it struck me there is only one class of buyer who will use an I/O loan
effectively. Someone who by nature will have a very serious
increase in their income soon. Recent graduates from med school,
People starting new small businesses (Franchises), people
in apprenticeship programs.

But that’s maybe 1-2% of all buyers. I/O’s are otherwise a tool for
flippers. if you aren’t amortizing the debt you will see a big spike in
payments, and for what?

The logic was “Property is skyrocketing, get an I/O now, then
when you have 80% equity re-fi”. Gee, why not get a 5/25 ARM
pay on an amortization schedule and then in 5 years look at re-fi.

I/O’s combined payment risk with interest risk.

I’m hanging out here in DC, because 50% of all sales in 2005 were
non-traditionals and when those I/O’s go amortizing they will
all go into default within 90 days.