The answer to today’s question on this thread “Why are mortgage brokers pushing interest only loans?”. Maybe this: Lenders want them to because the are conforming and also has a slight possibility of being enough to get someone into a house in California(and a commission for a mortgage broker used to dealing with greater fools). As Contraman has pointed out on two threads, several lenders are demanding conforming loans. Fannie mae has guidelines for interest only loans that meet the conforming standards and also hold any hope for actually getting someone in California into a house.They have long interest only periods like the type being talked about on this thread. The question now lingers, are these lenders offering incentives to Mortgage brokers to originate this loan?