The second-largest provider of U.S. mortgages through brokers is bringing back a debt type that that’s almost disappeared since the financial crisis: Interest-only loans.
United Wholesale Mortgage plans next month to expand access to the mortgages to borrowers beyond the wealthiest Americans who use so-called jumbo loans. Interest-only mortgages carry higher risks because they can leave homeowners facing a jump in their bills down the road.
The move by the family-owned lender, which grew more than 40-fold after the crash by working with brokers as banks such as JPMorgan Chase & Co. abandoned them, is the latest sign of how lending standards are expanding in the wake of the crisis.
Mat Ishbia, the Troy, Mich.-based company’s chief executive officer, said he isn’t embracing a return to misguided practices.
“It’s for a savvy borrower who can afford the higher […]