Really? Do you really think the gubmint should dictate which types of contracts I'm allowed to enter? Do you really think the gubmint knows what is best for me? If I make $100K a year, should it really be illegal for me to buy a $200K home with an interest only loan? Should it be illegal for everybody or just those that are not as financially savy as you?
The argument on the interest rates has gone on for over a century and how many family failures such and such an interest rate at time period, it would generate. Indeed in the 1950s loans over 10 years were consider immoral since a young family would be in mortgage debt for all the early childhood years.
Similar discussions rose around the 30 year loans and now we are talking about interest only loans in which young families are not encouraged at all to get out of debt.
The next stop in this process is loans on which your children and grandchildren have to pay off or never pay off. This is already underway in Japan.
Right now, I know of two families severely impacted by interest only loans. Their unhappy prospect is to have to leave their homes with a hanging debt over their heads that make their prospects of getting another mortgage in doubt.
So I do think the morality of these mortgages should be discussed or else are you against free speach?
I got an interest rate only loan and I'm stoked about it. I'm in Oregon(nice land use laws here) my property will not be going down. I got a 5/1 arm because me and my wife planned on having children(we ended up with twins).. my wife was previous married as well. In the event we end up with 4 kids all under our roof we are going to need a bigger house. Also we planned on my wife quitting work to take care of the twins. That tiny bit of savings each month on the main mortgage can make a big different when you are squeezing everything out you can.
Besides I'm in line for a promotion soon and if I should choose to pay princple on my loans I can. I have a 15 year 2nd loan so I am putting money into the house.
Some people just use interest only poorly.. they don't have a plan and only see a price. Interest only does have it's uses and I still stick by my strategy.