There have been many stories about nontraditional mortgages recently. I had not seen many products geared towards nontraditional mortgages like I have seen this year. Along with nontraditional mortgages comes some risk. What we have to ask ourselves is are people really ready for those risks? I was reading Housing and Mortgage News where it discussed Federal Financial Regulatory Agencies Issuing Final Guidance on Nontraditional Mortgage Product Risks. The bottom line as usual is do the borrowers fully understand the risks of the products being presented to them. The guide says management should ensure loan terms and underwriting standards are consistent with prudent lending practices including consideration of a borrower’s repayment capacity. I am sure there have been borrowers that have taken a long and not even considered their ability to repay a loan. This should be helpful for new borrowers that are considering nontraditional mortgages.
