NAR Warning About 'Risky' Loans

The National Association of Realtors is voicing concern about the growing use of interest-only loans and payment-option adjustable-rate mortgages, and is planning a consumer outreach effort later this summer.The NAR made the decision June 22 to move ahead with an educational campaign on these somewhat controversial products. According to figures compiled by National Mortgage News, IO production accounts for 21% of all loans funded in the United States. "We are going to provide educational brochures on these products," said NAR chief economist David Lereah, adding that the focus will be on IOs, payment-option loans, and negative amortization products. NAR president Al Mansell said in a statement that there are "insufficient disclosures" being made by lenders on these "riskier loan products." A spokeswoman for the Mortgage Bankers Association did not return a telephone call on the matter by MortgageWire's deadline.