Mortgage Products and Other Risks," on Wednesday, January 31, 2007. The conference was held at the Reserve Bank, located at 230 South LaSalle Street, in Chicago.
This timely and interactive conference provided a forum exploring predatory lending, mortgage and mortgage rescue fraud, and the risks posed by nontraditional mortgage products. "Nontraditional," "alternative," or "exotic" mortgage products are residential loans that include "interest-only" and "payment option" adjustable-rate mortgages that allow borrowers to defer repayment of principal and sometimes interest. These products allow borrowers to exchange lower payments during an initial period for higher payments later.
The program included a broad overview of the issues, a dialogue on regulatory considerations, and a more focused discussion of the central issues as seen from key perspectives.