As Javier Silva, senior research associate at Demos, a research and advocacy group, explained: "Prices have gone up so high that a lot of people can't afford to get into the market - so lenders have responded with these products," he said, stressing the popular loan world euphemism. Today, there are over a hundred of these multilayered products, many of them adjustable rate, he added, "but all they do is lower the monthly payment; they don't lower the cost of the mortgage."
Federal regulators are worried enough about how lax terms for loans have become that in May they released new guidelines to restrict home-equity borrowing. They plan to tighten the criteria for new mortgages soon as well.
