My bad… I should have made it more clear that the statement was made tongue-in-cheek. – used a wink 😉 or something like that. I’m a libertarian; so I don’t really think they should be outlawed. The larger implication was just that there are less destructive business arrangements in the U.S. that actually are outlawed, and that IO loans deserve some scrutiny by way of comparison.
But I will submit, FormerSanDiegan, that you are far and away the exception, rather than the rule, when it comes to IO loans.
In reality, the vast majority of IO loans go to people who look at the maximum monthly payment they can afford (and often really can’t afford) and they figure they can buy more house with the IO loan.
The other big IO users are flippers. And we see how well that has been working for them lately…
