Homebuyers seek riskier loans with echoes of 2008 housing crisis
WASHINGTON — Home buyers feeling financially squeezed by higher interest rates are increasingly being steered by real estate agents and mortgage brokers to potentially riskier types of mortgages, similar to those seen ahead of the 2008 financial crisis, causing concern among some consumer advocates and industry analysts. Among the loans being promoted to home buyers are adjustable rate mortgages, so-called 2-1 buydowns, which artificially lower rates for the first two years, and interest-only mortgages in which borrowers pay a lower monthly payment for several years by only paying the loan interest, according to interviews with real estate professionals, industry data and a review of marketing material from real estate agents and mortgage brokers. In all instances, borrowers can find themselves with monthly payments that increase by hundreds of dollars a month after the introductory period, a dynamic seen in the run-up to the last housing market crash when predatory lending resulted...