Wells Fargo & Co. funded $2.2 billion of interest-only residential loans in the fourth quarter, ranking first nationwide in this category, according to figures compiled by National Mortgage News. PHH Mortgage, Mt. Laurel, N.J., ranked second with $1.2 billion. Overall, Wells' IO production volume fell 6% compared to the same period a year ago. Interest only mortgages have been criticized in some quarters because the loans do not allow consumers to pay down any principal. However, many mortgage firms defend the loan, noting that borrowers (and investors in second homes) who are uncertain how long they might stay in a property can save money over the short-term.
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