Although we don’t always listen to, or agree with, Chairman Alan Greenspan, one part of his recent testimony definitely caught our eye.

The dramatic increase in the prevalence of interest-only loans, as well as the introduction of other relatively exotic forms of adjustable-rate mortgages, are developments of particular concern. To be sure, these financing vehicles have their appropriate uses. But to the extent that some households may be employing these instruments to purchase a home that would otherwise be unaffordable, their use is beginning to add to the pressures in the marketplace.

Some households? Greenspan should obviously plug in to SocketSite.
· Testimony of Chairman Alan Greenspan – June 9 [Federal Reserve]