Financial savvy for some, financial folly for others. According to The Chronicle and LoanPerformance, in 2002 less than 20% of property purchases in San Francisco utilized interest-only mortgages. In 2005? Nearly 70%.
And according the Federal Reserve, owners’ equity in household real estate has grown 46 percent over the past four years while mortgage debt has grown 56 percent. People are consuming, not investing, in real estate.
Red flags abound.
· High interest in interest-only home loans – POPULAR BUT DANGEROUS [Chronicle]
· High interest in interest-only home loans – RISK [Chronicle]

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