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OCC Goes Exotic: Will Issue Guidelines On Mortgages This Fall

Earlier in the year, the Chairman of the Federal Reserve indicated that interest only loans were of “particular concern” and the OCC began to review the economic risk of these products to the housing market [Washington Post] [1] but wanted to be careful about overreacting.

Source: CNN/Money

With the significant growth in interest only mortgages over the past 5 years, “the Office of the Comptroller of the Currency, along with other financial regulators, will issue guidelines for mortgage lenders that could make lenders think twice before readily offering exotic mortgages [Marketwatch] [2] to potential buyers.”

This may help stabilize the housing market by limiting easy access to credit [CNN/Money]. [3] Fewer buyers competing for the same property means more balance between supply and demand.




Lets review:
Few buyers to qualify for mortgages
More properties available for sale [Matrix] [4]

Housing market cools…